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Directors Report of Future Retail Ltd.

Mar 31, 2019

The Members,

The Directors are pleased to present the Twelfth Annual Report of the Company together with the Audited Financial Statements for the financial year ended March 31, 2019.

FINANCIAL HIGHLIGHTS

The financial performance of the Company is as follows:

(Rs. in crore)

Particulars	Standalone		Consolidated
	Financial Year 2018-19	Financial Year 2017-18	Financial Year 2018-19#
Revenue from Operations	20,164.90	18,477.97	20,332.58
Other Income	20.47	11.67	23.14
Total Revenue	20,185.37	18,489.64	20,355.72
Profit/(Loss) before Depreciation and Amortization Expense & Tax expense	833.40	668.61	831.22
Less: Depreciation and Amortization expense	100.59	53.43	104.02
Profit/(Loss) before Exceptional Item	732.81	615.18	727.20
Less: Exceptional Item	-	603.87	-
Profit/(Loss) before Tax	732.81	11.31	727.20
Less: Tax expense	-	-	0.01
Profit/(Loss) after Tax	732.81	11.31	727.19
Other Comprehensive Income for the year	5.81	1.96	5.85
Total Comprehensive Income for the year	738.62	13.27	733.04
Earnings Per Equity Share of Face Value of Rs. 2/- each
- Basic and Diluted (in Rs.)	14.58	0.23	14.47

(#)The Company has prepared the consolidated financial results as required under the provisions of the Companies Act, 2013 (hereinafter referred to as âthe Act") and the applicable prescribed Accounting Standards under the Act, since this is the first year, when the Company has subsidiary and joint venture companies. There were no subsidiary or joint venture companies in previous year and hence no comparable numbers of previous year are available.

REVIEW OF PERFORMANCE

During the year under review, your Company recorded an increase of 9.13% in the Standalone Revenue from Operations at Rs. 20,164.90 crore as compared to Rs. 18,477.97 crore in the previous financial year. Consolidated Revenue from Operations was reported at Rs. 20,332.58 crore during the year under review. Your Company also reported an increase of 19.12% in the Profit of Rs. 732.81 crore as compared to Rs. 615.18 crore for the previous financial year, before exceptional item.

The year 2018-19 was a very fulfilling year. We now have a pan India presence with 1,511 stores in 428 cities as of March 31, 2019 and total retail space of approximately 16.14 million sq. ft. for various formats of our Company. As on March 31, 2019, we have 292 Big Bazaar/Hypercity stores, 94 fbb stores, 12 Foodhall stores, 1,106 small format stores (including WHSmith stores) and 7 eZone stores. Our retail format business is supported by various other businesses operated by Future Group companies and through investee companies of Future Group operating in various ventures including branded fashion, food & FMCG, insurance, warehousing & logistics, media and textiles.

As regard the well-developed formats like Big Bazaar, fbb, Foodhall, easyday etc. which has received good recognition and also acceptance by our stakeholders, we have been able to develop presence across India with good loyal customer base of approximately 50 million members across all formats as of March 31, 2019.

Fiscal 2019 also firmed up the stage for a strong omnichannel business and Online to Offline conversions. The Company has set the foot on a focused small-store membership program, higher paid-loyalty membership enrolments in large format stores and in parallel, several functional enrichment to serve such loyal customers better. To this extent, we have increased the retail technology play across our stores, enriched the Future Pay wallet and introduced many member service aspects.

SCHEME OF ARRANGEMENT AND ACQUISITION

a. Scheme of Arrangement between Hypercity Retail (India) Limited and the Company and their respective Shareholders ("Hypercity Scheme")

The Company had entered into Scheme of Arrangement with Hypercity Retail (India) Limited ("HRIL") and their respective Shareholders under Sections 230-232 and other applicable provisions of the Act in order to consolidate the retail business under singly entity, whereby the retail business undertaking of HRIL got demerged and vested with the Company. The Hypercity Scheme has been given effect on April 25, 2018 ("Effective Date"). The Appointed Date under Hypercity Scheme for Demerger was December 1, 2017.

b. Acquisition of Travel News Services (India) Private Limited ("TNSI")

During the year under review, the Company has executed necessary agreement(s) and on May 11, 2018 acquired the entire equity share capital of TNSI from its existing shareholders for cash consideration. Consequent to this, TNSI has become a wholly owned subsidiary of the Company.

In addition to this TNSI Retail Private Limited, a wholly owned subsidiary of TNSI and Welcome Retail Private Limited, a joint venture of TNSI in which TNSI holds 51% of the share capital have also become step down subsidiaries of the Company effective from the same date i.e. May 11, 2018.

c. Acquisition of "Foodworld" business

During the year under review, the Company has entered into necessary agreement(s) with Foodworld Supermarkets Private Limited and acquired the retail business undertaking under the brand name "Foodworld" for cash consideration.

d. Acquisition of SHME Food Brands Private Limited ("SHME")

During the year under review, the Company has acquired the entire equity share capital of SHME (now known as SHME Food Brands Limited) for cash consideration from its existing shareholders on February 28, 2019 and accordingly, SHME has become a wholly owned subsidiary of the Company.

SHARE CAPITAL

During the year under review, the Company has issued and allotted in aggregate 6,23,285 Equity Shares of Rs. 2/each to eligible employees of the Company, upon exercise of the vested options granted to the concerned employees under Future Retail Limited Employee Stock Option Plan - 2016 (FRL ESOP - 2016). None of the employees 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 is as follows:

Sl. No.	No. of Equity Shares allotted	Date of allotment
1.	5,28,763	May 21, 2018
2.	64,522	August 09, 2018
3.	30,000	November 23, 2018

During the year under review, the Company has not issued any sweat equity shares or bonus shares or equity shares with differential rights.

