Future Enterprises Ltd. के निदेशक की रिपोर्ट

Mar 31, 2018

To

The Members,

The Directors are pleased to present the Thirtieth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2018.

FINANCIAL HIGHLIGHTS:

The financial performance of the Company is as follows:

(Rs. in Crore)

Particulars	Financial Year 2017-18	Financial Year 2016-17
Revenue from operations	4184.80	3782.09
Other Income	183.88	231.05
Total Income	4368.68	4013.14
Profit before Depreciation & Tax	679.76	676.75
Less: Depreciation	698.40	633.19
Tax expense	(6.45)	-
Profit after Tax	(12.19)	43.56

REVIEW OF PERFORMANCE

Income from operations for the financial year 2017-18 the year under review was at Rs.4184.80 Crore which was at Rs.3782.09 Crore during the financial year of 2016-17. Profit before Depreciation and tax stood at Rs.679.76 Crore for the financial year 2017-18 which was at Rs.676.75 Crore for the previous year. After providing depreciation and tax, loss for the year under review was Rs.12.19 Crore as compared to profit of Rs.43.56 Crore for the previous year.

SHARE CAPITAL

During the year under review, the Company has issued and allotted 2,05,37,232 Equity Shares which are as under:

- The Company has made allotment of 1,84,40,808 equity shares of Rs.2/- each, fully paid-up, at a premium of Rs.49.95 per share to Cedar Support Services Limited (“CEDAR”) on October 31, 2017 upon conversion of Optionally Convertible Debentures (OCDs) which were allotted to CEDAR pursuant to the Composite Scheme of Arrangement between the Company and Future Retail Limited (“FRL”) and their respective Shareholders and Creditors (“FEL - FRL Scheme”). After conversion, there are no outstanding OCDs remains in the Company.

- On November 13, 2017 the Company has made allotment of 20,96,424 Equity Shares of Rs.2/- each to the employees of the Company upon exercise their rights of vested options granted to the said employees under Employees’ Stock Option Plan - 2012 and 2015 ( FEL ESOP 2012 & 2015). None of the employee is in receipt of Equity Shares exceeding 1% of Equity Share capital of the Company against the vested options exercised by them under FEL ESOP - 2012 & 2015.

DIVIDEND AND RESERVES

Your Directors have not recommended any dividend for the financial year 2017-18. Further, no amount is proposed to be transferred to the General Reserve.

INVESTMENTS

During the year under review, the Company has made following investments which are as under:

- Subsidiaries Companies:

- Future Merchandising & Sourcing Pte. Ltd. (“FMSPL”) is incorporated as Wholly Owned Subsidiary Company at Singapore. The Company has invested US $ 30,000 in FMSPL.

- Company has acquired shares held by one of the investor of Future E-Commerce Infrastructure Limited (“FECIL”) for a value of Rs.1 Crore and increased its stake from 70.43% to 86.71%.

- Joint Venture / SPV Companies

The Company has made further investment of Rs.58.75 Crore in Future Generali India Life Insurance Company Limited and Rs.56.36 Crore in Sprint Advisory Services Private Limited, as a part of its entitlement of Rights issue of respective companies.

DIVESTMENTS

On July 6, 2017, the Company divested its holding of Future Consumer Limited (“FCL”) as a part of its divestments initiatives. At the end of the financial year ended March 31, 2018, your Company directly holds 100 equity shares in Future Consumer Limited.

On December 8, 2017, the Company participated in Offer for Sale (“OFS”) and divested 19,56,914 Equity shares of its subsidiary company, Future Supply Chain Solutions Limited (“FSCSL”), comprising of 5% of paid-up Equity share capital of FSCSL.

DEBENTURES

During the year under review, the Company has raised long term funds through Non-Convertible Debentures aggregating Rs.774 Crore. The funds were utilised for the objects as stated at the time of raising funds. This has helped the Company to improve its debt maturity profile as well as reduce the overall cost of debt.

The Company has made timely payment of interests and principal amount, as and when due on Debentures, issued by the Company. The Company has repaid the principal amount of Secured Redeemable Non - Convertible Debentures Series- IX A of Rs.415.48 Crore together with accrued interest thereon on March 27, 2018.

PUBLIC DEPOSITS

The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as at March 31, 2018.

CORPORATE GOVERNANCE

A Report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”), forms part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Regulation 34 read with Schedule V of the Listing Regulations, forms part of the Annual Report.

POLICIES AND DISCLOSURE REQUIREMENTS

The Company has in inter-alia following policies & code of conduct duly approved by the Board of Directors of the Company:

- Details of programmes for familiarization of Independent Directors with the Company are available on the website of the Company at the link http://felindia.in/pdf/Details_of_Familiarisation_ Programs_Imparted_to_Independent_Directors.pdf

- Policy for determining material subsidiaries of the Company is available on the website of the Company at the link http://felindia.in/pdf/Policy_For_Material_ Subsidiary.pdf

- Policy for determining Materiality of Events of the Company is available on the website of the Company at the link http://felindia.in/pdf/Policy_For_ Determining_Materiality_Of_Events.pdf

- Archival policy of the Company is available on the website of the Company at the link http://felindia.in/ pdf/Archival_Policy.pdf

- Policy for determining the code of conduct of board of directors and senior management personnel of the Company is available on the website of the Company at the link http://felindia.in/pdf/Code_of_Conduct.pdf

- Policy on dealing with related party transactions is available on the website of the Company at the link http://felindia.in/pdf/Related_Party_Transaction_

Policy.pdf

- Remuneration Policy of the Company is available on the website of the Company as at the link http:// felindia.in/pdf/Remuneration_Policy.pdf

- The Dividend distribution policy is given as Annexure I to this Report. The same is also available on the website of the Company at the link http://felindia.in/pdf/Dividend_Distribution_ Policy.pdf

The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance with the provisions of the Act and the regulations of the Listing Regulations.

NUMBER OF BOARD MEETINGS

The Board of Directors met 7 (Seven) times during the financial year 2017-18. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of the Annual Report.

COMMITTEES OF THE BOARD OF DIRECTORS

Details of Committees of the Company along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of the Annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

The Company has following Subsidiaries (including step down subsidiaries), Joint Ventures and Associates as at the end of financial year ended March 31, 2018.

Futurebazaar India Limited

Futurebazaar India Limited (“FBIL”) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience through e-portal www.futurebazaar. com. Your Company holds 100% in FBIL. FBIL is successfully operating its e-retailing business and during the financial year ended March 31, 2018, it has registered income from operations amounting to Rs.42.80 Crore and its net profit stood at Rs.0.08 Crore.

Future Media (India) Limited

Future Media (India) Limited (“FMIL”) is the Group’s media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consumers. FMIL offers relevant engagement through its media properties like Visual Spaces, Television and Activation. The Company holds equity capital of 93.10% in FMIL. During the financial year ended March 31, 2018, FMIL registered income from operations amounting to NIL and the net loss stood at Rs.0.06 Crore.

Future Supply Chain Solutions Limited

Future Supply Chain Solutions Limited (“FSCSL”) is designed to operate in the logistics, transportation, distribution and warehousing space. FSCSL provides solutions in the areas of integrated Supply Chain Management, warehousing, distribution and Multi Modal transportation. Your Company has 51.22 % stake in FSCSL. FSCSL has warehousing space of 4.58 million square feet spread over all across India. FSCSL is currently building large scale warehousing facilities and also increasing its presence in 3PL logistics solutions. During the year ended March 31, 2018, FSCSL has registered income from operations amounting to Rs.774.99 Crore and the earned net profit of Rs.67.35 Crore.

Vulcan Express Private Limited

Vulcan Express Private Limited (“VEPL”) was acquired by Future Supply Chain Solutions Limited on February 2, 2018. VEPL is 100% subsidiary of FSCSL and accordingly, is step down subsidiary of the Company. VEPL has earned revenue of Rs.18.67 Crore & incurred net loss of Rs.8.44 Crore during the year ended March 31, 2018.

Bluerock eServices Private Limited

Bluerock eServices Private Limited (“BEPL”) was incorporated to deal in the business of furniture and home furnishing under the brand “Fabfurnish”. BEPL is 100% subsidiary of the Company. BEPL has earned revenue of Rs.4.28 Crore & incurred net loss of Rs.1.64 Crore during the year ended March 31, 2018. During the year under review BEPL has demerged its ecommerce business undertaking and vested the same with Praxis Home Retail Limited w.e.f. November 20, 2017.

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited (“FECIL”) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. The Company holds equity capital of 86.71% however, considering total capital comprising of convertible preference capital the Company’s holding in the total capital of FECIL works out to 63.98%. FECIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2018, FECIL registered income from operations amounting to Rs.42.56 Crore and the net profit stood at Rs.0.42 Crore.

Work Stores Limited (f/k/a Staples Future Office Products Limited)

Work Stores Limited (“WSL”) is designed to capture the consumption space of office supplies, office equipment and products. WSL was formed as a Joint Venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). Your Company holds equity capital of 61.67% in WSL however, considering the total capital comprising of convertible preference capital the Company’s holding in the total capital of WSL works out to 62.63%. During the financial year ended March 31, 2018, WSL has registered income from operations amounting to Rs.78.27 Crore and the net loss stood at Rs.2.24 Crore.

Office Shop Private Limited

Office Shop Private Limited (“OSPL”) was incorporated to deal in the business of distribution services. OSPL is 100% subsidiary of WSL and accordingly, is step down subsidiary of the Company. OSPL has earned revenue of Rs.0.29 Crore & incurred net loss of Rs.1.45 Crore during the year ended March 31, 2018.

Future Merchandising & Sourcing Pte. Ltd.

The Company has incorporated wholly owned subsidiary in Singapore in the name of Future Merchandising & Sourcing Pte. Limited (FMSPL) to undertake the activity of global sourcing of food, fashion, footwear and others from South East Asia, Middle East, China and Japan and will act as an aggregator of various commodities (with back to back procurement contracts with identified vendors/ exporters) which will be imported by the Company for onward sales to FRL / Future Lifestyle Fashions Limited (“FLFL”) and other corporates. The Company holds 100% in FMSPL. FMSPL has earned revenue of NIL & incurred net loss of Rs.0.04 Crore during the year ended March 31, 2018.

JOINT VENTURES

Apollo Design Apparel Parks Limited and Goldmohur Design and Apparel Park Limited

The Company has entered into joint venture with National Textile Corporation (“NTC”) for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate SPV companies have been created viz. Apollo Design Apparel Parks Limited (“ADAPL”) & Goldmohur Design and Apparel Park Limited (“GDAPL”). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and Goldmohur Mills respectively as per the Memorandum of Understanding and other documents signed with NTC. During the financial year ended March 31, 2018 ADAPL registered income from operations amounting to Rs.305.66 Crore and earned net profit of Rs.8.37 Crore. Further during the year GDAPL registered income from operations amounting to Rs.320.20 Crore and earned net profit of Rs.8.05 Crore.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (“FGI-Life”) is Company’s joint venture in the Life insurance sector. FGI-Life has introduced many insurance products to suit requirements of various categories of customers. During the financial year ended March 31, 2018, FGI-Life has registered income from operations of Rs.957.51 Crore and net loss of Rs.146.82 Crore.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (“FGI-Nonlife”) is Company’s joint venture in the general insurance sector. FGI-Nonlife has introduced insurance products for various general insurance needs of the different categories of customers. During the financial year ended March 31, 2018, FGI-Nonlife has registered income from operations of Rs.1280.18 Crore and net profit of Rs.78.63 Crore.

Shendra Advisory Services Private Limited

Shendra Advisory Services Private Limited (“Shendra”) is a SPV with respect to the Company’s insurance arm Future Generali India Insurance Company Limited. During the financial year ended March 31, 2018, Shendra has registered income from operations of Rs.0.16 Crore and net profit of Rs.0.08 Crore.

Sprint Advisory Services Private Limited

Sprint Advisory Services Private Limited (“Sprint”) is a SPV with respect to the Company’s insurance arm Future Generali India Life Insurance Company Limited. During the financial year ended March 31, 2018, Sprint has registered income from operations of Rs.0.11 Crore and net profit of Rs.0.02 Crore.

ASSOCIATE COMPANY

Galaxy Entertainment Corporation Limited (upto January 2, 2018)

Galaxy Entertainment Corporation Limited (“GECL”) is a leisure and entertainment organization. The company is into operation of family entertainment gaming centers, food courts in shopping malls and restaurants. GECL also undertakes sponsorship contracts. Your Company has 19.57% stake in GECL. During the financial year ended March 31, 2018, GECL has registered income from operations amounting to Rs.40.52 Crore and the net loss stood at Rs.10.03 Crore.

GECL cease to be associate of the Company, upon issuance of fresh equity shares to other promoter and outside investors. Further, the holding of Company was further diluted to 18.03% upon conversion of Compulsory Convertible Debentures(CCDs) on April 3, 2018.

Leanbox Logistics Solutions Pvt Ltd. (w.e.f. July 27, 2017)

Leanbox Logistics Solutions Pvt Ltd. (“LLSPL”) is Associate of FSCSL. LLSPL has earned revenue of Rs.21.71 Crore & incurred net loss of Rs.1.14 Crore during the year ended March 31, 2018.

A report on the performance and financial position of each of the Subsidiaries, Joint Venture and Associate Companies as per the Companies Act, 2013 is provided as Annexure II as AOC-1 to this report forming part of Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements which is prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

In accordance to the provisions of Section 136(1) of the Act, the Annual Report of the Company, containing therein Standalone and the Consolidated Financial Statements of the Company and the Audited Financial Statements of the subsidiary companies have been placed on the website of the Company - www.felindia.in. The Audited Financial Statements in respect of each subsidiary company shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of ensuing Annual General Meeting. The aforesaid documents relating to subsidiary companies can be made available to any member interested in obtaining the same upon a request in that regards made to the Company.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of section 152 of the Act, Mr. Dinesh Maheshwari is liable to retire by rotation and being eligible, offers himself for re-appointment.

Additional information on appointment / reappointment of directors, as required under Regulation 36 of the Listing Regulations, is given in the Notice convening the ensuing Annual General Meeting.

DECLARATION OF INDEPENDENCE

The Company has received necessary declarations from all the Independent Directors under section 149(7) of the Act that they meet the criteria of independence laid down in section 149(6) of the Act and Regulation 25 of the Listing Regulations.

POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION

The Company’s policy on directors’ appointment and remuneration and other matters provided in section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of the Annual Report.

PARTICULARS OF EMPLOYEE STOCK OPTION PLAN 2012 (ESOP- 2012 & ESOP 2015)

Future Enterprises Limited (“FEL”) has not granted any Options under Employee Stock Option Plan 2012 (“ESOP 2012”) and FEL Employees Stock Option Plan 2015 (“ESOP 2015”) to eligible employees in the year under review.

The applicable disclosures as stipulated under SEBI (Share Based Employee Benefits) Regulation 2014 as on March 31, 2018 with regard to ESOP 2012 and ESOP 2015 are provided in Annexure III to this Report.

EXTRACT OF ANNUAL RETURN

In terms of provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in prescribed format is annexed to this Report as Annexure IV.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans granted, Guarantees provided and Investments made by the Company which are covered under the provision of Section 186 of the Companies Act, 2013, is provided in note no. 47 of Notes forming part of Standalone Financial Statements.

INDIAN ACCOUNTING STANDARD (Ind AS)

The Company has adopted Indian Accounting Standards (“Ind AS”) from April 01, 2016 with a transition date of April 01, 2015. Accordingly, the Financial Results for the year 2017-18 have been prepared in accordance with Ind AS, prescribed under Section 133 of the Act, read with the relevant Rules issued thereunder and the other recognised accounting practices and policies to the extent applicable

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all transactions entered into by the Company with related parties as defined under the Act and the Listing Regulations, were in the ordinary course of business and on an arm’s length basis. There were no materially significant transactions with the related parties during the financial year which were in conflict with the interest of the Company. Disclosure of transactions with related parties as required under the Indian Accounting Standard (AS-24) has been made in the notes forming part of the financial statements.

Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature with Related Parties. A statement of all such related party transactions is presented before the Audit Committee on periodic and need basis for its review and approval.

Particulars of contracts or arrangements with related parties as required under Section 134(3)(h) of the Act, in the prescribed Form AOC-2 is given in Annexure V of this Annual Report.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Pursuant to the applicable provisions of the Companies Act, 2013 read with the IEPF Authority (Accounting, Audit, Transfer and Refund Rules, 2016 (‘the Rules’) all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Government of India, after completion of seven years. Further, according to the rules, the shares on which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account of IEPF Authority, Accordingly, the Company has transferred the unclaimed and unpaid dividends of Rs.6,66,588/- relating to financial year 2009-10. Further, 4,93,921 equity shares & 49,360 Class B (Series 1) shares were transferred as per the requirements of the IEPF Rules. The details are provided on our website at http://felindia.in/investors/ shares-transferred-to-IEPF.aspx

MATERIAL CHANGES AND COMMITMENTS

Your Directors further state that no material changes have taken place from the date of closure of financial year under review till the date of signing of Accounts that could have an impact on the financial position of the Company.

FUTURE OUTLOOK

The Company is continuing with its operations and sevices activities, as per requirements of enitities availing its services and procuring its products. The Company is considering expansions based on the projected requirements of such entities. Futher, with improved economy and better results achieved by its few investee companies, the valuation of its investments in such investee companies is improving and enabling the Company to consider divestment as a part of its initiative to monetise investments and reduce overall debt of the Company.

VIGIL MECHANISM / WHISTLE BLOWER

The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted / framed from time to time. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.

AUDITORS AND AUDITORS’ REPORT

As per Section 139 of the Companies Act, 2013 and the Rules made thereunder, it was mandatory to rotate the statutory auditors on completion of the maximum term permitted under the section. In line with requirements of Companies Act, 2013, M/s. DMKH & Co., Chartered Accountants, (Firm Registration No. 116886W) was appointed as the Statutory Auditors of the Company to hold office for a period of 5 (Five) consecutive years from the conclusion of the 29th Annual General Meeting of the Company held on August 29, 2017 till the conclusion of the 34th Annual General Meeting to be held in the year 2022, subject to ratification by the shareholders at the General Meeting or as may be necessitated by the Act from time to time.

In terms of Section 40 of the Companies (Amendment) Act, 2017 notified on May 7, 2018 the requirement of ratification of appointment of Statutory Auditors by Members at every Annual General Meeting has been omitted and accordingly, henceforth Members’ approval would not be required for ratification of appointment of auditors on annual basis. The Board has confirmed the appointment of Statutory Auditors which was already appointed for a period of five (5) years based on recommendation of Audit Committee.

