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Notes to Accounts of Future Consumer Ltd.

Mar 31, 2016

1. Corporate Information

The Company was incorporated on July 10, 1996, under the name "Subhikshith Finance and Investments Limited". The name of the Company was changed to "Future Ventures India Private Limited" with effect from August 09, 2007 and became a Public Limited Company with effect from September 07, 2007 as "Future Ventures India Limited".

The shares of the Company are listed on the National Stock Exchange Limited and BSE Limited since May 10, 2011. The name of the Company was changed to Future Consumer Enterprise Limited w.e.f. September 30, 2013. The Company is engaged in the business of Sourcing, Manufacturing, Branding, Marketing and Distribution of FMCG, Food and Processed Food Products in Urban and Rural India.

The Reserve Bank of India in terms of application made by the Company has vide its order passed on 21st July, 2015 cancelled Certificate of Registration granted to the Company. Consequently, the Company now ceases to be a Non Banking Financial Company.

2. The Company has recognised an amount of Rs.233.37 lakhs (Previous Year Rs.217.01 lakhs) for Provident Fund contributions and Rs.70.20 lakhs (Previous Year Rs.80.84 lakhs) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss.

3. Employee Stock Option Plan

a) The ESOP scheme titled "FVIL Employees Stock Option Plan 2011" (ESOP 2011) was approved by the shareholders at the Annual General Meeting held on August 10, 2010. 5,00,00,000 options are covered under the ESOP 2011 for 5,00,00,000 shares. Post listing of equity shares on the stock exchanges, the Shareholders have ratified the pre-IPO scheme.

In the previous years, the Nomination and Remuneration / Compensation Committee of the Company had granted 1,95,35,000 options under the ESOP 2011 to certain directors and employees of the Company and some of its Subsidiaries. During the current year, the Nomination and Remuneration / Compensation Committee at its meeting held on 26th December 2015 has granted 1,50,00,000 options under the ESOP 2011 to certain directors / employees of the Company and some of its Subsidiaries. The options allotted under ESOP 2011 are convertible into equal number of equity shares. The exercise price of each option is Rs.6/-.

The options granted vest over a period of 3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 3 years from date of vesting.

b) The ESOP scheme titled "Future Consumer Enterprise Limited - Employee Stock Option Plan 2014" (ESOP 2014) was approved by the Shareholders vide resolution passed at the Extra Ordinary General Meeting held on 12th January, 2015 and through postal ballot on May 12, 2015 in respect of grant of 3,19,50,000 options under primary route and 7,98,00,000 options under secondary market route. ESOP 2014 has been implemented through a trust route whereby IL&FS Trust Company Limited has been appointed as the Trustee who monitors and administers the operations of the Trust.

The Nomination and Remuneration / Compensation Committee at its meeting held on 15th May 2015 has granted 1,59,50,000 options under the ESOP 2014 to certain directors / employees of the Company and some of its Subsidiaries under the secondary market route. The options allotted under ESOP 2014 are convertible into equal number of equity shares. The exercise price per Option shall not exceed market price of the Equity Share of the Company as on date of grant of Option or the cost of acquisition of such equity shares to the Company applying FIFO basis, whichever is higher.

The options granted vest over a period of 3 years from the date of the grant in proportions specified in the Scheme. Options may be exercised within 3 years from date of vesting.

Stock Compensation Expense:

The employee compensation cost has been calculated using the intrinsic value method of accounting for Options issued under the Company''s Employee Stock Option Schemes. Since options are granted under graded vesting plan with only service conditions, the Company has recognised the share-based compensation cost on a straight-line basis over the requisite service period for the entire award as per para 42A of the ICAI Guidance on Accounting for Employee Share-based Payments. The employee compensation cost as per the intrinsic value method for the financial year 2015-16 is Rs.265.64 Lakhs (Previous Year Rs.Nil).

4. Segment Reporting

The Company is engaged in the business of Branding, Manufacturing, Processing, Selling and Distribution of "Consumer Products" which constitutes a single reporting segment. Hence there is no separate reportable segment under Accounting Standard on "Segment Reporting" (AS 17).

5. Earnings per Share

The Company has only one class of equity share, hence the Profit after Tax is used for computation of earnings per share without any adjustment.

6. Related Party Disclosures

A) Names of Related Parties and Nature of Relationship

a. Subsidiary Companies

a. Aadhaar Wholesale Trading and Distribution Limited

b. Future Consumer Products Limited

c. Future Food and Products Limited

d. Star and Sitara Wellness Limited

e. Amar Chitra Katha Private Limited and its subsidiaries:

i. IBH Books and Magazines Distributors Limited

ii. ACK Edutainment Limited

iii. ACK Media Direct Limited

iv. Karadi Tales Company Private Limited (upto 16th July, 2015 )

v. Ideas Box Entertainment Limited

f. Express Retail Services Private Limited

g. Future Food Processing Private Limited (Formerly known as Future Personal Care and Hygiene Products Private Limited)

h. Aussee Oats Milling (Private) Limited

i. Aussee Oats India Private Limited (w.e.f. 19th February, 2016)

j. The Nilgiri Dairy Farm Private Limited

i. Appu Nutritions Private Limited

ii. Nilgiri''s Mechanised Bakery Private Limited

iii. Nilgiris Franchise Private Limited

k. Sublime Foods Private Limited

l. Integrated Food Park Private Limited

m. Bloom Fruit and Vegetables Private Limited (w.e.f. 15th January, 2016)

n. MNS Foods Private Limited (w.e.f. 4th August, 2015)

o. FCEL Overseas FZE*

b. Associates

a. Sarjena Foods Private Limited

b. Karadi Path company Private Limited (Associate of Amar Chitra Katha Private Limited) (From 17th July, 2015 to 3rd October 2015)

c. Joint Ventures

a. Mibelle Future Consumer Products AG (w.e.f. 9th October, 2015)

d. Key Management Personnel (KMP)

a. Arun Kumar Agarwal - Manager

b. Ashni Biyani - Whole Time Director

e. Enterprises over which key management personnel can exercise control / significant influence (KMP has significant influence)

a. Future Ideas Company Limited

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

c. Future Lifestyle Fashions Limited

d. Srishti Mall Management Company Private Limited

* Subsidiary by virtue of control through composition of Board

7. Details on derivative instruments and unhedged foreign currency exposures

a) The following derivative positions are open as at 31st March, 2016. These transactions have been undertaken to act as economic hedges for the Company''s exposures to various risks in foreign exchange markets and may / may not qualify or be designated as hedging instruments.

Cross Currency Interest rate swaps to hedge against fluctuations in interest rate changes and fluctuation in changes in exchange rate: No. of contracts: 2 (Previous Year : Nil)

b) The year-end foreign currency exposures are given below:

8. The estimated amount of contracts remaining to be executed on capital account as at 31st March 2016 is Rs.Nil. (Previous Year Rs.1,362.53 lakhs).

9. details of leasing arrangements:

The Company has entered into cancellable operating lease arrangement for its stores and office premises. Operating lease rentals charged to Statement of Profit and Loss aggregate to Rs.2,573.83 Lakhs (Previous year Rs.2,567.92 Lakhs.)

