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Directors Report of Future Retail Ltd.

Mar 31, 2017

The Directors are pleased to present the Tenth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2017.

FINANCIAL HIGHLIGHTS

The financial performance of the Company is as follows:

(Rs. in Crore)

Particulars

Financial Year 2016-17

Financial Year 2015-16

Revenue from Operations

17,075.09

6,845.13

Other Income

23.80

18.22

Total Revenue

17,098.89

6,863.35

Profit / (Loss) before Depreciation and Amortization Expense & Tax expense

400.86

51.85

Less: Depreciation and Amortization expense

32.58

36.76

Profit / (Loss) Before Tax

368.28

15.09

Less: Tax expense

-

-

Profit / (Loss) After Tax

368.28

15.09

Other Comprehensive Income for the year

(2.69)

(0.77)

Total Comprehensive Income for the year

365.59

14.32

Earnings Per Equity Share of Face Value of Rs.2/- each

- Basic and Diluted (in Rs.)

7.81

0.69

REVIEW OF PERFORMANCE

During the financial year, the Company had a total income of Rs.17,098.89 Crore. The total expenditure during the financial year amounted to Rs.16,730.61 Crore, thereby resulting Profit Before Tax of Rs.368.28 Crore.

We have a pan India presence with 901 stores in 240 cities in India as of March 31, 2017 and total retail space of approximately 13.8 million sq. ft. for various formats of our Company. As on March 31, 2017, we have 235 Big Bazaar stores, 54 fbb stores, 7 Foodhall stores, 538 easyday stores, 37 Home Town stores and 30 eZone stores. Our retail format business is supported by various other businesses operated by Future Group companies and through Future Group companies investments in various ventures including branded fashion, food and FMCG, insurance, warehousing and logistics, media, textiles and online retailing.

Our retail formats primarily comprises of, value business and home business. In our value business, our formats include (i) "Big Bazaar", a hypermarket format that combines the "see - touch - feel" of Indian bazaars with the choice and convenience of modern retail; (ii) "fbb", an affordable fashion destination; (iii) "Foodhall", a premium supermarket; (iv) "easyday", convenient and neighborhood stores which offers the pre-packed vegetables and fruits to the consumers, FMCG and daily use products. In our home business, we operate (i) "Home

Town", a one-shop destination for home improvement; and

(ii) "eZone", a consumer durable and electronics chain.

SCHEME OF ARRANGEMENT

a) Composite Scheme of Arrangement between the Company and Future Enterprises Limited and their respective Shareholders and Creditors ("FRL - FEL Scheme")

The Composite Scheme of Arrangement between the Company and Future Enterprises Limited ("FEL" - formerly known as Future Retail Limited) and their respective Shareholders and Creditors ("the FRL - FEL Scheme") has been approved under the provisions of Sections 391-394 of the Companies Act, 1956 read with Sections 100-104 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 for demerger of Retail Business Undertaking of FEL into the Company and demerger of Infrastructure Business Undertaking of the Company and vesting into FEL with effect from Appointed Date of October 31, 2015, as defined in the said Scheme and has been given effect on May 1, 2016 ("Effective Date"), after receipt of Hon''ble High Court approval. Pursuant to the same, all the assets and liabilities pertaining to the Retail Business Undertaking of FEL has been demerged and vested into the Company and all the assets and liabilities pertaining to Infrastructure Business Undertaking of the Company has been demerged and vested into FEL.

b) Composite Scheme of Arrangement among Heritage Foods Limited and Heritage Foods Retail Limited and the Company and their respective Shareholders and Creditors ("Heritage Scheme")

The Composite Scheme of Arrangement among Heritage Foods Limited ("Transferor Company" or "HFL") and Heritage Foods Retail Limited ("Transferee Company" or "Demerged Company" or "HFRL") and the Company and their respective Shareholders and Creditors under Sections 391-394 and Sections 100-103 of the Companies Act, 1956 and/or Sections 230-232 and Section 66 of the Companies Act, 2013 (as applicable) and Section 52 of the Companies Act, 2013 ("Heritage Scheme"), inter-alia involving demerger of the Retail Business Undertaking of HFL, through its wholly owned subsidiary HFRL, into the Company has been given effect on May 19, 2017 ("Effective Date - Demerger") after receipt of approval of National Company Law Tribunal Bench at Hyderabad and Mumbai on May 03, 2017 and May 11, 2017 respectively. The Appointed Date under Heritage Scheme for Demerger was close of business on March 31, 2017.

Pursuant to the Heritage Scheme, the Retail Business Undertaking of HFRL has been transferred to and vested in the Company. As consideration for the demerger, the Company will issue 1,78,47,420 (One Crore Seventy Eight Lakh Forty Seven Thousand Four Hundred and Twenty) equity shares of the face value of Rs.2/- (Rupees Two) each, fully paid-up, to the shareholders of HFRL (i.e. HFL).