The Company has received a written confirmation from the M/s DMKH & Co., Chartered Accountants, for their appointment as Statutory Auditors, that their continued appointment shall be in accordance with the criteria and provisions as provided under Section 139 and 141 of the Companies Act, 2013 and Rules made thereunder.

The Auditors’ Report on the financial statements for the financial year ended March 31, 2018 does not contain any qualification, observation, emphasis of matter of adverse remark. The Auditors’ Report is enclosed with the financial statements in this Annual Report.

SECRETARIAL AUDITOR

M/s. Virendra Bhatt, Practising Company Secretary (Membership No. 1157 / Certificate of Practice No.124) was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2017-18, as required under Section 204 of the Act and Rules made thereunder.

The Secretarial Audit Report for the financial year 201718 is appended as Annexure VI which forms part of this Report.

The said Secretarial Auditors’ Report does not contain any qualifications, reservations or adverse remarks.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors’ Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31, 2018, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors 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 as at March 31, 2018 and of the loss of the Company for that year;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts for the financial year ended March 31, 2018, on a going concern basis;

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The particulars as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, are provided in Annexure VII which forms part of this report.

The Company being concentrating on the domestic consumption space does not have any specific exports initiatives to report to members.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. S. Doreswamy, Independent Director as Chairman of the Committee and Mr. V.K. Chopra, Independent Director and Ms. Bala Deshpande, Independent Director, as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL

The Company has a well-defined risk management framework in place, which provides an integrated approach for identifying assessing, mitigating, monitoring and reporting of all risk associated with the business of the Company.

The Board has delegated responsibility to the Risk Management Committee to monitor and review risk management, assessment and minimization procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risk which the Company may be exposed to. The Audit Committee and the Board also periodically review the risk management assessment and minimization procedures.

The Company has in place adequate internal financial controls with reference to Financial Statements. Key risks and threats to the Company and internal Controls are analyzed in the Management Discussion and Analysis which forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT (CSR)

In terms of the provisions of Section 135 of the Act, read with Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors of your Company has constituted a Corporate Social Responsibility (“CSR”) Committee. The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report, which forms part of this Annual Report.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is made in prescribed form which is annexed to this Report as Annexure VIII.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013.

Your Company has always believed in providing a safe and harassment free workplace for every individual working in the Company premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

SECRETARIAL STANDARDS

During the year under review, the Company has complied with Secretarial Standards on meetings of the Board of Directors (“SS-1”) and on General Meetings (“SS-2”) as amended and issued by the Institute of Company Secretaries of India in terms of Section 118(10) of the Companies Act, 2013.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the directors individually.

At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the independent directors was carried out by the entire Board except the independent director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under Annexure IX, which is annexed to this Report.

In terms of the provisions Section 197 (12) of the Companies Act, 2013, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report.

In terms of proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is been sent to the Members of the Company. The said information by the Members is available for inspection at the Registered Office of the Company during working hours on working days. Member interested in obtaining such information, may write to the Company Secretary and the same will be furnished on request. The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is also available on the Company’s website.

ACKNOWLEDGEMENT

Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders, Future Group entities, and in particular, their employees, regulatory authorities and its banks. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year.

For and on behalf of the Board of Directors

Place: Mumbai V. K. Chopra

Date : May 25, 2018 Chairman

---

Mar 31, 2017

To

The Members,

The Directors are pleased to present the Twenty Ninth Annual Report of the Company together with the Audited financial statements for the financial year ended March 31, 2017.

FINANCIAL HIGHLIGHTS:

The financial performance of the Company is as follows:

(Rs, in Crore)

Particulars	Financial Year 2016-17	Financial Year 2015-16
Sales (Net of Taxes)	3105.03	7,981.20
Other Operating Income	677.06	376.50
Other Income	231.05	47.49
Total Income	4013.14	8,405.19
Profit before Depreciation, exceptional Items & Tax	676.75	573.53
Less: Depreciation	633.19	546.74
Tax expense	-	5.52
Profit after Tax	43.56	21.27
Total Comprehensive Income For the year	339.87	180.44

REVIEW OF PERFORMANCE

The year under review, was first full year of operation, post completion of the Composite Scheme of Arrangement, wherein the Retail Business Undertaking of the Company was demerged and the demerged Retail Infrastructure Business Undertaking of Future Retail Limited (FRL) (formerly known as - Bharti Retail Limited) was vested with the Company. The previous year results contains for part of year, the income from demerged Retail Business Undertaking and accordingly the results of the current financial year are not comparable to the results of the previous financial year.

Income from operations for the current financial year under review was at Rs, 3,782.09 Crore which was at Rs, 8,357.70 Crore during the previous financial year. Profit before Depreciation, exceptional items and tax stood at Rs, 676.75 Crore for the financial year 2016-17 which was at Rs, 573.53 Crore for the previous financial year. Profit after Tax for the year under review was Rs, 43.56 Crore which was at Rs, 21.27 Crore for the previous financial year.

SHARE CAPITAL

During the year under review, the Company has issued and allotted 4,49,74,219 Equity Shares as under:

- 4,34,78,261 Equity Shares issued and allotted to the Shareholders of as per the Composite Scheme of Arrangement between the Company and FRL;

- 14,95,958 Equity Shares were issues and allotted under Employees'' Stock Option Scheme - 2012 to eligible Employees of the Company.

COMPOSITE SCHEME OF ARRANGEMENT

The Composite Scheme of Arrangement between the Company and Future Retail Limited (formerly known as ''''Bharti Retail Limited'''') and their respective Shareholders and Creditors ("the FEL-FRL the Scheme") has been approved under the provisions of Sections 391-394 of the Companies Act, 1956 read with Sections 100-104 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013. The Scheme, which provides for demerger of Retail Business Undertaking of the Company into the Future Retail Limited "FRL" and demerger of Retail Infrastructure Business Undertaking of "FRL" and vesting into the Company with effect from Appointed Date of October 31, 2015, as defined in the Scheme and has been given effect on May 1, 2016 ("Effective Date"), after filing of order issued by Hon''ble High Court of Original Judicature at Bombay with Registrar of Companies, Mumbai under Ministry of Corporate Affairs. Pursuant to the scheme, all the assets and liabilities pertaining to the Retail Business Undertaking of the Company has been demerged and vested into FRL and all the assets and liabilities pertaining to Retail infrastructure Business Undertaking of FRL has been demerged and vested into the Company.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of '' 0.20 (10%) per Equity Share (previous financial year '' 0.10 (5%) per Equity Share) and dividend of '' 0.24 (12%) per Class B (Series 1) Share {previous financial year '' 0.14 (7%) per Class B (Series 1) Share} for the financial year ended March 31, 2017. The said dividend shall be subject to the approval of the members at the ensuing Annual General Meeting.

The dividend, if approved by the Shareholders in the Annual General meeting based on the paid up share capital as at the date of this report, entail a payout of Rs, 11.57 Crore including dividend distribution tax of Rs, 1.96 Crore. The dividend is free of tax in the hands of the Shareholders.

INVESTMENTS

During the year under review the Company has made investment in Joint Venture and Subsidiaries Companies as under.

Rs, 25.50 Crore in Future Generali India Insurance Company Limited; Rs, 14.16 Crore in Future Generali India Life Insurance Company Limited. Further Rs, 24.35 Crore in Shendra Advisory Services Private Limited; and Rs, 13.55 Crore in Sprint Advisory Services Private Limited and Rs, 8.70 Crore in Work Store Ltd. (f/k/a Staples Future Office Limited).

DIVESTMENTS

On June 28, 2016, the Company divested part its stake being 12.75% shares from its total holding, in one of its subsidiary company, Future Supply Chain Solutions Limited ("FSCSL"). At the end of the financial year ended March 31, 2017, your Company continue to hold majority stake of 57.42% in FSCSL after the above referred divestment.

On December 26, 2016, the Company divested its entire holding of Future Lifestyle Fashions Limited ("FLFL") being 16.09% of paid up capital of FLFL. Further, Company also divested its small holding of equity shares in Centrum Capital Limited ("CCL").

DEBENTURES

During the year under review, the Company has raised long term funds through Non-convertible Debentures aggregating Rs, 1326.50 Crore. The funds were utilised for the objects as stated at the time of raising funds. This has helped the Company to improve its debt maturity profile and reduce the overall cost of debt.

The Company has made timely payment of interests and principal amount, as and when due on Debentures, issued by the Company. The Company has repaid the principal amount of Secured Redeemable Non - Convertible Debentures Series- V of Rs, 418.03 together with accrued interest thereon on March 20, 2017 and Secured Redeemable Non-Convertible Debentures Series- VIII of Rs, 668.85 together with accrued interest thereon on March

21, 2017.

Debentures (OCDs)

The Optionally Convertible Debentures (OCDs) issued to erstwhile Shareholders of FRL, were split between the Company and FRL, as provided in the Composite Scheme of Arrangement and accordingly the Company had issued new OCDs on May 1, 2016 of Rs, 98.50 Crore. These OCDs would be convertible into equity shares / redeemable on or before October 31, 2017.

FIXED DEPOSITS FOR PUBLIC

The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as at March 31, 2017.

CORPORATE GOVERNANCE REPORT

A report on Corporate Governance along with a Certificate from the Statutory Auditors of the Company regarding the compliance with the conditions of Corporate Governance as stipulated under Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), forms part of this Annual Report.

BUSINESS RESPONSIBILITY REPORTING

Pursuant to Listing Regulations, a Business Responsibility Report is included in this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Regulation 34 read with Schedule V of the Listing Regulations, forms part of this Annual Report.

NUMBER OF BOARD MEETINGS

The Board of Directors met 7 (Seven) times during the financial year 2016-17. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of this Annual Report.

COMMITTEES OF THE BOARD OF DIRECTORS

Details of Committees of the Company along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of this Annual Report.

SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES

SUBSIDIARY COMPANIES

The Company has following Subsidiaries (including step down subsidiaries), as at the end of financial year ended March 31, 2017.

Futurebazaar India Limited

Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience through e-portal www.futurebazaar. com. Your Company holds 100% in FBIL. FBIL is successfully operating its e-retailing business and during the financial year ended March 31, 2017, it has registered income from operations amounting to Rs, 12 Crore and its net loss stood at Rs, 0.1 Crore.

Future Media (India) Limited

Future Media (India) Limited (FMIL) is the Group''s media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consume. FMIL offers relevant engagement through its media properties like Visual Spaces, Television and Activation. The Company holds equity capital of 93.10% in FMIL however, considering the total capital comprising of convertible preference capital the Company''s holding in the total capital of FMIL works out to 35.37%. FMIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2017, FMIL registered income from operations amounting to Rs, 24 Crore and the net profit stood at Rs, 1 Crore.

Future Supply Chain Solutions Limited

Future Supply Chain Solutions Limited (FSCSL) is designed to operate in the logistics, transportation, distribution and warehousing space. FSCSL provides solutions in the areas of integrated Supply Chain Management, warehousing, distribution and Multi Modal transportation. Your Company has 57.42% stake in FSCSL. FSCSL has warehousing space of 3.6 million square feet spread over all across India. FSCSL is currently building large scale warehousing facilities and also increasing its presence in 3PL logistics solutions. During the year ended March 31, 2017, FSCSL has registered income from operations amounting to Rs, 561 Crore and the earned net profit of Rs, 46 Crore.

Bluerock eServices Private Limited

Bluerock eServices Private Limited (BEPL) was incorporated to deal in the business of furniture and home furnishing under the brand "Fabfurnish". BEPL is 100% subsidiary of the Company. BEPL has earned revenue of Rs, 7 Crore and incurred net loss of Rs, 43 Crore during the year ended March 31, 2017.

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited (FECIL) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. The Company holds equity capital of 70.43% however, considering total capital comprising of convertible preference capital the Company''s holding in the total capital of FECIL works out to 40.33%. FECIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2017, FECIL registered income from operations amounting to Rs, 12 Crore and the net profit stood at Rs, 1 Crore.

Work Stores Limited (f/k/a Staples Future Office Products Limited)

Work Stores Limited {(WSL) f/k/a Staples Future Office Products Limited} is designed to capture the consumption space of office supplies, office equipment and products. WSL was formed as a Joint Venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). Your Company holds equity capital of 61.67% in WSL however, considering the total capital comprising of convertible preference capital the Company''s holding in the total capital of WSL works out to 62.63%. During the financial year ended March 31, 2017,

WSL has registered income from operations amounting to Rs, 89 Crore and the net loss stood at Rs, 3 Crore.

Office Shop Private Limited

Office Shop Private Limited (OSPL) was incorporated to deal in the business of distribution services. OSPL is 100% subsidiary of WSL and accordingly, is step down subsidiary of the Company. OSPL has earned revenue of Rs, 12 Crore and incurred net loss of Rs, 2 Crore during the year ended March 31, 2017.

ASSOCIATE COMPANY

Galaxy Entertainment Corporation Limited

Galaxy Entertainment Corporation Limited (GECL) is a leisure and entertainment organization. The Company is into operation of family entertainment gaming centers, food courts in shopping malls and restaurants. GECL also undertakes sponsorship contracts. Your Company has 31.55% stake in GECL. During the financial year ended March 31, 2017, GECL has registered income from operations amounting to Rs, 42 Crore and the net loss stood at Rs, 14 Crore.

JOINT VENTURES

Apollo Design Apparel Parks Limited and Goldmohur Design and Apparel Park Limited

The Company has entered into joint venture with National Textile Corporation (NTC) for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate SPV companies have been created viz. Apollo Design Apparel Parks Limited (ADAPL) and Goldmohur Design and Apparel Park Limited (GDAPL). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and Goldmohur Mills respectively as per the memorandum of understanding and other documents signed with NTC. During the financial year ended March 31, 2017 ADAPL registered income from operations amounting to Rs, 310 Crore and earned net profit of Rs, 7 Crore. Further during the year GDAPL registered income from operations amounting to Rs, 293 Crore and earned net profit of Rs, 7 Crore.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (FGI-Life) is Company''s joint venture in the Life insurance sector. FGI-Life has introduced many insurance products to suit requirements of various categories of customers. During the financial year ended March 31, 2017, FGI-Life has registered income from operations of Rs, 708 Crore and net loss of Rs, 87 Crore.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (FGI-Nonlife) is Company''s joint venture in the general insurance sector. FGI-Nonlife has introduced insurance products for various general insurance needs of the different categories of customers. During the financial year ended March 31, 2017, FGI-Nonlife has registered income from operations of Rs, 1,088 Crore and net profit of Rs, 43 Crore.

Shendra Advisory Services Private Limited

Shendra Advisory Services Private Limited (Shendra) is a SPV with respect to the Company''s insurance arm Future Generali India Insurance Company Limited. During the financial year ended March 31, 2017, Shendra has registered income from operations of '' 0.1 Crore and net profit of '' 0.04 Crore.

Sprint Advisory Services Private Limited

Sprint Advisory Services Private Limited (Sprint) is a SPV with respect to the Company''s insurance arm Future Generali India Life Insurance Company Limited. During the financial year ended March 31, 2017, Sprint has registered income from operations of '' 0.002 Crore and net loss of '' 0.06 Crore.

A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 (''''the Act'''') is provided as Annexure-I as AOC-1 to this report forming part of this Annual Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements which is prepared in accordance with the Indian Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

In accordance to the provisions of Section 136(1) of the Act, the Annual Report of the Company, containing therein standalone and the consolidated financial statements of the Company and the audited financial statements of each of the subsidiary companies have been placed on the website of the Company - www.felindia.in. The audited financial statements in respect of each subsidiary company shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of ensuing Annual General Meeting. The aforesaid documents relating to subsidiary companies can be made available to any Member interested in obtaining the same upon a request in that regards made to the Company.

DISCLOSURE REQUIREMENTS

Details of programmes for familiarization of Independent Directors with the Company are available on the website of the Company at the link http://felindia.in/pdf/ID_ Familiarization.pdf

Policy for determining material subsidiaries of the Company is available on the website of the Company at the link http://felindia.in/pdf/Mat_Sub_Policy.pdf

Policy for determining Materiality of Events of the Company is available on the website of the Company at the link http://felindia.in/pdf/Policy_for_Determining_ Materiality_of_Events.pdf

Archival policy of the Company is available on the website of the Company at the link http://felindia.in/pdf/Archival_ Policy.pdf

Policy for determining the code of conduct of board of directors and senior management personnel of the

Company is available on the website of the Company at the link http://felindia.in/pdf/Code_of_Conduct_for_Key_ Managerial_Persons.pdf

Policy on dealing with related party transactions is available on the website of the Company at the link http:// felindia.in/pdf/RPT_Policy.pdf

The Dividend distribution policy is given as Annexure-II to this Report. The same is also available on the website of the Company at the link http://felindia.in/pdf/Dividend_ Distribution_Policy.pdf

The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance with the provisions of the Act and the regulations of the Listing Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In terms of Section 152 of the Act, Mr. Vijay Biyani is liable to retire by rotation and being eligible, offers himself for re-appointment.

The details of changes in the Board structure as follows:

Mr. Vijay Biyani, Managing Director of the Company has been re-appointed as a Managing Director with effect from September 26, 2017 for a period of three years.

Additional information on appointment / reappointment of directors and revision of remuneration payable to them, as required under Regulation 36 of the Listing Regulations, is given in the Notice convening the ensuing Annual General Meeting.

The Company has received necessary declarations from all the Independent Directors under Section 149(7) of the Act that they meet the criteria of independence laid down in Section 149(6) of the Act and Regulation 25 of the Listing Regulations.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s policy on directors'' appointment and remuneration and other matters provided in Section 178(3) of the Act, has been disclosed in the Corporate Governance Report, which forms part of this Annual Report.

PARTICULARS OF EMPLOYEE STOCK OPTION PLAN 2012 (ESOP-2012) AND 2015 (ESOP-2015)

Future Enterprises Limited (FEL) has granted Options to eligible employees in 2014 and 2015 under Employee Stock Option Scheme 2012 ("ESOP 2012") and 2015 ("ESOP 2015"). In a Composite Scheme of Arrangement, FEL has transferred its Retail business carried on under the format brands of Big Bazaar, Food Bazaar, e-zone, Home town to Future Retail Limited (f/k/a Bharti Retail Limited), the Composite Scheme of Arrangement has been sanctioned by the Bombay High Court in its order dated March 04, 2016.

The Employee Stock Options of the Company has adjusted for the corporate actions on Value for exchange to protect the fair value of Options per option grantee and aggregate fair value of the Options.

During the under review, the Nomination and Remuneration Committee has granted 23,22,102 Stock Options to the eligible employees under FEL Employees Stock Option Plan 2012 ("ESOP 2012") and 26,03,196 Stock Options to the eligible employees under FEL Employees Stock Option Plan 2015 ("ESOP 2015").