10. Certain subsidiaries of the Company have incurred losses resulting in erosion of their net- worth. These companies are in the process of building respective businesses/brands and creating substantial value. The management is fully committed to lead to profitability by providing the necessary financial support and mentoring. Therefore, in the opinion of the management, the diminutions in the value of the said investment are temporary in nature and consequently, no adjustment is considered necessary to the carrying value of investment.

11. Pursuant to approval granted by the Shareholders of the Company at an Extra Ordinary General Meeting held on 22nd January, 2016, the Committee of Directors of the Board of Directors of the Company had on 5th February, 2016 issued and allotted 6,700 Warrants of Rs.1,00,000/- each to Srishti Mall Management Company Private Limited ("Srishti"), a promoter group company, on preferential allotment basis upon receipt of Rs.1,675 lakhs from Srishti being 25% of the total consideration price for the warrants. The warrant holder may exercise the warrants at any time before expiry of 18 months from the date of allotment of warrants. Upon such exercise and on payment of balance 75% of the total consideration amount by the warrant holder, the warrants shall be converted into equity shares at a conversion price of Rs.22.73 per equity share.

In the event the warrant holder does not exercise the Warrants within the said period, the warrants shall lapse and the amount paid shall stand forfeited by the Company.

12. The information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified based on information available with the Company.

13. During the year under review, the Company has re-aligned its business by way of shifting the operations of convenience stores to be undertaken under a Franchisee model. Under the new model all the convenience stores which earlier were operated by the Company and/or its subsidiaries under various format brands "KB''s Fair Price", "KB''s Conveniently Yours", "Big Apple", "Aadhaar" and "Nilgiris" will be operated by the franchisee appointed by the Company. As a result of the above, the Company shall not hereafter be operating any convenience stores either directly by itself or by any of the above mentioned subsidiaries.

14. Addition to Capital Work in Progress during the year includes borrowing cost - Rs.81.30 Lakhs (Previous Year - Rs.Nil), adjustment on account of exchange rate fluctuation - Rs.0.78 Lakhs (Previous Year - Rs.Nil) and other expenditure in the course of construction of the assets - Rs.414.55 Lakhs (Previous Year - Rs.Nil). Foreign exchange fluctuation included above remaining to be amortised is Rs.0.78 Lakhs (Previous Year - Rs.Nil).

Addition to Plant & Machinery includes borrowing cost amounting to Rs.14.39 Lakhs. (Previous Year - Rs.Nil).

15. The Company has interest in the following Joint venture Entity:

16. Pursuant to approval granted by the Shareholders of the Company at an Extra Ordinary General Meeting held on January 22, 2016, the Company has on April 26, 2016 issued and allotted 100 Equity Shares of Rs.6 each at a premium of Rs.16.73 per equity share and 29,985 CCDs of Rs.1,00,000/- each to Black River Food 2 Pte. Ltd ("Black River") upon receipt of Rs.29,985.02 Lakhs on preferential allotment basis.

The CCDs shall carry a coupon of 8.50% per annum compounded on a quarterly basis. The CCDs shall automatically and compulsorily be converted into equity shares at a conversion price of Rs.22.73 per equity share on the earlier of occurrence of following events - a) Black River electing to convert the CCDs into equity shares and b) the date that is 18 months from the date of issue of CCDs. In the event of unpaid coupons, if any, the Investor shall be entitled to such number of equity shares, equivalent to the amount of coupons remaining unpaid at a conversion price of Rs.22.73 for each equity share.

17. Particulars of loans given \ investments made \ guarantees given, as required by clause (4) of Section 186 of the Companies Act, 2013

Figures in bracket represent previous year''s figures.

18. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure. Pursuant to shareholders'' approval, w.e.f. February 1, 2016, the Company has re-aligned its business by way of shifting the operations of convenience stores to be undertaken under a Franchisee model. Consequently, the figures for the current year are not comparable with that of the previous year.


Mar 31, 2015

1. CORPORATE INFORMATION

The Company was incorporated on July 10, 1996, under the name "Subhikshith Finance and Investments Limited" The name of the Company was changed to "Future Ventures India Private Limited" with effect from 9th August, 2007 and became a Public Limited Company with effect from September 7 2007 as "Future Ventures India Limited"

The shares of the Company are listed on the National Stock Exchange of India Limited and BSE Limited since May 10, 2011. Pursuant to a composite scheme of Amalgamation and Arrangement coming into effect during the financial year 2012-13, the Company has become an operating entity from being a Non-Banking Finance Company "(NBFC") since it was unable to satisfy the prescribed norms of assets / income pattern as required under the Reserve Bank of India regulations. In view of the same, the Company has made an application to Reserve Bank of India ("RBI") seeking de-registration as NBFC on May 30, 2013.

The name of the Company was changed to Future Consumer Enterprise Limited w.e.f. September 30, 2013. Consequent to the aforesaid, the Company is now engaged in the business of Sourcing, Branding, Marketing and Distribution of FMCG, Food and Processed Food Products in Urban and Rural India.

2.SHARE CAPITAL

Terms/Rights attached to Equity Shares:

The Company has only one class of equity shares having a face value of RS. 6 per share. Each holder of equity shares is entitled to one vote per share.

In the event of repayment of capital of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

e) As at 31st March, 2015 in terms of FVIL Employees Stock Option Plan 2011 equity shares aggregating to 1,006,000 (Previous Year- 15,785,000 equity shares) were reserved for issuance towards outstanding Employee Stock Options granted. (Refer Note 29)

f) The Company has alloted 45,918,367 (Previous Year - NIL) equity shares of RS. 6 each fully paid up at a premium of RS. 6.74 per share on preferential basis without payment being received in cash to the minority shareholders of Aadhaar Wholesale Trading and Distribution Limited (a subsidiary of the Company) for acquisition of their stake consequently Aadhaar Wholesale Trading and Distribution Limited has become as wholly owned subsidiary of the Company.

3. The Company has recognised an amount of " 21701 lakhs (Previous Year RS. 163.53 lakhs) for Provident Fund contributions and RS. 80.84 lakhs (Previous Year RS. 65.84 lakhs) for Employee State Insurance Scheme contributions in the Statement of Profit and Loss.

4. EMPLOYEE STOCK OPTION PLAN

The Board at its meeting held on July 12, 2010, has approved issue of Stock Options up to a maximum of 50,000,000 Equity Shares, with a ceiling of upto 1% of the paid-up equity share capital in any financial year subject to the approval of the shareholders under Section 81 (1A) of the Companies Act, 1956. The options allotted under ESOP are convertible into equal number of equity shares.The Shareholders of the Company at the Annual General Meeting held on August 10, 2010 approved the afore-said issue of 50,000,000 stock options on Equity Shares under one or more Employee Stock Option Scheme(s). Post listing of the Equity Shares on the stock exchanges, the Shareholders have ratified the pre-IPO scheme. The Compensation and Nomination Committee has approved the following grants to certain directors and employees of the Company and some of its Subsidiaries in accordance with the FVIL Employees Stock Option Plan 2011 (ESOP Scheme):

Stock Compensation Expense:

The employee compensation cost has been calculated using the intrinsic value method of accounting for Options issued under the Company"s Employee Stock Option Schemes. The employee compensation cost as per the intrinsic value method for the financial year 2014-15 is Nil.