Post March 31, 2019 and on receipt of initial warrant subscription amount of Rs. 500 crore equivalent to 25% of the warrant issue price as prescribed by the SEBI (ICDR) Regulations for allotment of the equity warrants, on April 23, 2019 the Company considered and allotted 3,96,03,960 equity warrants to M/s. Future Coupons Limited, a Promoter Group entity, on preferential basis. The conversion option can be exercised by Warrantholder(s) at any time during the period of 18 (Eighteen) months from the date of allotment of equity warrants, in one or more tranches, as the case may be and on such other terms and conditions as applicable.

BUSINESS OUTLOOK

We believe that your Company with its unparalleled network of stores spread across India is poised to get the maximum benefit of the surge in the consumption drive. We also believe that the network is strategically well placed to capture the growth in organised sector over unorganised as well as yield incumbency advantages.

Our Retail 3.0 organisation of small format stores has come together and we have now focussed strategy on a combined expansion of member platform and member-retail stores. The small stores are overlaid with digital & technology functionalities in many ways which makes the pace of the business management more efficient and allows the Company to expand at a very fast pace. We now have more than 11 lakh active, paid members on our small stores network. Currently, we are rolling out the easyday app for members to order digitally or through inter active commerce from their mobile phones and track delivery at home. The app has unique features like voice search and scheduling in-store or at-home delivery.

Future Group had launched a Future Consumer and Digital (C&D) Lab in Bengaluru that focuses on the consumer and digital space to bring in next-generation innovations using Artificial Intelligence, Big Data Analytics, Blockchains, Internet of Things, Robotics and allied technologies. The C&D Lab brings together multiple teams and companies that are working in these areas, housed in a common, collaborative space and will have ready access to test, experiment, and prototype their technologies across Future Group''s brand and retail platforms that serve over a million customers every day.

The Lab is pursuing technology developments that will influence consumer experiences in areas such as payments, unique consumer identification and development of one-on-one consumer conversations, analytics and predictive modeling as well as in back-end functions such as supplier engagements, supply chain automation and infrastructure deployment.

As you are also aware, Future Group is the chosen partner for the launch of 7-Eleven brands of convenience stores in India. With over 67,000 stores across 17 countries, 7-Eleven is an iconic, global retail brand. In India, we will be scripting a unique story for 7-Eleven, combining food services, convenience and superb customer service in every urban neighbourhood. The growth and expansion of 7-Eleven will be a critical part of growing our food and FMCG brands and bringing new services, formats and conveniences for our customers. A dedicated team is being set up to bring together the best practices of 7-Eleven Inc. and our understanding of India, to create the best proposition and offerings for our customers.

As a consumer-driven business it is important for us to build upon new trends, new categories and new ideas that are going to shape consumption in the years ahead. Future Group''s own brands represents one of our strongest pillars for the growth and value creation of our business. Our own brands allows us to earn higher end-to-end margins for the organisation. More importantly, it helps us own and deepen the relationship with customers, addresses gaps not fulfilled by our suppliers and also to meet the customers expectations.

As reported during last year performance, the Big Bazaar, the flagship format contributing good return as witnessed from Same Stores Sales Growth at 10.9% in the year 2018-19 and the management is optimistic to see improvement in performance going forward while their expansion plan of opening new stores and renovating existing Big Bazaar stores in place.

The Company is continuing its expansion plan for fbb format and will add more exclusive brand outlets in coming years. Your Company has already taken fbb brand to international markets through its joint venture with Oman based conglomerate Khimji Ramdas LLC and have already opened 2 (Two) stores in Oman in the current financial year. Over the past few years, fbb has undergone a significant transformation and we will continue our journey of improving products assortments, in-store experience and strengthening our supply chain.

DIVIDEND & RESERVES

Keeping in mind the future prospects and further expansion plans of the Company, the Board of Directors of the Company have decided not to recommend any Dividend during the financial year 2018-19. No amount is proposed to be transfer to General Reserve.

INVESTMENTS

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

- Travel News Services (India) Private Limited ("TNSI")

The Board of Directors of the Company had approved the acquisition of entire equity share capital of TNSI and also executed necessary agreement(s) and related documents for the said transaction. On May 11, 2018, the Company has paid Rs. 65.42 crore in cash (after adjustments) to the existing shareholders of TNSI towards the said acquisition.

Further, on March 29, 2019, the Company had made an additional investment by subscribing 34,00,000 7% Cumulative Redeemable Preference Shares of Rs. 100/- each, aggregating to Rs. 34 crore in cash.

- Future Retail LLC

The Company had entered into shareholders agreement with Khimji Ramdas LLC and incorporated a joint venture company viz; Future Retail LLC ("JV Company") to operate "fbb" brand in Oman and then across other member state of GCC. The Company has in aggregate invested fund to the tune of Rs. 4.57 crore towards total 2,50,000 shares of Omani Rial 1 each in the share capital and accordingly it holds 50% of JV Company.

- SHME Food Brands Private Limited ("SHME")

Pursuant to the approval of the Board of Directors, the Company had acquired the entire equity share capital of SHME (now known as SHME Food Brands Limited) for cash consideration of Rs. 0.01 crore from its existing shareholders on February 28, 2019.

DIVESTMENTS

During the year under review, the Company has not made any divestment.

PUBLIC DEPOSITS

The Company has obtained the approval of Members for acceptance of fixed deposits from public and/or Members of the Company. However, the Company has not accepted any fixed deposits during the year under review and accordingly, no amount on account of principal or interest on deposits from public and/or Members were outstanding as at March 31, 2019.

DEBENTURES

During the year under review, the Members of the Company have granted the approval for issuance of Non-Convertible Debentures. However, the Company has not issued any Debentures during the year ended March 31, 2019.

