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Directors Report of Future Lifestyle Fashions Ltd.

Mar 31, 2016

The Directors are pleased to present the Fourth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2016.

financial highlights

The financial performance of the Company is as follows:

(Rs. in Crore)

Financial Year Financial Year particulars 2015-16 2014-15

Revenue from Operations 3300.19 3,134.09

Other Income 16.49 21.74

Total Revenue 3316.68 3,155.83

Profit before Depreciation and Amortization expense and Tax expense 206.40 193.57

Less: Depreciation and Amortization expense 161.42 170.09

Profit before Tax 44.98 23.48

Less: Tax expense 15.51 4.93

Profit after Tax 29.47 18.55

Balance brought forward from previous year 7.73 2.33

Less: Adjustments for Depreciation as per Schedule II of the Companies Act, 2013 - 1.45

Surplus available for appropriation 37.20 19.43

APPROPRIATION

Additional Dividend on shares issued during the year - 0.74

Transfer to General Reserve - 1.86

Proposed Dividend on Equity Shares 7.58 7.58

Tax on Proposed Dividend 1.55 1.52

Balance carried to Balance Sheet 28.07 7.73

REVIEW OF PERFORMANCE

During the year under review, your Company recorded an increase of 5.30% in revenue from operations at Rs. 3,300.19 Crore as compared to Rs. 3,134.09 Crore in the previous financial year. Your Company reported an increase of 91.57% in net profit before tax of Rs. 44.98 Crore for the year under review as compared to Rs. 23.48 Crore for the previous financial year.

Your Company''s fashion brands are distributed through its retail chains, exclusive brand outlets (EBOs) and multi brand outlets (MBOs) across the country. The stores in Company''s retail chains viz. Central, Brand Factory, I Am In, all, Planet Sports and Lee Cooper are spread in more than 80 cities across the country and cover over 4.97 million sq. ft. of retail space. These retail chains collectively attracted over 46.98 million customer footfalls during the financial year ended March 31, 2016. These chains are backed by strong sourcing network, in- house trend-spotting and design teams, coupled with robust logistics and warehousing network. Further, the Company''s distribution network includes 31 Central Stores, 42 Brand Factory Outlets along with 296 Sport Stores and EBOs.

BUSINESS outlook

Your Company continues to focus on building a strong portfolio of fashion brands and growing the distribution footprint across various channels. The Company''s Brands also continue to follow a persistent approach to capture new categories and new customers in order to capture a larger consumer spending. Your Company aims to focus on fast fashion products / categories enabling higher churns and continues to ensure that dedicated teams review various brands and formats on an on-going basis in light of the trends, moods and aspirations of the customers and appropriately position these brands to ensure the growth.

Your Company also foresees revenue growth being driven by new store additions and increased customer spending within the Company''s stores. With the surge in demand for readymade branded apparel, rising income levels and youth population, the Company envisages higher same store sales growth along with higher operating margins. The Company would undertake various initiatives to increase footfalls, store productivity and consumer ticket size and it will also continue to explore opportunities to partner and invest in fast growing labels managed by designers and entrepreneurs.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of Rs. 0.40 per Equity Share of Rs. 2 each for the financial year ended March 31, 2016. The said dividend shall be subject to the approval of the Members at the forthcoming Annual General Meeting.

The dividend, if approved by the Members at the Annual General Meeting, would entail a payout of Rs. 9.13 Crore (including Dividend Distribution Tax of Rs. 1.55 Crore) for the financial year 2015-16 as compared to Rs. 9.10 Crore (including Dividend Distribution Tax of Rs. 1.52 Crore) for the financial year 2014-15.

ISSUE OF EQUITY SHARES

During the year under review, the Company has issued and allotted 34,03,427 Equity Shares of the Company as under:

- 32,96,700 Equity Shares of Rs. 2 each were issued and allotted to Arlette Infrastructure Private Limited (AIPL), a promoter group company, at a price of Rs. 91 per Equity Share (including share premium of Rs. 89 per Equity Share), upon conversion of 32,96,700 Compulsorily Convertible Debentures (CCDs) held by AIPL, on April 01, 2015;

- An aggregate of 1,06,727 Equity Shares of Rs. 2 each were issued and allotted under FLFL Employees'' Stock Option Scheme - 2013, to the eligible employees of the Company on May 20, 2015, December 15, 2015 and January 30, 2016.

DEBENTURES

During the year under review, 32,96,700 Compulsorily Convertible Debentures (CCDs) face value of Rs. 91 each, were converted into 32,96,700 Equity Shares of Rs. 2 each of the Company on April 01, 2015.

The Company has fully repaid the principal amount of Secured Redeemable Non-Convertible Debentures Series-II aggregating to Rs. 250 Crore in two equal tranches on June 06, 2015 and June 07, 2016.

Further, the Company has also repaid partially the principal amount of Secured Redeemable Non- Convertible Debentures Series-III aggregating to Rs. 100 Crore on May 31, 2016.

The Company has made timely payment of interest and principal amount, as and when due on Debentures, issued by the Company.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act 2013 (''the Act''), the Board of Directors of the Company confirms that:

(i) in the preparation of the annual accounts for the financial year ended March 31, 2016 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 at the end of the financial year and of the profit of the Company for the year ended March 31, 2016;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act 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, 2016 on a going concern basis;

(v) the directors, further state that they 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

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, the following changes took place in the Board of Directors and Key Managerial Personnel of the Company.