Fair Value Methodology

The fair value of Options used to compute proforma net profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent valuer.

5. SEGMENT REPORTING

The Company is engaged in Branding, Selling and Distribution of "Consumer products" which in terms of Accounting Standard 17 "Segment Reporting" constitute a single reporting segment. Hence, there is no separate reportable segment under Accounting Standard 17 "Segment Reporting"

6. RELATED PARTY DISCLOSURES

A. Names of Related Parties and Nature of Relationship

1. Subsidiary Companies

a. Aadhaar Wholesale Trading and Distribution Limited

b. Future Consumer Products Limited

c. Future Food and Products Limited

d. Star and Sitara Wellness Limited

e. Amar Chitra Katha Private Limited and its subsidiaries

i. IBH Books and Magazines Distributors Limited

ii. ACK Edutainment Limited

iii. ACK Media Direct Limited

iv. Karadi Tales Company Private Limited

v. Ideas Box Entertainment Limited

f. Express Retail Services Private Limited

g. Future Personal Care and Hygiene Private Limited (Formerly known as ACK Eaglemoss Collectibles Publishing Private Limited)

h. Aussee Oats Milling (Private) Limited (w.e.f. 16th Sept 2014)

i. The Nilgiri Dairy Farm Private Limited (w.e.f. 20th Nov 2014)

i. Appu Nutritions Private Limited

ii. Nilgiri"s Mechanised Bakery Private Limited

iii. Nilgiris Franchise Private Limited

j. Sublime Foods Private Limited (w.e.f. 18th Feb 2015)

k. Integrated Food Park Private Limited (Associate during the period 24th July 2014 to 5th Feb 2015)

2. Associates

a. Sarjena Foods Private Limited (w.e.f. 5th July 2014)

3. Key Management Personnel (KMP)

a. Arun Kumar Agarwal - Manager

b. Ashni Biyani - Whole Time Director (w.e.f 15th Nov 2014)

4. Enterprises over which key management personnel can exercise control / significant influence (KMP has significant influence)

a. Future Ideas Company Limited (upto 30th May 2013)

b. Future Retail Limited (formerly known as Pantaloon Retail (India) Limited) (upto 30th May 2013)

7. CONTINGENT LIABILITIES

As at As at

Particulars 31st March 2015 31st March 2014

RS. In Lakhs RS. In Lakhs

Corporate Guarantees issued to bank 11,015.98 5,565.24

Disputed Income Tax Demand 2,01758 126.70

Disputed Sales Tax Matter 14705 -

Claims not acknowledged as debt* 50.98 4763

13,231.59 5,739.57

*does not include cases where liability is not ascertainable.

Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.

8. The estimated amount of contracts remaining to be executed on capital account as at 31st March "2015 is RS. 1,362.53 lakhs. (Previous Year RS. NIL).

9. COMPOSITE SCHEME OF AMALGAMATION AND ARRANGEMENT

A Scheme of Amalgamation under Sections 391 and 394 and other applicable provisions of the Companies Act, 1956, filed by the Company for merger of its subsidiary Future Agrovet Limited (FAL) with the Company has been approved by the Hon"ble High Court of Bombay on January 30, 2015 and necessary filings have been done with the Registrar of Companies on March 13, 2015. The scheme has been given effect to in the books with effect from April 1, 2014, being the Appointed Date as approved by the Hon"ble High Court at Bombay on the following basis:

1. The business of FAL which stands transferred to and vested in the Company comprises of the business of procuring, processing and supplying of agricultural commodities in loose and packaged form under various private brands of the company.

2. The amalgamation has been accounted under the Purchase Method.

3. The entire assets and liabilities of FAL (the Amalgamating Company) have been accounted in the books of the Company at their respective fair values.

4. Since the entire share capital of FAL is held by the Company, no shares or consideration is to be issued / payable by the Company.

5. The difference between the fair value of assets net of liabilities of FAL and the value of investments in FAL held by the Company amounting to RS. 3279.80 lakhs has been debited to goodwill.

10. DETAILS OF LEASING ARRANGEMENTS:

The Company has entered into cancellable operating lease arrangement for its stores and office premises. Operating lease rentals charged to Statement of Profit and Loss aggregate to RS. 2,56792 lakhs (Previous year RS. 2,092.46 lakhs.)

11. Certain subsidiaries of the company have incurred losses resulting in erosion of their net- worth. These companies are in the process of building respective businesses/brands and creating substantial value. The management is fully committed to lead to profitability by providing the necessary financial support and mentoring. Therefore, in the opinion of the management, the diminutions in the value of the said investment are temporary in nature and consequently, no adjustment is considered necessary to the carrying value of investment.

12. During the year, pursuant to the notification of Schedule II to the Companies Act, 2013 with effect from April 1, 2014, the Company has revised the estimated useful life of some of its assets to align the useful life with those specified in Schedule II. Further, assets individually costing RS. 5,000/- or less that were depreciated fully in the year of purchase are now depreciated based on the useful life considered by the Company for the respective category of assets.

The depreciation expense in the statement of Profit and Loss for the year is higher by RS. 266.51 lakhs consequent to the change in useful life of the assets.

Pursuant to the transition provisions prescribed in Schedule II to the Companies Act, 2013, the Company has fully depreciated the carrying value of assets, net of residual value, where the remaining useful life of the asset was determined to be nil as on April 1,2014, and has adjusted an amount of RS. 63.82 lakhs against the opening balance in Profit & Loss Account under Reserves and Surplus.

13. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified based on information available with the Company. The principal amount due and remaining unpaid as on 31st March 2015 is RS. NIL (Previous year RS. 26.04 lakhs) and interest due and payable there on is RS. 0.82 lakhs (Previous year 0.82 lakhs ).

14. During the current year, one of the subsidiary of the Company, Star and Sitara Wellness Limited has closed down its business on account of losses. The Company has made a provision for other than temporary diminution in value of its entire Investment in Star and Sitara Wellness Limited amounting to RS. 1,800 lakhs and written off inter corporate deposits of RS. 714.00 lakhs given to the Subsidiary.

15. The Company is engaged primarily in operating Food and FMCG products sourcing, branding and distribution business and is no longer entitled to hold the certificate of registration based on the non-fulfilment of the principal business criteria as required for being a Non-Banking Financial Company ("NBFC"), as laid down in the press release dated April 08, 1999. The Company accordingly has intimated the change in business to the Reserve bank of India (RBI) and has applied for deregistration as a NBFC, vide its communication dated May 30, 2013.

However, pending deregistration by the RBI, the Company has for the year under consideration, complied with the prudential norms relating to income recognition, accounting standards, asset classification and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 However, no disclosures pursuant to Reserve Bank of India Notification DNBS.193DG (VL) - 2007 dated 22nd February, 2007 (Para 13 Disclosure), Notification DNBS.200/ CGM (PK) 2008 dated 1st August, 2008 (CRAR Disclosure) and additional disclosure pursuant to Notification DNBR (PD) CC.No.002/03.10.001/2014-15 dated 10th November, 2014 have been made in these financial statements, as the same are no longer considered to be pertinent.