The shareholders of HFRL (i.e. HFL) have agreed to share with the Company an upside on the realization out of the shares of the Company, subject to certain broad terms and conditions.

c) Composite Scheme of Arrangement Between the Company and Bluerock eServices Private Limited and Praxis Home Retail Private Limited and their respective Shareholders ("Home Town Scheme")

The Board of Directors of the Company have approved the Composite Scheme of Arrangement between the Company and Bluerock eServices Private Limited (''BSPL'' or ''Second Demerged Company'') and Praxis Home Retail Private Limited (''PHRPL'' or ''Resulting Company'') and their respective Shareholders ("Home Town Scheme") under Sections 230-232 read with Section 66 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 in their meeting held on April 20, 2017. The Scheme inter-alia involves demerger of Home Retail Business of the Company into PHRPL with effect from the commencement of business on August 1, 2017.

Pursuant to the Home Town Scheme, the Home Retail Business of the Company carried on through Home Town Stores would be transferred to and vested in PHRPL. As a consideration for the said demerger, PHRPL would issue 1 fully paid up Equity Share of Rs.5/- each, fully paid up, to the shareholders of the Company for every 20 fully paid up shares of Rs.2/- each held by the Shareholders in the Company on Record Date to be fixed by the Company. Post issue of such shares, the equity shares of PHRPL would be listed on the stock exchanges viz, BSE & NSE (subject to listing permission) and the shareholding pattern of PHRPL would be identical to that of the Company.

The Home Town Scheme also provides for demerger of e-Commerce Home Retail Business from BSPL into PHRPL and for which PHRPL shall issue 6,30,000, 9% Redeemable Preference Shares of Rs.100/- each to the shareholders of BSPL as consideration for Demerger. The Appointed Date for Demerger of e-Commerce Home Retail Business is April 15, 2016.

The Home Town Scheme would be given effect on receipt of requisite approvals from the applicable statutory authorities.

EQUITY SHARE CAPITAL

During the year under review, the Company has issued and allotted in aggregate 42,83,34,478 Equity Shares as under:

- Pursuant to FRL - FEL Scheme

Pursuant to the FRL - FEL Scheme becoming Effective, the Shareholders of FEL who were holding equity or Class B (Series-1) shares on Record Date i.e. May 12, 2016, were allotted Equity Shares of the Company in the ratio as mentioned in the Scheme (i.e. 1 Equity Share of '' 2 each for each equity share or Class B (Series-1) shares held in FEL). Accordingly, on May 18, 2016, the Company allotted 42,78,60,296 Equity Shares to the existing Shareholders of FEL.

- Pursuant to FRL - ESOP Plan, 2016

During the year under review, the Company has made allotment of total 474,182 Equity Shares of '' 2/- each to concerned employees of the Company, upon exercise of the vested options granted to the said employees under Future Retail Limited Employee Stock Option Plan - 2016 (FRL ESOP - 2016). None of the employee is in receipt of Equity Shares exceeding 1% of Equity Share capital of the Company against the vested options exercised by them under FRL ESOP - 2016. The breakup of allotment of 474,182 equity shares is as follows:

- 4,67,558 Equity Shares of Rs.2/- each allotted on January 19, 2017; and

- 6,624 Equity Shares of Rs.2/- each allotted on March 21, 2017.

BUSINESS OUTLOOK

We have developed well recognized formats like Big Bazaar, fbb, Foodhall, easyday, Home Town and eZone. Due to the recognition and acceptability of these formats, we have been able to develop pan India presence with a loyal consumer base, as of March 31, 2017, of approximately 30 million members across various formats. As our business is driven by consumer spending, we believe that our presence across India and wide consumer base ensure that we are well positioned to grow our business.

A focused first-full year of pure-play asset light retail business has opened doors to huge opportunities across our large & small stores. Deployment of technology tools in the last few years & on a continued basis, has given the Company a concrete direction with which we feel lot more confident to begin our next phase of journey armoured with ''Data''. Consumption Data through an unparalleled reach to over approx 300 million unique customers across 901 stores on a truly pan-India basis is the key business driver as we set ourselves for the next few years.

Our unique extensions in form of Future Pay wallet, Membership & Loyalty drive across formats are redefining our customer connect and increasing the relevance to customers by many folds. This would allow us to have deeper share of their consumption spends and bring in new customers in our fold with a higher consistency.

Our process of reimagining retail was extended with Big Bazaar GEN NXT across large metros and fbb stores at select locations. Many of them have already become shopping destinations and we believe the differentiation allows us to cater to aspiring Indians more effectively and increases the productivity of our stores.