The applicable disclosures as stipulated under SEBI (Share Based Employee Benefits) Regulation 2014 as on March 31, 2017 with regard to ESOP 2012 and ESOP 2015 are provided in Annexure-III to this Annual Report.

EXTRACT OF ANNUAL RETURN

In terms of provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in prescribed format is annexed to this Report as Annexure-IV.

SIGNIFICANT AND MATERIAL ORDERS

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013

Details of Loans granted, Guarantee provided and Investment made by the Company which are covered under the provision of Section 186 of the Companies Act,

2013, is provided in note no. 51 of Notes forming part of Standalone Financial Statements.

INDIAN ACCOUNTING STANDARDS (IND AS)

As mandated by the Ministry of Corporate Affairs (MCA), the Company has adopted Indian Accounting Standards ("Ind AS") from April 01, 2016 with a transition date of April 01, 2015. The Financial Results for the year 20162017 have been prepared in accordance with Ind AS, prescribed under Section 133 of the Companies Act, 2013 read with the relevant Rules issued there under and the other recognized accounting practices and policies to the extent applicable. The Financial Results for all the periods of 2016-2017 presented have been prepared in accordance with Ind AS.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, all transactions entered into by the Company with related parties as defined under the Act and the Listing Regulations, were in the ordinary course of business and on an arm''s length basis.

Particulars of contracts or arrangements with related parties as required under Section 134(3)(h) of the Act, in the prescribed form AOC-2 is given in Annexure-V of this Annual Report.

Disclosure of transactions with related parties as required under the applicable Accounting Standards has been made in the notes forming part of the financial statements.

DETAIL UNDER REGULATION 39(4) OF THE LISTING REGULATIONS - UNCLAIMED SUSPENSE ACCOUNT

Pursuant to Regulation 39(4) read with Schedule V of the Listing Regulations, pertaining to outstanding shares lying in Unclaimed Suspense Account at the beginning of financial year under review, the aggregate number of Shareholders holding Equity Shares and Class B (Series 1) Share were 184 holding 92,010 Equity shares and 9,250 Class B (Series 1) shares respectively. The total Shareholders continue to remain 183 for Equity Shares and for Class B (Series 1) shares holds 91,510 Equity shares and 9,200 Class B (Series 1) outstanding shares respectively lying in the Unclaimed Suspense Account as on March 31, 2017. All the unclaimed shares are credited to a Demat Unclaimed Suspense Account and all the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. The Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

MATERIAL CHANGES AND COMMITMENTS

Your Directors further state that there were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts.

FUTURE OUTLOOK

The national economy is nearing per capita GDP of $2000 which has been a mile stone in other developing economies as well, which have witnessed spurt in economic activities. Biggest beneficiary of this surge will be consumption sector and organized retail. The Company''s activities and operations are linked to retail growth and hence management believes that there will be increased demand for its services and products. The Company may in future consider expansion of its services and operations to cope up with increased demand and also in turn increase/its profitability.

Other factors fuelling economic growth such as GST, infrastructure development, will also be favorable to Company being part of organized sector.

The overall growth expected in next few years would also mean the growth of its investee businesses and better valuation of its investments.

VIGIL MECHANISM

The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted / framed from time to time. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in exceptional cases.

AUDITORS AND AUDITOR''S REPORT

M/s. NGS & Co. LLP, Chartered Accountants, (Firm Registration No. 119850W) have been appointed as the Statutory Auditors of the Company from the conclusion of the 26^th Annual General Meeting of the Company held on August 02, 2014 till the conclusion of the 29^th Annual General Meeting of the Company. Accordingly, the term of Statutory Auditors is expiring at the ensuing Annual General Meeting of the Company.

In view of above, the Board at its meeting held on May 19, 2017 appointed M/s. DMKH & Co. Chartered Accountants, (Firm Registration No. 116886W) as Statutory Auditors of the Company, subject to approval of the Members of the Company at ensuing Annual General Meeting. Accordingly, it has been recommended to appoint M/s. DMKH & Co., Chartered Accountants, (Firm Registration No. 116886W) as the Statutory Auditors of the Company for a term of 5 years, from the conclusion of the Twenty Ninth Annual General Meeting of the Company. Their appointment shall be subject to further ratification by the members at every Annual General Meeting of the Company during the said term.

The Company has received a written confirmation from the M/s. DMKH & Co., Chartered Accountants, for their appointment as Auditors, if made, shall be in accordance with the criteria and provisions as provided under Section 139 and 141 of the Act.

The Auditors'' Report on the financial statements for the financial year ended March 31, 2017 does not contain any qualification, observation, emphasis of matter or adverse remark.

SECRETARIAL AUDITOR

M/s. Virendra Bhatt, Practising Company Secretary (Membership No. 1157 / Certificate of Practice No.124) was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2016-17, as required under Section 204 of the Act and Rules made there under.

The Secretarial Audit Report for the financial year 2016-17 is appended as Annexure-VI which forms part of this Report.

The said Secretarial Auditors'' Report does not contain any qualifications, reservations or adverse remarks.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act, with respect to Directors'' Responsibility Statement it is hereby confirmed that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) the Directors 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 as at March 31, 2017 and of the profit of the Company for that year;

(iii) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the Directors have prepared the annual accounts for the financial year ended March 31, 2017, on a going concern basis.

(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ON FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

The particulars as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption foreign exchange earnings and outgo, are provided in Annexure-VII which forms part of this Annual Report.

The Company being concentrating on the domestic consumption space does not have any specific exports initiatives to report to members.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. S. Doreswamy, Independent Director as Chairman of the Committee, Mr. V.K. Chopra, Independent Director and Ms. Bala Deshpande, Independent Director, as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROL

The Company has a well-defined risk management framework in place, which provides an integrated approach for identifying assessing, mitigating, monitoring and reporting of all risk associated with the business of the Company.

The Board has delegated responsibility to the Risk Management Committee to monitor and review risk management, assessment and minimization procedures and to develop, implement and monitor the risk management plan and identify, review and mitigate all elements of risk which the Company may be exposed to. The Audit Committee and the Board also periodically review the risk management assessment and minimization procedures.

The Company has in place adequate internal financial controls with reference to Financial Statements. Key risks and threats to the Company and internal Controls are analyzed in the Management Discussion and Analysis which forms part of this Annual Report.

CORPORATE RESPONSIBILITY STATEMENT (CSR)

The Company has constituted a Corporate Social Responsibility Committee ("CSR Committee") in accordance with Section 135 of the Companies Act, 2013. The Board of Directors of the Company has based on recommendation made by CSR Committee formulated and approved CSR Policy of the Company.

The Company has set up "Sone Ki Chidiya" Foundation Trust with an objective to consolidate and merge the CSR funds at Future Group level so that the combined corpus from all the Group entities would help in undertaking better and larger CSR initiatives.

The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is made in prescribed form which is annexed to this Report as Annexure-VIII.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Future Enterprises premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

The Company has in place a robust policy on prevention of sexual harassment at workplace. The policy aims at prevention of harassment of employees as well as contractors and lays down the guidelines for identification, reporting and prevention of sexual harassment. The Company has an Internal Complaints Committee (ICC) which is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the policy. ICC Conducts training workshop mainly focusing on investigation skills, basic counselling skills like listening, paraphrasing and dealing with biases through various kind of case studies, role plays activities based on real life examples, role of ICC, critical attitudes of an ICC member and Investigation process & Report writing, etc. ICC has its presence at corporate office as well as at stores / other locations.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the directors individually.

At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority Shareholders, etc. The performance evaluation of the independent directors was carried out by the entire Board except the independent director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 (12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under Annexure-IX, which is annexed to this Report.

In terms of the provisions of first proviso to Section 197

(12) of the Companies Act, 2013, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said rules are provided in this Annual Report.

Having regard to the provisions of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to Members of the Company. The said information is available for inspection at the registered office of the Company during working hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining such information, such member may write to the Company Secretary and the same will be furnished on request. The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is also available on the Company''s website.

ACKNOWLEDGEMENT

Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders, Future Group entities, and in particular, their employees, regulatory authorities and its banks. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year.

For and on behalf of the Board of Directors

Place : Mumbai V. K. Chopra

Date : May 19, 2017 Chairman

---

Mar 31, 2015

The Members,

The Directors have pleasure in presenting the Twenty Seventh Annual Report together with Audited Statement of Accounts of Future Retail Limited for the financial year ended March 31,2015.

FINANCIAL HIGHLIGHTS

The operating results of the Company for the financial year ending March 31,2015 is summarised below:

(Rs. in Crore)

April 01,2014 January 01,2013 to March 31,2015 to March 31,2014

Sales (Net of Taxes) 10,157.79 11,336.16

Other Operating Income 183.87 241.28

Other Income 26.73 27.74

Total Income 10,368.39 11,605.18

Profit before Depreciation, Exceptional Items & Tax 473.73 374.95

Less: Depreciation 512.88 404.34

Profit /(Loss) before Tax & exceptional items (39.15) (29.39)

Exceptional Items 100.51 30.66

Tax expense (12.70) (1.54)

Profit after Tax 74.06 2.81

Add: Profit brought forward from previous period 68.64 654.07

Surplus available for appropriation 142.70 656.89 appropriation

Proposed Dividend 24.96 13.97

Provision for Dividend Distribution Tax 4.99 2.37

Transfer to General Reserve 7.41 0.28

REVIEW OF PERFORMANCE

This was first full year of performance after realignment of all value retail business under one Company. The Company is now operating in supermarket, home fashion and electronic business which interalia includes formats like Big Bazaar, Food Bazaar, fbb, Food Hall, Home Town and eZone.

We are pleased to inform you that the Retail business of the Company has been showing growth trend during the financial year under review. During the year the Company has recorded growth through increase in presence in various cities. Income from operations for the financial year 2014-15, for the year under review was at Rs. 10,341.66 Crore, which was at Rs. 11,577.44 Crore (on 12 months ended March 2014 basis Rs. 9,241.16 Crore) during the financial period of 2013-14. EBIDTA excluding exceptional items, stood at Rs. 1,142.76 Crore during the financial year 2014-15, which was at Rs. 1067.50 Crore (on 12 months ended March 2014 basis Rs. 887.11 Crore) in the previous financial period. PAT for the financial year under review was Rs. 74.06 Crore, which was at Rs. 2.81 Crore (on 12 months ended March 2014 basis Rs. 7.71 Crore) for the preceding financial period. Due to various realignment exercises undertaken by the Company and different duration of the current financial year and previous financial period, the current financial year result is not comparable with the previous financial period result, which was of fifteen months.

During the financial year 2014-15, the Company is operating through 11.36 million square feet of retail space, spread over pan India basis.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of Rs. 0.60 (30%) per equity share (previous financial period Rs. 0.60 (30%) per equity share) and dividend of Rs. 0.64 (32%) per Class B share (series 1) (previous financial period Rs. 0.64 (32%) per Class B share) for the Financial year ended March 31, 2015.The said dividend shall be subject to the approval of the members at the ensuing annual general meeting.

The dividend, if approved by the shareholders in the Annual General meeting shall based on the paid up share capital as at the date of this report, entail a payout of Rs. 29.95 Crore including dividend distribution tax of Rs. 4.99 Crore. The dividend is free of tax in the hands of the shareholders

SHARE CAPITAL

During the year under review, the Company has issued and allotted 17,26,67,884 Equity shares and 99,47,227 Class B (series I) shares of the Company as under:

- 2,88,594 equity shares were issued and allotted under employees' stock Option scheme - 2012, to the eligible employees of the Company;

- 1,53,84,615 equity shares were issued and allotted to Investor on Preferential basis at a price of Rs. 130 per equity share (including share premium of Rs. 128 per equity share);

- 76,92,307 equity and 1,34,98,300 Class B (series I) warrants were issued and allotted at a price of Rs. 130 per equity share (including share premium of Rs. 128 per equity share) and Rs. 68.69 per Class B (series I) shares (including share premium of Rs. 66.69 per Class B (series I) share) respectively to Future Corporate Resources Limited, a promoter group company of which 76,92,307 equity shares were issued and allotted on exercise of option by Future Corporate Resources Limited (FCRL) as equity Warrant holder, at a price of Rs. 130 per equity share (including share premium of Rs. 128 per equity share). Class B Warrant holder have not exercised option for allotment of Class B (series 1) shares in the financial year. The option for the same can be exercised till expiry of eighteen months from the date of allotment of Warrants i.e. August 19, 2014.

- 14,93,02,369 equity shares and 99,47,227 Class B (series I) shares were issued and allotted to shareholders' on Rights basis at as price of Rs. 103 (including share premium of Rs. 101 per equity share) and Rs. 50.25 (including share premium of Rs. 48.25 per Class B (series I) share).

RIGHTS ISSUE

During the year under review, your Company issued and allotted 14,93,02,369 equity shares of Rs. 2 each at a premium of Rs. 101 per equity share and 99,47,227 Class B (series 1) shares of Rs. 2 each at a premium of Rs. 48.25, aggregating to Rs. 1589.55 Crore to the existing shareholders of the Company on a rights basis (the "Rights Issue"). The total shares allotted pursuant to the Rights Issue were admitted for listing and trading on Bse Limited and the National stock exchange of India Limited with effect from February 11,2015.

Your Directors take this opportunity to thank all the shareholders for their overwhelming response and for the confidence reposed by them in the Company. The issue proceeds are being utilised for the purpose as stated in the Letter of Offer and same is also being reviewed by the monitoring agency appointed for the said purpose.

SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES

SUBSIDIARY COMPANIES (In Alphabetical Order)

The Company has following subsidiaries (including step down subsidiaries), as at the end of financial year ended March 31,2015.

Futurebazaar India Limited

Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future group for providing on-line shopping experience through e-portal www.futurebazaar. com. your Company holds 100% in FBIL. FBIL is successfully operating its e-retailing business and during the financial year ended March 31,2015, it has registered income from operations amounting to Rs. 12.15 Crore and its net loss stood at Rs. 0.41 Crore.

Future Media (India) Limited

Future Media (India) Limited (FMIL) is the group's media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consume. FMIL offers relevant engagement through its media properties like Visual spaces, Television and Activation. The Company holds equity capital of 93.10% in FMIL however, considering the total capital comprising of convertible preference capital the Company's holding in the total capital of FMIL works out to 35.37%. FMIL also has Convertible Preference shares, which has not yet been converted into equity shares. During the financial year ended March 31,2015, FMIL registered income from operations amounting to Rs. 32.79 Crore and the net loss stood at Rs. 2.76 Crore.

Future Supply Chain Solutions Limited

Future Supply Chain Solutions Limited (FSCSL) is designed to operate in the logistics, transportation, distribution and warehousing space. FsCsL provides solutions in the areas of integrated supply Chain Management, warehousing, distribution and Multi Modal transportation.Your Company has 70.17% stake in FSCSL. FSCSL has warehousing space of 3.6 million square feet spread over all across India. FSCSL is currently building large scale warehousing facilities and also increasing its presence in 3PL logistics solutions. During the year ended March 31, 2015, FSCSL has registered income from operations amounting to Rs. 407.96 Crore and the earned net profit of Rs. 24.73 Crore. During the year under review, FSC Distribution Services Limited, a 100% subsidiary company of FSCSL was merged with FSCSL with effect from October 05, 2014, with appointed date of April 1, 2014.

Staples Future Office Products Limited

Staples Future Office Products Limited (SFOPL) is designed to capture the consumption space of office supplies, office equipments and products. SFOPL was formed as a Joint Venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). Your Company holds equity capital of 60% in SFOPL however, considering the total capital comprising of convertible preference capital the Company's holding in the total capital of SFOPL works out to 52.17%. During the financial year ended March 31, 2015, SFOPL has registered income from operations amounting to Rs. 80.26 Crore and the net loss stood at Rs. 4.92 Crore.

Office Shop Private Limited

Office Shop Private Limited (OSPL) was incorporated to deal in the business of distribution services. OSPL is 100% subsidiary of SFOPPL and accordingly, is step down subsidiary of the Company. OSPL has earned revenue of Rs. 51.54 Crore & incurred net loss of Rs. 9.62 Crore during the year ended March 31,2015.

During the year under review, following companies ceased to be subsidiaries and joint venture of the Company.

Future Home Retail Limited Future Freshfoods Limited Future Knowledge Services Limited Future Learning and Development Limited Home Solutions Retail (India) Limited Integrated Food Park Private Limited NuZone Ecommerce Infrastructure Limited Winner Sports Limited

ASSOCIATES

Galaxy Entertainment Corporation Limited

Galaxy Entertainment Corporation Limited (GECL) is a leisure and entertainment organization. The company is into operation of family entertainment gaming centers, food courts in shopping malls and restaurants. GECL also undertakes sponsorship contracts. Your Company has 31.55% stake in GECL. During the financial year ended March 31, 2015, GECL has registered income from operations amounting to Rs. 40.42 Crore and the net profit stood at Rs. 2.95 Crore

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited (FECIL) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. The Company holds equity capital of 70.43 % however, considering total capital comprising of convertible preference capital the Company's holding in the total capital of FECIL works out to 40.33%. FECIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2015, FECIL registered income from operations amounting to Rs. 11.96 Crore and the net loss stood at Rs. 2.06 Crore.

JOINT VENTURES (In Alphabetical Order)

Apollo Design Apparel Parks Limited and Goldmohur Design & Apparel Park Limited

The Company has entered into joint venture with National Textile Corporation (NTC) for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate SPV companies have been created viz. Apollo Design Apparel Parks Limited (ADAPL) & Goldmohur Design & Apparel Park Limited (GDAPL). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and Goldmohur Mills respectively as per the memorandum of understanding and other documents signed with NTC. During the financial year ended March 31, 2015 ADAPL registered income from operations amounting to Rs. 257.23 Crore and earned net profit of Rs. 7.21 Crore. Further during the year GDAPL registered income from operations amounting to Rs. 245.91 Crore and earned net profit of Rs. 7.20 Crore.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (FGI-Life) is Company's joint venture in the Life insurance sector. FGI-Life has introduced many insurance products to suit requirements of various categories of customers. During the financial year ended March 31,2015, FGI-Life has registered income from operations of Rs. 587.83 Crore and net profit of Rs. 0.99 Crore.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (FGI- Nonlife) is Company's joint venture in the general insurance sector. FGI-Nonlife has introduced insurance products for various general insurance needs of the different categories of customers. During the financial year ended March 31,2015, FGI-Nonlife has registered income from operations of Rs. 1079.12 Crore and net profit of Rs. 60.29 Crore.

Shendra Advisory Services Private Limited

shendra Advisory services Private Limited (shendra) is a sPV with respect to the Company's insurance arm Future Generali India Insurance Company Limited. During the financial year ended March 31, 2015, shendra has registered income from operations of Rs. 0.02 Crore and net loss of Rs. 0.004 Crore.