16. Previous year"s figures have been regrouped / reclassified wherever necessary to correspond with the current year"s classification / disclosure. The figures for the current year includes the operations of the entire business undertaking of Future Agrovet Limited with effect from April 1, 2014 as explained in detail in Note 38. In view of this, the figures for the current year are not comparable with those of the corresponding previous year.


Mar 31, 2014

1. Employee Stock Option Plan

The Board at its meeting held on July 12, 2010, has approved issue of Stock Options up to a maximum of 50,000,000 Equity Shares, with a ceiling of upto 1% of the paid-up equity share capital in any fi nancial year subject to the approval of the shareholders under Section 81 (1A) of the Companies Act, 1956. The options allotted under ESOP are convertible into equal number of equity shares. The Shareholders of the Company at the Annual General Meeting held on August 10, 2010 approved the afore-said issue of 50,000,000 Equity Shares of the Company under one or more Employee Stock Option Scheme(s). Post listing of the Company, the Shareholders have ratifi ed the pre-IPO scheme. The Compensation and Nomination Committee has approved the following grants to certain directors and employees of the Company and some of its Subsidiaries in accordance with the FVIL Employees Stock Option Plan 2011 (ESOP Scheme):

Stock Compensation Expense:

The employee compensation cost has been calculated using the intrinsic value method of accounting for Options issued under the Company''s Employee Stock Option Schemes. The employee compensation cost as per the intrinsic value method for the financial year 2013-14 is Nil.

Fair Value Methodology

The fair value of Options used to compute proformanet profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent valuer.

2. Segment Reporting

The Company was in the process of reorganizing its business, since the previous year, to become an entity engaged in Branding, Selling and Distribution of "Consumer products" which in terms of Accounting Standard 17 "Segment Reporting" constitute a single reporting segment. Consequently, on all the schemes becoming effective, investment activities are no longer considered a separate business segment by the management and thus reporting of "Investment" as a separate segment has been discontinued. Hence, there is no separate reportable segment under Accounting Standard 17 "Segment Reporting".

3. Earnings per Share

The Company has only one class of equity share, hence the Profi t after Tax is used for computation of earnings per share without any adjustment.

4. Related Party Disclosures

A. Names of Related Parties and Nature of Relationship for Financial Year 2013-14 1. Subsidiary Companies

a. Aadhaar Wholesale Trading and Distribution Limited (formerly known as Aadhaar Retailing Limited)

b. Future Agrovet Limited (w.e.f. 12th November 2013)

c. Future Consumer Products Limited

d. Future Food and Products Limited (formerly known as Future Consumer Enterprises Limited)

e. Star and Sitara Wellness Limited (Formerly known as Star and Sitara Wellness Private Limited)

f. Amar Chitra Katha Private Limited and its subsidiaries:

i. IBH Books and Magazines Distributors Limited (Formerly known as IBH Books and Magazines Distributors Private Limited)

ii. ACK Edutainment Limited (Formerly known as ACK Edutainment Private Limited)

iii. ACK Eaglemoss Collectibles Publishing Private Limited

iv. ACK Media Direct Limited (Formerly known as ACK Media Direct Private Limited)

v. Karadi Tales Company Private Limited

vi. Ideas Box Entertainment Limited (Formerly known as Ideas Box Entertainment Private Limited)

g. Express Retail Services Private Limited

2. Associates

a. Capital Foods Private Limited (Formerly known as Capital Foods Exportts Private Limited (upto 11th December 2013) and its subsidiary:

i. Integrated Food Park Private Limited (upto 11th December 2013)

b. Karadi Path Education Company Private Limited (Upto 31st August 2013) (Associate of Amar Chitra Katha Private Limited).

3. Key Management Personnel (KMP)

a. Mr. Kishore Biyani - Managing Director (upto 30th May, 2013)

b. Mr. K.K. Rathi - Executive Director and CEO (From 31st May 2013 upto 4th February 2014)

c. Arun Kumar Agarwal - Manager (w.e.f. 5th February 2014)

4. Enterprises over which key management personnel can exercise control / significant influence (KMP has significant influence)

a. Future Ideas Company Limited (upto 30th May, 2013)

b. Vayuputra Realty Private Limited (upto 30th May, 2013)

c. Future Retail Limited (formerly known as Pantaloon Retail (India) Limited) (upto 30th May, 2013)

B. Names of Related Parties and Nature of Relationship for Financial Year 2012-13

1. Subsidiary Companies

a. Aadhaar Wholesale Trading and Distribution Limited (formerly Aadhaar Retailing Limited)

b. Indus League Clothing Limited (Upto 31st December,2012)

c. Lee Cooper (India) Limited (Up to 30th November,2012)

d. Indus Tree Crafts Private Limited (Up to 31st December,2012)

e. Indus Tree Producer Transform Private Limited (Up to 31st December,2012)

f. Future Consumer Products Limited

g. Amar Chitra Katha Private Limited and its subsidiaries:

i. IBH Books and Magazines Distributors Limited (Formerly known as IBH Books and Magazines Distributors Private Limited)

ii. ACK Edutainment Limited (Formerly known as ACK Edutainment Private Limited)

iii. ACK Eaglemoss Collectibles Publishing Private Limited

iv. ACK Media Direct Limited (Formerly ACK Media Direct Private Limited)

v. Karadi Tales Company Private Limited

vi. Ideas Box Entertainment Limited (Formerly known as Ideas Box Entertainment Private Limited )

h. Express Retail Services Private Limited (With effect From 15th September,2012)

i. Think Fresh International Private Limited (With effect from 15th September,2012)

j. Star and Sitara Wellness Limited (Formerly known as Star and Sitara Wellness Private Limited) (With effect From 12th September,2012)

k. Future Food and Products Limited (Formerly known as Future Consumer Enterprises Limited )

2. Associates

a. And Designs India Limited (Up to 31st December,2012)

b. Capital Food Private Limited (Formerly known as Capital Foods Exportts Private Limited) and its subsidiary:

i. Integrated Food Park Private Limited

c. Turtle Limited (Up to 31st December,2012) (Associate of Indus League Clothing Limited)

d. Biba Apparels Private Limited (Up to 31st December,2012)

e. Karadi Path Education Company Private Limited (Associate of Amar Chitra Katha Private Limited)

3. Joint Ventures

a. Holii Accessories Private Limited (Up to 31st December,2012)

b. Celio Future Fashion Limited (Joint Venture of Indus League Clothing Limited) (Up to 31st December,2012)

c. Clarks Future Footwear Limited (Up to 31st December,2012)