We are more closer to integrating our retail stores with advanced supply-chain capabilities, technology-enabled processes, differentiated assortments including world-foods, overall membership experience and many more services to usher in a unique model for our neighbourhood stores. The next few years are defining for us and we are dedicated to work towards making it a success.

DIVIDEND

Due to accumulated losses of previous years and further with a view to preserve the profits of current year for future prospectus, the Board of Directors of the Company were unable to recommend any Dividend during the financial year 2016-17.

INVESTMENTS AND DISINVESTMENTS

During the year under review, the Company has made nominal investment in Future Supply Chain Solutions Limited and has not divested any investment.

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, 2017.

DEBENTURES

Pursuant to FRL - FEL Scheme, the Optionally Convertible Debentures as standing in the books of pre-demerged entity was splitted between the two Companies as per the assets and liabilities transferred for the Retail Business Undertaking and Retail Infrastructure Business Undertaking. Accordingly, the Company issued 1,542 10% Optionally Convertible Debentures of Rs.10 lakh each (hereinafter referred to as "OCDs") aggregating to Rs.154.20 Crore to M/s. Cedar Support Services Limited, entity not forming part of Promoter Group. These OCDs are convertible into equity shares of the Company at the option of issuer.

CORPORATE GOVERNANCE REPORT

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

BUSINESS RESPONSIBILITY REPORT

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

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

M/s. NGS & Co. LLP, Chartered Accountants (Firm Registration No. 119850W) have been appointed at last AGM for a period of 5 (Five) years from the conclusion of the Ninth Annual General Meeting till the conclusion of the Fourteenth 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 Act").

Auditors'' Report

The Auditors'' Report on the Financial Statement for the financial year ended March 31, 2017 is issued with unmodified opinion and does not contain any qualification, reservation or adverse remark.

Secretarial Auditor

Ms. Bindu Darshan Shah (Membership No. A20066 / CP No. 7378), Proprietor: K. Bindu & Associates, Practicing Company Secretaries was appointed as Secretarial Auditor to conduct the secretarial audit of the Company for the financial year 2016-17, as required under Section 204 of the Act and Rules made thereunder.

The Secretarial Audit Report for the financial year 2016-17 is appended as Annexure - I which forms part of this Report. The said Secretarial Audit Report doesn''t contain any qualifications, reservations or adverse remarks.

POLICIES & 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://www.futureretail.co.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://www.futureretail.co.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://www.futureretail.co.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:// www.futureretail.co.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://www.futureretail.co.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:// www.futureretail.co.in/pdf/RPT_Policy.pdf

The Dividend distribution policy is given as Annexure - II to this Report. The same is also available on the website of the Company at the link http://futureretail.co.in/pdf/ Dividend_Distribution_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. This Policy is in compliance with the provisions of the Act and Listing Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Details of changes in the structure of Board and various Committees were disclosed in our earlier report for the year ended March 31, 2016. We are pleased to inform you that on April 20, 2017, Ms. Sridevi Badiga was appointed as an Additional (Independent) Director for a period of Five (5) years subject to the approval of Shareholders of the Company.

Ms. Sridevi Badiga holds office upto the date of the forthcoming Annual General Meeting of the Company. The Company has received separate notice from a member signifying its intention to propose Ms. Sridevi Badiga as candidate for the office of Director of the Company at the forthcoming Annual General Meeting.

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

The Company has received necessary disclosure and confirmation from concerned Director(s) in connection with their appointment / re-appointment. Additional information on appointment / re-appointment of

Directors as required under Regulation 36 of the Listing Regulations, is given in the Notice convening the ensuing Annual General Meeting.

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

COMMITTEES OF THE BOARD OF DIRECTORS

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

NUMBER OF MEETINGS OF THE BOARD

During the year under review, total Eight (8) meetings of the Board were held, details of which are given in the Corporate Governance Report that forms part of this Annual Report.

VIGIL MECHANISM

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

SUBSIDIARY, JOINT VENTURE, HOLDING COMPANY AND ASSOCIATE COMPANIES

There is no subsidiary or joint venture or associate company of our Company during the year under review.

M/s. Cedar Support Services Limited ("Cedar") was holding company of our Company as on March 31, 2016. Consequent, to allotment of Equity Shares pursuant to the FRL-FEL Scheme on May 18, 2016, our Company ceased to be subsidiary of Cedar.

PERFORMANCE EVALUATION OF BOARD

Pursuant to the provisions of the Act and the 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 Chairman of the Board, who were inter-alia 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 Act, has been disclosed in the Corporate Governance Report, which forms part of this Annual Report.