Sprint Advisory Services Private Limited

sprint Advisory services Private Limited (sprint) is a sPV with respect to the Company's insurance arm Future Generali India Life Insurance Company Limited. During the financial year ended March 31, 2015, sprint has registered income from operations of Rs. 0.02 Crore and net profit of Rs. 0.01 Crore.

A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as Annexure 1 as AOC-1 to this report forming part of Annual Report.

DISCLOSURE REQUIREMENTS

Policy for Code of Practices and Procedures for Fair Disclosure of unpublished Price sensitive Information are available on website of the Company at the link:

http://www.futureretail.co.in/pdf/uPsi_Code.pdf

Policy for CsR Policy is available on website of the Company at the link:

http://www.futureretail.co.in/pdf/CsR-Policy.pdf

Policy for Code of Conduct is available on website of the Company at the link:

http://www.futureretail.co.in/pdf/Code_of_Conduct.pdf

Policy for Independent Directors Familiarization is available on website of the Company at the link: http://www.futureretail.co.in/pdf/ID_Familiarization.pdf

Policy for Terms and conditions of appointment of Independent Directors is available on website of the Company at the link:

http://www.futureretail.co.in/pdf/TC_of_ID.pdf

Policy for Material subsidiary is available on website of the Company at the link:

http://www.futureretail.co.in/pdf/Mat_sub_Policy.pdf

Policy for Vigil Mechanism is available on website of the Company at the link: http://www.futureretail.co.in/pdf/Vigil.pdf

Policy for Related Party Transaction is available on website of the Company at the link: http://www.futureretail.co.in/pdf/RPT_Policy.pdf

The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance of the provisions of section 177(9) of the Act and the Clause 49 of the Listing Agreements with the stock Exchanges.

NUMBER OF BOARD MEETINGS

The Board of Directors met 5 (Five) times during the financial year 2014-15. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of the Annual Report.

COMMITTEES OF THE BOARD OF DIRECTORS

Details of Committees of the Company along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of the Annual Report.

EXTRACT OF ANNUAL RETURN

In terms of provisions of section 92(3) of the Companies Act, 2013, an extract of Annual Return in prescribed format is annexed to this Report as Annexure II.

DECLARATION UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013

The Company has received declaration from all the Independent Director(s) of the Company stating that they meet the criteria of independence as provided under sub section (6) of section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement:

a) Mr. s. Doreswamy

b) Mr. Anil Harish

c) Ms. Bala Deshpande

d) Mr. V. K. Chopra

PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013:

Details of Loans granted, Guarantee provided and Investment made by the Company which are covered under the provision of section 186 of the Companies Act, 2013, is provided in note no. 50 of Notes forming part of standalone Financial statements.

RELATED PARTY TRANSACTIONS

All transactions entered into with related parties (as defined under Section 188(3) of the Companies Act, 2013 and Clause 49 of the Listing agreement) during the financial year under review were in the ordinary course of business and on arms length pricing basis.

The particulars of contracts or arrangements with related parties are given under section 188(1) of the Companies Act, 2013. As there were no materially significant transactions with the related parties during the financial year 2014-15, which were in conflict with the interest of the Company and hence, enclosure of Form AOC-2 is not required.

RESERVES

For the financial year 2014-15, there is Rs. 5091.90 Crore, amount which is proposed to be appropriated towards Reserves.

CLAUSE 5A OF THE LISTING AGREEMENT

Pursuant to clause 5A.II of the Listing Agreement, the aggregate number of shareholders is 92 Equity and 84 Class B (series I) amounting to 92,010 equity and 9,250 Class B (series I) outstanding shares which are lying in the unclaimed suspense Account as on April 01,2014. There were no shareholders who approached issuer for transfer of shares and to whom shares were transferred from unclaimed suspense Account upto March 31,2015. The total shareholders remains to be 92 equity and 84 as Class B (series I) shares 92,010 equity and 9,250 Class B (series I) outstanding shares lying in the unclaimed suspense Account as on March 31, 2015.

All the unclaimed shares are credited to a Demat unclaimed suspense Account and all the corporate

benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. The Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

MATERIAL CHANGES AND COMMITMENTS

Your Directors further state that there were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts, except as discussed about the demerger of the "Retail undertaking" and transfer to Bharti Retail Limited and vesting of the demerged "Retail Infrastructure undertaking" of Bharti Retail Limited with the Company. More detail related to the scheme has been given hereunder.

FUTURE OUTLOOK

The Board of Directors of the Company has approved the composite scheme of arrangement for the consolidation of the retail and retail infrastructure businesses of Bharti Retail Limited (BRL) and the Company.This will be achieved by way of two simultaneous demergers i.e. the FRL Demerger and the BRL Demerger as part of the composite scheme of arrangement. Accordingly, the Retail Business undertaking of the Company shall stand transferred to and vested in BRL as a going concern and the Retail Infrastructure undertaking of BRL shall stand transferred to and vested in the Company as a going concern.

In consideration for the transfer and vesting of the Retail Business undertaking of the Company in BRL, BRL shall issue and allot fully paid up equity shares to all the shareholders of FRL (which include holders of equity shares of FRL and holders of equity shares of FRL classified as Class B (series-1) shares. The shares of BRL are proposed to be listed. Further, in consideration for the transfer and vesting of the Retail Infrastructure undertaking of BRL in FRL, FRL shall issue and allot fully paid up equity shares to all the existing shareholders of BRL. Both the Companies will be under control of the Future Group.

With the above consolidation of the retail and retail infrastructure business in two separate entities, will ensure unlocking of value, attribution of appropriate risk and valuation to the Core Retail Business based on its risk-return profile and cash flows, more focused leadership and dedicated management, greater visibility on the performance of Core Retail Business, segregation of other businesses and activities and other non-core assets from Core Retail undertaking of FRL and emergence of BRL (to be renamed) as a Core Retail company focusing on in-store retail business.

The Company continues to explore possibilities to monetise its non-core retail investments which will help in improving liquidity and net worth position of the Company

With improved debt equity ratio, due to increase in net worth of the Company and subsequent reduction of the debts, the Credit Analysis & Research Limited (CARE), has revised its rating as under for short Term borrowings to Care A1 [A One Plus] and Long Term borrowings as well as Long Term Non-Convertible Debentures to CARE AA - [Double A Minus] as of March 31,2015.

With positive outlook for the economy, the Company is confident to achieve better growth in the years to come and the benefits of the consolidation will ensure better profitability for the Company.

PUBLIC DEPOSITS

Your Company has not accepted any deposits from the public during the year under review.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review:

In terms of the provisions of the Companies Act, 2013, Mr.Vijay Biyani retires from the Board of Directors of the Company by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re- appointment.

The term of Mr. Kishore Biyani, as Managing Director, was for a period of 5 years from April 01,2010 which expired on March 31, 2015. The Board is seeking to reappoint Mr. Kishore Biyani as a Managing Director for a period of 3 years. Detail of the proposal for appointment of Mr. Kishore Biyani is mentioned in the Statement under Section 102 of the Companies Act, 2013 of the Notice of the 27th Annual General Meeting. His appointment is appropriate and in the interest of the Company.

The Notice convening the forthcoming Annual General Meeting includes the proposal for re-appointment of aforesaid Director. A brief resume of the Directors seeking re-appointment at the forthcoming Annual General Meeting and other details as required under to be disclosed in terms of Clause 49 of the Listing Agreement forms part of the said Notice. None of the Directors are disqualified for re-appointment under Section 164 of the Companies Act, 2013.

The Company is also proposing resolution for the remuneration payable to Mr. Kishore Biyani as a Managing Director of the Company to be approved by the Shareholders, in view of the requirement to make application to the Central Government for approval of remuneration, due to inadequacy of profits.

The details as required by clause 49 of the listing agreement, is given as part of the notice.

CORPORATE GOVERNANCE

A report on Corporate Governance together with Auditors' Certificate as required under Clause 49 of the Listing Agreement forms part of this Annual Report.

VIGIL MECHANISM

The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted / framed from time to time. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the CEO / Chairman of the Audit Committee in exceptional cases.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion & Analysis Report as required under Clause 49 of the Listing Agreement is presented separately and forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard.

AUDITORS AND AUDITORS' REPORT

At the 26th Annual General Meeting of the Company held on August 02, 2014, M/s NGS & Co. LLP, Chartered Accountants, Mumbai was appointed as statutory auditors of the Company, for tenure of three years, to hold office till the conclusion of the 29th Annual General Meeting.

In terms of the first proviso to section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed before the members for ratification at every Annual General Meeting.

Accordingly, the appointment of M/s. NGs & Co. LLP, Chartered Accountants, Mumbai, as statutory auditors of the Company, placed before for ratification by the shareholders.

The Auditors' Report does not contain any disqualification, reservation or adverse mark.

SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

The Company has appointed Mr.Virendra Bhatt, Practising Company Secretary to conduct Secretarial Audit of the Company for the financial year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor Report is annexed to this report as Annexure III.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is hereby confirmed that:

a) in the preparation of the annual accounts for the financial year ended March 31,2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) the Directors 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 as at March 31,2015 and of the profit of the Company for that year;

c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Directors have prepared the annual accounts for the financial year ended March 31,2015, on a going concern basis.

e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

PARTICULARS OF EMPLOYEE STOCK OPTION SCHEME 2012 (ESOS-2012)

Future Retail Limited (FRL) has granted Options to eligible employees in 2013 under PRIL-Employee Stock Option Scheme 2012 ("ESOS 2012").

In a Scheme of demerger, "FRL" (Demerged Company) has transferred its Fashion business under the brand name "Pantaloons" and variations thereof to "Peter England Fashions and Retail Limited" (Resulting Company); demerger scheme has been duly sanctioned by the Bombay High Court in its order dated March 01, 2013.

In a subsequent Scheme of demerger, "FRL" (Demerged Company) has transferred its fashion business carried on under the format brands of Central, Brand Factory, and Planet Sports to "Future Lifestyle Fashions Limited"; demerger scheme has been duly sanctioned by the Bombay High Court in its order dated May 10, 2013.

The Employee Stock options of the Company has adjusted for the corporate actions on Value for Value exchange and hence there is no incremental benefit to the option grantee and also it does not result in change in aggregate Fair Value of the Options.

FRL ESOP 2015 has been approved by the Shareholders of the Company vide resolution passed through postal ballot on March 30, 2015. The Shareholders of the Company through postal ballot have also approved formation of Future Retail Limited Employee Welfare Trust for implementation of FRL ESOP 2015.

PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION ON FOREIGN EXCHANGE EARNINGS AND OUTGO ETC.

The particulars as required under Section I34(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption foreign exchange earnings and outgo, are provided in Annexure IV which forms part of this report.

The Company being concentrating on the domestic consumption space does not have any specific exports initiatives to report to members.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. s. Doreswamy, Independent Director as Chairman of the Committee and Mr. V. K. Chopra, Independent Director and Ms. Bala Deshpande, Independent Director, as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested statutory as well as Internal Auditors. significant audit observations and follow up actions thereon are reported to the Audit Committee.

CORPORATE RESPONSIBILITY STATEMENT (CSR)

The Company has constituted a Corporate social Responsibility Committee ("CsR Committee") in accordance with section 135 of the Companies Act, 2013. The Board of Directors of the Company has based on recommendation made by CsR Committee formulated and approved CsR Policy of the Company. The Company has identified the amount to be spent for the purpose of CsR. It is proposed to create a foundation at group level to carry on CsR initiative at group level. The process of creating the foundation is expected to complete by end of september 2015.

The disclosures as per Rule 9 of Companies (Corporate social Responsibility Policy) Rules, 2014 is made in prescribed form which is annexed to this Report as Annexure V.

DISCLOSURE UNDER THE SExUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, Prohibition AND REDRESSAL) ACT, 2013

Your Company has always believed in providing a safe and harassment free workplace for every individual working in Future Retail premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment.

Your Directors further state that during the year under review, there were no cases filed pursuant to the sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

NOMINATION AND REMUNERATION POLICY

In terms of requirements prescribed under Companies Act, 2013, the Nomination and Remuneration Committee has approved Remuneration Policy for payment of remuneration to Directors and Key Managerial Personnel. Details of Remuneration Policy are provided in Annexure VI, which is annexed to this Report.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the directors individually. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Independent Director being evaluated. The performance evaluation of the Chairman and ^n-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under Annexure VII, which is annexed to this Report.

In terms of the provisions of first proviso to section 136 (1) of the Companies Act, 2013, information pursuant to section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is excluded from the Annual Report being sent to the members of the Company and is available for inspection by the Members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company secretary and the same shall be provided.

The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is available on the website of the Company.

INTERNAL FINANCIAL CONTROL

The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report.

AWARDS AND RECOGNITIONS

- Hat-trick of Awards at INTEROP Awards 2014 Business Technology services scores A Hat-trick of Awards at Interop Awards 2014.

- Asia Pacific HRM Congress 2014

Future Learning triumphs at Asia Pacific HRM Congress 2014 in the 'Innovation in Retention' category.

- 'Power To The People' and 'From grocery to gift' at the esteemed EFFIE Awards

Big Bazaar was awarded with 'Power To The People' and 'From grocery to gift' at the esteemed EFFIE Awards.

- Images Most Admired Food & grocery Retailer of the Year

Big Bazaar won the 'Images Most Admired Food & grocery Retailer of the year in Food & grocery category.

- Images Excellence Awards for Largest National Expansion

Food Bazaar won the 'Images Excellence Awards for Largest National Expansion' for the year 2014

- Dun & Bradstreet (D&B) Corporate Award 2015 Future Retail won the Dun & Bradstreet (D&B) Corporate Award 2015 for its leading performance in the Retail sector.

ACKNOWLEDGEMENT

your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its shareholders, Future group entities, and in particular, their employees, regulatory authorities and its banks. your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year.

On behalf of the Board of Directors

Kishore Biyani Rakesh Biyani

Managing Director Joint Managing Director

Mumbai

May 25, 2015

---

Mar 31, 2014

The Members,

The Directors are pleased to present the twenty sixth annual Report together with the audited statements of accounts for the period ended March 31, 2014.

FINANCIAL HIGHLIGHTS

The operating results of the company for the period under review are as follows:

( Rs. in crores)

January 01, 2013 July 01, 2011 to to March 31, 2014 December 31, 2012

Sales (net of taxes) 11,336.16 6,771.78

Other operating income 241.28 215.95

Other income 27.74 27.70

Total income 11,605.18 7,015.43

Profit before Depreciation, exceptional items & tax 374.95 343.59

Less: Depreciation 404.34 311.87

Profit before tax (29.39) 31.72

Exceptional items 30.66 256.60

Less: earlier year''s income tax - -

Less: Provision for taxation (1.54) 15.06

Profit after Tax 2.81 273.26

Add: Profit brought forward from previous year 654.07 506.35

Surplus available for Appropriation 656.89 779.61

APPROPRIATION

Excess Provision Reversal of tax on Dividend - (0.85)

Pursuant to the composite schemes of arrangements 451.62 -

Debenture Redemption Reserve 120.00 69.38

Proposed Dividend 13.97 25.54

Proposed Dividend on Preference share - -

Provision for Dividend tax 2.37 4.14

Transfer to general Reserve 0.28 27.33

REVIEW OF PERFORMANCE

The performance review is for the financial period of fifteen months pursuant to extension of the present accounting period by three months. in the current financial period we mark beginning of a new innings and laying the foundation for the company''s future, as major realignment initiatives of the company have been achieved. the company has also changed its name to Future Retail limited from its earlier name, viz. Pantaloon Retail (india) limited. the company is now operating in hypermarket and home business including Big Bazaar, Food Bazaar, fbb, Home town and eZone.

We are pleased to inform you that the Retail business of the company has been showing growth trend during the financial period under review. the company is now present in hypermarket segment and home business and for the period under review recorded growth through increase in presence in various cities. income from operations for the financial period under review were at Rs. 11,577.44 crores which was at Rs. 6,987.73 crores during the financial period of 2011-12. PBDit excluding exceptional items, stood at Rs. 1,067.49 crores in during the financial period of 2013-14, which was at Rs. 804.00 crores in the previous financial period. Pat for the financial period under review was Rs. 2.81 crores, which was at Rs. 273.26 crores for the preceding financial period. Due to various realignment exercises undertaken by the company and different duration of the current and previous financial period, the current financial period result is not comparable with the previous financial period, which was of eighteen months.

During the financial period 2013-14, the company is operating through 10.36 million square feet of retail space, spread over pan india basis.

SCHEME OF ARRANGEMENT:

As part of realignment exercise, the company has given effect to three schemes of arrangement during the financial period under review, detail of which are given hereunder:

1. scheme of arrangement between the company and Pantaloons Fashion and Retail limited.

Pursuant to the approval of the members at the court convened Meeting held on December 06, 2012, the company filed petition with the Hon''ble High court at Bombay for demerger of Pantaloons Format Business to Peter england Fashions and Retail limited now known as Pantaloons Fashion and Retail limited (PFRl). the demerged undertaking comprises of company''s business under the name "Pantaloons" together with all assets, liabilities, brands etc. attached to the said Brand.

Your directors are pleased to inform that the demerger of Pantaloon Format Business scheme has been approved by the Hon''ble High court of Judicature at Bombay on March 1, 2013, and thereafter on filing of the certified copy of the court order with Registrar of companies, Maharashtra, Mumbai, on april 8, 2013, the entire assets and liabilities pertaining to Pantaloons Format Business were transferred and stand vested, as a going concern, in the PFRl effective from July 1, 2012 ("appointed Date").

Pursuant to the approved scheme, PFRl, without any further application or deed, issued and alloted shares, credited as fully paid up, to the extent indicated below, to the members (including class B (series 1) shareholder) whose name appeared in the Register of Members of company as on the Record Date (april 18, 2013) or to their respective heirs, executors, administrators or other legal representatives or the successors-in-title, as the case may be, in the following manner:

"1 (one) fully paid equity share of Rs. 10/- (Rupees ten only) each of PFRl for every 5 (Five) equity shares of Rs. 2/- (Rupees two) each held in the company.

1 (one) fully paid equity share of Rs. 10 (Rupees ten only) each of PFRL for every 5 (Five) class B (series 1) shares of Rs. 2 (Rupees two) each held in the company."

Fractional entitlement arising out of the aforesaid allotment were consolidated and allotted to one of the persons nominated by PFRL Board. sale Proceeds of these shares was distributed to shareholders who were entitled to such fractional shares. the shares of the PFRL were listed on the stock exchanges after compliance with the requirements of the stock exchanges and regulatory authorities.