CORPORATE GOVERNANCE

The Company''s Corporate Governance Report for the year under review, forms part of this Annual Report.

A certificate from the Statutory Auditors of the Company regarding the compliance with the conditions of the Corporate Governance as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred to as "SEBI Listing Regulations"), is annexed to Corporate Governance Report and forms a part of this Report.

BUSINESS RESPONSIBILITY REPORT

Pursuant to SEBI 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 SEBI 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 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 Members of the Company.

Pursuant to the notification issued by the Ministry of Corporate Affairs on May 7, 2018, the mandatory requirement for ratification of appointment of Auditors by the Members at every Annual General Meeting ("AGM") has been omitted. Hence, no resolution was proposed for the ratification of appointment of Statutory Auditors at the ensuing AGM.

The Company has received a written confirmation from the Statutory Auditors confirming that their continued appointment shall be in accordance with the applicable provisions of the Act.

Auditors'' Report

The Auditors'' Report on the financial statements for the financial year ended March 31, 2019 is issued with unmodified opinion and does not contain any qualifications, reservations or adverse remarks.

Secretarial Auditor

As required under provisions of Section 204 of the Act and Rules made thereunder, Ms. Bindu Darshan Shah (Membership No. A-20066 / 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 2018-19.

The Secretarial Audit Report for the financial year 2018-19 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

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

-Details of programs for familiarization of Independent Directors with the Company are available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html

- Policy for determining material subsidiaries of the Company is available on the website of the Company at the linkhttps://www.futureretail.in/investors/ Policies.html

- Policy for determining Materiality of Events of the Company is available on the website of the Company at the linkhttps://www.futureretail.in/investors/ Policies.html

- Policy for archival of documents of the Company is available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html

- 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 https://www.futureretail.in/investors/corporate-governance-standards.html

- Policy on dealing with related party transactions is available on the website of the Company at the link https://www.futureretail.in/investors/Policies.html

- The Remuneration Policy is available on the website of the Company at the linkhttps://www.futureretail.in/ investors/Policies.html

- 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 linkhttps:// www.futureretail.in/investors/Policies.html

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL(S)

During the year under review, Mr. Rajan Bharti Mittal ceased to be a Director of the Company with effect from August 9, 2018 due to pre-occupation, which was noted by the Board.

Based on the recommendation of Nomination and Remuneration Committee ("NRC"), the Board has appointed Mr. Rahul Garg as an Additional Director (Non-Executive) of the Company with effect from August 9, 2018. Further, the Members at Eleventh AGM held on August 29, 2018 have approved the appointment of Mr. Garg as a Non-Executive Director of the Company.

Further, as recommended by NRC, the Board has considered and approved the re-appointment of Mr. Kishore Biyani as Managing Director and Mr. Rakesh Biyani as Jt. Managing Director both for a period of 3 (Three) years with effect from May 2, 2019, subject to the approval of Members of the Company.

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

The Company has received necessary disclosure and confirmation from concerned Director(s) in connection with their re-appointment. Additional information as required under Regulation 36 of SEBI Listing Regulations and Secretarial Standards, is given in the Notice convening the ensuing AGM.

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

COMMITTEES OF THE BOARD

Details of Committees of the Board of Directors 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, Six (6) meetings of the Board of Directors of the Company were held. The details of date of above meeting including the attendance of the Directors, are given in the Corporate Governance Report which forms part of this Annual Report.

VIGIL MECHANISM/WHISTLE BLOWER

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

During the year under review, your Company has the following subsidiaries and joint venture:

Travel News Services (India) Private Limited ("TNSI")

TNSI is a wholly owned subsidiary and is mainly into retail trade of confectionery, food, beverages, accessories etc. and it operates at various airports, corporate parks and also at universities in Delhi and NCR under the brand name "WHSmith" and also provides rental/leasing services. During the year under review, it has reported income from operations amounting to Rs. 158.36 crore and its net profit stood at Rs. 0.60 crore.

TNSI Retail Private Limited ("TNSI Retail")

TNSI Retail is subsidiary of TNSI and is mainly into retail trading and operates at Metro stations in Delhi and NCR under the brand name "WHSmith" and also deals in wholesale trading. During the year under review, it has reported income from operations amounting to Rs. 64.83 crore and incurred a net loss of Rs. 2.23 crore.

Welcome Retail Private Limited ("WRPL")

WRPL is a joint venture of TNSI & Felmingo Group and is into business of setting-up, developing, operating, renting and sub-leasing services for various spaces mainly at airports and metro stations. During the year under review, it has reported income from operations amounting to Rs. 24.16 crore and its net profit stood at Rs. 0.29 crore.

SHME Food Brands Private Limited ("SHME")

SHME (now known as SHME Food Brands Limited) is a wholly owned subsidiary of the Company and is into business of operating, developing, maintaining and running of convenience stores and commercial establishments of similar nature. SHME and the Company have executed a master franchise agreement with 7-Eleven, Inc to develop and operate 7-Eleven stores within India. During the year under review, it has reported income from operations amounting to Rs. 0.03 crore and a net profit of Rs. 0.02 crore.

Future Retail LLC ("FRLLC")

FRLLC is a joint venture incorporated in Oman to undertake business to operate "fbb"brand fashion outlets in Oman and across other member states of GCC. For the period ended December 31, 2018, the joint venture has not commenced any operation and has incurred expenses towards setting up of business and has reported loss of Rs. 0.49 crore.

INDIAN ACCOUNTING STANDARD (IND AS)

The Company has adopted Indian Accounting Standards ("IND AS") from April 01, 2016 with a transition date of April 01, 2015. Accordingly, the financial statement for the year 2018-19 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.