4. Key Management Personnel (KMP)

a. Mr. Kishore Biyani - Managing Director

5. Enterprises over which key management personnel can exercise control/significant influence

i. Akar Estate Finance Private Limited

ii. Anchor Residency Private Limited (Formerly known as "Anchor Malls Private Limited")

iii. Asian Retail Lighting Limited

iv. Bansi Mall Management Co Private Limited

v. DMA Yellow Works Limited

vi. ESES Commercial Private Limited

vii. Fashion Global Retail Limited

viii. FSC Brand Distribution Services Limited

ix. Future Agrovet Limited

x. Future Brands Limited

xi. Future Corporate Resources Limited

xii. Future E Commerce Infrastructure Limited

xiii. Future Venture Employee Welfare Trust

xiv. Future Human Development Limited

xv. Future Ideas Company Limited

xvi. Future Ideas Realtors India Limited

xvii. Future Knowledge Services Limited

xviii. Future Lifestyle Fashion Limited

xix. Future Outdoor Media Solutions Limited

xx. Future Retail Limited (formerly Pantaloon Retail (India) Limited)

xxi. Future Supply Chain Solutions Limited

xxii. Future Value Retail Limited

xxiii. Idiom Design and Consulting Limited

xxiv. Manz Retail Private Limited

xxv. Nufuture Digital (India) Limited

xxvi.nuFuture Haribhakti Business Services Limited

xxvii.PRTL Enterprises Limited

xxviii.Staples Future Office Products Private Limited

xxix.Suhani Trading and Investment Consultants Private Limited

xxx. Vayuputra Realty Private Limited

xxxi. Weavette Texstyles Limited

5. Contingent Liabilities

As at As at Particulars 31st March 2014 31st March 2013 Rs.In Lakhs Rs. In Lakhs

Corporate Guarantees issued to bank 5,565.24 3,900.00

Bank Guarantees 28.00

Disputed Income Tax Demand 126.70 51.80

Bill Discounting 292.37

Claims not acknowledged as debt* 47.63

Total 5,739.57 4,272.17

*does not include cases where liability is not ascertainable.

Future cash outflows in respect of the above matters are determinable only on receipt of judgments / decisions pending at various forums / authorities.

6. Composite scheme of Amalgamation and Arrangement

A. The Composite Scheme of Arrangement and Amalgamation fi led by the Company in respect of transfer of business and undertakings of Express Retail Services Private Limited (ERSPL) relating to food products and related activities, and transfer of entire business and undertakings of Think Fresh International Private Limited (TFIPL) with the Company, as a going concern, with the H''ble High Court at Delhi, has been approved on July 25, 2013 and necessary flings have been done with the Registrar of Companies on September 25, 2013. The scheme has been given effect to in the books with effect from September 15, 2012, being the Appointed Date as approved by the H''ble High Court at Delhi. Consequently:-

(a) The net loss of the above mentioned business and undertakings from the appointed date till March 31, 2013, amounting to Rs. 866.58 lakhs, has been transferred to opening Reserves and surplus (Defi cit in Statement of Profi t and Loss) as on April 1, 2013; and

(b) The difference between the value of assets and liabilities (after adjustment of investment in the above mentioned business and undertakings), ofRs. 4,672.75 lakhs has been debited to goodwill,

(c) Amortization of goodwill (net of capital reserve amounting to Rs. 715.51 lacs) for the period ended March 31, 2013 amounting to Rs. 396.30 lakhs has been adjusted against the opening Reserves and Surplus (defi cit in Statement of Profit and Loss)

(d) Since the entire share capital of ERSPL is held by the Company, no shares or considerations is to be issued/payable by the company.

B. Disclosures relating to amalgamation of TFIPL with the Company as required under AS 14:

Pursuant to the composite scheme of amalgamation and arrangement as explained in Para 37 A, the entire business and undertaking of TFIPL (the Amalgamating Company) stand transferred to and vested in the Company as a going concern w.e.f. September 15, 2012. The accounting for this arrangement was done as per the scheme sanctioned by the Hon''ble High Court of Judicature at Delhi vide its order dated July 25, 2013 and the

same has been given effect to as under:

1. The business of TFIPL which stands transferred to and vested in the Company comprises of the business of food products.

2. The amalgamation has been accounted under the Purchase Method.

3. The entire assets and liabilities of TFIPL (the Amalgamating Company) have been accounted in the books of the Company at their respective fair values.

4. Since the entire share capital of TFIPL is held by ERSPL and consequently pursuant to the transfer of ERSPL Demerged undertaking, the entire capital of TFIPL will be held by the Company, no shares or consideration is to be issued / payable by the Company.

5. The difference between the value of assets net of liabilities of TFIPL and the value of investments in TFIPL held by the Company amounting to Rs. 62.66 lakhs has been debited to goodwill.

7. A composite scheme of Amalgamation and Arrangement between the Company, Indus League Clothing Limited, Lee Cooper (India) Limited, Future Retail Limited (formerly known as Pantaloon Retail (India) Limited) and Future Lifestyle Fashion Limited and their respective shareholders and creditors was approved by the Hon''ble High Court and has been given effect to in the books of accounts in the previous Financial Year. Similarly, a part of composite scheme of Amalgamation and Arrangement between the Company, Future Food and Products Limited (formerly known as Future Consumer Enterprises Limited), Express Retail Services Private Limited and Think Fresh International Private Limited and their respective shareholders and creditors was also given effect to in the books of accounts in the previous Financial Year.

8. Details of leasing arrangements:

The Company has entered into cancellable operating lease arrangement for its stores and office premises. Operating lease rentals charged to revenue aggregate to Rs. 2,092.46 Lakhs (Previous year Rs. 1,206.78 Lakhs.)

9. Certain subsidiaries of the company have incurred losses resulting in erosion of their net- worth. These companies are in the process of building respective businesses/brands and creating substantial value. The management is fully committed to lead to profitability by providing the necessary financial support and mentoring. Therefore, in the opinion of the management, the diminutions in the value of the said investment are temporary in nature and consequently, no adjustment is considered necessary to the carrying value of investment.

10. This information as required to be disclosed under section 22 of the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. The principal amount outstanding and interest due there on as at the year end is Rs. 26.04 lakhs and Rs. 0.82 lakhs respectively.

11. Consequent to the amalgamation and arrangement schemes becoming effective in the previous financial year, the Company became an entity engaged primarily in operating Food and FMCG outlets and distribution business. As a result of the above- mentioned reorganisation, the asset/ income pattern of the Company as on March 31, 2013 changed consequent to which the Company was no longer entitled to hold the certificate of registration based on the non-fulfillment of the principal business criteria as required for being a Non-Banking Financial Company ("NBFC"), as laid down in the press release dated April 08, 1999. The Company accordingly intimated the change to the Reserve bank of India (RBI) and has applied for deregistration as a NBFC, vide its communication dated May 30, 2013.

However, pending deregistration by the RBI, the Company has for the year under consideration, complied with the prudential norms relating to income recognition, accounting standards, asset classification and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. However, no disclosures pursuant to Reserve Bank of India Notification DNBS.193DG (VL) - 2007 dated 22nd February, 2007 (Para 13 Disclosure) and Notification DNBS.200/CGM (PK) 2008 dated 1st August, 2008 (CRAR Disclosure) have been made in these financial statements, as the same are no longer considered to be pertinent.

12. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure. The figures for the current year includes the operations of demerged undertaking of Express Retail Services Private Limited (ERSPL) and entire business undertaking of Think Fresh International Private Limited (TFIPL) with effect from September 15, 2012 as explained in detail in Note 37. In view of this, the figures for the current year are not comparable with those of the corresponding previous year.