Mr. C. P. Toshniwal has tendered his resignation as an Executive Director & Chief Financial Officer of the Company effective from the close of the business hours on May 01, 2016. However, he continued to be a member of the Board, as a Non-Executive Director of the Company. The Board at its Meeting held on May 26, 2016 has re- appointed Mr. Kishore Biyani as the Managing Director of the Company for a further period of three years with effect from June 25, 2016.

The Board has appointed Mr. Bijou Kurien as an Additional (Independent) Director of the Company for a term of five years with effect from May 26, 2016, subject to approval of Members of the Company at the forthcoming Annual General Meeting.

The Board has also appointed Ms. Avni Biyani as an Additional Director of the Company with effect from June 07, 2016.

Mr. Bijou Kurien and Ms. Avni Biyani hold office up to the date of the forthcoming Annual General Meeting of the Company. The Company has received separate notices from a member under section 161 of the Companies Act, 2013, signifying its intention to propose Mr. Bijou Kurien and Ms. Avni Biyani as candidates for the office of Director of the Company at the forthcoming Annual General Meeting.

Mr. Rakesh Biyani retires by rotation at the forthcoming Annual General Meeting and being eligible, offers himself for re-appointment.

Mr. Kaleeswaran Arunachalam was appointed as Chief Financial Officer of the Company with effect from May 26, 2016.

The necessary resolutions for re-appointment of Mr. Kishore Biyani as Managing Director and appointment of Mr. Bijou Kurien as an Independent Director and Ms. Avni Biyani as a Director, are being placed before the Members for approval at the forthcoming 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.

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

NUMBER OF MEETINGS OF THE BOARD

During the year under review, six meetings of the Board of Directors were held. The details of date of meetings of the Board including attendance of directors, are given in the Corporate Governance Report that forms part of this Annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Pursuant to the provisions of section 129(3) of the Act, a statement containing salient features of the financial statements of the Company''s subsidiaries / associate companies / joint ventures as on March 31, 2016 in the prescribed Form AOC-1 is attached to the financial statements of the Company, which forms part of this Annual Report.

The details of the Company''s subsidiaries / associate companies / joint ventures are as under:

SUBSIDIARIES

Future Style Lab Limited (FSLL)

During the year under review, the Company incorporated a wholly owned subsidiary in the name and style of "Future Style Lab Limited", with an objective of developing women focused fast fashion brand at affordable pricing. FSLL launched "COVER STORY" India''s first fast fashion brand for women offering the latest fashion trends. Styled at Future Style Lab Design Studio in London, COVER STORY is a perfect blend of modern and traditional clothing. The brand will focus on catering to the rising demand for global fashion among young women''s segment in India. Your Company, with FSLL''s brand promises to deliver the latest international trends while they are still latest. The brand was initially launched in select shop-in-shop (SIS) stores of Central. This was followed by opening of Exclusive Brand Outlets (EBOs) in Mumbai and in NCR region.

Presently, your Company holds 90.00% of the paid-up equity capital of FSLL.

Indus-League Clothing Limited (ILCL)

ILCL, a wholly owned subsidiary of the Company, was engaged in design, manufacture and marketing of readymade apparels and accessories. It had developed exciting fashion brands such as "Indigo Nation",

"Scullers", "Jealous21", "Urbana" and "Urban Yoga". The entire business of ILCL has been transferred to and vested in the Company, pursuant to the Composite Scheme of Arrangement and Amalgamation.

Elisir Lifestyle private Limited (ELpL)

ELPL is engaged in the business of supply and distribution of footwear and accessories in India. The core competence of ELPL lies in initiating designs & keeping in tune with fashionability in the market to develop latest fashion products in footwear and apparel for brand "SPUNK".

It owns and runs 12 EBOs for brand SPUNK. It also markets and distributes SPUNK products in over 300 MBOs and over 200 Large Format Stores (LFS).

Presently, your Company holds 60.00% of the paid-up equity capital of ELPL.

Rachika Trading private Limited (RTpL)

RTPL is in the business of design, manufacture and marketing of readymade apparels and accessories under the brand "GIOVANI". The brand "GIOVANI", a quintessential suits & jackets brand, eases the layer of formal-rituals around the suit and allows ones true self to manifest. Giovani also offers a niche and unique collection for the more discerning man and woman with elegant sense of style. It markets its products through EBOs and other leading hyper markets across India.

During the year under review, your Company has made further investment in the Rights Issue of RTPL, which resulted in increase of its total stake from 80.00% to 96.00% of the paid-up equity capital of RTPL.

Presently, your Company holds 96.00% of the paid-up equity capital of RTPL.

JOINT VENTURES

Holii Accessories private Limited (HApL)

HAPL is engaged in the business of retailing fashion accessories such as leather handbags, wallets and other accessories under the Brand "Holii".

HAPL has always tried to reflect the ever changing lifestyle of the modern Indian women through their designs. Right now it has complete range of handbags, wallets, clutches, travel bags and small accessories.

HAPL is available through 15 exclusive boutiques across India and over 50 MBOs and also available online from it''s website www.holii.in and from major e-retailers.

During the year under review, the Company has made further investment in the Rights Issues of HAPL. Presently, your Company holds 50.00% of the paid-up equity capital of HAPL.

Clarks Future Footwear private Limited (CFFpL)

CFFPL is a Company''s joint venture with C&J Clark International Limited, is engaged in the business of single brand wholesale and retailing of footwear and accessory such as shoes, boots, sandals, handbags and accessories. The Brand "CLARKS" is world''s largest casual and smart shoe brand and the world number one in ''everyday footwear''. It is sold over 35 countries around the world. In India, Clarks is available through 38 EBOs and over 50 MBOs / LFS and also available online through website www.clarks.in.