CONSOLIDATED FINANCIAL STATEMENT

During the year under review, the Board has reviewed the affairs of subsidiaries and joint venture. The Consolidated Financial Statement of the Company is prepared in accordance with the Act and applicable IND AS along with the relevant documents and Auditors'' Report thereon form part of this Annual Report.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing salient features of the financial statement of the subsidiaries and joint venture in the prescribed Form AOC-1 is attached to the financial statement, which forms part of this Annual Report.

In accordance with the provisions of Section 136(1) of the Act, the Annual Report of the Company containing therein the audited standalone and consolidated financial statement and the audited financial statements of each of the subsidiary companies have been placed on the website of the Company. The audited financial statements in respect of subsidiaries shall also be kept open for inspection at the Registered Office of the Company during working hours for a period of 21 days before the date of ensuing AGM. The aforesaid documents are also available to Members interested in obtaining the same upon a request made to the Company.

PERFORMANCE EVALUATION OF BOARD

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

Based on guidance note, the performance of the Board was evaluated after seeking inputs on all the relevant factors from all the Directors on the basis of criteria such as the Board and Committee composition, structure, effectiveness of board processes, information and functioning etc.

The performance of the Committees were evaluated by the Board after taking input from the respective Committee members on all the relevant factors material for evaluation purpose.

A separate exercise was carried out at meeting of Independent Directors 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, 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 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.

The details of commission paid to Executive and Non-Executive Director, is given in Corporate Governance Report forming 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 risks associated with the businesses of the Company.

The Board has delegated responsibility to the Risk Management Committee to monitor and review risk management, assessment and minimisation 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 major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Audit Committee and the Board also periodically reviews the risk management assessment and minimisation 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 analysed in the Management Discussion and Analysis, which forms part of this Annual Report.

EMPLOYEES STOCK OPTIONS PLAN

The Members of the Company have passed necessary resolutions through Postal Ballot and approved the 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 Rs. 2/- each, in one or more tranches, at such price and on such terms and conditions as may be fixed or determined by the NRC or People Office.

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

The applicable disclosures as stipulated under SBEB Regulations as on March 31, 2019 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.

CREDIT RATING

The details pertaining to credit rating for the facilities obtained by the Company during the year under review is given in Corporate Governance Report forming 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 endeavours 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 complied with the provisions relating to Internal Complaints Committee ("ICC"). Further, ICC is responsible for redressal of complaints related to sexual harassment and follows the guidelines as 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.

Information regarding the no. of complaints received/ resolved/remained unresolved is given in Corporate Governance Report forming part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY STATEMENT

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 Committee ("CSR Committee"). The composition and terms of reference of the CSR Committee is provided in the Corporate Governance Report, which forms part of this Annual Report.

The disclosures as per Rule 9 of above mentioned Rules 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 provisions of Section 186 of the Act, is provided in Notes forming part of financial statement.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

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

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

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

Disclosure of transactions with related parties (including entity belonging to the Promoter/Promoter Group which hold(s) 10% or more shareholding in the Company) as required under SEBI Listing Regulations and the applicable Accounting Standards have been given in the Notes forming part of the financial statement.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 134(5) of the Act, the Board, to the best of its ability confirms that:

i. in the preparation of the annual accounts for the financial year ended March 31, 2019, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. they 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, 2019;

iii. they 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. they have prepared the annual accounts for the financial year ended March 31, 2019 on a going concern basis;

v. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

vi. they 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, Jt. Managing Director as other 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

The information pertaining to the 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 as Annexure - VI which forms part of 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 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 by the Members at the Registered Office of the Company during business hours on working days and Members interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. Such details are also available on Company''s website at www.futureretail.co.in.

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 and foreign exchange earnings and outgo, are provided in Annexure - VII 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 - VIII which forms part of this Report.

In accordance with Section 92(3) of the Act, a copy of the Annual Return for the financial year ended March 31, 2019 is available on the website of the Company at https://www.futureretail.in/investors/annual-reports.html.

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

Pursuant to Regulation 39(4) read with Schedule V of SEBI Listing Regulations, the details pertaining to outstanding shares lying in Unclaimed Suspense Account are given in Corporate Governance Report forming part of this Annual Report. 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(s) claim such shares.

SECRETARIAL STANDARDS

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

AWARDS AND RECOGNITIONS

The Company and its formats received awards in categories like:

Big Bazaar

- Big Bazaar was ranked among the most valuable brand by Interbrand;

- Big Bazaar won IMAGES Most Admired Brand Retail Partnership of the Year 2018;

- Big Bazaar won IMAGES Most Admired Retailer of the Year under Digital Marketing Campaign category;

- Big Bazaar''s Smart Search Campaign won MMG Awards, Troxy, London for Best Campaign in Fashion, Beauty & Retail Category for 2018 and the best Mobile Search Campaign globally by SMARTIES, New York;

- Big Bazaar''s 24hr Facebook Live Campaign won:

- Gold in Exchange4Media - Maddies of the Year 2018;

- EMVIE Silver under the category Best Media Innovation, Digital, Social Media;

- Best Online Advertising Campaign by Exchange4Media, Indian Digital Media Awards 2018.

- Big Bazaar''s Midnight Sale Campaign won Silver in Exchange4Media - Maddies of the Year 2018;

- Big Bazaar''s Decide Your price won Gold in DMA Asia Echo 2018 under the Create Effect category;

- Big Bazaar Profit Club won Customer Loyalty Awards for the Best Card Based Loyalty Program and Best Loyalty Program in Retail Sector.

fbb (Fashion @ Big Bazaar)

- fbb''s Airport Makeover won ET Now - Stars of the Industry Award under the best Experiential and Brand Experience of the year;

- fbb''s "National Jeans Day" Campaign won:

- ET Now - Stars of the Industry Award for the best use of social media and marketing;

- Best Branded Regional Campaign by Foxglove -Afaqs!;

- Gold for the Best Use of Social Media to launch a product or service by SAMMIEs - Social Samosa;

- Gold for the Best Lead Gen Campaign at 9th IDA

- IAMAI;

- Best Launch of a Product by LIDMA - Lighthouse Insights;

- Digital Awards for the best lead generation campaign through mobile.