Mar 31, 2013

1. Corporate Information

Future Ventures India Limited ("Company") is part of Future Group and its vision is to create, build, acquire, and invest in and operate innovative and emerging businesses in India''s rapidly growing "consumption-led" sectors. This sector is highly dependent on the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. Vision is achieved through operational control or infl uence in the business ventures that the company promotes or in which it acquires interest in. It also engages in operationally managing and strategically mentoring these businesses.

The Company was incorporated on 10th July, 1996, as a Private Limited Company and became a Public Limited Company with effect from 7th September, 2007. The shares of the Company were listed in the National Stock Exchange and Bombay Stock Exchange on 10th May, 2011. The Company is regulated by the RBI as a non-deposit taking Non-Banking Financial Company (NBFC).

During the year, the management of Future Group reorganized their businesses in order to consolidate the food and fashion businesses through two separate Composite Scheme of Amalgamation and Arrangement ("the Schemes") which were sanctioned by the Hon''ble High Court of Judicature at Bombay vide its order dated 10th May, 2013 (Refer Note 38 for further details about the Scheme). As a result of the reorganization as stated above, the Company has become an entity, engaged in operating Food and FMCG outlets and distribution in Urban and Rural areas with its own branded products in addition to the third party brands and products, and will not be able to satisfy the norms of having the prescribed assets/income pattern otherwise required for being a Non-Banking Financial Company. The Company is in the process of carrying out the necessary formalities to surrender its Certifi cate of Registration with the Reserve Bank of India. Pending completion of formalities and surrendering of the Certifi cate of Registration, the Company has for the year, complied with the prudential norms relating to income recognition, accounting standards, asset classifi cation and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.

2. Employee Stock Option Plan

The Board at its meeting held on 12th July, 2010, has approved issue of Stock Options up to a maximum of 50,000,000 Equity Shares, with a ceiling of upto 1% of the paid-up equity share capital in any fi nancial year subject to the approval of the shareholders under Section 81 (1A) of the Companies Act, 1956. The Shareholders of the Company at the Annual General Meeting held on 10th August, 2010 approved the aforesaid issue of 50,000,000 Equity Shares of the Company under one or more Employee Stock Option Scheme(s). Post listing of the Company, the Shareholders have ratifi ed the pre-IPO scheme.

3. Segment Reporting

In accordance with paragraph 4 of Accounting Standard 17 - Segment Reporting, segment information has been presented only on the basis of the consolidated fi nancial statements.

4. Earnings Per Share

The Company has only one class of equity share, hence the Profi t after Tax is used for computation of earnings per share without any adjustment

5. Certain subsidiaries of the Company have incurred losses resulting in erosion of their networth. These companies are in the process of building respective businesses/brands and creating substantial value. The management is fully committed to lead to profi tability by providing the necessary fi nancial support and mentoring. Therefore, in the opinion of the management, the diminutions in the value of the said investment are temporary in nature and consequently, no adjustment is considered necessary to the carrying value of investment.

6. Related Party Disclosures

A. Names of Related Parties and Nature of Relationship

( as identifi ed by the management and relied upon by the auditors)

1. Subsidiary Companies

i. Aadhaar Retailing Limited

ii. Indus League Clothing Limited (Upto 31st December,2012)

iii. Lee Cooper (India) Limited (Subsidiary of Indus League Clothing Limited) (Up to 30th November,2012)

iv. Indus Tree Crafts Private Limited (Up to 31st December,2012)

v. Indus Tree Producer Transform Private Limited (Subsidiary of Indus Tree Craft Private Limited) (Up to 31st December,2012)

vi. Future Consumer Products Limited

vii. Amar Chitra Katha Private Limited

viii. India Books and Magazines Distributors Private Limited (Subsidiary of Amar Chitra Katha)

ix. ACK Edutainment Limited (formerly known as ACK Edutainment Private Limited) (Subsidiary of Amar Chitra Katha)

x. ACK Eaglemoss Collectibles Publishing Private Limited (Subsidiary of Amar Chitra Katha)

xi. ACK Media Direct Private Limited (Subsidiary of Amar Chitra Katha)

xii. Karadi Tales Company Private Limited (Subsidiary of Amar Chitra Katha)

xiii. Ideas Box Entertainment Limited (formerly known as Ideas Box Entertainment Private Limited) (Subsidiary of Amar Chitra Katha)

xiv. Express Retail Services Private Limited (With effect From 15th September,2012)

xv. Think Fresh International Private Limited (Subsidiary of Express Retail Services Private Limited) (With effect From 15th September,2012)

xvi. Star and Sitara Wellness Private Limited (With effect From 12th September,2012)

xvii. Future Consumer Enterprises Limited

2. Associates

i. And Designs India Limited (Up to 31st December,2012)

ii. Capital Foods Exportts Private Limited

iii. Integrated Food Park Private Limited (Subsidiary of Capital Foods Exportts Private Limited )

iv. Turtle Limited (Up to 31st December,2012) (Associate of Indus League Clothing Limited)

v. Biba Apparels Private Limited (Up to 31st December,2012)

vi. Karadi Path Education Company Private Limited (Associate of Amar Chitra Katha)

3. Joint Ventures

i. Holii Accessories Private Limited (Up to 31st December,2012)

ii. Celio Future Fashion Limited (Joint Venture of Indus League Clothing Limited)(Up to 31st December,2012)

iii. Clarks Future Footwear Limited (Up to 31st December,2012)

4. Enterprises over which key management personnel can exercise control/ signifi cant infl uence i. Akar Estate Finance Private Limited

ii. Anchor Residency Private Limited (Formerly known as "Anchor Malls Private Limited")

iii. Asian Retail Lighting Limited

iv. Bansi Mall Management Co Private Limited

v. DMA Yellow Works Limited

vi. ESES Commercial Private Limited

vii. Fashion Global Retail Limited

viii. FSC Brand Distribution Services Limited

ix. Future Agrovet Limited

x. Future Brands Limited

xi. Future Corporate Resources Limited

xii. Future E Commerce Infrastructure Limited

xiii. Future Ventures Employee Welfare Trust

xiv. Future Human Development Limited

xv. Future Ideas Company Limited

xvi. Future Ideas Realtors India Limited

xvii. Future Knowledge Services Limited

xviii. Future Lifestyle Fashion Limited

xix. Future Outdoor Media Solutions Limited

xx. Future Retail Limited (formerly Pantaloon Retail (India) Limited)

xxi. Future Supply Chain Solutions Limited

xxii. Future Value Retail Limited

xxiii. Idiom Design and Consulting Limited

xxiv. Manz Retail Private Limited

xxv. Nufuture Digital (India) Limited

xxvi. nuFuture Haribhakti Business Services Limited

xxvii. PRTL Enterprises Limited

xxviii. Staples Future Offi ce Products Private Limited

xxix. Suhani Trading and Investment Consultants Private Limited

xxx. Vayuputra Realty Private Limited

xxxi. Weavette Texstyles Limited

5. Key Management Personnel

i. Kishore Biyani - Managing Director

7. Contingent Liabilities

As at As at Paicuars 31st March 2013 31st March 2012 Rs. In Lakhs RS. In Lakhs

Corporate Guarantees issued to Bank 3,900.00 3,900.00 Bank Guarantees 28.00

Disputed Income Tax Demand 51.80 113.20 Bill Discounting 292.37

Total 4,272.17 4,013.20

No provision is presently considered necessary for Income tax demands aggregating to Rs. 51.80 Lakhs (Previous Year Rs. 113.20 Lakhs) which are under various stages of appeal as the Company is of the view that the said demands are not sustainable in law.