2. Composite scheme of arrangement and amalgamation between PRIL (FRL), FVIL(FCEL), LEE, ILCL and FLFL

The composite scheme of arrangement and amalgamation between Pantaloon Retail (india) limited (now known as - ''Future Retail limited'') and Future lifestyle Fashions limited (FLFL) and indus-league clothing limited and lee cooper (india) limited and Future Ventures india limited (now known as – ''Future consumer enterprise limited'') (FCEL) and their respective shareholders and creditors ("The Fashion scheme") under the provisions of sections 391-394 of the companies act, 1956 for demerger of respective fashion format business of the company (Fashion Format Business) and Fcel with effect from appointed Date of January 1, 2013, as defined in the Fashion scheme, has been given effect on May 29, 2013, after receipt of High court approval. Pursuant to the same, all the assets and liabilities pertaining to the Fashion Format Business has been demerged and vested in FLFL. accordingly, the shares of FlFl have been issued to the shareholders of the company as on the June 25, 2013 as stated in the Fashion scheme, as per entitlement ratio of 1 (one) fully paid equity share of Rs. 2/- (Rupees two only) each of FlFl for every 3 (three) equity shares &/or class B (series 1) share of Rs. 2/- (Rupees two) each held in the company.

Fractional entitlement arising out of the aforesaid allotment were consolidated and allotted to one of the persons nominated by FLFL Board. sale Proceeds of these shares was distributed to shareholders who were entitled to such fractional shares. the shares of the FLFL were listed on the stock exchanges after compliance with the requirements of the stock exchanges and regulatory authorities.

3. Scheme of amalgamation between the company and Future Value Retail limited

During the period under review, the Board of Directors of the company approved the amalgamation of Future Value Retail limited (FVRL) with the company pursuant to the scheme under sections 391-394 of the companies act, 1956 with effect from appointed Date of July 1, 2012 ("the Retail scheme"). FVRl is wholly owned subsidiary of your company having core retail business formats like Big Bazaar, Food Bazaar etc. the Retail scheme for merger of FVRl with effect from July 1, 2012, has been approved by Hon''able High court of Judicature at Bombay on January 31, 2013 and scheme has been made effective upon filing of the certified copy of court order with Registrar of companies, Maharashtra on February 11, 2014. Pursuant to the Retail scheme all the assets and liabilities of FVRl was merged and vested in the company.

The company issued debentures as stated in paragraphs given hereunder for the debentures held by investors in FVRl. no shares were issued as 100% of capital in FVRL is held by the company.

4. Divestment of stake in Future generali india life insurance company limited on December 17, 2013, the company divested part of its stake in one of its insurance joint venture company, Future generali india life insurance company limited as a part of company''s strategy to focus on retail segment. at the end of the financial period ended March 31, 2014, your company directly holds 3% stake in Future generali india life insurance company limited.

DIVIDEND

The Board of Directors of the company has recommended a dividend of Rs. 0.60 (30%) per equity share (previous financial period Rs. 1.10 (55%) per equity share) and dividend of Rs. 0.64 (32%) per class B share (series 1) (previous financial period Rs. 1.14 (57%) per class B share (series 1) for the financial period ended March 31, 2014. the said dividend shall be subject to the approval of the members at the ensuing annual general meeting.

The dividend, if approved by the shareholders in the annual general meeting shall based on the paid up share capital as at the date of this report, entail a payout of Rs. 16.34 crores including dividend distribution tax of Rs. 2.37 crores. the dividend is free of tax in the hands of the shareholders.

EQUITY SHARE CAPITAL

Paid-up Share Capital

Equity Capital

After the completion of the financial period under review, pursuant to the approval of members through Postal Ballot and employees exercise their options the company issued and allotted 2,17,594 equity shares of Rs. 2/- each to employees under esos 2012 scheme on april 29, 2014.

After above allotments, the paid up equity share capital as on date Rs. 46,36,00,370 divided into 21,58,71,033 equity shares of Rs. 2/- each and 1,59,29,152 class B (series-1) shares of Rs. 2/- each.

DEBENTURES

Pursuant to the scheme of amalgamation and arrangement of Future Value Retail limited (FVRl), a wholly owned subsidiary company with the company under the provisions of section 391- 394 of the companies act, 1956 for merger of FVRl with effect from appointed Date of July 1, 2012 after receipt of approval of Hon''able High court of Judicature at Bombay on January 31, 2013 and scheme has been made effective upon filing of the certified copy of court order with Registrar of companies,

Maharashtra on February 11, 2014. Pursuant to the same compulsorily convertible Debentures (ccDs) of Rs. 150 crores and optionally convertible Debentures (ocDs) of Rs. 250 crores issued by FVRl transferred to the company.

During the period under review, the company has raised long term funds through non-convertible Debentures aggregating Rs. 275 crores. the funds raised were utilised for the objects as stated at the time of raising of funds.

FIXED DEPOSITS

The company has not accepted any Deposits during the period under review.



REPORT ON CORPORATE GOVERNANCE

A detailed report on corporate governance together with auditors certificate as required under clause 49 of the listing agreement has been included as an enclosure to this Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The management discussion and analysis as required under clause 49 of the listing agreement has been dealt with extensively as part of this annual Report.

THE FUTURE

The focus on strengthening core competency in core retail operations, by optimising store network, improving store productivity by increasing store efficiency through upgraded high margin product offering and rationalising the operating area.

Introduction of reinvented fbb product mix, ensured availability of the fashion products for the youth and other customer categories at highly competitive pricing. in food segment as well the new categories offered customers multiple choices resulting in better turnover. similarly other categories such as furniture, home furnishing and electronics also offered revised product mix, giving choice of hot and current products to customers. the company also introduced the certain customer centric initiative resulting in addition of the new customer categories.

Further various realignment and divestment initiative, ensured reduced debt burden on the company resulting in overall reduction in finance cost. in addition to the above, certain strategic management changes made during the financial period under review would result in further cost reduction and thereby contributing to the profitability in the years to come.

SUBSIDIARY COMPANIES & JOINT VENTURES

SUBSIDIARY COMPANIES (In Alphabetical Order)

The company has following subsidiaries (including step down subsidiaries) as at the end of financial period ended March 31, 2014.

FSC Brand Distribution Services Limited

Fsc Brand Distribution services limited (FscBDsl) was incorporated to deal in the business of distribution services. FscBDsl is subsidiary of Future supply chain solutions limited, another subsidiary of the company and accordingly is step down subsidiary of the company. the company has earned revenue of Rs. 5.69 crores & incurred net loss for Rs. 4.29 crores during the period ended March 31, 2014.

Future E-Commerce Infrastructure Limited

Future e-commerce infrastructure limited (Fecil) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. the company has 70.43% stake in Fecil. the company also has convertible Preference shares, which has not yet been converted into equity shares. During the period ended March 31, 2014, Fecil registered income from operations amounting to Rs. 61.88 crores and the net loss stood at Rs. 21.20 crores.

Future Freshfoods Limited

Future Freshfoods limited (FFl) is a company which caters to the sourcing and supply of fresh food products to retail formats of the group. FVRl was holding company of FFl holding 79.17% of equity capital in FFl. the company acquired the balance shares held by other shareholders in the company and with merger of FVRl with the company, FFl became 100% subsidiary of the company. During the period ended March 31, 2014, FFl registered income from operations amounting to Rs. 0.05 crores and net loss stood at Rs. 0.44 crores.

Future Home Retail Limited

Future Home Retail limited (FHRl) has been created as subsidiary with the objective to transfer the retail electronic and consumer durable business from PRil. During the period ended March 31, 2014, FHRl registered total income of Rs. 0.01 crore and net loss of Rs. 0.0007 crore.

Futurebazaar India Limited

Futurebazaar india limited (FBil) is set up as the e-Retailing arm of the Future group for providing on-line shopping experience through e-portal www.futurebazaar.com. your company holds 100% in FBil. FBil is successfully operating its e-retailing business and during the period ended March 31, 2014, it has registered income from operations amounting to Rs. 22.33 crores and its net loss stood at Rs. 0.82 crores.

Future Knowledge Services Limited

Your company holds 100% in Future Knowledge services limited (FKsl) which has a net loss of Rs. 3.66 crore as on March 31, 2014.

Future Learning and Development Limited

Your company holds 100% in Future learning and Development limited (FlDl) which has during the period ended March 31, 2014 registered total revenue of Rs. 0.10 crore with net loss of Rs. 1.75 crore.

Future Media (India) Limited

Future Media (india) limited (FMil) is the group''s media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consumers. FMil offers relevant engagement through its media properties like Visual spaces, Print, Radio, television and activation. your company has 93.10% stake in FMil. the company also has convertible Preference shares, which has not yet been converted into equity shares. During the period ended March 31, 2014, FMil registered income from operations amounting to Rs. 57.40 crores and the net loss of Rs. 14.19 crores.

Future Supply Chain Solutions Limited

Future supply chain solutions limited (Fscsl) is designed to operate in the logistics, transportation, distribution and warehousing space. Fscsl provides solutions in the areas of integrated supply chain Management, warehousing, distribution and Multi Modal transportation. your company has 70.17% stake in Fscsl. Fscsl has warehousing space of 2.7 Million square feet spread over all across india. the company is currently building large scale warehousing facilities and also increasing its presence in 3Pl logistics solutions. During the period ended March 31, 2014, Fscsl registered income from operations amounted to Rs. 521.34 crores and the earned net profit of Rs. 9.33 crores.

Home Solutions Retail (India) Limited

Home Solutions Retail (India) Limited (HSRIL) was incorporated to operate in the home and hard goods consumption space. your company has 66.86% stake in HsRil. During the period ended on March 31, 2014, HsRil registered an income from operations of Rs. 0.05 crores and net loss of Rs. 1.05 crores.

NUZONE ECOMMERCE INFRASTRUCTURE LIMITED

NUZONE ECOMMERCE INFRASTRUCTURE LIMITED (NEIL) has been created as subsidiary with the objective to transfer the wholesale and sourcing business related to electronic and consumer durable business from PRil. During the period ended March 31, 2014, neil has a net loss of Rs. 0.0009 crore.

Office Shop Private Limited

Office Shop Private Limited (OSPL) was incorporated to deal in the business of distribution services. OSPL is 100% subsidiary of sFoPPl and accordingly, is step down subsidiary of the company. the company has earned revenue of Rs. 59.42 crores & incurred net loss for Rs. 5.20 crores during the period ended March 31, 2014.

Staples Future Office Products Private Limited

Staples Future office Products Private limited (SFOPPL) is designed to capture the consumption space of office supplies, office equipments and products. sFoPPl was formed as a Joint Venture between the company and staples asia investment limited (a subsidiary of staples inc usa) your company has 60% stake in sFoPPl. During the period ended March 31, 2014, sFoPPl registered income from operations amounting to Rs. 160.34 crores and the net loss stood at Rs. 15.75 crores. your company has acquired a part of the stake from staples asia investment limited by which sFoPPl became subsidiary of your company.

Winner Sports Limited

Winner sports limited (WSL) is a wholly owned subsidiary of the company. at present the WSL does not have any operating business and management is evaluating various business opportunities. During the period ended March 31, 2014, Wsl registered net loss of Rs. 0.02 crore.

Companies which moved out of subsidiary status

Future Agrovet Limited (subsidiary upto 11-11-2013)

Future agrovet limited (FAL) is to strengthen sourcing and distribution of staples and other food products for the company. FAL has sourcing and distribution bases at all key cities across the country. the company was holding 96.16% stake in FAL. the company divested the stake in Fal, which has been taken over by another group company, Future consumer enterprise limited with effect from november 11, 2013. Due to divestment within the group, it is ensured that various food formats of the company continue to get supply of staples and other food products from FAL.

Future Lifestyle Fashions Limited

Future lifestyle Fashions limited (FLFL) was incorporated on May 30, 2012 and was wholly owned subsidiary of your company. With a view to dedicated focus on fashion business, comprising of central, Brand Factory, Planet sports etc. of your company and identified fashion business of Future consumer enterprise limited (earlier known as - Future Ventures india limited) (FCEL), was demerged and vested with FlFl under the provisions of section 391-394 of the companies act, 1956 and was effected on May 29, 2014. Pursuant to the terms of the scheme, FLFL has issued equity shares to the shareholders of the company and FCEL and thereby moved out of the subsidiary status of the company.

Future Value Retail Limited

Future Value Retail limited (FVRL) was a wholly owned subsidiary of your company and engaged in Value Retail Business under various formats like Big Bazaar, Food Bazaar etc. and other small format in Value Retail Business. However, as part of the merger scheme various business formats of FVRL has been transferred to the company.

As required under the listing agreement with the stock exchanges, the company is mandatorily required to prepare the consolidated Financial statements, according to the applicable indian accounting standards and reflects the financial position of all the subsidiary companies of the company.

A statement pursuant to section 212 of the companies act, 1956 relating to subsidiary companies is given as an annexure to the annual Report. Further the Board has passed resolution pursuant to the general circular no. 2/2011 dtd February 8, 2011, issued by Ministry of corporate affairs, giving consent for not attaching the balance sheet of the subsidiary companies. the company is publishing the consolidated financial statements of the holding company and all subsidiaries duly audited by its auditors, in compliance with the applicable accounting standards and listing agreement and a statement disclosing the necessary information regarding each of subsidiaries.

It is hereby confirmed that annual accounts of the subsidiary companies and the related detailed information shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. the annual accounts of the subsidiary companies shall be available for inspection by any shareholders in the head office of the holding company and of the subsidiary companies concerned. Details of accounts of subsidiaries shall be furnished to any shareholder on demand.

JOINT VENTURES (In Alphabetical Order)

Apollo Design Apparel Parks Limited and Goldmohur Design & Apparel Park Limited the company has entered into joint venture with ntc for the restructuring and development of the apollo Mills and goldmohur Mills situated in Mumbai. For the same two separate sPV companies have been created viz. apollo Design apparel Parks limited (ADAPL) & goldmohur Design & apparel Park limited (GDAPL). the ADAPL & GDAPL would be working for the restructuring and development of the apollo Mills and goldmohur Mills respectively. During the period ended March 31, 2014 aDaPl made a turnover of Rs. 248.51 crores and earned net profit of Rs. 9.12 crores. Further during the period gDaPl made a turnover of Rs. 228.78 crores and earned net profit of Rs. 9.46 crores.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (FGI-life) is company''s joint venture in the life insurance sector. FGI-life has introduced many insurance products to suit requirements of various categories of customers. the company has divested its part investment in FGI-life with effect from 17th December, 2013. During the period ended March 31, 2014, FGI-life has registered a total income of Rs. 1,315.31 crores and net loss of Rs. 63.56 crores.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (FGI-NonLife)

Is company''s joint venture in the general insurance sector. FGI- Nonlife has introduced insurance products for various general insurance needs of the different categories of customers. During the period ended March 31, 2014, Fgi-nonlife has registered a total income of Rs. 1,499.77 crores and net profit of Rs. 47.71 crores.

Integrated Food Park Private Limited

Integrated Food Park Private Limited (IFPPL) is designed to capture the consumption space of food and aims to facilitate the establishment of strong food processing industries backed by an efficient supply chain, which would include collection centres, processing centres, cold chain infrastructures. the company has received the approval from the government for setting up ''Mega Food Park'' at tumkur District in the state of Karnataka. IFPPL was formed as a joint venture between the company, capital Foods Private limited and sattva Developers Private limited with 28.86% stake held by your company. iFPPl has not earned any income during the period ended March 31, 2014 since its project has yet not commenced. net loss of IFPPL for the said period stood at Rs. 0.09 crore.

Shendra Advisory Services Private Limited

Shendra advisory services Private limited (shendra) is a sPV with respect to the company''s insurance arm Future generali india insurance company limited. During the period ended March 31, 2014, shendra has registered a total income of Rs. 0.03 crore and net loss of Rs. 0.12 crore.

Sprint Advisory Services Private Limited

Sprint advisory services Private limited (sprint) is a sPV with respect to the company''s insurance arm Future generali india life insurance company limited. During the period ended March 31, 2014, sprint has registered a total income of Rs. 0.09 crore and net profit of Rs. 0.004 crore.

DIRECTORS

Mr. Kishore Biyani & Mr. Rakesh Biyani retire by rotation at the forthcoming annual general Meeting and being eligible, offer themselves for re-appointment.

The term of Mr. Vijay Biyani, as Whole-time Director, which was for a period of 5 years from september 26, 2009 is to expire on september 26, 2014. the Directors are seeking appointment of Mr. Vijay Biyani as a Whole-time Director for a period of 3 years. Detail of the proposal for appointment of Mr. Vijay Biyani is mentioned in the statement under section 102 of the companies act, 2013 of the notice of the 26th annual general Meeting. His appointment is appropriate and in the interest of the company.

The company is also proposing resolutions for the remunerations payable to all the executive directors of the company to be approved by the shareholders, in view of the requirement to make application to the central government for approval of remuneration, due to inadequacy of profits.

Impending notification of section 149 and other applicable provisions of the companies act, 2013, your Directors are seeking appointment of Mr. s. Doreswamy, Mr. anil Harish, Ms. Bala Deshpande and Mr. V.K. chopra as independent Directors for a term of five years. Details of the proposal for appointment of Mr. s. Doreswamy, Mr. anil Harish, Ms. Bala Deshpande and Mr. V.K. chopra are mentioned in the statement under section 102 of the companies act, 2013 of the notice of the 26th annual general Meeting.

The details as required by clause 49 of the listing agreement, is given as part of the notice.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 217(2aa) of the companies act, 1956, the Board of Directors of the company hereby state and confirm that: -

(i) In preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation and there are no material departures;

(ii) The accounting policies selected have been applied consistently and judgments made and estimates given are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as on March 31, 2014 and the profit of the company for the period ended on that date;

(iii) The proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the companies act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) The accounts have been prepared on a going concern basis.

AUDITORS

M/s NGS & CO. LLP, chartered accountants, Mumbai, hold office as statutory auditors upto the conclusion of the ensuing annual general Meeting and being eligible, offer themselves for re-appointment. shareholders are requested to re-appoint them as statutory auditors to hold office upto the three years and to fix their remuneration. the observations made by the auditors are self-explanatory.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements are provided as part of the annual Report in accordance with accounting standard as-21, as-23 & as 27 dealing with the consolidated financial reporting. these statements have been prepared on the basis of the financial statements received from subsidiaries and joint ventures, as approved by their respective Board of Directors. some of the financial statements provided by the subsidiaries, associates and joint ventures are unaudited and considered on certification of management. Due to extension of financial period of the company, relevant financial period of subsidiaries, associates and joint ventures for a period of eighteen months is being considered for consolidation.

THE EMPLOYEE STOCK OPTION SCHEME

The nomination and Remuneration committee of the Board of the company inter alia administers and monitors the employee stock option scheme of the company in accordance with the securities exchange Board of india (employee stock option scheme and employee stock Purchase scheme) guidelines, 1999 (the seBi guideline).