- fbb won the best Print Campaign of the year at the Activation Venue Forum - Umbrella Aegis;

- fbb "500 Festive Looks" Campaign won:

- Best Use of Instagram by Foxglove - Afaqs!;

- Silver for the Best Content Marketing - Retail by DIGIXX - AdGully.

- fbb''s "World Shorts Day" Campaign won:

- Silver under Social Media - Retail category by DIGIXX - AdGully;

- the Best Digital Integrated Campaign by Global Marketing Congress - CMO Asia;

- Silver for the Best Use of Social Media to generate leads or drive revenues by SAMMIEs - Social Samosa.

- fbb won the Best Media Marketing Campaign, for "Dil Se Desi" Campaign by Global Marketing Congress -CMO Asia.

easyday

- easyday Club awarded Most Admired Food & Grocery Retailer of the Year under National Supermarket Category by IMAGES.

Foodhall

- Foodhall at MKT, Chanakyapuri won VM&RD Awards 2019, North in Food Groceries and General Merchandise;

- Foodhall at MKT, Chanakyapuri won VM&RD Awards 2019, North in Best Shop Fitting;

- Foodhall at Two Horizon Centre, Gurugram won VM&RD Awards 2019, North in Food Groceries and General Merchandise.

GENERAL DISCLOSURES

Your Directors state that:

- There were 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;

- 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;

- There were no events relating to non-exercising of voting rights in respect of shares purchased directly by employees under a scheme pursuant to Section 67(3) of the Act read with Rule 16(4) of Companies (Share Capital and Debentures) Rules, 2014;

- There were no events relating to receipt of any remuneration or commission from any of its subsidiary companies by the Managing Director / Jt. Managing Director of the Company;

- Maintenance of cost records and requirement of cost audit as prescribed under the provisions of Section 148(1) of the Act are not applicable for the business activities carried out by the Company.

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 Members, Future Group entities and in particular, their employees, regulatory authorities, suppliers, customers 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 : Mumbai Kishore Biyani

Date : May 25, 2019 Chairman & Managing Director

Mar 31, 2018

To,

The Members,

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

FINANCIAL HIGHLIGHTS

The financial performance of the Company is as follows:

(Rs. in Crore)

Particulars	Financial Year 2017-18	Financial Year 2016-17
Revenue from Operations	18,477.97	17,075.09
Other Income	11.67	23.80
Total Revenue	18,489.64	17,098.89
Profit / (Loss) before Depreciation and Amortization Expense & Tax expense	668.61	400.86
Less: Depreciation and Amortization expense	53.43	32.58
Profit / (Loss) before Exceptional Item	615.18	368.28
Less: Exceptional Item	603.87	-
Profit / (Loss) before Tax	11.31	368.28
Less: Tax expense	-	-
Profit / (Loss) after Tax	11.31	368.28
Other Comprehensive Income for the year	1.96	(2.69)
Total Comprehensive Income for the year	13.27	365.59
Earnings Per Equity Share of Face Value of Rs.2/- each
- Basic and Diluted (in Rs.)	0.23	7.81

REVIEW OF PERFORMANCE

During the financial year, the Company had a total income of Rs.18,489.64 Crore. The total expenditure during the financial year amounted to Rs.17,874.46 Crore resulting in profit before exceptional item and tax of Rs.615.18 Crore as compared to profit of Rs.368.28 Crore in previous year. The Profit after Tax for the year under review is Rs.11.31 Crore after adjusting non-cash exceptional item of Rs.603.87 Crore.

The financial results for the twelve months ended March 31, 2018 are not comparable with previous year, due to demerger of Home Retail Business undertaking to Praxis Home Retail Limited and vesting of demerged Retail undertaking of Heritage Foods Retail Limited and Retail Business Undertaking of Hypercity Retail (India) Limited with the Company.

The year 2017-18 was a very fulfilling year. We have a pan India presence with 1,035 stores in 321 cities in India as of March 31, 2018 and total retail space of approximately 14.5 million sq. ft. for various formats of our Company. As on March 31, 2018, we have 285 Big Bazaar / Hypercity stores, 61 fbb stores, 10 Foodhall stores, 666 small format stores and 13 eZone stores. Our retail format business is supported by various other businesses operated by Future Group companies and through Future Group companiesâ investments in various ventures including branded fashion, food & FMCG, insurance, warehousing & logistics, media, textiles and online retailing.

As regards the well-developed formats like Big Bazaar, fbb, Foodhall, easyday etc., which has received good recognition and also acceptance from our consumers, we have been able to develop presence across India with good loyal customer base as of March 31, 2018 of approximately 38 million members across all formats. The business continues to be driven by growing consumer spending pattern. We strongly believe that our increased store presence during the year would help grow faster in coming years.

Our constant efforts to connect with our customers on social sites like facebook, twitter etc. has not only helped in increasing brand building but also helped in satisfying the queries and complaints of our customers in shortest possible time. The presence of dedicated team for online screening and resolution of queries and complaints of customer has also helped in developing a personal relationship with customers on pan India basis.

We have partnered with People Strong, a leading technology-led HR solutions company to enable the end to end digital transformation of the People Office. This is a crucial step and that will enable us in building a far more digital organization and bring in technology led solutions in all employee facing processes.