8. Composite scheme of Amalgamation and Arrangement

A. A composite scheme of Amalgamation and Arrangement (hereinafter referred as "Fashion Scheme") between the Company, Indus League Clothing Limited ("ILCL"), Lee Cooper (India) Limited ("LEE"), Pantaloon Retail (India) Limited ("PRIL") (now known as "Future Retail Limited"), and Future Lifestyle Fashion Limited ("FLFL") and their respective shareholders and creditors has been sanctioned by Hon''ble Bombay High Court vide its order dated 10th May, 2013. As the relevant appointed dates from which the arrangements under the scheme are effective fall within the Financial Year As at 31st March 2013 the said scheme has been given effect to in these fi nancial statements.

Pursuant to the said "Fashion scheme":

1. The entire business and undertaking of ILCL relating to its Fashion business and related activities (ILCL demerged undertaking) stand transferred to and vested in the Company as a going concern w.e.f. 1st December, 2012.

2. The entire business and undertaking of LEE (the Amalgamating Company) stand transferred to and vested in the Company as a going concern w.e.f. 1st December, 2012.

3. The entire business and undertaking of fashion business of the Company (FVIL demerged undertaking) stand transferred to and vested in FLFL as a going concern w.e.f. 1st January, 2013.

4. In consideration of the transfer of ILCL demerged undertaking to the Company the minority shareholders of ILCL have to be issued and allotted 2,17,32,971 fully paid equity share of Rs. 10 each in the Company against 14,27,364 shares held by them.

5. The entire share capital of LEE is held by ILCL and consequently pursuant to the transfer of ILCL demerged undertaking, the entire capital of LEE (which forms part of ILCL demerged undertaking) will be held by the Company, no shares or consideration is to be issued / payable by the Company.

6. In consideration of the transfer of FVIL demerged undertaking to FLFL, equity shareholders of the Company have to be issued and allotted 1 (One) equity share of Rs. 2/- each of FLFL fully paid up for every 31 (thirty one) fully paid up equity shares of the Company held by them.

7. As an integral part of the scheme the face value of shares held by shareholders of the Company stands reduced from Rs. 10 to Rs. 6 each. Pursuant to the above, an amount of Rs. 63,919.07 Lakhs has been credited to Business Restructuring Reserve and has been set off against the goodwill aggregating to Rs. 63,203.56 Lakhs arising in the books of the Company pursuant to the Fashion scheme referred above and food scheme referred in 38 B below. The balance amount of Rs. 715.51 Lakhs remaining in the Business Restructuring Reserve has been transferred to Capital Reserve which shall be subject to adjustment of goodwill on giving effect to the Composite Scheme of Amalgamation and Arrangement with respect to Food Scheme which is pending before the Hon''ble High Court of Delhi for their sanction (Refer Note 38B(3)).

B. A composite scheme of Amalgamation and Arrangement (hereinafter referred as "Food Scheme") between the Company, Future Consumer Enterprise Limited ("FCEL"), Express Retail Services Private Limited ("ERSPL"), and Think Fresh International Private Limited ("TFIPL") and their respective shareholders and creditors has been sanctioned by Hon''ble Bombay High Court vide its order dated 10th May, 2013. As the relevant appointed date from which the arrangement under the scheme are effective fall in the Financial Year As at 31st March 2013 the said scheme has been given effect to in the fi nancial statements.

Pursuant to the said "Food scheme":

1. The entire business and undertaking of FCEL relating to Consumer Goods business and related activities (FCEL demerged undertaking) stand transferred to and vested in the Company as a going concern w.e.f. 1st April, 2012.

2. Since the entire share capital of FCEL is held by the Company, no shares or consideration is to be issued / payable by the Company.

3. The other part of the scheme relating to transfer of entire business and undertaking relating to food business of ERSPL to the Company as a going concern and transfer of entire business and undertaking of TFIPL to the Company as a going concern is pending for sanction by Hon''ble High Court of Delhi. The scheme will be given effect to in the books with effect from 15th September, 2012, being the appointed date upon receipt of sanction of the said part of the scheme from Hon''ble High Court of Delhi and on completion of other regulatory formalities.

C. Disclosures relating to Amalgamation of Lee with the Company as required under AS 14:

Pursuant to the composite scheme of Amalgamation and Arrangement as explained in Para 38 A, the entire business and undertaking of LEE (the Amalgamating Company) stand transferred to and vested in the Company as a going concern w.e.f. 1st December, 2012. The accounting for this arrangement was done as per the scheme sanctioned by the Hon''ble Bombay High Court vide its order dated 10th May, 2013 and the same has been given effect to as under:

1. Lee is engaged in the business of manufacturing and retailing of lifestyle products ,including denims, trousers , jackets , shirts and shoe under the "Lee Cooper Brand"

2. The Amalgamation has been accounted under the Purchase Method.

3. The entire assets and liabilities of LEE (the Amalgamating Company) has been accounted in the books of the Company at their respective fair values.

4. Since the entire share capital of LEE is held by ILCL and consequently pursuant to the transfer of ILCL demerged undertaking, the entire capital of LEE will be held by FVIL, no shares or consideration is to be issued / payable by the Company.

5. The difference between the value of assets net of liabilities of LEE and the value of investments in Lee held by the Company amounting to Rs. 209.97 Lakhs has been credited to Capital reserve. This amount is set-off against goodwill referred in Para 38A7 above.

9. Details of leasing arrangements:

The Company has entered into cancellable operating lease arrangement for its stores and offi ce premises. Operating lease rentals charged to revenue aggregate to Rs.1027.98 Lakhs.

10. In view of the reorganisation of the businesses by the Future Group and pursuant to the composite scheme of Amalgamation and Arrangement, as sanctioned by the Hon''ble High Court, as referred in Note 1 above, the Company has become an operating entity, engaged predominantly in operating Food and FMCG outlets and distribution business. Accordingly, the Company now has operating income from activities which are not fi nancial activities and hence is not able to satisfy the norms of having the prescribed assets/income pattern otherwise required for being a Non-Banking Financial Company. The Company has intimated about the same to the Reserve Bank of India and pending completion of formalities and surrendering of the Certifi cate of Registration, the Company has for the year, complied with the prudential norms relating to income recognition, accounting standards, asset classifi cation and provisioning for bad and doubtful debts as applicable to it in terms of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007. However, no disclosures pursuant to Reserve Bank of India Notifi cation DNBS.193DG (VL) - 2007 dated 22nd February, 2007 (Para 13 Disclosure) and Notifi cation DNBS.200/CGM (PK) 2008 dated 1st August, 2008 (CRAR Disclosure) have been made in these fi nancial statements as they are no longer pertinent.