Presently, your Company holds 50.00% of the paid-up equity capital of CFFPL.

Celio Future Fashion private Limited (CFFPL)

CFFPL deals in the Retail trading and distribution of men''s ready to wear garments under single brand "Celio". Decoding trends to offer smart and contemporary menswear is the brand''s forte. Showcasing collections oriented to the different moments of a man''s life, Celio captures effortless style for men. "Celio" is a French menswear brand and is present across 1,000 stores in 60 countries. It carries the latest international range in India of casual wear, denim wear & smart work wear through its 40 EBOs & 128 SIS in leading departmental stores. Presently, your Company holds 3.13% of the paid-up equity capital of CFFPL.

ASSOCIATES

Indus Tree Crafts private Limited (ITCPL)

ITCPL is in the business of design, manufacture and marketing of readymade apparels, accessories, home decor and handicraft items, and other related articles. ITCPL owns brand "MOTHER EARTH". ITCPL is an artisanal enterprise founded to provide market support to rural craftsmen and provide training and infrastructure support to artisans. ITCPL is one of India''s best known social enterprises which organizes and trains groups of artisans into producer Self Help Groups (SHGs). It sources from a network of over 100 producer groups and has developed production facilities in Bangalore as well as grass root facilities in Tirunelveli. It''s aim is to work with craftspeople in a selfsustainable fashion and marketing rural skills to urban markets all over the world.

Presently, your Company holds 25.79% of the paid-up capital of ITCPL.

Indus Tree producer Transform private Limited (ITPTPL)

ITPTPL a wholly owned subsidiary of ITCPL, is engaged in the business of designing, retailing, wholesale trading, exporting handicrafts, handloom, personal care and value added food items made by commodities. This includes garment, furniture, personal and home accessories, utility items, textiles, leather, natural fibre, stone wood glass rubber items as well as personal care such as soaps, shampoos, cosmetics and value added food such as staples, cereals, spices, tea, coffee, pickles, papads, juices, ready to eat and ready to prepare items.

ITPTPL is in the business of marketing of readymade apparels, accessories, home decor and handicraft items, and other related articles under the name "MOTHER EARTH". The brand "MOTHER EARTH" is India''s first green and sustainable brand that believes that nature provides for all as long as one gives back as much as one takes. With a wide range of carefully selected merchandise under fashion and home decor, every time a customer shops at "MOTHER EARTH", he/she participates in preserving India''s heritage of centuries old art and craft. ITPTPL sources traditionally handcrafted products from artisans from all over India and provides them a market for their livelihood and crafting skills. ITPTPL also markets innovative products made from natural fibres for homes.

ITPTPL markets its products through EBOs and other leading hyper markets across India and supplies to leading home companies of the world, such as Ikea and Pier Europe.

Resource World Exim private Limited (RWEPL)

RWEPL is engaged in the business of indo-fusion women''s fashion apparel under the brand "Desi Belle". The Brand Desi Belle has made a mark in the Indo-Western category for fashionable young women. Desi Belle was conceptualized with the idea of evolving the way women dress in India. Desi Belle''s footprints spreads PAN India and is now available in 300 MBOs & LFS across the country as well as internationally.

Presently, your Company holds 27.50% of the paid-up equity capital of RWEPL.

KFC Shoemaker private Limited (KSPL)

KSPL focuses on wholesale and retailing of footwear under the brands ''''Tresmode'''' & ''''Solovoga''''.

"Tresmode" is a brand synonymous with uber-chic footwear and designed at a studio in Florence. Tresmode''s shoes are manufactured across the world with young, trendy and fashion forward designs. Tresmode shoes are ever changing keeping pace with fashion trends and at times setting new trends. Tresmode''s versatile collection from party to work wear appeals to the urban clientele whose fashion tastes are constantly evolving. Within a short time, Tresmode has truly established its name and became a celeb favorite. Tresmode is a phenomenon that evolves each season, continuously keeping pace with the fast changing styles, discovering designers and elevating the fashion industry.

During the year under review, the Company has made further investment in the Rights Issue of KSPL. Presently, your Company holds 33.30% of the paid-up equity capital of KSPL.

Mineral Fashions private Limited (MFPL)

MFPL is engaged in designing of elevated casual collections and Indian western wear and markets, distributes and retails under the brand "Mineral". Mineral is an elegant recombination of predominantly natural fabrics with a western construct, creating clothing that makes a woman look and feel special. Versatile, elegant, perfect fits and effortless styling are words which describe Mineral.

Mineral collections currently include clothing and fashion jewelry and is available at exclusive stores in Mumbai and at select stores of Shoppers Stop, Central, Lifestyle and Brand Factory. It is available online with Amazon, Jabong and Myntra. MFPL retails out of 92 locations in 25 cities across India.

The Company has made further investment in the Rights Issue of MFPL, which resulted in increase of its total stake from 37.00% to 49.62% of the paid-up equity capital of MFPL. During the year under review, the Company also subscribed to 3,33,333 Compulsorily Convertible Debenture (CCDs) of MFPL. Subsequent to the year under review, these CCDs were converted into equity shares of MFPL on April 01, 2016, which resulted in further increase of its stake from 49.62% to 52.44% of the paid-up equity capital of MFPL.

Presently, your Company holds 52.44% of the paid-up equity capital of MFPL.