The applicable disclosure as stipulated under the seBi guidelines as on March 31, 2014 with regard to employee stock option scheme is provided hereunder:

Future Retail limited (FRL) (earlier known as Pantaloon Retail (india) limited) has granted options to eligible employees in 2013 under PRIL-employee stock option scheme 2012 ("ESOS 2012").

In a scheme of demerger, "FRL" (Demerged company) has transferred its Fashion business under the brand name "Pantaloons" and variations thereof to "Peter england Fashions and Retail limited" (Resulting company); demerger scheme has been duly sanctioned by the Bombay High court in its order dated March 1, 2013.

In a subsequent scheme of demerger, "FRL" (Demerged company) has transferred its fashion business carried on under the format brands of central, Brand Factory, and Planet sports to "Future lifestyle Fashions limited"; demerger scheme has been duly sanctioned by the Bombay High court in its order dated May 10, 2013.

The employee stock options of the company has adjusted for the corporate actions on Value for Value exchange and hence there is no incremental benefit to the option grantee and also it does not result in change in aggregate Fair Value of the options.

The stock-based compensation cost calculated as per the intrinsic value method for the financial year 2011-12 is Rs.1.09crores. The stock-based compensation cost was calculated as per the fair value method, the total cost to be recognised in the financia statements for the year 2011-12 would be Rs.3.70 crores. the effect of adopting the fair value method on the net income an earnings per share is presented below:

PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under section 217(2a) of the companies act, 1956 and the rules made thereunder, is given as an annexure appended hereto and forms part of this report. in terms of section 219(1)(b)(iv) of the act, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. any shareholder interested in obtaining the copy of annexure may write to the company secretary at the registered office of the company.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

A statement giving details of conservation of energy (in Form a) and foreign exchange earnings and outgo, as required under section 217(1)(e) of the companies act, 1956 read with the companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, in annexure i is enclosed and forms part of this report. However there is no expenditure on R&D, technology absorption, adoption & innovation during the current financial period. the company being concentrating on the domestic consumption space do not have any specific exports initiatives to report to members.

AWARDS AND RECOGNITIONS

- Future Retail Limited Won the Best Run Award in IT (technology solutions) at saP ace 2013

- Best Run Award 2013

Home town became the first indian retailer to bag global innovation award for the year 2012- 2013

- EMC Transformers Award 2013

technology services team at Future group won the eMc transformers awards for their smart and judicious use of it services

- CIO100 Awards 2013

Business technology services of Future group won this award for the 2nd consecutive year for the project "Pratibimb", a project carried for virtualization of desktops to enhance user productivity

- CISO Award 2013

it support services received this prestigious for innovative ways to secure the business in the most effective manner and deliver business value, by creating competitive advantage, optimizing business processes, enabling growth and mproving relationships with customers.

- Consumer Survey of Product Innovation 2013

Sach Handwash voted product of the year by consumer survey of Product innovation 2013

- Images Fashion Awards 2013

The Most admired Fashion Retail Personality of the year - Mr. Kailash Bhatia

- The Global Innovation Award

International Home House wares Retail excellence /global nnovation'' for the year 2012-2013 - Home town

- Retailer Technology Awards 2013

Future group''s it team was felicitated with the following awards:

Retail application of the year

It team of the year

Supply chain software solution

- 4th Most Trusted Service Brands In India

Big Bazaar is the 4th most trusted service brand in india in the Brand equity survey 2013 conducted by nielsen

- Images Most Admired Food & Grocery Retailer

Foodhall bagged the images Most admired Food & grocery Retailer at the 7th coca cola golden spoon awards 2014.

ACKNOWLEDGMENT

The Board wishes to place on record their sincere appreciation to all the consumers, working capital consortium bankers lead by Bank of india, vendors, and other stakeholders for the continued support and patronage during the previous period the board further wishes to record their sincere appreciation to the employees of the company whose efforts, hard work and dedication has enabled the company to achieve the targets and recognitions

For and on behalf of the Board

Kishore Biyani Rakesh Biyani

Managing Director Jt. Managing Director

Mumbai

May 30, 2014

---

Dec 31, 2012

To The Members

The Directors are pleased to present the Twenty Fifth Annual Report together with the Audited Statements of Accounts for the period ended December 31, 2012.

FINANCIAL HIGHLIGHTS

The operating results of the Company for the period under review are as follows:

(Rs. in Crores)

2011-2012 2010-2011

Sales (Net of Taxes) 6,771.78 3,942.31

Other Operating Revenue 215.95 159.17

Other Income 27.70 16.34

Total Revenue 7,015.43 4,117.82

Profit Before Depreciation, Exceptional Items & Tax 343.59 261.67

Less: Depreciation 311.87 146.37

Profit Before Exceptional Items & Tax 31.72 115.29

Exceptional Items 256.60 -

Profit Before Tax 288.32 115.29

Less: Earlier Year''s Income Tax - 2.08

Less: Tax Expense 15.06 36.55

Profit After Tax 273.26 76.66

Add: Balance Brought Forward From Previous Year 506.35 495.98

Surplus Available for Appropriation 779.61 572.64

APPROPRIATION

Excess Provision Reversal of Tax on Dividend (0.85) (0.16)

Debenture Redemption Reserve 69.38 35.00

Proposed Dividend on Equity Shares 25.54 20.27

Proposed Dividend on Preference Shares - 0.01

Provision for Dividend Tax 4.14 3.29

Transfer to General Reserve 27.33 7.88

Balance carried to Balance Sheet 654.07 506.35

REVIEW OF PERFORMANCE

The review is for the financial period of eighteen months pursuant to extension of the present accounting period by six months. We are pleased to inform you that the Retail business of the Company has been showing growth trend in spite of economy slowdown in entire retail industry during the financial period under review. The Company is now present in Lifestyle Retail segment and for the year under review recorded a good growth through increase in presence in various cities. Income from operations for the financial period under review were at Rs. 6987.73 Crores which was at Rs. 4101.48 Crores during the financial year of 2010-11. Profit Before Depreciation, Exceptional Items & Tax stood at Rs. 343.59 Crores in during the financial period of 2011-12, which was at Rs. 261.67 Crores in the previous year. PAT for the financial period under review was Rs. 273.26 Crores, which was at Rs. 76.66 Crores in the previous year. As explained above, since the current financial period was of eighteen months, accordingly, the current financial period result is not comparable with the previous financial period, which was of twelve months.

During the financial period 2011-12, the Company increased its retail presence from around 15 million square feet to approximately 16.5 million square feet space spread pan India basis.

Restructuring / hiving off businesses:

1. Scheme of Amalgamation between the Company and Future Value Retail Limited

During the period under review, the Board of Directors of the Company approved the amalgamation of Future Value Retail Limited (FVRL) with the Company pursuant to the Scheme under Sections 391-394 of the Companies Act, 1956 with effect from July 01, 2012. FVRL is wholly owned subsidiary of your Company having retail business formats like Big Bazaar, Food Bazaar etc. The Company is in process to file the application with the Hon''ble High Court of Bombay for its approval. However, the Scheme was subject to further review of the Board.

2. Scheme of Arrangement between the Company and Aditya Birla Group

Pursuant to the approval of the members at the General Meeting held on May 30, 2012 the Company filed petition with the Hon''ble High Court at Bombay for demerger of Pantaloon Format Business to Peter England Fashions and Retail Limited, a Aditya Birla Group entity. The demerged undertaking comprises of Company''s business under the name "Pantaloons" together with all assets, liabilities, brands etc. attached to the said Brand. The Company has obtained all requisite approvals from NSE, BSE, CCI and shareholders of the Company and petition had been submitted in the Hon''ble High Court of Bombay and would be coming up for final hearing on March 01, 2013.

3. Composite Scheme of Arrangement and Amalgamation between PRIL, FVIL, LEE, ILCL and FLFL

The Board of Directors at its meeting held on November 09, 2011 approved the composite scheme of arrangement and amalgamation between Indus-League Clothing Limited (ILCL), Lee Cooper (India) Limited (LEE), Future Ventures India Limited (FVIL), Pantaloon Retail (India) Limited (PRIL) and Future Lifestyle Fashions Limited (FLFL) under Sections 391-394 of the Companies Act, 1956. The Scheme provides for demerger of fashion business of ILCL and amalgamation of LEE into FVIL, demerger of fashion business of FVIL and PRIL into FLFL. Pursuant to the said Scheme becoming effective, the shareholders of FVIL and PRIL shall be allotted equity shares of FLFL in the ratio as mentioned in the Scheme. The Company has already filed the application with the Hon''ble High Court at Bombay which has directed to hold the shareholders'' meeting on March 04, 2013 for obtaining approval of the Scheme.

4. Divestment of stake in Future Capital Holdings Limited

On September 27, 2012 the Company divested its majority stake in its subsidiary company Future Capital Holdings Limited (presently Capital First Limited) as a part of Company''s strategy to focus on retail segment. At the end of the financial period ended December 31, 2012 your Company holds 9.55% stake in Capital First Limited. The majority stake sold by your Company was acquired by Cloverdell Investment Limited (Acquirer) following the open offer made by the Acquirer pursuant to the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 2011.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of Rs. 1.10 (55%) per equity share {Previous year Rs. 0.90 (45%)} and dividend of Rs. 1.14 (57%) per Class B (Series-1) share {Previous year Rs. 1.00 (50%)} for the Financial period ended December 31, 2012. The said dividend shall be subject to the approval of the members at the Annual General Meeting.

The dividend, if approved by the shareholders in the Annual General Meeting shall entail a payout of Rs. 25.54 Crores including dividend distribution tax of Rs. 4.14 Crores. The dividend is free of tax in the hands of the shareholders.

EQUITY SHARE CAPITAL

Paid-up Equity Share Capital

Pursuant to the conversion of Compulsorily Convertible Preference Shares (CCPS), the Company issued and allotted 63,47,635 equity shares of Rs. 2/- each as fully paid up to the holders of CCPS on July 31,2011.

Pursuant to the approval of the members at the Extra Ordinary General Meeting held on May 30, 2012 the Company issued and allotted 81,63,265 equity shares of Rs. 2/- each to Bennett, Coleman & Co. Limited on June 06, 2012 on preferential basis.

After the above allotments, the paid up equity share capital stood at Rs. 46,31,65,182 divided into 21,56,53,439 equity shares of Rs. 2/- each and 1,59,29,152 Class B (Series-1) Shares of Rs. 2/- each.

WARRANTS

During the period under review, the Company forfeited 100 lacs warrants allotted to the Promoter Group entity which were not converted into equity shares. The subscription amount of Rs. 100 crore paid on these warrants have been forfeited and transferred to capital reserves.

DEBENTURES

During the period under review, the Company has raised long term funds through Non-Convertible Debentures aggregating Rs. 225 Crores. The funds raised were utilised for the objects as stated at the time of raising of funds.

FIXED DEPOSITS

The Company has not accepted any Deposits during the period under review.

REPORT ON CORPORATE GOVERNANCE

A detailed report on Corporate Governance together with Auditors certificate as required under clause 49 of the listing agreement has been included as an enclosure to this Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The management discussion and analysis as required under clause 49 of the listing agreement has been dealt with extensively as part of this Annual Report.

THE FUTURE

The Company entered the new financial period with a renewed focus on driving profitability within the stores and in full preparedness for the upcoming sale season across both the lifestyle and value segment. While spaces within some stores have been rationalised, the Company also added merchandise in preparation for the promotion period. Encouraging response from customers during the promotion has resulted in the promotion period ending on time and fresh merchandise entering stores on time to be sold at full price.

Heavy investment in refurbishment and up-gradation of format stores to make them more contemporary and in line with higher value and more aspirational merchandise being introduced, especially in the fashion category. These steps have met with an encouraging response from customers and have started yielding higher sales in these stores. In the year ahead, the Company will continue to selectively refurbish existing stores even as it adds new, upgraded stores. Change of overall strategy to format specific strategy would result in direct attention towards various formats of the Company and enable immediate resolution of the various format specific issues.

Various divestment and realignment initiatives taken by management and strategic management changes made during the financial period under review would result in reduced debt, cost reduction and better planning. This all initiatives would contribute to better profitability in years to come.

SUBSIDIARY COMPANIES & JOINT VENTURES

SUBSIDIARY COMPANIES

The Company has 15 subsidiaries as at the end of financial period. Subsidiary companies information for financial performance is given for eighteen months period ended September 30, 2012 as applicable for respective subsidiaries.

Home Solutions Retail (India) Limited

Home Solutions Retail (India) Limited (HSRIL) was incorporated to operate in the home and hard goods consumption space. Your Company has 66.86% stake in HSRIL. During the period ended on September 30, 2012 HSRIL registered total income of Rs. 4.50 Crores and net loss of Rs. 5.34 Crores.

Future Supply Chain Solutions Limited

Future Supply Chain Solutions Limited (FSCSL) is designed to operate in the logistics, transportation, distribution and warehousing space. FSCSL provides solutions in the areas of integrated Supply Chain Management, warehousing, distribution and Multi-Modal transportation. Your Company has 70.17% stake in FSCSL. FSCSL has warehousing space of 4 million square feet spread over all across India. The company is currently building large scale warehousing facilities and also increasing its presence in 3PL logistics solutions. During the period ended on September 30, 2012 FSCSL registered total income amounted to Rs. 514.07 Crores and net loss stood at Rs. 8.70 Crores.

Future Agrovet Limited

Future Agrovet Limited (FAL) is to strengthen sourcing and distribution of staples and other food products for the Company. FAL has sourcing and distribution bases at all key cities across the country. The Company has 96.16% stake in FAL. During the period ended on September 30, 2012 FAL registered total income amounting to Rs. 1633. 96 Crores and net profit stood at Rs. 4.52 Crores.

Future Media (India) Limited

Future Media (India) Limited (FMIL) is the Group''s media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consumers. FMIL offers relevant engagement through its media properties like Visual Spaces, Print, Radio, Television and Activation. Your Company has 93.10% stake in FMIL. During the period ended on September 30, 2012 FMIL registered total income amounting to Rs. 57.27 Crores and net loss of Rs. 1.19 Crores.

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited (FECIL) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. The Company has 72% stake in FECIL. During the period ended on September 30, 2012 FECIL registered total income amounting to Rs. 112.60 Crores and net loss stood at Rs. 42.88 Crores.

Futurebazaar India Limited

Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience through e-portal www.futurebazaar.com. Your Company holds 100% in FBIL. FBIL is operating its e-retailing business and during the period ended on September 30, 2012 it has registered total income amounting to Rs. 36.57 Crores and net loss after tax stood at Rs. 6.70 Crores.

Future Knowledge Services Limited

Your Company holds 100% in Future Knowledge Services Limited which has a net loss of Rs. 3.92 Crores as on September 30, 2012.

Future Value Retail Limited

Future Value Retail Limited (FVRL) is a wholly owned subsidiary of your Company and engaged in Value Retail Business under various formats like Big Bazaar, Food Bazaar etc. and other small formats in Value Retail Business. During the period ended December 31, 2012 FVRL registered total income amounting to Rs. 11,121.55 Crores and net profit for the said financial period stood at Rs. 90.04 Crores. The Company has161 Big Bazaars at the close of financial period. Further, the Company has 43 Food Bazaars at the close of financial period. In addition to the above, other formats of FVRL also saw a good growth in terms of numbers as well as turnover.

Future Learning and Development Limited

Your Company holds 100% in Future Learning and Development Limited which has registered total income of Rs. 0.03 Crore During the period ended on September 30, 2012 with net loss of Rs. 1.76 Crore.

Future Lifestyle Fashions Limited

Future Lifestyle Fashions Limited (FLFL) was incorporated on May 31, 2012 and is wholly owned subsidiary of your Company. With a view to dedicated focus on fashion business of your Company and Future Ventures India Limited (FVIL) comprising of Central, Brand Factory, Planet Sports etc., it is proposed to demerge these businesses to FLFL under the provisions of section 391-394 of the Companies Act, 1956. FLFL has not yet completed its first accounting year.

Future Home Retail Limited (Formerly known as nuZone Electronics Limited)

Future Home Retail Limited (FHRL) has been created as subsidiary with the objective to transfer the retail electronic and consumer durable business from PRIL. During the period ended September 30, 2012 FHRL registered total income of Rs. 0.0035 Crore and net loss of Rs. 0.003 Crore.

nuZone Ecommerce Infrastructure Limited

nuZone Ecommerce Infrastructure Limited (NEIL) has been created as subsidiary with the objective to transfer the wholesale and sourcing business related to electronic and consumer durable business from PRIL. During the period ended September 30, 2012 NEIL registered total income of Rs. 0.0035 Crore and net loss of Rs. 0.0016 Crore.

Winner Sports Limited

Winner Sports Limited (WSL) is a wholly owned subsidiary of the Company. At present the WSL does not have any operating business and management is evaluating various business opportunities. During the period ended on September 30, 2012 WSL registered income from operations of Rs. 1.56 Crore and net loss of Rs. 0.005 Crore.

Future Freshfoods Limited

Future Freshfoods Limited (FFL) is a company which caters to the sourcing and supply of fresh food products to retail formats of the group. FFL is subsidiary of FVRL. FVRL holds 79.17% of equity capital in FFL. During the period ended on September 30, 2012 FFL registered total income amounting to Rs. 118.61 Crores and net loss stood at Rs. 16.52 Crores.

FSC Brand Distribution Services Limited

FSC Brand Distribution Services Limited (FSCBDSL) was incorporated to deal in the business of distribution services. The company has earned total income of Rs. 45.98 Crores & incurred net loss for Rs. 0.97 Crores during the period.

As required under the Listing agreement with the Stock Exchanges, the Company is mandatorily required to prepare the Consolidated Financial Statements, according to the applicable Indian Accounting Standards and reflects the financial position of all the subsidiary Companies of the Company. For the purposes of consolidation subsidiary accounts of eighteen months ended September 30, 2012 have been considered except for Future Value Retail Limited where financial account of eighteen months ended December 31, 2012 has been considered.

A statement pursuant to section 212 of the Companies Act, 1956 relating to subsidiary companies is given as an annexure to the Annual Report. Further the Board has passed resolution pursuant to the General Circular No. 2/2011 dtd February 08, 2011, issued by Ministry of Corporate Affairs, giving consent for not attaching the balance sheet of the subsidiary companies. The Company is publishing the consolidated financial statements of the holding company and all subsidiaries duly audited by its auditors, in compliance with the applicable accounting standards and listing agreement and a statement disclosing the necessary information regarding each of subsidiaries.

It is hereby confirmed that Annual accounts of the subsidiary companies and the related detailed information shall be made available to the shareholders of the holding and subsidiary companies seeking such information at any point of time. The annual accounts of the subsidiary companies shall be available for inspection by any shareholders at Registered Office of the holding company and of the subsidiary companies concerned. Details of accounts of subsidiaries shall be furnished to any shareholder on demand.