SCHEME OF ARRANGEMENT AND ACQUISITION

a. Composite Scheme of Arrangement among Heritage Foods Limited and Heritage Foods Retail Limited and the Company and their respective Shareholders and Creditors (âHeritage Schemeâ).

The Composite Scheme of Arrangement among Heritage Foods Limited (âHFLâ) and Heritage Foods Retail Limited (âHFRLâ) 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 (âHeritage Schemeâ), 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 (âEffective Date - Heritage Demergerâ). 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 with the Company. As consideration for the Demerger, the Company on July 27, 2017 has issued 1,78,47,420 equity shares of the face value of Rs.2/each fully paid-up at a premium of Rs.163.29 per equity share, 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.

b. Composite Scheme of Arrangement among the Company and Bluerock eServices Private Limited and Praxis Home Retail Limited and their respective Shareholders (âHome Town Schemeâ).

The Composite Scheme of Arrangement among the Company and Bluerock eServices Private Limited (âBSPLâ) and Praxis Home Retail Limited (âPHRLâ) and their respective Shareholders under Sections 230-232 read with Section 66 of the Companies Act, 2013 and other applicable provisions of the Companies Act, 2013 (âHome Town Schemeâ), inter-alia involving demerger of the Home Retail Business Undertaking of the Company into PHRL has been given effect on November 20, 2017 (âEffective Date - Home Town Demergerâ). The Appointed Date under Home Town Scheme for Demerger of Home Retail Business Undertaking was August 01, 2017.

Pursuant to the Home Town Scheme, the Home Retail Business of the Company carried on through Home Town Stores have been transferred to and vested in PHRL. As a consideration for the said demerger, on December 08, 2017, PHRL issued and allotted 1 (One) fully paid up equity share of Rs.5/- each, to the Shareholders of the Company for every 20 (Twenty) fully paid up equity shares of Rs.2/- each held in the Company on November 30, 2017, the Record Date which was fixed by the Company in this connection.

Post issue of such equity shares to the Shareholders of the Company and on January 31, 2018 the equity shares of PHRL got listed on the stock exchanges viz, BSE & NSE.

The Home Town Scheme which also provided for demerger of e-Commerce Home Retail Business Undertaking of BSPL into PHRL has also been given effect on Effective Date - Home Town Demerger.

c. Acquisition of Hypercity Retail (India) Limited

The Company acquired the entire share capital of Hypercity Retail (India) Limited (âHRILâ) from its shareholders for combination of cash and share consideration and has executed Share Purchase Agreement in this connection. In order to discharge part of the consideration, the Company issued and allotted in aggregate 93,10,987 equity shares of Rs.2/- each fully paid up, collectively to erstwhile shareholders of HRIL (in proportion to their shareholding in HRIL) at a premium of Rs.535/- per equity share on a preferential basis. Consequent to this acquisition, HRIL became a wholly owned subsidiary of the Company effective November 30, 2017.

d. Scheme of Arrangement between Hypercity Retail (India) Limited and the Company and their respective Shareholders (âHypercity Schemeâ)

In order to consolidate the retail business under singly entity, the Company entered into Scheme of Arrangement with Hypercity Retail (India) Limited (âHRILâ) and their respective Shareholders under Sections 230-232 and other applicable provisions of the Companies Act, 2013 (âHypercity Schemeâ), whereby the Retail Business Undertaking of HRIL got demerged and vested with the Company. The said scheme was made effective on April 25, 2018 (âEffective Date - Hypercity Demergerâ). Further pursuant to the Scheme, Capital Reserve has been re-organised and recorded as Security Premium. The Scheme has been given effect in financials of the period under review. The Appointed Date under Hypercity Scheme for Demerger was December 01, 2017.

e. Acquisition of âFoodworldâ business

Post March 31, 2018, the Company has entered into Business Transfer Agreement (âBTAâ) with Foodworld Supermarkets Private Limited (âFSPLâ) and acquired the Retail Business Undertaking under the brand name âFoodworldâ for cash consideration.

EQUITY SHARE CAPITAL

During the year under review, the Company has issued and allotted in aggregate 3,01,62,415 Equity Shares, the details of which are as under:

- Pursuant to FRL ESOP - 2016

On July 13, 2017, the Company allotted 1,51,622 Equity Shares of Rs.2/- each to eligible 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.

- Pursuant to Heritage Scheme

On July 27, 2017, the Company allotted 1,78,47,420 Equity Shares of Rs.2/- each at a premium of Rs.163.29 per share to Heritage Foods Limited (âHFLâ) as a consideration for the acquisition of business, pursuant to the Composite Scheme of Arrangement among the Company, HFL and HFRL and their respective Shareholders and Creditors.

- On conversion of Optionally Convertible Debentures (OCDs)

On October 31, 2017, the Company has made allotment of total 28,52,386 Equity Shares of Rs.2/each at a premium of Rs.538.60 per share to Cedar Support Services Limited (âCEDARâ) upon conversion of Optionally Convertible Debentures (OCDs) which were originally allotted to CEDAR pursuant to the Composite Scheme of Arrangement between the Company and Future Enterprises Limited and their respective Shareholders and Creditors (âFEL - FRL Schemeâ). After conversion, there are no outstanding OCDs remains in the Company.

- Pursuant to acquisition of Hypercity Retail (India) Limited

On December 01, 2017, the Company has allotted 93,10,987 Equity Shares of Rs.2/- each at a premium of Rs.535/- per share to the erstwhile shareholders of Hypercity Retail (India) Limited (âHRILâ) in the ratio of their holding in HRIL as a part of consideration in order to acquire the entire share capital of HRIL from its erstwhile shareholders.

During the year under review, the Company has not issued any shares with differential rights as to dividend, voting or otherwise.