Eclat Life Style private Limited (ELSpL )

ELSPL operates in retailing of its own lifestyle brand "Famozi", with a vision to create an iconic brand globally with an omni-channel presence. It operates through online channels (both Indian & International) and its stores. Currently, ELSPL operates in the men''s lifestyle footwear space, specializing in the corporate casual range. The brand is centered on the proposition of "occasion-based" footwear. The collection includes Drivers, Loafers, Boat shoes, Derby, Oxfords, Boots, Mules, Chukkas, Espadrilles, Sandals & Slippers. Famozi''s vision is to create an iconic brand globally, with an omni- channel presence.

Famozi is one of the most widely traded online brands. Its off-line presence spans across over 20 cities, having over 45 SIS counters. On the international front, Famozi is present in the Middle-east, Singapore, Malaysia and Russia. The brand currently has one of the highest style rotations within the men''s lifestyle footwear space in India. The brand shall soon be launching its collection of men''s corporate bags.

Presently, your Company holds 30.00% of the paid-up equity capital of ELSPL.

Turtle Limited (TURTLE)

TURTLE focuses on manufacturing and retailing of readymade garments under the brand ''''Turtle". With trend setting fashion and redefining styles, its two iconic brands "Turtle" and "London Bridge" have become favorites among men.

Turtle has an impressive and complete range of men''s Formals, Casuals, Party-wear and much more, these include Suits, Trousers, Blazers, Jackets, Pullovers, Denims, T-shirts, Shirts, Belts, Ties, Eyewear and wide range of Accessories. The brand has nurtured a reputation of providing international style at a formidable value to its customers.

Turtle is one of the fastest growing apparel brands in the country with a nationwide presence in over 400 cities, across 1200 Dealer/Agents and over 97 EBOs and also has presence in over 320 stores in Central, Pantaloons, Reliance Trendz, Shoppers Stop and Brand factory as well as online which is growing rapidly on e-retailers websites such as Turtleonline.in, jabong.com, flipkart.com, myntra. com and amazon.in to name a few.

Presently, your Company holds 26.00% of the paid-up equity capital of TURTLE.

DIVESTMENTS

During the year under review, the Company as a part of its strategy to look for opportunity to divest such investments which provides appropriate appreciation and valuation, has divested 2,967 equity shares in Biba Apparels Private Limited and entire investment held in Edmon Trading Private Limited.

CONSOLIDATED FINANCIAL STATEMENTS

The Company had acquired certain investments through vesting of the demerged undertakings under the Composite Scheme of Arrangement and Amalgamation. It had been decided by the Company that all the investments would be held for sale. The investments made thereafter, were also decided to be held for sale. Since all investments made by the Company in subsidiary companies, joint venture companies and associate companies are held exclusively with a view to its subsequent disposal in near future and therefore it was not required to prepare consolidated financial statements under the provisions of the Act and the prescribed Accounting Standards under the Act as applicable to the Company.

AUDIT COMMITTEE

The details of composition of the Audit Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report. There are no instances where the Board did not accept the recommendations of the Audit Committee.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

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 Second Annual General Meeting of the Company held on August 08, 2014 till the conclusion of the Fifth Annual General Meeting of the Company. However, their appointment shall be subject to ratification by the Members in every Annual General Meeting during the said term.

The Company has received a written confirmation from the Auditors that the ratification of their appointment for the next financial year, if made, shall be in accordance with the criteria as provided under section 141 of the Act.

The Auditors'' Report on the financial statements for the financial year ended March 31, 2016 is issued with unmodified opinion and does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

M/s. Sanjay Dholakia & Associates, Practising Company Secretary (Membership No. 2655 / Certificate of Practice No.1798) was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2015-16, as required under section 204 of the Act and Rules made thereunder.

The Secretarial Audit Report for the financial year 2015-16 is given in Annexure A which forms part of this Report.

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

RISK MANAGEMENT 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 risks 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 risks which the Company may be exposed to. The Audit Committee and the Board also periodically review the risk 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 and their adequacy are analyzed in the Management Discussion and Analysis, which forms part 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.

BOARD EVALUATION

Pursuant to the provisions of the Act and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), 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 Chairperson 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 Chairperson and Non-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION

The Company''s policy on Directors'' appointment, 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.

corporate SOCIAL responsibility (CSR)

The CSR Committee of the Company comprises of Mr. Kishore Biyani as a Chairperson, Dr. Darlie Koshy, Mr. C. P. Toshniwal and Ms. Sharda Agarwal as members of the Committee.

During the year under review, "Sone Ki Chidiya" Foundation Trust has been set up with an objective to consolidate and merge the CSR funds at Future Group level so that the combined corpus from all the group entities required to do CSR spent as per applicable provisions, would help in undertaking better and larger CSR initiatives.

With regard to the year under review, the Company was not required to spend any amount on CSR activities, since the average net profits of the Company made during the three immediately preceding financial years, as calculated under section 198 of the Act was negative. The Brief outline of the CSR Policy of the Company is given in Annexure B which forms part of this Report.

EMPLOYEES STOCK OPTIONS (ESOPS)

During the year under review, the Nomination and Remuneration Committee has granted 3,95,476 Stock Options to the eligible employees under the FLFL Employees Stock Option Scheme-2013 (''''FLFL ESOS- 2013") and cancelled 14,278 unvested Stock Options in terms of FLFL ESOS-2013.