JOINT VENTURES

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (FGI-Life) is Company''s joint venture in the Life insurance sector. FGI-Life has introduced many insurance products to suit requirements of various categories of customers.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (FGI-Nonlife) is Company''s joint venture in the general insurance sector. FGI-Nonlife has introduced insurance products for various general insurance needs of the different categories of customers.

Apollo Design Apparel Parks Limited & Goldmohur Design & Apparel Park Limited

The Company has entered into joint venture with NTC for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate

SPV companies have been created viz. Apollo Design Apparel Parks Limited (ADAPL) & Goldmohur Design & Apparel Park Limited (GDAPL). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and GoldMohur Mills respectively. During the period ADAPL made a total income of Rs. 273.17 Crores and earned net profit of Rs. 7.62 Crores. Further during the year GDAPL made a total income of Rs. 255.60 Crores and earned net profit of Rs. 7.66 Crores.

Staples Future Office Products Private Limited

Staples Future Office Products Private Limited (SFOPPL) is designed to capture the consumption space of office supplies, office equipments and products. SFOPPL was formed as a joint venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). During the period ended September 30, 2012 SFOPPL registered total income amounting to Rs. 315.05 Crores and net loss stood at Rs. 59.85 Crores.

After the close of the financial period under review, your Company has acquired a part of the stake from Staples Asia Investment Limited by which SFOPPL became the subsidiary of your Company.

Integrated Food Park Private Limited

Integrated Food Park Private Limited (IFPPL) is designed to capture the consumption space of food and aims to facilitate the establishment of strong food processing industries backed by an efficient supply chain, which would include collection centres, processing centres, cold chain infrastructures. The Company has received the approval from the Government for setting up ''Mega Food Park'' at Tumkur District in the State of Karnataka. IFPPL was formed as a joint venture between the Company, Capital Foods and Satva Developers Private Limited with 26% stake held by your company. IFPPL has not earned any income during the period ended September 30, 2012 since its project has yet not commenced. Net loss of IFPPL for the said period stood at Rs. 0.06 Crores.

Shendra Advisory Services Private Limited

Shendra Advisory Services Private Limited (Shendra) is a SPV with respect to the Company''s insurance arm Future Generali India Insurance Company Limited. During the period ended on September 30, 2012 Shendra has registered a total income of Rs. 0.09 Crore and net loss of Rs. 0.68 Crore.

Sprint Advisory Services Private Limited

Sprint Advisory Services Private Limited (Sprint) is a SPV with respect to the Company''s insurance arm Future Generali India Life Insurance Company Limited. During the period ended on September 30, 2012 Sprint has registered a total income of Rs. 0.015 Crore and net loss of Rs. 0.68 Crore.

DIRECTORS

Mr. Shailesh Haribhakti, Mr. S. Doreswamy and Mr. Gopikishan Biyani retire by rotation and being eligible, offer themselves for re- appointment. The details as required by clause 49 of the listing agreement, is given as part of the notice.

DIRECTORS RESPONSIBILTY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: -

(i) in preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

(ii) the accounting policies selected have been applied consistently and judgments made and estimates given are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on December 31, 2012 and the profit of the company for the period ended on that date;

(iii) The proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the accounts have been prepared on a going concern basis.

AUDITORS

M/s. NGS & Co. LLP, Chartered Accountants, Mumbai, hold office as Statutory Auditors upto the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Shareholders are requested to re-appoint them as Statutory Auditors to hold office upto the conclusion of the next Annual General Meeting and to fix their remuneration. The observations made by the auditors are self-explanatory.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited consolidated financial statements are provided as part of the Annual Report in accordance with Accounting Standard AS- 21, AS-23 & AS 27 dealing with the consolidated financial reporting. These statements have been prepared on the basis of the financial statements received from subsidiaries and joint ventures, as approved by their respective Board of Directors.

PARTICULARS OF EMPLOYEES

The statement containing particulars of employees as required under Section 217(2A) of the Companies Act, 1956 and the rules made thereunder, is given as an annexure appended hereto and forms part of this report. In terms of Section 219(1)(b)(iv) of the Act, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining the copy of annexure may write to the Company Secretary at the Registered Office of the Company.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

A Statement giving details of conservation of energy (in Form A) and foreign exchange earnings and outgo, as required under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, in Annexure I is enclosed and forms part of this report. However, there is no expenditure on R&D, Technology absorption, adoption & innovation during the current financial period. The Company being concentrating on the domestic consumption space do not have any specific exports initiatives to report to members.

EMPLOYEE STOCK OPTION PLAN

The management has recognised need to introduce reward plans to acknowledge efforts of the emplyees. Accordingly, the Board and Shareholders of the Company has approved Employee Stock Option Scheme 2012 (ESOS 2012) and same has been adopted in Nomination and Remuneration Committee Meeting held on February 25, 2013. So, applicable disclosure will be required to be given from the current financial period.

AWARDS AND RECOGNITIONS

Rural Marketing Association of India''s (RMAI) Corporate Awards 2012

Best marketing communication towards women, youth and children - Future Learning 2012

Brand Equity Most Trusted Brands 2012

Big Bazaar Ranked No. 3 as The Most Trusted Brand and Is the Most Trusted Retailer of The Year for Top Service

Retail Asia Pacific Top 500 2012

Future Value Retail Won Gold in Top 10 Retailers Award, India Pantaloon Retail India Received Certificate oF Distinction in Top 10 Retailers Award, India

Star Retailer Awards 2012

Retailer of The Year 2012 - Future Group. Most Valued Retailer - KBFP

Asia Recognition Award 2012

Highest Sale in Asia by VF Corporation - Central

Images Fashion Awards (IFA) 2012

Reliance Performance Award for Best Performing Partner - Indus League

CISO Award 2012

Future Group was felicitated for using Information security technology in the most effective and innovative manner

Golden Spoon Awards 2012

Most Admired Food and Grocery Retailer of the Year for its Private Labels in Big Bazaar - Future Group

Retail Professional of the Year for innovation in Private Brands- Mr. Devendra Chawla, President - Food & FMCG Category

Images Fashion Awards (IFA) 2012

Most Admired Private Label Retailer - Pantaloons

ET Retail Awards 2012

FedEx Most Trusted Retailer of the Year Award - Big Bazaar TRRAIN Retail Employee of the Year Award - Mr. Jitendra Kalyani, Big Bazaar

Recognition by CMO Council, USA and CMO Asia

Master Brand Award - Future Supply Chains

Retail Icon of the Year- Mr. Anshuman Singh, MD & CEO, Future

Supply Chains

Bloomberg UTV B-School Excellence Award

Best educational institute in Retail- Future Innoversity

ACKNOWLEDGMENT

The Board wishes to place on record their sincere appreciation to all the consumers, working capital consortium bankers lead by Bank of India, vendors, and other stakeholders for the continued support and patronage during the previous year. The board further wishes to record their sincere appreciation to the employees of the Company whose efforts, hard work and dedication has enabled the Company to achieve the targets and recognitions.

For and on behalf of the Board,

Place: Mumbai Shailesh Haribhakti

Date : February 25, 2013 Chairman

---

Jun 30, 2010

The Directors are pleased to present the Twenty Third Annual Report together with the Audited Statements of Accounts for the year ended 30th June, 2010.

FINANCIAL HIGHLIGHTS

The operating results of the Company for the year under review are as follows:

Rs. in Crores

2009-2010 2008-2009

Sales (Net ofTaxes) 5706.07 6,103.70

Operating Income 228.30 238.35

Other Income 84.63 6.06

Total Income 6019.00 6,347.76

Profit before Depreciation &Tax 388.45 356.28

Less: Depreciation 161.88 140.05

Profit before Tax 226.57 216.23

Less: EarlierYears IncomeTax (3.17) (0.27)

Less: Provision forTaxation 37.25 75.38

Profit afterTax 179.56 140.58

Add: Profit brought forward from previous year 380.54 267.56

Surplus available for appropriation 558.97 408.14

APPROPRIATION

Debenture Redemption Reserve 25.00 --

Proposed Dividend 17.13 11.57

Provision for Dividend Tax 2.91 1.97

Transfer to General Reserve 17.95 14.06

Balance carried to Balance Sheet 495.98 380.54

(Note: In view of the effect given in accounts to the Schemes of Arrangement and for the realignment of the business undertaken during the year, the figures for the current year are not comparable with those of the previous year).

REALIGNMENT OF BUSINESS

The Companys value retail business has grown in size and scale during the past couple of years and in order to bring in a more focussed approach towards growing it further, the Company realigned its value retail and lifestyle retail business under two separate companies. Accordingly, Value Retail Business operated through the formats such as Big Bazaar, Food Bazaar and other value retail formats such as Fashion@Big Bazaar, Fashion Station, Depot, Health Village, Wholesale Club and Navras were transferred to the wholly owned subsidiary of the Company, Future Value Retail Limited (FVRL) with effect from 1st January 2010. This move would enable both the Companies, to concentrate on their respective growth plans and would bring in core competency in their respective businesses.

The Company also initiated a number of steps towards creating a Retail Pure Play by divesting or demerging a number of non-retail subsidiaries and merging some of the retail businesses. These are listed further in this document.

REVIEW OF PERFORMANCE

The Company has recorded growth (after transfer of value retail business operations w.e.f. January 2010) in both the topline as well as in bottom line. Income from operations for the current year stood at Rs. 5934.37 Crores compared to FY08-09 operating income of Rs. 6341.70 Crores. Further, PBDIT stood at Rs. 676.69 Crores in FY09- 10,compared to PBDIT of Rs. 674.50 Crores for the FY 08- 09. PAT for the year FY09-10 stood at Rs. 179.56 Crores compared to PAT of Rs. 140.58 Crores for the FY 08-09.

The performance for the current year cannot be compared with the previous year due to the realignment exercise initiated by the Company. However, as you would observe, in like to like growth the Company has improved its performance.

SCHEME OF ARRANGEMENT:

As part of the realignment exercise, the Company has completed two Schemes of Arrangement, detail of which are given hereunder.

Scheme of Arrangement between Home Solutions Retail (India) Limited (HSRIL) and the Company and their respective Shareholders and Creditors ("the HSRIL Scheme")

As part of consolidation initiative of Consumer Durable, Home Furnishing, Home Improvement, and Furniture Business of its subsidiary. Home Solutions Retail (India) Limited (HSRIL) with the Company, the HSRIL Scheme was moved under Sections 391-394 of the Companies Act, 1956.

Your directors are pleased to inform that the HSRIL Scheme has been approved by the Honble High Court of Judicature at Bombay on 24th August, 2010, and thereafter on filing of the certified copy of the court order with Registrar of Companies, Maharashtra, Mumbai, on 27th August, 2010, the entire assets and liabilities pertaining to business undertaking except Collection i of Home Solutions Retail (India) Limited (HSRIL), a 66.86% subsidiary of the Company, were transferred and stand vested in the Company as a going concern, effective from 1st April, 2009 ("Appointed Date"). In Consideration of the transfer of the Business Undertaking, as provided in the HSRIL Scheme, the Company has issued during the current year (FY 2010-11) shares to HSRIL investors (other than the Company) aggregating to 59,28,818 fully paid Equity Shares of Rs. 21- each and 63,47,635 fully paid 0.01% Compulsory Convertible Preference Shares (CCPS) of Rs. 100/- each convertible into 63,47,635 fully paid Equity Shares of Rs. 21- each within a period of 12 months from the date of allotment but not later than 31st July, 2011 such that equity shares and 0.01% CCPS of the Company would be deemed to be issued in consideration of equity shares held by them in HSRIL.

Scheme of Arrangement between the Company and Future Mall Management Limited (FMML) and Future Merchandising Limited (FML) and their respective Shareholders and Creditors ("the FMML Scheme").

Further as part of its initiative of removing all non-core non-retail business from the Company, a Demerger exercise was moved under which the Mall Management, & Project Management Business Undertaking were being demerged into Future Mall Management Limited (FMML) wholly owned subsidiary of the Company and Mall Asset Management Undertaking & Food Services Undertaking were being demerged into Future Merchandising Limited ("FML) wholly owned subsidiary of FMML pursuant to the FMML Scheme under Sections 391-394 of the Companies Act, 1956. Your Directors are pleased to inform that the FMML Scheme has been approved by the Honble High Court of

Judicature at Bombay on 24th August, 2010 and thereafter on filing of the certified copy of the court order with Registrar of Companies, Maharashtra, Mumbai, on 28th August, 2010, the entire assets and liabilities of Mall Management Undertaking and Project Management Undertaking of the Company were transferred to Future Mall Management Limited ("FMML), a wholly owned subsidiary (WOS) of the Company and Mall Asset Management Undertaking and Food Services Undertaking of the Company were transferred to Future Merchandising Limited ("FML), a WOS of FMML, effective from 1 April, 2010 ("Appointed Date").

Pursuant to the approved scheme, the FMML shall, without any further application or deed, issue and allot shares, credited as fully paid up, to the extent indicated below, to the members (including Class B (Series 1) shareholder) and the compulsory convertible preference shareholders of the Company whose name appears in the Register of Members of Company as on the Record Date i.e., 20th September, 2010 or to their respective heirs, executors, administrators or other legal representatives or the successors-in-title, as the case may be, in the following manner:

"1 (One) fully paid Equity Share of Rs. 10/- (Rupees Ten Only) each of FMML shall be issued and allotted for every 20 (Twenty) Equity Shares of Rs. 21- (RupeesTwo) each held in the Company.

1 (One) fully paid Equity Share of Rs. 10/- (RupeesTen Only) each of FMML shall be issued and allotted for every 20 (Twenty) Class B (Series 1) shares of Rs. 21- (RupeesTwo) each held in the Company. And

1 (One) fully paid up Equity Share of Rs. 10/- (RupeesTen Only) each of FMML shall be issued and allotted for every 20 (Twenty) compulsory convertible preference shares of Rs. 100/- (Rupees One Hundred Only) each held in the Company."

The shareholders of the Company will be allotted equity shares by the resulting Company (FMML), in terms of the Scheme. Fractional entitlement would be consolidated and allotted to one of the persons nominated by FMML Board. Sale proceeds of these shares will be distributed to shareholders who were entitled to such fractional shares. The shares of the FMML will be listed on the Stock Exchanges after compliance with the requirements of the stock exchanges and regulatory authorities. DIVIDEND

The Board of Directors of the Company has recommended a dividend of Rs. 0.80 (40%) per equity share on the increased capital of 20,11,42,539 Equity Shares of Rs. 21- each (previous year Rs. 0.60 per share) and dividend of Rs. 0.90 (45%) per Class B share (Series 1) on 1,59,29,152 Class B Shares of Rs. 21- each (previous year - Rs. 0.70 per share) fully paid-up for the Financial Year 2009-10 & 0.01% per Compulsorily Convertible Preference Shares (CCPs). On 63,47,635 CCPs of Rs. 100/- each. Further, warrants converted into shares on or before the Book Closure / record date announced for the dividend, would also be entitled to dividend declared by the members at the ensuing Annual General Meeting. The dividend will be declared at the ensuing Annual General Meeting by the Shareholders.

On account of the realignment exercise initiated during the year and Schemes of Arrangement as explained here above, the dividend figures for the current year and previous year are not comparable.

EQUITY SHARE CAPITAL

Paid-up Share Capital

Equity Capital

During the year under review, the equity share capital of the Company has been increased from Rs. 38,06,41,346/-to 7 41,22,85,746/- due to the following further issue of capital as follows:

- Allotment of 1,58,22,200 Equity shares of Rs. 21- each at a premium of Rs. 314/-(Rupees Three Hundred Fourteen only) per equity share aggregating to an issue price of Rs.316/- (Rupees Three Hundred Sixteen Only) to Qualified Institutional Buyers (QIBs) on preferential basis pursuant to Chapter VIII of the Securities and Exchange Board of India (Issue of Capital Disclosure Requirements) Regulations, 2009.

Further, during the current financial year 2010-11 following further issue of capital has been completed.

- Allotment of 59,28,818 Equity shares of Rs. 21- each to the shareholders of Home Solutions Retail (India) Limited (HSRIL) as per the Scheme of Arrangement approved by the Honble High Court of Judicature at Bombay.

- Allotment of 63,47,635 Compulsorily Convertible Preference shares of Rs. 100/- each to the shareholders of Home Solutions Retail (India) Limited (HSRIL) as per the Scheme of Arrangement approved by the Honble High Court of Judicature at Bombay.

Warrants

As on the start of the year under review lacs warrants, which were allotted to the Promoter group company, were pending to be converted into Equity Shares. These warrants had been converted into equity shares by the warrant holders on 9th September, 2010 during the current financial year (FY 2010-11) by making payment of balance 75% due on these warrants.

Further, during the year under review, the Company has further allotted 100 lacs warrants, each to be converted into equity shares at a price of X 400/-. These warrants were issued and allotted on 29th June, 2010. These warrants could be converted into equity shares as per terms of issue of warrants at any time before 28th December, 2011. DEBENTURES:

During the year under review, the Company has raised long term funds in two tranches through Non- Convertible Debentures aggregating Rs. 500 Crores. The funds raised were utilised for the objects as stated at the time of raising funds. These has helped the Company to improve its debt maturity profile and reduce the cost of debt. FIXED DEPOSITS

The Company has not accepted any Deposits during the year.

REPORT ON CORPORATE GOVERNANCE

A detailed report on Corporate Governance together with Auditors certificate as required under clause 49 of the listing agreement the has been included as an attachment to this Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT

The management discussion and analysis as required under clause 49 of the listing agreement has been dealt with extensively as part of this Annual Report.

THE FUTURE

After sustaining the economic slow down with its strategic and confident moves, the year under review was a welcome change from many perspective. The Company has initiated its strategic decision to focus on the retail business where it has core competency and monetise the other support businesses or demerge the same from the main company.The Company in the said strategic move, transferred its Value Retail Business to its wholly owned subsidiary and consolidated its home furnishing and improvement as well as electronic business. Further the non-core retail business related to the mall management, project management, mall asset management and food services businesses were moved into separate companies. The Company and management is committed to complete the initiative of the concentrating in pure retail play and would be coming to you for few more approvals to demerge / sale / transfer the other non-retail non-core businesses.

Your Company has planned to increase its operating retail space from around 11.65 million square feet currently to around 13.25 million square feet by FY 2010-11.