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 which has been constituted on May 02, 2016 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 reviews the risk management assessment and minimization procedures.

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

EMPLOYEES STOCK OPTIONS (ESOPS)

The Shareholders of the Company had passed resolutions through Postal Ballot on November 07, 2016 and approved the Future Retail Limited Employees Stock Option Plan - 2016 (FRL ESOP - 2016) and also approved to offer, issue and allot at any time or to acquire by way of secondary acquisition, to or for the benefit of Eligible Employees under FRL ESOP - 2016, not exceeding 90,00,000 Equity Shares of '' 2 each, in one or more tranches, at such price and on such terms and conditions as may be fixed or determined by the Committee.

Pursuant to the applicable provisions of the Act and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014, the Company has set up a ''Future Retail Limited Employees'' Welfare Trust'' ("Trust") for implementation of the said Scheme.

During the year under review, the Nomination and Remuneration Committee has granted 13,24,071 Stock Options to the eligible employees (including to employees transferred from FEL pursuant to FRL-FEL Scheme) and cancelled 19,758 Stock Options under FRL ESOP - 2016.

The applicable disclosures as stipulated under Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 as on March 31, 2017 with regard to the FRL ESOP - 2016 are provided in Annexure - III to this Report.

Further, the Company has constituted Employees Gratuity Trust in name of "Future Retail Limited - Employees Gratuity Trust" and constituted a Fund through Trust in the name of "Future Retail Employees Superannuation Trust" for benefits of eligible employees 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.

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

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.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

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

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans granted, Guarantee provided and Investment made by the Company which are covered under the provision of Section 186 of the Companies Act, 2013, is provided in note no. 5 and 42 of Notes forming part of Standalone Financial Statements.

INDIAN ACCOUNTING STANDARDS (IND AS)

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

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

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

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

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act, the Board of Directors of the Company hereby confirms that:

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

ii. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the year ended March 31, 2017;

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, 2017 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.

AUDIT COMMITTEE

The Audit Committee of the Company comprises of Ms. Gagan Singh, Independent Director as Chairperson of the Committee, Mr. Ravindra Dhariwal, Independent Director, Ms. Sridevi Badiga, Independent Director and Mr. Rakesh Biyani, Joint Managing Director as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of this Annual Report.

PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors and employees 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 under Annexure - VI, which is annexed to this Report.

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

In terms of the provisions of first proviso to Section 136(1) of the Act, information pursuant to Section 197 of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is excluded from the Annual Report being sent to the members of the Company and is available for inspection by the Members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary and the same will be furnished on request. The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is available on the website of the Company.

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

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 on foreign exchange earnings and outgo, are provided in Annexure - VII which forms part of this Annual 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 appended as Annexure - VIII 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.

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

Pursuant to Regulation 39(4) read with Schedule V of the Listing Regulations, pertaining to outstanding shares lying in Unclaimed Suspense Account at the beginning of financial year under review, the aggregate number of Shareholders holding Equity Shares were 185 holding 101,260 Equity Shares. Out of which One (1) shareholder claimed 550 Equity Shares which were credited to shareholder''s account. The total Shareholders now remained are 184 holding 100,710 Equity shares lying in the Unclaimed Suspense Account as on March 31, 2017. All the unclaimed shares are credited to a Demat Unclaimed Suspense Account and all the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. The Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed in this report about the Home Town Demerger Scheme which was approved by the Board of Directors at its meeting held on April 20, 2017 (based on the recommendation of the Audit Committee), there were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts.

AWARDS AND RECOGNITIONS

The Company or its formats received awards in categories like:

- FRL has been ranked among the top 50 most valuable Brand Owners by Brand Finance.

Big Bazaar

- Big Bazaar was ranked 14th in the Most Trusted Brand survey done by Nielsen and The Economic Times;

- The brand is 4th Most Trusted in the Services category (other brands are Airtel, SBI, Vodafone);

- The brand was ranked 4th in the Youth Male segment (other brands: Samsung Mobile, Colgate);

- The brand was 11th in the NCCS B segment and 15th in the Monthly income Group of Rs.10,000 - Rs.25,000

- showing a strong preference in under-penetrated segments of modern retail and scope for future growth;

- Retailer of the Year, Large Format from Coca Cola Golden Spoon Awards in 2017.

Home Town

- Excellence under category of "importer and Distribution" at MATRADE, Government of Malaysia;

- Won "Gold Award" in ACEF - Asian Customer Engagement Forum for Gurukul App;

- Won "Rockstar Award" at Pepperfry Partners Meet in August, 2016.

easyday

- Retailer of the Year, Supply Chain Management from Coca Cola Golden Spoon Awards.

fbb - campaign

- What started as a foot-tapping Denim Dance music video by celebrity choreographer Terence Lewis, concluded with a swooping Guinness World Record for making the ''world''s largest photo book''!