Further, the Company has formulated a new FLFL Employees Stock Option Scheme-2015 (''''FLFL ESOP- 2015"), which would be routed / implemented through the FLFL Employees'' Welfare Trust, set up by the Company. The applicable disclosures as stipulated under the Act and SEBI (Share Based Employee Benefits) Regulations, 2014 as on March 31, 2016 with regard to the FLFL ESOS- 2013 and FLFL ESOP-2015 are given in Annexure C to this Report and also available on the Company''s website www.futurelifestyle.in

FIXED DEPOSITS FROM PUBLIC

The Company has not accepted any fixed 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, 2016.

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 in Regulations 17 to 27 and clauses (b) to

(i) of sub-regulation (2) of Regulation 46 of the Listing Regulations, which comes into effect from December 01, 2015 and corresponding provisions of erstwhile Listing Agreement for the period between April 1, 2015 and November 30, 2015, forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

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

particulars of employees

The information pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure D which forms part of this Report.

In terms of the provisions of section 197(12) of the Act 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 the 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 the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any 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 the aforesaid information is being sent electronically to all those Members who have registered their email addresses and is also available on the Company''s website.

DISCLOSURE REQUIREMENTS

- Details of programs for familiarization of Independent Directors with the Company are available on the website of the Company at the link http:// futurelifestyle.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://futurelifestyle.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://futurelifestyle.in/pdf/Policy_for_ Determining_Materiality_of_Events.pdf

- Policy for archival of documents of the Company is available on the website of the Company at the link http://futurelifestyle.in/pdf/Archival_Policy.pdf

- The code of conduct for the Board of Directors and senior management personnel of the Company is available on the website of the Company at the link

http://futurelifestyle.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://futurelifestyle.in/pdf/RPT_Policy.pdf

The Company has established a Whistle Blower Policy to provide Vigil Mechanism for Stakeholders of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company.

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 through various training, awareness 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.

particulars of loans, guarantees and

INVESTMENTS

Particulars of loans, guarantees and investments under the provisions of section 186 of the Act are provided in the note no. 46 of notes forming part of the financial statements, which forms part of this Annual Report.

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. Accordingly, the disclosure of related party transactions as required under section 134(3)(h) of the Act, in Form AOC-2 is not applicable to your Company.

Disclosure of transactions with related parties as required under the Accounting Standard (AS-18) has been made in the notes forming part of the financial statements.

particulars REGARDING CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

EXTRACT OF ANNUAL RETURN

In accordance with section 134(3)(a) of the Act, an extract of annual return in the prescribed Form MGT-9 is given as Annexure F, which forms part of this Report.

ACKNOWLEDGEMENT

The Board thanks all customers, bankers, investors, vendors and other stakeholders for their continued support and patronage during the year under review. The Board also places on records its sincere appreciation to the employees of the Company for their efforts, hard work and dedication, which enabled the Company to achieve the targets and recognitions.

For and on behalf of the Board of Directors

Place: Mumbai Shailesh Haribhakti

Date : June 08, 2016 Chairperson


Mar 31, 2015

Dear Members,

The Directors are pleased to present the Third Annual Report of the Company together with the Audited financial statements for the financial year ended March 31, 2015.

FINANCIAL HIGHLIGHTS:

The financial performance of the Company is as follows:

(Rs. in Crore)

Financial Year Financial Year ParticularS 2014-15 2013-14

Revenue from Operations 3,134.09 2,743.98

Other Income 21.74 331.72

Total Revenue 3,155.83 3,075.70

Profit before Depreciation and Amortization expense & Tax expense 193.57 419.43

Less: Depreciation and Amortization expense 170.09 385.19

Profit before Tax 23.48 34.24

Less: Tax expense 4.93 10.96

Profit after Tax 18.55 23.28

Balance brought forward from previous year 2.33 (0.34)

Add: Profit pursuant to Composite Scheme of Arrangement and Amalgamation - 4.05

Less:Adjustments for Depreciation as per Schedule II of the Companies Act, 2013 1.45 -

Surplus available for appropriation 19.43 26.99

APPROPRIATION

Dividend for the financial year 2013-14 paid on shares issued up to July 2014 0.63 -

Tax on Dividend paid 0.11 -

Transfer to Debenture Redemption Reserve - 15.10

Transfer to General Reserve 1.86 2.33

Proposed Dividend on Equity Shares 7.58 6.18

Tax on Proposed Dividend 1.52 1.05

Balance carried to Balance Sheet 7.73 2.33

REVIEW OF PERFORMANCE

During the year under review, your Company recorded an increase of 14.22% in revenue from operations at Rs. 3,134.09 Crore as compared to Rs. 2,743.98 Crore in the previous financial year. Your Company reported net profit before tax of Rs. 23.48 Crore for the year under review as compared to Rs. 34.24 Crore for the previous financial year.

Your Company''s fashion brands are distributed through its retail chains exclusive brand outlets (EBOs) and multi brand outlets(MBOs) across the country. The stores in Company''s retail chains viz. Central, Brand Factory, I am in, aLL, Planet Sports and Lee Cooper are spread in 76 cities across the country and cover over 4.90 million square feet of retail space. These retail chains collectively attracted over 44.3 million customer footfalls during the financial year ended March 31, 2015. These chains are backed by strong sourcing network, in-house trend-spotting and design teams, coupled with robust Logistics and warehousing network. Further, our distribution network includes 29 Central stores, 39 Brand Factory outlets along with 290 sport stores and exclusive brand outlets.

BUSINESS OUTLOOK

The Management is pLanning to emerge the Company as a brand company with an extensive distribution network, both offLine and onLine during the financiaL year 2015-16. Your Company would add new stores, expLore new channeL of saLes for the brand portfoLio and increase consumer spending within the stores to increase in growth of revenue and it wouLd be on achieving disproportionate growth of the brands business which wouLd Lead to margin expansions.