BUSINESS OUTLOOK

Retail 3.0 is one of our most ambitious projects and a business model that we believe will change the way retail happens. We aim to open 10,000 small format stores in the coming years across the Country. Driven by Data, Technology and People, these stores will be big on âHigh Touch and High Techâ. These âMembers Onlyâ store with 2,000 members per store will work on customer data and customer proximity. We will be connected to our customers 24/7 in Real Time mode.

The expansion of our neighborhood stores format and the growth of a FMCG business are among the two key pillars of realizing Future Groupâs Vision 2021. We are building our neighborhood stores in clusters of 100 to 500 stores in and around large cities. The Small Format Retail model is an ambitious plan that will see us open around 10,000 stores backed by a tech augmented âHigh Touch and High Techâ model that will set the standards for the future of retail in India. Enabling this ambition, we have put in our efforts to set up and increase the size of the team that will ensure that we realise our ambition and relentlessly drive the execution of this strategy.

Our decision to concentrate as pure-play asset light retail business has thrown more opportunities across all our large & small stores. Development and implementation of technology tools across all stores and offices on pan India basis and continuously updating of technology tools has helped in achieving our goals which were set during past years. The âDataâ of our customer has helped in achieving more sales per customer across all formats and we strongly believe that we can capitalize the same in coming years.

The effort to continue our unique extensions in form of Future Pay wallet, Membership & Loyalty drive across formats have once again provided good response and well accepted by our customers. This will continue to guide us to understand our customer in better way by tracking their spending pattern and allow us opportunity to serve them in a better way. It will continue to help in acquiring new customers in our fold.

Our initiative of Big Bazaar Gen Nxt across large metros and fbb stores at select locations has received good response and going forward we look to expand our presence across major locations for both these formats. These formats have been recognized as shopping destinations and we believe that our continuous efforts to make them unique will allow us to cater to aspiring Indians more efficiently and also increases the sales at our stores. We are on our path to redefine the aspirations and consumption trend in our nation for our customers. While we are taking a leap in building retail ecosystems for our customers, we will build an organization that will help realize this dream of ours. Our efforts of past years in improving supply-chain capabilities, technology-enabled processes, increasing focus on membership experience and other services shall help in creating an exceptional model for our neighborhood stores. We have already initiated our journey and continuous efforts in that direction will lead us to success in coming years.

We have already set up a C & D Lab at Bengaluru and a dedicated team is working towards making this transformation and also to create a digital and product organization.

We are working to create a high tech and high touch experience for our customers, increasing our efforts in integrating data and technology in real time. Backed with data intelligence, we are on our journey to build an end-to-end unified retail commerce experience for all our customers.

DIVIDEND & RESERVES

Due to accumulated losses of previous years and further with a view to preserve the profits of current year for future prospects, the Board of Directors of the Company were unable to recommend any Dividend during the financial year 2017-18. No amount is proposed to be transfer to General Reserve.

INVESTMENTS

The Company has made the following investments:

- Hypercity Retail (India) Limited (âHRILâ)

In terms of the share purchase agreement which was executed between the Company, HRIL and erstwhile shareholders of HRIL (hereinafter collectively referred as Sellers) of the Company has acquired the entire share capital of HRIL from Sellers comprising of 15,10,30,306 equity shares of Rs.10/- each. Consequent to this, with effect from November 30, 2017, HRIL became a wholly owned subsidiary of the Company. In turn the Company has allotted 93,10,987 equity shares to the Sellers in the proportion of their shareholding in HRIL and also paid cash consideration in terms of the aforesaid share purchase agreement.

- Travel News Services (India) Private Limited (âTNSIâ)

The Board of Directors of the Company had approved the acquisition of entire equity share capital of TNSI and also executed share purchase agreement and related documents for the said transaction. On May 11, 2018, the Company has paid Rs.65.42 Crore in cash (after adjustments) to the existing shareholders of TNSI towards the said acquisition.

Consequent to this, and with effect from May 11, 2018, TNSI has become a wholly owned subsidiary of the Company. In addition to this and with effect from May 11, 2018, TNSI Retail Private Limited which is a wholly owned subsidiary of TNSI and Welcome Retail Private Limited, a joint venture of TNSI in which TNSI holds 51% of the share capital have become step down subsidiaries of the Company.

DIVESTMENTS

Pursuant to demerger of Retail Business Undertaking and vesting of the same with Company on March 29, 2018, the shares of HRIL comprising of Remaining Business Undertaking were sold to Kalap Fabtraders Private Limited (Nominee of Jas Infra Space Private Limited), for an aggregate consideration of Rs.7.85 Crore and accordingly, HRIL ceased to be subsidiary of the Company.

PUBLIC DEPOSITS

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

DEBENTURES

During the year under review total 1,542, 10% Optionally Convertible Debentures of Rs.10 Lakh each (OCDs) aggregating to Rs.154.20 Crore which were originally issued to Cedar Support Services Limited (âCEDARâ) and was standing in the books of the Company have been converted into 28,52,386 equity shares of the Company at a price of Rs.540.60 (including the premium of Rs.538.60) which was determined as per the pricing formula as specified in SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. The said 28,52,386 equity shares has been issued and allotted to CEDAR on October 31, 2017 and thereafter listed on BSE and NSE.

The Company has not issued any other debentures during the year under review.

CORPORATE GOVERNANCE

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 âListing Regulationsâ) 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 AUDITORSâ REPORT Statutory Auditors

In view of recent amendment in the Companies Act, 2013 (âthe Actâ) which were notified with effect from May 07, 2018 by the Ministry of Corporate Affairs, the requirement of ratification of Auditors at every year has been removed and accordingly, there is no requirement of ratification of appointment of Auditors.