BBPC

- Wins the Award for Best Loyalty Program in Retail Sector (Single / Specialty format) at the 10th Customer Loyalty Summit 2017.

ACKNOWLEDGEMENT

Your Board of Directors would like to thank and place on record their appreciation for the continued support and co-operation provided to your Company by its Shareholders, Future Group entities in particular, their employees, regulatory authorities and its banks and financial institutions. Your Directors would also like to place on record its sincere appreciation for the efforts put in by employees of the Company whose efforts, hard work and dedication has enabled the Company to achieve the targets and recognitions during the year.

For and on behalf of the Board of Directors

Place: London Kishore Biyani

Date : May 23, 2017 Chairman & Managing Director


Mar 31, 2016

To

The Members,

The Directors are pleased to present the Ninth 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)

Particulars

Financial Year 2015-16

Financial Year 2014-15

Revenue from Operations

6,844.96

1,779.42

Other Income

15.51

70.03

Total Revenue

6,860.47

1,849.45

Profit / (Loss) Before Depreciation and Amortization Expense & Tax Expense

51.31

(335.11)

Less: Depreciation and Amortization Expense

36.76

44.10

Profit / (Loss) Before Tax

14.55

(379.21)

Less: Tax Expense

--

--

Profit / (Loss) After Tax

14.55

(379.21)

Earnings Per Equity Share of Face Value of Rs. 2/- each

Basic & Diluted (in Rs.

0.66

(107.24)

REVIEW OF PERFORMANCE

During the financial year, the Company had a total income of Rs. 6,860.47 Crore. The total expenditure during the year amounted to Rs. 6,845.92 Crore, thereby resulting profit before Tax of Rs. 14.55 Crore. There was no provision for tax and therefore the profit for the year amounted to Rs. 14.55 Crore.

Post considering effect of the Scheme, we have a pan India presence with 738 across 221 cities in India as of March 31, 2016 and total retail space of approximately 12.97 million sq. ft. Post Scheme, the various formats viz Big Bazaar, Food Bazaar, fbb, Foodhall, easyday, (including KB''s Conveniently Yours & KB''s Fairprice), Home Town and eZone are part our Company and as on March 31, 2016, we have 218 Big Bazaar stores, 10 Food Bazaar stores, 51 fbb stores, 4 Foodhall stores, 320 easyday (including "KB''s Conveniently Yours" and KB''s Fairprice) stores. 43 Home Town stores, 92 eZone stores. The early mover advantage has not only helped us develop a wide network of stores across India in various formats but also establish brand equity for our Company as well as for our various formats. Further, our retail format business is supported by various other businesses operated by group companies and through group companies investments in various ventures including branded fashion, food and FMCG, insurance, warehousing and logistics, media, textiles and online retailing.

Our retail formats primarily comprises of, value business and home business. In our value business, our formats include, (i) "Big Bazaar", a hypermarket format that combines the "see - touch - feel" of Indian bazaars with the choice and convenience of modern retail; (ii) "Food Bazaar", a supermarket which offers the convenience of pre-packed vegetables and fruits to the consumers and also retains the Indian''s preference of "see - touch - feel" created by displaying the products, FMCG and daily use products; (iii) "fbb", an affordable fashion destination;

(iv) "Foodhall", a premium supermarket and (v) "easyday" (including "KB''s Conveniently Yours" & "KB''s Fairprice"), convenient stores which offers the pre-packed vegetables and fruits to the consumers, FMCG and daily use products. In our home business, we operate (i) "Home Town", a one-shop destination for home improvement; and (ii) "eZone", a consumer durable and electronics chain

COMPOSITE SCHEME OF ARRANGEMENT

The Composite Scheme of Arrangement between Future Enterprises Limited (formerly known as - ''Future Retail Limited'') and Future Retail Limited (formerly known as -''Bharti Retail Limited'') and their respective shareholders and creditors ("the Scheme") under the provisions of Sections 391-394 of the Companies Act, 1956. The Scheme, which provides for demerger of Retail Business

Undertaking of Future Enterprises Limited (''''FEL'''') and vesting into the Company and demerger of Retail Infrastructure Business Undertaking of the Company and vesting into FEL with effect from Appointed Date of October 31, 2015, as defined in the Scheme, has been given effect on May 1, 2016, after filing of order issued by Hon''ble High Court of Original Judicature at Bombay with Registrar of Companies, Mumbai under Ministry of Corporate Affairs. Pursuant to the Scheme, all the assets and liabilities pertaining to the Retail Business Undertaking of FEL has been demerged and vested into the Company and all the assets and liabilities pertaining to Retail Infrastructure Business Undertaking of the Company has been demerged and vested into FEL.