Your Company wouLd be taking aLL steps to expand its retaiL network by expansion of its own format stores as weLL as capture newer markets which are currentLy not serviced by muLti-brand outLets. The Management wouLd aLso ensure that the dedicated teams continuousLy review various brands in Light of the trends, moods and aspirations of the customers and appropriateLy position these brands to ensure the growth. The teams would also be increasing Company''s brands portfolio as well as extend existing brands to newer categories to capture larger consumer spending. The Company would undertake various initiatives to increase footfaLLs, store productivity and consumer ticket size and it wiLL continue to expLore opportunities to partner and invest in fast growing labels managed by designers and entrepreneurs.

ISSUE OF EQUITY SHARES

During the year under review, the Company has issued and allotted 3,17,35,800 Equity Shares of the Company as under:

* 2,73,785 Equity Shares were issued and allotted under FLFL Employees'' Stock Option Scheme - 2013, to the eligible employees of the Company;

* 1,55,27,950 Equity Shares were issued and allotted to PI Opportunities Fund-I, a venture capitaL fund at a price of Rs. 80.50 per Equity Share (including share premium of Rs. 78.50 per Equity Share) on preferential basis on June 13, 2014;

* 1,59,34,065 Equity Shares were issued and allotted to Ryka Commercial Ventures Private Limited, a promoter group company at a price of Rs. 91 per Equity Share (including share premium of Rs. 89 per Equity Share) on preferential basis on November 17, 2014.

Subsequent to the cLosure of the year under review, the Company has issued and allotted 33,09,436 Equity Shares of the Company as under:

* 32,96,700 Equity Shares of the Company were issued and allotted to Arlette Infrastructure Private Limited (AIPL), a promoter group company, at a price of Rs. 91 per Equity Share (including share premium of Rs. 89 per Equity Share) upon conversion of 32,96,700 Compulsorily Convertible Debentures (CCDs) held by AIPL on April 01, 2015;

* 12,736 Equity Shares were issued and allotted under FLFL EmpLoyees'' Stock Option Scheme - 2013, to the eligible employee of the Company on May 20, 2015.

DIVIDEND

The Board of Directors of the Company has recommended a dividend of '' 0.40 (20.00%) per Equity Share of Rs. 2 each 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 Members at the Annual General Meeting, would entail a payout of Rs. 9.10 Crore (including Dividend Distribution Tax of Rs. 1.52 Crore) for the financial year 2014-15 as compared to Rs. 7.97 Crore (including Dividend Distribution Tax of Rs. 1.16 Crore) for the financial year 2013-14.

INVESTMENTS

During the year under review, the Company has made strategic investments in the following entities:

Eclat Life Style Private Limited (ECLAT)

The Company has made further investment in ECLAT to increase its total stake from 11.00% to 30.00% of the paid-up equity capital of ECLAT, a company engaged in the business of footwear under brand "Famozi" in India.

Mineral Fashions Private Limited (MFPL)

The Company has made further investment in MFPL to increase its totaL stake from 22.70% to 37.00% of the paid-up equity capital of MFPL, a company engaged in the business of manufacturing & retailing of clothing & fashion accessories under the brand "Mineral".

Indus Tree Crafts Private Limited (ITCPL)

The Company has made further investment in ITCPL to increase its total stake from 63.34% to 72.16% of the paid-up equity capital of ITCPL, a company engaged in the business of designing, creating, exporting, domestic retailing and distribution of a wide range of environmentally and socially sustainable products under brand "Mother Earth".

Unico Retail Private Limited (URPL)

The Company has acquired 12.00% equity stake in URPL, a company engaged in the business of handbags, belts and wallets under the brand "PEPERONE" in India.

Elisir Lifestyle Private Limited (ELISIR)

The Company has acquired 60.00% equity stake in ELISIR, a company engaged in the business of manufacture, supply and distribution of footwear and accessories under the brand "Spunk" in India.

Rachika Trading Private Limited (RTPL)

The Company has acquired 80.00% equity stake in RTPL, a company engaged in the business of apparels and fashion accessories under the brand "Giovani".

The Company holds all the above investments made during the year, together with investments already held in its books, as held for sale.

DIVESTMENTS

During the year under review, as a part of its strategy to look for opportunity to divest such investments which provide appropriate appreciation and valuation, the Company divested 31.50% equity stake out of 35.00% equity stake held in Celio Future Fashion Private Limited (formerly known as Celio Future Fashion Limited).

DEBENTURES

During the year under review, the Company had issued 32.96.700 Compulsorily Convertible Debentures (CCDs) of face value of Rs. 91 each convertible into 32.96.700 Equity Shares of Rs.2 each of the Company to Arlette Infrastructure Private Limited (AIPL), a promoter group company on November 17, 2014. The said CCDs have been converted into equity shares of the Company as mentioned herein above.

The Company has also issued 2,000 11.00% Secured Non-Convertible Debentures of face value of Rs. 10 lakh each at par aggregating to Rs. 200 Crore on private placement.

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, 2015.

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 Clause 49 of the Listing Agreement, forms part of the Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion and Analysis as required under Clause 49 of the Listing Agreement forms part of the Annual Report.

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:// futurelifestyle.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://futurelifestyle.in/pdf/Mat_Sub_Policy. pdf

Policy on dealing with related party transactions is available on the website of the Company at the link http://futurelifestyle.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 Companies Act, 2013 and Clause 49 of the Listing Agreements with the Stock Exchanges in India.