The Company has received a written confirmation from the Statutory Auditor that their continued appointment shall be in accordance with the criteria as provided under Section 141 of the Act.

Auditorsâ Report

The Auditorsâ Report on the Financial Statement for the financial year ended March 31, 2018 was issued with unmodified opinion and does not contain any qualifications, reservations or adverse remarks.

Secretarial Auditor

As required under provisions of Section 204 of the Act and Rules made thereunder, Ms. Bindu Darshan Shah (Membership No. A-20066 / CP No. 7378), Proprietor: K. Bindu & Associates, Practising Company Secretaries was appointed as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year 2017-18.

The Secretarial Audit Report for the financial year 2017-18 is appended as Annexure - I, which forms part of this Report. The said Secretarial Audit Report doesnât contain any qualifications, reservations or adverse remarks.

POLICIES & DISCLOSURE REQUIREMENTS

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

- 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 Remuneration Policy is available on the website of the Company at the link http://www.futureretail.in/ pdf/Remuneration 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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, Ms. Sridevi Badiga was appointed as an Additional (Independent) Director on April 20, 2017 for a period of Five (5) years. Further, the Members at Tenth Annual General Meeting held on August 29, 2017 have approved the appointment of Ms. Badiga as an Independent Director of the Company.

In terms of Section 152 of the Act, Mr. Rakesh 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 Nine (9) 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 / WHISTLE BLOWER

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

SUBSIDIARY, JOINT VENTURE, HOLDING COMPANY AND ASSOCIATE COMPANIES

During the year under review, the Company has entered into a joint venture agreement with Khimji Ramdas LLC, a company incorporated under the laws of the Sultanate of Oman wherein a joint venture company was established in Oman under the name âFuture Retail LLCâ effective May 01, 2018. The Company shall be contributing 50% of the share capital of said joint venture company.

During the year under review, the Company acquired 100% of equity share capital of Hypercity Retail (India) Limited (âHRILâ) from its shareholders and consequently, it became a wholly owned subsidiary of the Company effective November 30, 2017.

Subsequently, pursuant to demerger of Retail Business Undertaking and vesting of the same with Company on March 29, 2018, the shares of HRIL comprising of Remaining Business Undertaking were sold to Kalap Fabtraders Private Limited (Nominee of Jas Infra Space Private Limited), for an aggregate consideration of Rs.7.85 Crore and accordingly, HRIL ceased to be subsidiary of the Company.

There is no subsidiary or holding company or associate company of our Company as on year end.

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 DIRECTORSâ APPOINTMENT AND REMUNERATION

The Companyâs policy on Directorsâ 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 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 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 PLAN

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 (âFRL ESOP - 2016â) 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 Rs.2 each, in one or more tranches, at such price and on such terms and conditions as may be fixed or determined by the Nomination and Remuneration Committee.

Pursuant to the applicable provisions of the Act and the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âSBEB Regulationâ), the Company has set up a âFuture Retail Limited Employeesâ Welfare Trustâ (âTrustâ) for implementation of the said scheme.

The applicable disclosures as stipulated under SBEB Regulation as on March 31, 2018 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 âFuture Retail Limited - Employees Gratuity Trustâ and constituted a Fund through Trust in the name of âFuture Retail Employees Superannuation Trustâ 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 STATEMENT (CSR)

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

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

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Details of Loans granted, Guarantee provided and Investment made by the Company which are covered under the provisions of Section 186 of the Companies Act, 2013, is provided in Notes forming part of Standalone Financial Statements.

INDIAN ACCOUNTING STANDARD (Ind AS)

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

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

During the year under review, the 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 armâs length basis.

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

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

DIRECTORSâ 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, 2018, 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, 2018;

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, 2018 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, Jt. 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 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 by the Members at the Registered Office of the Company during business hours on working days and Member is interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is also available on Companyâs website.

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

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 Companyâs operations in future.

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

In connection with the details 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, there were 184 shareholders holding 100,710 Equity Shares. 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.

SECRETARIAL STANDARDS

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

MATERIAL CHANGES AND COMMITMENTS

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 awarded as Marketer of the Year at the prestigious Leadership Award for excellence in marketing, advertising and media; and

- Board Diversity Award, 2017 Big Bazaar

- Big Bazaar won IMAGES Most Admired Food & Grocery Retailer of the Year 2017;

- Big Bazaarâs DecideYourPrice campaign won SILVER for âBest Campaign to Drive Salesâ at âThe Maddies Awards;

- Big Bazaarâs Smart Search won Best Search Marketing Campaign at CMO Asia Awards 2017;

- Big Bazaarâs Decide Your Price campaign won Gold for Best Social Media amplification at BW Applause awards;

- Big Bazaarâs Fast Billing campaign won Silver for Best Use of Digital marketing at BW Applause awards;

- Big Bazaar won Silver for its Grahpravesh campaign at Effie 2018 under the Retail section; and

- Big Bazaar ranked Number 6 in the âBrand Asia -2017â Survey by Market Xcel in association with Nikkei BP, Japan.

Easyday

- Easyday won IMAGES Most Admired National Supermarket.

fbb (Fashion @ Big Bazar)

- fbb won IMAGES Most Effective Marketing and Promotions Campaign of the Year;

- fbb won IMAGES Most Admired Retailer of the Year Innovative Retail Concept; and

- fbbâs World Shorts Day won Best Social media Campaign of the year CMO Asia Awards 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, and 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: Mumbai Kishore Biyani

Date : May 21, 2018 Chairman & Managing Director

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.

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

COMMITTEES OF THE BOARD OF DIRECTORS

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.

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;

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

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 14^th in the Most Trusted Brand survey done by Nielsen and The Economic Times;

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

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

- The brand was 11^th in the NCCS B segment and 15^th 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 10^th 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

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

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.

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