EQUITY SHARE CAPITAL

- Issue of Equity shares

During the year under review, the Company allotted following Equity Shares to Cedar Support Services Limited:

- 13,30,00,000 Equity Shares of '' 10/- each at par on April 27, 2015; and

- 18,80,90,000 Equity Shares of '' 10/- each at par on May 25, 2015.

- Capital Reduction

Pursuant to the provisions of Sections 100 to 104 of the Companies Act, 1956 and in pursuance of the Scheme approved by High Court at Bombay the issued, subscribed and paid-up equity share capital of the Company was reduced from Rs. 17,19,75,00,000/comprising of 1,71,97,50,000 Equity Shares of Rs. 10/each, fully paid up to Rs. 8,69,56,522/- divided into 4,34,78,261 Equity Shares of Rs. 2/- each, fully paid-up, as part of the Scheme, without any further act or deed and such reorganization of capital was carried out by reducing appropriately the face value of each equity share of Rs. 10/- each and reconsolidating the same into 4,34,78,261 Equity Shares of Rs. 2/- each, fully paid-up, without any further act or deed.

- Issue of Equity shares to the shareholders of FEL

Pursuant to the said Scheme becoming Effective, the shareholders of FEL who were holding equity or Class B (Series-1) shares on Record Date i.e. May 12, 2016, were allotted Equity Shares of the Company in the ratio as mentioned in the Scheme (i.e. 1 Equity Share of Rs. 2 each for each equity share or Class B (Series-1) shares held in FEL.

Accordingly, on May 18, 2016, the Company allotted 42,78,60,296 Equity Shares to the existing shareholders of FEL as mentioned herein:

- 38,84,85,617 Equity Shares to the equity shareholders of FEL.

- 3,93,74,679 Equity Shares to the Class B Shares (Series-1) Shareholders of FEL.

The Company has initiated process for listing of its equity share capital on BSE Limited and National Stock Exchange of India Limited as required under the Scheme.

BUSINESS OUTLOOK

The Company has well recognized Retail formats like Big Bazaar, Food Bazaar, fbb, Foodhall, easyday (including KB''s Conveniently Yours & KB''s Fairprice), Home Town and eZone. Due to the recognition and acceptability of these formats, we have been able to develop pan India presence with a loyal consumer base, as of March 31, 2016, of approximately 12.03 million consumers across formats for Payback Loyalty Program. The Company has also able to add substantial number of consumers for other loyalty initiatives of the Company and Group. As our business is driven by consumer spending, we believe that our presence across India and wide consumer base ensure that we are well positioned to grow our business.

We intend to enhance our consumer base through increasing our presence in various cities in India and drive cross spending across various formats. We are specifically focusing to achieve a larger share of consumption spending in our existing markets. We intend to increase our share in the consumer spending in India by launching new formats or by adding categories to our existing product range to cater to consumers across Indian society in various consumption spaces. Pursuant to the same, we have launched Big Bazaar Direct to reach out to the consumers that are not catered by physical stores and book orders on customized tablets. We are also in the initial phases of developing omni channel retailing which will enable us to sell our products on every platform such as physical stores, online retailing, assisted e-commerce platforms, on television or outdoor medium, or on mobile platforms.

With the Scheme we have achieved our aim to simplify the corporate structure, achieve greater administrative efficiency, elimination of capital expenditure, consolidation of retail operations into one entity and consolidation of infrastructure operations into other entity. The Scheme helped us to create asset light model.

DIVIDEND

Due to accumulated losses in the previous financial years and with a view to preserve the current year profits for future prospects, the Board of Directors of the Company were unable to recommend any Dividend for the financial year 2015-16.

INVESTMENTS AND DIVESTMENTS

During the year under review, the Company has not made any strategic investment. As the Company do not hold investments there were no divestments during the year.

PUBLIC DEPOSITS

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.

CHANGE OF NAME

As provided in the Scheme, the name of the Company was changed from "Bharti Retail Limited" to "Future Retail Limited" and a Certificate of Incorporation consequent to change of name was obtained from Registrar of Companies, Mumbai on May 25, 2016.

DEBENTURES

Pursuant to the Scheme, the Optionally Convertible Debentures as standing in the books of pre-demerged retail entity was splitted between the two companies as per the assets and liabilities transferred for the Retail Business Undertaking and Retail Infrastructure Business Undertaking. Accordingly, the Company issued 1,542, 10% Optionally Convertible Debentures of '' 10,00,000/each (hereinafter referred to as "OCDs") aggregating to Rs. 154.20 Crore to Cedar Support Services Limited, not forming part of Promoter Group subject to the necessary approval of the regulatory authorities.