NUMBER OF MEETINGS OF THE BOARD

During the year under review, six meetings of the Board were held, details of which are given in the Corporate Governance Report that forms part of the Annual Report.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES

Pursuant to provisions of section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Company''s subsidiaries in Form AOC-1 is attached to the financial statements of the Company, which forms part of the Annual Report.

SUBSIDIARIES

Indus-League Clothing Limited (ILCL)

ILCL is dealing in the readymade apparels and accessories. Your Company holds 100.00% of paid-up capital of ILCL.

Elisir Lifestyle Private Limited (ELPL)

ELPL is engaged in the business of manufacturing, supply and distribution of footwear and accessories in India. Your Company holds 60.00% of paid-up capital of ELPL.

Rachika Trading Private Limited (RTPL)

RTPL is engaged in the business of apparels and fashion accessories. Your Company holds 80.00% of paid-up capital of RTPL.

JOINT VENTURES

Holii Accessories Private Limited (HOLII)

HOLII is engaged in the business of retailing fashion accessories such as leather handbags, wallets and other accessories. Your Company holds 50.00% of paid-up capital of HOLII.

Celio Future Fashion Private Limited (CELIO)

CELIO is engaged in the business of single brand retailing of men''s wear. Your Company holds 3.50% of paid-up capital of CELIO. As reported hereinabove, your Company has sold 31.50% shares to Celio International, SA during the year under review.

Clarks Future Footwear Private Limited (CLARKS)

(formerly known as Clarks Future Footwear Limited]

CLARKS is engaged in the business of single brand wholesale and retailing of footwear and accessory and deals in foreign collaboration of various footwear items and accessories such as shoes, boots, sandals, handbags. Your Company holds 50.00% of paid-up capital of CLARKS.

ASSOCIATES

Indus Tree Crafts Private Limited (ITCPL)

ITCPL is engaged in the business of designing, creating, exporting, domestic retailing and distribution of a wide range of environmentally and socially sustainable products. Your Company holds 72.16% of paid-up equity capital, which represents 25.79% of total paid-up capital (inclusive of equity and convertible preference capital) of ITCPL.

Indus Tree Producer Transform Private Limited (ITPTPL)

ITPTPL is engaged in the business of designing, retailing, wholesale trading, exporting handicrafts, handloom, personal care and value added food items made by commodities. This includes garment, furniture, personal and home accessories, utility items, textiles, leather, natural fibre, stone wood glass rubber items as well as personal care such as soaps, shampoos, cosmetics and value added food such as staples, cereals, spices, tea, coffee, pickles, papads, juices, ready to eat and ready to prepare items. ITCPL holds 100.00% of paid-up capital of ITPTPL.

Resource World Exim Private Limited (RWEPL)

RWEPL is engaged in the business of indo-fusion women''s fashion apparel business under the brand "Desi Belle". Your Company holds 27.50% of paid-up capital of RWEPL.

KFC Shoemaker Private Limited (KSPL)

KSPL focuses on wholesale and retailing of footwear under the brands ''''Tresmode'''' & ''''Solovoga''''. Your Company holds 33.30% of paid-up capital of KSPL.

Mineral Fashions Private Limited (MFPL)

MFPL focuses on manufacturing & retailing of clothing & fashion accessories under the brand "Mineral". Your Company holds 37.00% of paid-up capital of MFPL.

Eclat Life Style Private Limited (ECLAT)

ECLAT engaged in business of footwear under brand "Famozi" in India. Your Company holds 30.00% of paid-up capital of ECLAT.

Turtle Limited (TURTLE)

TURTLE focuses on manufacturing and retailing of readymade garments. Your Company holds 26.00% of paid-up capital of TURTLE.

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 Non-Independent Directors was carried out by the Independent Directors.

The Directors expressed their satisfaction with the evaluation process.

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 Companies Act, 2013, has been disclosed in the Corporate Governance Report, which forms part of the Annual Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Mr. Rahul Mehta ceased to be an Additional Director at the Second Annual General Meeting of the Company held on August 08, 2014. The Board placed on record its appreciation of the valuable contribution made by him during his tenure with the Company.

During the year under review, the Board appointed Ms. Sharda Agarwal as an Additional (Independent) Director of the Company w.e.f. March 27, 2015. As per the provisions of section 161(1) of the Companies Act, 2013 (''the Act''), she holds office upto the date of the ensuing Annual General Meeting. A Notice under section 160(1) of the Act, has been received from a Member signifying its intention to propose Ms. Sharda Agarwal as an Independent Director of the Company.

The Board is also of the opinion that Ms. Sharda Agarwal is independent of the management of the Company and recommended her appointment as an Independent Director for a term of five years at the ensuing Annual General Meeting.

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

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 Clause 49 of the Listing Agreement.

Mr. Kuldeep Sharma has resigned as Head-Legal & Company Secretary of the Company w.e.f. January 14, 2015. Subsequently, Mr. Sanjay Kumar Mutha was appointed as Chief Legal & Company Secretary of the Company w.e.f. March 17, 2015.

Additional information on appointment / reappointment of directors as required under Clause 49 of the Listing Agreement, is given in the Notice convening the ensuing Annual General Meeting.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Mr. Shailesh Haribhakti, Independent Director as Chairman of the Committee and Dr. Darlie Koshy, Independent Director and Mr. C. P. Toshniwal, Executive Director & Chief Financial Officer, 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

The Board has formulated risk management framework mainly covering risk management, risk classification, risk register, risk assessment and management policy, risk identification and mitigation process, risk management - role of internal audit, risk culture, dynamic risk and risk management assurance.