During the year, as per mandate received from the shareholders, the Company managed to reduce the number of subsidiaries from 30 at the beginning of the year to 25 at the close of the year. Further, during the current year also the Company is planning to reduce the number of other subsidiaries, which are not required to be retained under the Company and can be either monetised or transferred, without affecting its core business activities. The Company has incubated few support businesses under various subsidiary companies, which were in its startup phase during the FY2008-09 and also suffered some setback due to slowdown of the economy. The Company would be identifying all such businesses and evaluate the need for further nurturing and development of such businesses or consider divestment/unlocking value. The Company continues to believe that the support businesses of the various subsidiaries would create value over a long run and the Company would be able to unlock such values in future.

The Company continues to analyse customer spend on various categories and accordingly finalise its strategy to further enhance shareholders wealth by strengthening existing business and taking new initiatives that helps increase its share in four key categories that the Company is focussing on. The four key consumption categories are: food, fashion, general merchandise and home, which includes home improvement products and consumer electronics.

SUBSIDIARY COMPANIES & JOINT VENTURES

SUBSIDIARY COMPANIES

As informed above, during the financial year 2009-10, to fulfil commitment made to the members, the Company has reduced in all five subsidiaries from its total list of subsidiaries. These were, Pairs Retail India Limited (Formerly known as Home Lighting India Limited), Future Brands Limited, Future Consumer Enterprises Limited, Future Consumer Products Limited and Future Capital Credits Limited. The Company now have in all 25 subsidiaries as at the end of financial year 2009-10. Further, as per the order given in case of FMML scheme by Honble High Court of original judicature of Bombay, the investment held in Future Mall Management Ltd. (FMML) has also been cancelled with effect from 1st April, 2010. Hence, FMML and its wholly owned subsidiary. Future Merchandising Ltd. were or not considered as subsidiary of the Company as on 30th June, 2010.

Future Capital Holdings Limited

Future Capital Holdings Limited (FCH) is the financial services arm of the Company. FCH is involved in the business of providing retail financial services, corporate lending, wholesale credit, trade finance and asset management and advisory services. Post FCHs public offer, your Company has 54.14% stake in FCH. During FY09-10, FCH registered income from operations of Rs. 55.38 Crores and its profit after tax stood at Rs. 17.32 Crores.

Home Solutions Retail (India) Limited

Home Solutions Retail (India) Limited (HSRIL) was incorporated to operate in the home and hard goods consumption space. However, as part of the demerger scheme, the various business undertakings of HSRIL has been transferred to the Company leaving only Collection i format under HSRIL. During FY09-10, HSRIL registered an income from operations of Rs. 13.59 Crores and a corresponding loss of Rs. 3.62 Crores.

Future Supply Chain Solutions Limited (Formerly known as Future Logistic Solutions Limited)

Future Supply Chain Solutions Limited (FSCSL) is a specialized company providing logistics, reverse logistics, transportation, distribution and warehousing space and related services to the Company and its subsidiaries. FSCSL provides solutions in the areas of integrated Supply Chain Management, warehousing, distribution and Multi Modal transportation. Your Company has 94.23% stake in FSCSL. FSCSL has warehousing space of 3.50 Million square feet spread over all across India. The company is currently building large scale warehousing facilities and will focus on providing 3PL logistics solutions. During FY09-10, FLSL registered income from operations amounted to Rs. 196.73 Crores and the profit stood at Rs. 0.24 Crores.

Future Agrovet Limited (Formerly knov/n as Pantaloon Food Product (India) Limited)

Future Agrovet Limited (FAL) is designed to strengthen sourcing and distribution of staples and other food products for the Company. FAL has sourcing and distribution bases at all key cities across the country.The Company has 96.16% stake in PFPIL. During FY09-10, PFPIL registered income from operations amounting to Rs. 577.64 Crores and loss stood at Rs. 0.27 Crores.

Future Media (India) Limited

Future Media (India) Limited (FMIL) is a specialised company aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consumers. FMIL offers relevant engagement through its media properties like Visual Spaces, Print, Radio, Television and Activation. Your Company has 84.24% stake in FMIL. During FY09- 10, FMIL registered income from operations amounting to Rs. 35.70 Crores and the loss stood at Rs. 5.63 Crores.

Future E-Commerce Infrastructure Limited

Future E-Commerce Infrastructure Limited (FECIL) is designed to capture the consumption space through the internet, as well as other technology based and digital modes. The Company has 72% stake in FECIL. During FY09-10, FECIL registered income from operations amounting to X 116.69 Crores and the loss stood at Rs. 13.94 Crores.

Future Mobiles and Accessories Limited

Future Mobile and Accessories Limited (FMAL) is designed to cater to the consumers need in the space of telecommunications products. The Company has 100% stake in FMAL. During FY09-10, FMAL registered income from operations amounted to Rs. 234.23 Crores and loss stood at Rs. 3.07 Crores.

Futurebazaar India Limited

Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience.Your Company is presently holding 100% in FBIL. Futurebazaar.com was launched in 2007. FBIL is successfully operating its e-retailing business and during FY09-10, FBIL registered income from operations amounting to X 64.55 Crores and its profit after tax stood at Rs. 0.24 Crores.

Future Knowledge Services Limited

Future Knowledge Services Limited (FKSL) is a retail technology service provider for high quality, low cost services model catering to the entire retail value chain. The Company has 100% stake in FKSL. During FY09-10, FKSL registered income from operations amounting to Rs. 57.23 Crores and loss stood at Rs. 5.47 Crores.

Future Value Retail Limited (Formerly known as Pantaloon Future Ventures Limited)

During the year as part of its realignment initiative, the Company has transferred its Value Retail Business to its wholly owned subsidiary company. Future Value Retail Limited (FVRL). During FY09-10, FVRL has started operations commencing from January, 2010 and registered income from operations amounting to Z 2991.71 Crores and Profit stood at Rs. 50.60 Crores.

The transfer of Value Retail Business to FVRL has been done with the objective of having clear driving factor for

both the companies, i.e. your main Company, PRIL, which would be operating Life Style Retail and its wholly owned subsidiary company, FVRL, which would operate Value Retail Business. This would enable both the companies, to extract maximum out of its top management team and skilled resources, who would maximise the core competency of each of the businesses. FVRL would be material subsidiary of the Company in terms of clause 49 (III) (i) of the listing agreement. Accordingly, the Company has nominated its one of the independent director on the board of FVRL.

Future Learning and Development Limited

Future Learning and Development Limited (FLDL) is a wholly owned subsidiary of PRIL. During FY09-10, FLDL registered income from operations amounting to 7 13.45 Crores and loss stood at Rs. 2.08 Crores. CIG Infrastructure Private Limited

CIG Infrastructure Private Limited (CIPL) was incorporated to deal in the business of real estate promotion and development.The Company is holding 51% stake in CIPL. CIPL is Special Purpose Vehicle (SPV) for development of real estate project at Noida (U.P.). During the year, the Company incurred losses of 7 0.16 lacs. The Company has already divested its investment in CIPL with effect from 16th August, 2010. Winner Sports Limited

Winner Sports Limited (WSL) is 100% subsidiary Company. During the FY09-10, WSL registered income from operations amounting to 7 158.51 Crores and loss stood at 7 2.16 Crores.

FELLOW SUBSIDIARY COMPANIES Subsidiaries of Future Capital Holdings Limited (FCH)

Kshitij Property Solutions Pvt. Ltd. (Formerly known as Kshitij CapitaLand & Mall Management Pvt. Limited (KPSPL)

Kshitij Property Solutions Pvt. Ltd. (KPSPL) is a subsidiary of FCH and is in the business of providing mall management services. The company is managing the retail malls developed by the Kshitij Real Estate Fund. During FY09-10, KPSPL registered income from operations amounting to Rs. 0.76 Crores and its loss after tax stood at Rs. 0.17 Crores. Axon Development Solutions Limited (ADSL)

Axon Development Solutions Limited (ADSL) has become a subsidiary of FCH on 25 April, 2008, which is subsidiary of your Company. ADSL is involved in the business of providing consultancy services for all development and leasing related activities pertaining to the real estate industry. ADSL has registered income from operations amounting to 7 Nil and its loos after tax stood at Rs. 0.01 Crores.

Future Finance Limited (formerly known as Sivagami Finance & Investments Limited)

Future Finance Limited (FFL) is a subsidiary of FCH and is engaged in the business of providing finance, factoring, investment, hire purchase and leasing and to finance industrial, trading and manufacturing. During FY09-10, FFL registered income from operations amounting to 7 1.09 Crores and its Profit after tax stood at 7 0.78 Crores.

Future Hospitality Management Limited

Future Hospitality Management Limited (FHML) is a subsidiary of FCH and is involved in the business of managing and developing business of hotels, long stay apartments, service apartments, motels 148 and restaurants. During FY09-10, FHML has registered income from operations amounting to Rs. Nil and its loss after tax stood at 7 0.01 Crores.

Kshitij Investment Advisory Company Limited

Kshitij Investment Advisory Company Limited (KIACL) is a subsidiary of FCH and is involved in the business of business of providing financial, investment advisory services, management and facilitation services. During FY09-10, KIACL registered income from operations amounting to Rs. 17.23 Crores and profit after tax stood at Rs. 7.05 Crores.

FCH Securities & Advisors Limited (Formerly known as Ambit Investment Advisory Company Limited)

FCH Securities & Advisors Limited (FSAL) is a subsidiary of FCH and is involved in the business of providing financial, investment advisory services, management and facilitation services. During FY09-10, FSAL registered income from operations amounting to Rs. Nil and registered loss after tax stood at 7 0.43 Crores.

Future Capital Investment Advisors Limited (formerly known as Indivision Investment Advisors Limited)

Future Capital Investment Advisors Limited (FCIAL) is subsidiary of FCH and is involved in the business of providing investment consultancy and financial advisory services. During FY09-10, FCIAL registered income from operations amounting to Rs. 9.86 Crores and profit after tax stood at 7 3.89 Crores.

Myra Mall Management Company Limited

Myra Mall Management Company Limited (MMMCL) is a subsidiary of FCH and is involved in the business of acquiring, improving, building, selling leasing, managing, commercially exploiting and dealing in real estate and properties of diverse natures. MMMCL owns office premises FCH House of 44,000 square feet at Peninsula Corporate Park. During FY09-10, MMMCL registered income from operations amounting to Rs. 12.14 Crores and the profit after tax stood at Rs. 5.39 Crores.

Future Capital Financial Services Limited

Future Capital Financial Services Limited (FCFSL) (formerly known as Future Finmart Limited) is a 100% subsidiary of FCH and is in the business of retailing financial services products, wholesale credit and acting as direct selling agents, franchises, licenses, authorized sales agents for any kind of financial and saving instruments. FCFSL is rolling out a financial supermarket format "Future Money/ During FY09-10, FCFSL registered income from operations amounting to Rs. 147.37 Crores and the profit after tax stood at Rs. 24.90 Crores.

Realterm FCH Logistics Advisors Private Limited, FCH CentrumDirect Limited and FCH Centrum Wealth Managers Limited are JV of Future Capital Holdings Limited.

Subsidiary of Future Supply Chain Solutions Limited (FSCSL)

FLSL Distribution Services Limited

FLSL Distribution Services Limited was incorporated to deal in the business of distribution services. The company has revenue of Rs. 1.84 Crores & incurred loss for Rs. 0.02 Crores during the year under review.

As required under the Listing agreement with the Stock Exchanges, the Company is mandatorily required to prepare the Consolidated Financial Statements, according to the applicable Indian Accounting Standards and reflects the financial position of all the subsidiary Companies of the Company.

The Ministry of Corporate affairs has granted the exemption to the Company from the requirement to present detailed financial statement of each subsidiary. A statement pursuant to section 212 of the Companies Act, 1956 relating to subsidiary companies has been given as an annexure to the Annual Report. Further annual accounts of the subsidiaries companies and related detailed information will be made available to the holding and subsidiaries investors, seeking such information at any point of time. The annual accounts of the subsidiary companies are kept for inspection by any investor at the head office of the Company and that of the respective subsidiary companys office. Furtheraseparatestatement is attached to the consolidated balance sheet giving information about the subsidiary as per requirement of the exemption letter.

JOINT VENTURES

Future Axiom Telecom Limited

The Company has a 50% stake in Future Axiom Telecom Limited (FATL) which is a joint venture Company with Axiom Telecom LLC, UAE. The Company is engaged in sourcing and wholesale distribution of mobile handsets, accessories and in setting up service centres for mobile handsets in India. During FY09-10, FATL registered income from operations amounting to Rs. 259.68 Crores and loss stood at Rs. 65.91 Crores. FATL has one more line of activities as Authorised service centres operated through its 100% subsidiary Mobile Repair. Service City India Limited.

Future Generali India Life Insurance Company Limited

Future Generali India Life Insurance Company Limited (FGI-Life) is Companys joint venture in the Life insurance sector. FGI-Life has commenced the commercial operations from September 2007. The Company has also entered into joint venture arrangements with Sain Advisory Services Private Limited which is SPV for this insurance venture of the Company. FGI-Life has commenced operations and introduced many insurance products to suit requirements of various categories of customers.

Future Generali India Insurance Company Limited

Future Generali India Insurance Company Limited (FGI- Nonlife) is Companys joint venture in the general insurance sector. FGI-Nonlife has commenced the commercial operations from September 2007. The Company has also entered into joint venture arrangements with Shendra Advisory Services Private Limited which is SPV for this insurance venture of the Company. FGI-Nonlife has also commenced operations and introduced insurance products for various general insurance needs of the different categories of customers.

NTC joint ventures - Apollo Design Apparel Parks Limited & Goldmohur Design & Apparel Park Limited

The Company has entered into joint venture with NTC for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate SPV companies have been created viz. Apollo Design Apparel Parks Limited (ADAPL) & Goldmohur Design & Apparel Park Limited (GDAPL). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and GoldMohur Mills respectively. During the year ADAPL made a turnover of Rs. 209.63 Crores and earned profit of 7 5.78 Crores. Further during the year GDAPL made a turnover of Rs. 204.53 Crores and earned profit of Rs. 5.63 Crores.

Staples Future Office Products Private Limited

Staples Future Office Products Private Limited (SFOPPL) is designed to capture the consumption space of office supplies, office equipments and products. SFOPPL is a joint venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). During FY09-10, SFOPPL registered income from operations amounting to Rs. 132.71 Crores and the loss stood at Rs. 11.78 Crores.

Talwalkars Pantaloon Fitness Private Limited

Talwalkars Pantaloon Fitness Private Limited (TPFPL) is involved operates gymnasiums and deals with fitness equipments and other health products. TPFPL is a 50-50 joint venture between the Company andTalwalkars Better Value Fitness Private Limited. The company is presently running 5 gymnasiums. During FY09-10,TPFPL registered income from operations amounting to X 7.31 Crores and loss after tax stood at Rs. 4.11 Crores.

Clarks Future Footwear Limited

Clarks Future Footwear Limited (CFFL) is a company engaged in the retailing of footwear using the international brand "Clarks This would be a 50:50 joint venture with C & J Clark International, a company incorporated in UK, for the Single brand retailing of the "Clarks" branded footwear and allied products. The joint venture would also be engaged in wholesale business of Clarks branded products in India. The Joint Venture activities would be carried out by a separate joint venture company.

With this Joint Venture, the Company has taken a strategic business decision to enlarge its business activities and have a better footprint in retail as well as wholesale of branded footwear and allied products in India.

Other joint ventures of the subsidiaries companies Subsidiaries of the Companies have also entered into

few joint ventures. Real Term FCH Logistics Advisors Private Limited is the JV of Future Capital Holdings Limited for the undertaking the investment advisory services relating to logistics, warehousing facilities.

During the year the Company also terminated joint venture arrangement with Pan India Food Solutions Private Limited and settled the matter.

DIRECTORS

Mrs. Bala Deshpande, Mr. V. K. Chopra, Mr. Rakesh Biyani and Mr. Gopikishan Biyani retire by rotation and being eligible, offer themselves for re-appointment. The details as required by clause 49 of the listing agreement, is given as part of the notice.

During the current year, Mr. Vijay Biyani and Mr. Kailash Bhatia have been co-opted to the Board and then they were also appointed as Wholetime Directors. Mr. Gopikishan Biyani, who was Wholetime Director, has resigned as executive director and would continue to be non-executive promoter director.

GROUP

Pursuant to intimation received from the Promoter(s) and in accordance with regulation 3(1 )(e) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997("SEBI Regulations") regarding identification of persons constituting "Group" (within the meaning as defined in the Monopolies and Restrictive Trade Practices Act,1969) are disclosed in this Annual Report as separate disclosure.

DIRECTORS RESPONSIBILTY STATEMENT

Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that: -

(i) in preparation of the annual accounts, the applicable accounting standards have been followed with proper explanation relating to material departures;

(ii) the accounting policies selected have been applied consistently and judgments made and estimates given are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on 30th June, 2010 and the profit of the company for the year ended on that date;

(iii) The proper and sufficient care have been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

(iv) the accounts have been prepared on a going concern basis.

AUDITORS

M/s. NGS & Co., Chartered Accountants, Mumbai, hold office as Statutory Auditors upto the conclusion of the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment. Shareholders are requested to appoint them as Statutory Auditors to hold office upto the conclusion of the next Annual General Meeting and to fix their remuneration.The observations made by the auditors are self-explanatory.

CONSOLIDATED FINANCIAL STATEMENTS

The Audited consolidated financial statements are provided as part of the Annual Report in accordance with Accounting Standard AS-21, AS-23 & AS 27 dealing with the consolidated financial reporting. These statements have been prepared on the basis of the financial statements received from subsidiaries and joint ventures, as approved by their respective Board of Directors.

PARTICULARS OF EMPLOYEES

The Company has certain employees / ex-employees who were in receipt of the prescribed annual remuneration for the full period or prescribed monthly remuneration for the part period. The statement containing particulars of employees as required under section 217(2A) of the Companies Act, 1956 and the rules made thereunder, is given as an annexure appended hereto and forms part of this report. In terms of section 219(1 )(iv) of the Act, the report and accounts are being sent to the shareholders excluding the aforesaid annexure. Any shareholder interested in obtaining the copy of annexure may write to the company secretary at the registered office of the company.

CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

A Statement giving details of conservation of energy (in Form A) and foreign exchange earnings and outgo, as required under Section 217(1 )(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Directors) Rules, 1988, in Annexure I is attached and forms part of this report. However there is no expenditure on R&D,Technology absorption, adoption & innovation during the current financial year. The Company being concentrating on the domestic consumption space do not have any specific exports initiatives to report to members.

ACKNOWLEDGMENT

The Board wishes to place on record their sincere appreciation to all the consumers, working capital consortium bankers lead by Bank of India, vendors, and other stakeholders for the continued support and patronage during the previous year. The board further wishes to record their sincere appreciation to the employees of the Company whose efforts, hard work and dedication has enabled the Company to achieve the targets and recognitions.

For and on behalf of the Board,

Place: Mumbai Shailesh Haribhakti

Date : 1st October, 2010 Chairman