CORPORATE GOVERNANCE

As the Company is in process of getting its Equity Shares listed, it has tried to create its Board structure and various Committees in such a manner as would be compliant with Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") in addition to applicable provisions of the Companies Act, 2013 and Rules related thereto. Accordingly, a report on Corporate Governance forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis as required under Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations") forms part of the Annual Report.

POLICIES & DISCLOSURE REQUIREMENTS

The Board of Directors of the Company at its meeting has approved the following policies & code of conduct:

- Details of programs for familiarization of Independent Directors with the Company are available on the website of the Company at the link http://www. futureretail.co.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://www.futureretail.co.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://www.futureretail.co.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://www.futureretail.co.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://www.futureretail.co.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://www.futureretail.co.in/pdf/RPT_Policy.pdf

The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and Directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance with the provisions of the Companies Act, 2013 ("the Act") and Listing Regulations.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The details of reconstituted Board, Post Scheme is as follows:

Mr. Kishore Biyani and Mr. Rakesh Biyani who were coopted as Additional Directors of the Company on April 30, 2016 were subsequently, appointed as Managing Director and Joint Managing Director respectively with effect from May 02, 2016 for a period of 3 years.

In the Board Meeting held on May 25, 2016, Mr. Kishore Biyani was further appointed as the Chairman of the Board and he is currently designated as Chairman and Managing Director of the Company.

Further, following directors were co-opted on the Board effective April 30, 2016.

- Mr. Rajan Bharti Mittal : Non Executive Director;

- Mr. Ravindra Dhariwal : Independent Director;

- Mr. Shailendra Bhandari : Independent Director; and

- Ms. Gagan Singh : Independent Director.

The necessary resolutions proposing the appointment of all directors who were appointed as Additional Directors are being placed before the members for the approval.

Additional information on appointment of Directors as required under the Regulation 36 of the Listing Regulation is given in the notice convening the ensuing Annual General Meeting.

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

On Scheme becoming effective, the following Directors have resigned with effect from May 02, 2016

- Mr. Inderjit Walia;

- Mr. Devendra Khanna;

- Mr. Rajendra Chopra;

- Mr. Sridhar Natarajan;

- Ms. Veenu Mittal.

Further, Key Managerial Personnel (KMP) Mr. Anupam Goyal resigned as Chief Financial Officer, Mr. Manish Sabnis resigned as Key Managerial Personnel and Ms. Gurdeep Kaur as Company Secretary effective from May 02, 2016.

Further, Mr. C. P. Toshniwal was appointed as Chief Financial Officer (KMP) and Mr. Virendra Samani, was appointed as Dy. Company Secretary (KMP) and Compliance Officer respectively effective from May 02, 2016.

COMMITTEES

The details of various committees and their meetings held during the year under review is given as part of Corporate Governance Report which forms the part of Annual Report:

Post Scheme becoming Effective and reconstitution of the Board in the current year, the compositions of various Committees and their scope has been once again defined. The details of reconstitution of existing Committees and constitution of new committees is given here under.

1. Audit Committee

The Audit Committee has been reconstituted with effect from May 02, 2016. Presently, the Committee comprises of following members:

- Ms. Gagan Singh : Independent Director / Chairperson;

- Mr. Ravindra Dhariwal : Independent Director; and

- Mr. Rakesh Biyani : Joint Managing Director

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.

2. Nomination and Remuneration Committee

The Nomination and Remuneration Committee has been reconstituted with effect from May 02, 2016. Presently, the Committee comprises of following members:

- Mr. Ravindra Dhariwal : Independent Director / Chairman;

- Mr. Shailendra Bhandari: Independent Director; and

- Mr. Rajan Bharti Mittal : Director

The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

3. Stakeholders'' Relationship Committee

The Stakeholders'' Relationship Committee has been constituted on May 02, 2016. Presently, the Committee comprises of following members:

- Mr. Shailendra Bhandari : Independent Director / Chairman;

- Ms. Gagan Singh : Independent Director; and

- Mr. Rajan Bharti Mittal : Director

The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

4. Corporate Social Responsibility Committee

The Corporate Social Responsibility Committee has been reconstituted on May 02, 2016. Presently, the Committee comprises of following members:

- Mr. Kishore Biyani : Chairman;

- Ms. Gagan Singh : Independent Director; and

- Mr. Rajan Bharti Mittal : Director

The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

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 - I which forms part of this Report.

5. Share Transfer Committee

The Share Transfer Committee has been constituted on May 02, 2016. Presently, the Committee comprises of Mr. Kishore Biyani, Mr. Rakesh Biyani and Mr. Shailendra Bhandari.