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 alt elements of risks which the Company may be exposed to. The Audit Committee and the Board also periodically review the risk management assessment and minimization procedures.

Key risks and threats to the Company are analyzed in the Management Discussion and Analysis, which forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of section 135 and Schedule VII of the Companies Act, 2013 (''the Act''), the Board of Directors of your Company constituted a CSR Committee. The Board, based on the recommendation of the CSR Committee, adopted CSR Policy for the Company in its meeting held on May 20, 2015.

In pursuance of the CSR Policy, the CSR Committee is working towards a road map to identify and take up CSR projects, which are still in the initial stage. It was also intended to merge the CSR funds at Future Group level so that the combined corpus from all the Group entities would help in undertaking better initiatives.

With regard to the year under review, the Company was not required to spend any amount on CSR activities, since the average net profits of the Company made during the two years immediately preceding financial years (since incorporation), as calculated under section 198 of the Act was negative.

The Brief outline of the CSR Policy of the Company is enclosed as part of this Report as Annexure A.

EMPLOYEES STOCK OPTIONS (ESOPs)

During the year under review, the Nomination and Remuneration Committee has granted 4,64,622 Stock Options to the eligible employees under the FLFL Employees Stock Option Scheme-2013 ("ESOS-2013") and cancelled 11,596 Stock Options granted in terms of ESOS-2013.

The applicable disclosures as stipulated under SEBI Guidelines as on March 31, 2015 with regard to the ESOS-2013 are provided in Annexure B to this Report.

Further, the Company also proposes a new FLFL Employees Stock Option Scheme-2015, which is proposed to be implemented through the Employees'' Welfare Trust. Necessary resolutions for approval of the Members are being placed at the ensuing Annual General Meeting.

PARTICULARS OF EMPLOYEES

In terms of the provisions of section 197(12) of the Companies Act, 2013 (''the Act'') read with Rules 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 the employees drawing remuneration in excess of the limits set out in the said rules are provided in the Annual Report.

Disclosures pertaining to remuneration and other details as required under section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in the 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 the Members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any 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 the aforesaid information is being sent electronically to all those Members who have registered their email addresses and is available on the Company''s website.

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 through various training, awareness 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.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Particulars of loans, guarantees and investments under the provisions of section 186 of the Companies Act, 2013 are provided in the note no. 46 of notes forming part of the financial statements, which forms part of the Annual Report.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board of Directors of the Company confirms that:-

(i) 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;

(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 at the end of the financial year and of the profit of the Company for the year ended March 31, 2015;

(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, 2015 on a going concern basis;

(v) the directors, further state that they 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

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

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

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 Second Annual General Meeting of the Company held on August 08, 2014 till the conclusion of the Fifth Annual General Meeting of the Company. However, their appointment shall be subject to ratification by the Members in every Annual General Meeting during the said term.

The Company has received a written confirmation from the Auditors that the ratification of their appointment for the next financial year, if made,shall be in accordance with the criteria as provided under section 141 of the Companies Act, 2013.

The Auditors'' Report on the financial statements for the financial year ended March 31, 2015 does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

M/s. Sanjay Dholakia & Associates, Practising Company Secretary (Membership No.2655 /Certificate of Practice No.1798) was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2014-15, as required under section 204 of the Companies Act, 2013 and Rules made thereunder.

The Secretarial Audit Report for the financial year 2014-15 is appended as Annexure C which forms part of this Report.

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

EXTRACT OF ANNUAL RETURN

In accordance with section 134(3)(a) of the Companies Act, 2013, an extract of annual return in the prescribed Form MGT-9 is appended as Annexure D, which forms part of this Report.

CONSOLIDATED FINANCIAL STATEMENTS

The Company had acquired certain investments through vesting of the demerged undertakings under the Composite Scheme of Arrangement and Amalgamation. It had been decided by the Company that all the investments would be held for sale. The investments made thereafter, were also decided to be held for sale. Since all investments made by the Company in Subsidiary companies, Joint Venture companies and Associate companies are held exclusively with a view to its subsequent disposal in near future and therefore it is not required to prepare consolidated financial statements under the provisions of Companies Act, 2013 and the prescribed Accounting Standards.

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 Companies Act, 2013 and Clause 49 of the Listing Agreement, 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 Accounting Standard (AS-18) has been made in the notes forming part of the financial statements.

Particulars of contract or arrangements with related parties referred to in section 188(1) of the Companies Act, 2013, in the prescribe Form AOC-2, is appended as Annexure E, which forms part of this Report.

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 the Annual Report.

PARTICULARS REGARDING 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, foreign exchange earnings and outgo, are provided in Annexure F, which forms part of this Report.

AWARDS AND RECOGNITIONS

The Company received awards in categories like

* Central''s lingerie category team bagged two awards at Triumph India''s Annual Awards Ceremony for ExceLLence in Business Innovation and for highest LTL growth for the year 2013-14.

* Converse was awarded the ''Best Men''s Footwear Brand'' at the Myntra Brand Summit 2014 held in September 2014;

ACKNOWLEDGEMENT

The Board thanks all customers, bankers, investors, vendors and other stakehoLders for the continued support and patronage during the year under review. The Board pLaces on records its 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 of Directors

Place: Mumbai Shailesh Haribhakti Date: May 20, 2015 Chairman

 
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