11. Previous year''s fi gures have been regrouped / reclassifi ed wherever necessary to correspond with the current year''s classifi cation / disclosure. The results for the current year includes the operations of demerged undertaking of Future Consumer Enterprises Limited with effect from 1st April, 2012 and the demerged undertaking of Indus League (ILCL) and entire business undertaking of Lee Cooper (LEE) for one month as more explained in detail in Note 38. In view of this, the results for the current year are not comparable with those of the corresponding previous year.


Mar 31, 2012

Notes:

i) Pursuant to the Initial Public Offer made during the month of April 2011, the Company issued 750,000,000 Shares of Rs. 10 each at a price of Rs.10 each raising Rs. 75,000 Lakhs. The shares of the Company were listed on National Stock Exchange of India Limited and Bombay Stock Exchange Limited on May 10, 2011.

ii) During the previous year, the Company had issued 250,000,000 Equity shares at par value ofRs. 10/- each to promoter companies on preferential basis.

a) Terms/Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. During the year ended March 31, 2012 and March 31, 2011, the Company has not declared any dividend.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in the proportion to the number of equity shares held by the shareholders.

1. EXCEPTIONAL ITEMS - IPO EXPENSES

During the year, the Company has allotted 750,000,000 Shares at par value ofRs. 10 per equity share. The IPO expenses incurred during the year aggregating to Rs. 3,100.30 Lakhs (Previous Year Rs. 448.03 Lakhs) have been absorbed in the Statement of Profit and Loss.

The estimates of future salary increase take into account inflation, seniority, promotion and other relevant factors. The disclosure requirement with regard to composition of Investments in the Fair Value of Plan assets has not been furnished, since the liability is not funded. Disclosure relating to experience adjustments has not been provided in the absence of relevant information.

2. EMPLOYEE STOCK OPTION PLAN

The Board at its meeting held on July 12, 2010, approved issue of Stock Options up to a maximum of 1 % of the paid up Equity Share Capital of the Company (before Rights Issue) aggregating to 50,000,000 Equity Shares in a manner provided in the SEBI (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 subject to the approval of the shareholders under Section 81 (1A) of the Companies Act, 1956. The Shareholders of the Company at the Annual General Meeting held on August 10, 2010 approved the aforesaid issue of 50,000,000 Equity Shares of the Company under one or more Employee Stock Option Scheme(s). Post listing of the company, the shareholders have ratified the pre-IPO scheme. The Compensation and Nomination Committee has approved the following grants to certain directors and employees of the Company and some of its Subsidiaries in accordance with the FVIL Employees Stock Option Plan 2011 (ESOP Scheme):

Deferred Stock Compensation Expense:

As the exercise price has been fixed at fair value as on date of grant, there is no compensation cost which needs to be amortized over the vesting period of the stock option.

Fair Value Methodology

The fair value of Options used to compute proforma net profit and earnings per Equity Share have been estimated on the date of the grant using Black-Scholes model by an independent consultant.

3. During the year ended March 31, 2012, the Company has formulated a scheme (Future Ventures Employee Welfare Trust Plan (FVEWTP)) which shall be administered by the IL&FS Trust Company Limited . The objective of the FVEWTP is to subscribe to the equity shares of the Company, to hold and dispose them from time to time and to distribute any surpluses arising there from to the beneficiaries of FVEWTP. Certain eligible employees of the Company and its Business Ventures as recommended by the Executive Committee are the beneficiaries under FVEWTP.

4. SEGMENTAL REPORTING

The Company is primarily engaged in the business of investing/financing in consumer product Businesses/Brands. Further, the Company does not have any operations outside India. As such, there are no separate reportable segments as per AS 17"Segmental Reporting".

5. EARNINGS PER SHARE Numerator

The Company has only one class of equity share, hence the Profit after Tax is used for computation of earnings per share without any adjustment.

The Company has issued employee stock options during the year which gives rise to potential equity shares. However, as per the terms of the stock option scheme, the exercise price is greater than the average fair value of the shares during the year. Therefore, these potential shares are considered to be anti-dilutive and accordingly, they are not considered in the computation of diluted earnings per share. Hence the basic and diluted earnings per share are the same.

Pending utilization of the full proceeds of the issue, the funds are temporarily invested/held in various Mutual Funds, Certificate of Deposits, Inter Corporate Deposits and Company's Bank Accounts.

6. Certain subsidiaries of the company have incurred losses resulting in erosion of their net worth. These companies are in the process of building respective businesses/brands and creating substantial value. The management is fully committed to lead them to profitability by providing the necessary financial support and mentoring. Therefore, in the opinion of the management, the diminutions in the value of the said investment are not other than temporary in the nature and consequently, no adjustment is considered necessary to their carrying values.

Notes:

i. Includes Optional convertible debentures amounting to Rs. 2,000 Lakhs issued by a subsidiary company Aadhaar Retailing Limited which has been converted into equity shares ofRs. 10 each.

ii. Figures in bracket represent previous year's figures.

Notes:

i. Includes optionally convertible debentures amounting to Rs. 2,000 Lakhs issued by subsidiary company Aadhaar Retailing Limited has been converted into equity.

ii. In the previous year, 7,000,000 shares of Aadhaar Retailing Limited held by the Company have been pledged to Future Capital Holdings Limited.

7. CONTINGENT LIABILITIES

A. Bank Guarantees and Asset Given as Security

As at As at Particulars March 31, 2012 March 31, 2011 Rs.In Lakhs Rs.In Lakhs

Bank Guarantees

Indus League Clothing Ltd. 3,300.00 3,300.00

Indus Tree Crafts Pvt. Ltd. 600.00 600.00

Asset Given as Security *

Aadhaar Retailing Ltd - 1,900.00

TOTAL 3,900.00 5,800.00

* In the previous year, 7,000,000 Equity Shares in Aadhaar Retailing Limited have been pledged to Future Capital Holdings Limited (FCH) as security for loan availed by Aadhaar Retailing Limited from FCH.

B. Share Purchase Obligation towards investment in Group Company (net of advances) is Rs. Nil (Previous Year - Rs. 2,188.08 Lakhs)

C. No provision is presently considered necessary for Income tax demands aggregating to Rs. 113.20 Lakhs (Previous Year Rs. Nil) which are under various stages of appeal as the company is of the view that the said demands are not sustainable in law.

8. Disclosure Pursuant to Reserve Bank of India Notification DNBS.193DG (VL) - 2007 dated February 22, 2007 (Para 13 Disclosure) is given below :-

Schedule to the Balance Sheet of a non-deposit taking Non-Banking Financial Company (as required in terms of paragraph 13 of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007)

9. Disclosure of Frauds reported during the year vide DNBS.PD.CC No. 256/03.10.042/2011-12 Dated March 2, 2012 (as relied upon by auditors).

During the year there were no events of frauds noticed or reported by the Company.

10. INFORMATION ON JOINT VENTURE ENTITY

The particulars of the Company's Joint Venture Entities as at March 31, 2012 including its percentage holding and its proportionate share of Assets, Liabilities, Contingent Liabilities, Capital Commitments, Income and Expenditures of each Joint Venture Entities are given here below: -

11. The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.

 
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