The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report.

6. Committee of Directors

The Committee of Directors has been constituted on May 02, 2016. Presently, the Committee comprises of Mr. Kishore Biyani, Chairman and Managing Director and Mr. Rakesh Biyani, Joint Managing Director as members of the 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.

VIGIL MECHANISM

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

NUMBER OF MEETINGS OF THE BOARD

During the year under review, 10 (Ten) 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, HOLDING COMPANY AND ASSOCIATE COMPANIES

There is no subsidiary or joint venture or associate company of our Company during the year under review.

M/s Cedar Support Services Limited ("Cedar") was holding company of our Company as on March 31, 2016. Consequent, to allotment of Equity Shares pursuant to the Scheme on May 18, 2016, our Company ceased to be subsidiary of Cedar.

PERFORMANCE EVALUATION OF BOARD

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

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

A separate exercise was carried out to evaluate the performance of individual Directors, 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 Directors being evaluated. The performance evaluation of 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 Act, has been disclosed in the Corporate Governance Report, which forms part of the Annual Report.

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 which has been constituted on May 02, 2016 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 reviews the risk management assessment and minimization procedures.

The Company has in place adequate internal financial controls with reference to financial statements. Key risks and threats to the Company and internal controls and their adequacy are analyzed in the Management Discussion and Analysis, which forms part of the Annual Report.

EMPLOYEES STOCK OPTIONS (ESOPs)

Subject to the approval of members in the general meeting, our Company is in process to implement Employees Stock Option Scheme, 2016. The Scheme is being introduced to ensure compliance with the provisions contained in the Composite Scheme of Arrangement, wherein it has been provided, that employees of Future Enterprises Limited, who had been granted stock options and transferred pursuant to the Scheme, would be granted option in our Company, ensuring protection of the option value as well as the period of exercise of various granted options.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197 of 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 Annexure-II which forms part of this Annual Report.

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

The Company has not made any investment and guarantees during the period and has not granted any loan during the period under review.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of 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.

AUDITORS AND AUDITORS'' REPORT

Statutory Auditors

M/s S.R. Batliboi & Co. LLP was appointed at last AGM for a period of three years subject to ratification by the members in every Annual General Meeting during the said term. However, as on April 30, 2016 they expressed their unwillingness to continue as the Statutory Auditors of the Company.

In view of above, the Board at its meeting held on May 02, 2016, appointed M/s. NGS & Co. LLP as a Statutory Auditors of the Company to fill up the casual vacancy caused by the resignation of M/s. S.R. Batliboi & Co. LLP. The approval of members for appointment of Statutory Auditors has been obtained at EGM held on May 03, 2016 and M/s NGS & Co. LLP shall hold the office till the conclusion of Ninth AGM.

Further, it has been proposed to appoint M/s. NGS & Co. LLP, as the Statutory Auditors of the Company for a term of 5 years, from the conclusion of the Ninth Annual General Meeting of the Company till the conclusion of the Fourteenth 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 for their appointment, if made, shall be in accordance with the criteria as provided under Section 141 of the Act.

Secretarial Auditor

M/s. K. Bindu & Associates, Practicing Company Secretary (Membership No. 20066 / Certificate of Practice No. 7378) 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 there under.

The Secretarial Audit Report for the financial year 2015-16 is appended as Annexure - III which forms part of this Report. The said Secretarial Audit Report doesn''t contain any qualifications, reservations or adverse remarks.

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 appended as Annexure - IV, which forms part of this 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, 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 provided in Annexure - V, which forms part of this 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.

MATERIAL CHANGES AND COMMITMENTS

Except as disclosed in this report about the Scheme becoming effective on May 1, 2016 and thereby Retail Infrastructure Business Undertaking of the Company stands demerged and vested with FEL and Retail Business Undertaking stands demerged from FEL and vest with the Company with effect from October 31, 2015, the Appointed Date defined in the Scheme, there were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts.

AWARDS AND RECOGNITIONS

The Company or its formats received awards in categories like:

- In the year 2016, Company was awarded with Most Admired Food & Grocery Retailer of the Year from National Supermarket - Private Label Development (Coca Cola Golden Spoon Awards);

- In the year 2016, Big Bazaar won the Images Most Admired Food & Grocery Retailer of the Year in Food & Grocery category;

- In the year 2016, Company was awarded with IMAGES Most Admired Food & Grocery Retailer of the Year for Effective Technology Application and Increase in store count and retail space.

- Big Bazaar was adjudged among the top 5 most trusted brands in the services sector in India in a consumer poll by Nielsen and The Economic Times.

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

Kishore Biyani

Place : Mumbai Chairman and

Date : May 25, 2016 Managing Director

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