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Notes to Accounts of Future Retail Ltd.

Mar 31, 2017

(ii) Terms/Rights Attached to Equity Shares

The Company has only one class of Equity Shares having a par value of '' 2/- each (2016: '' 2/- each post Scheme of Arrangement) at the Balance Sheet Date. Each holder is entitled to one vote per share in case of voting by show of hands and one vote per Shares held in case of voting by poll/ballot. Each holder of Equity Share is also entitled to normal dividend (including interim dividend, if any) as may declared by the Company. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the Shareholders in the Annual General Meeting.

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

(iii) Pursuant to the provisions of the Companies Act, 2013, the issue of 104,371 Equity Shares are kept in abeyance corresponding to their status in Future Enterprises Limited

(iv) Shares held by holding/ultimate holding Company

Cedar Support Services Limited was 100% Holding company as on March 31, 2016. Consequent to allotment of Equity Shares pursuant to the Composite Scheme of Arrangement with Future Enterprises Limited (Formerly Known as Future Retail Limited) on May 18, 2016, it ceased to be Holding company.

Nature and Purpose of Reserves:

a) Securities Premium Reserve

Securities Premium Reserve is created when shares are issued at premium. The Company may issue fully paid-up bonus shares to its Members out of the security premium reserve account, and company can use this reserve for buy-back of shares.

b) Securities Premium Reserve Suspense

Securities Premium Reserve will be created on allotment of equity shares on account of demerger of Retail Business Undertaking, pursuant to the scheme of arrangement with Heritage Foods Retail Limited.

c) Capital Reserve

During the financial year ended March 31, 2017, the capital reserve of Rs.2.96 Crore recognized due to demerger of Retail Business Undertaking, pursuant to the scheme of arrangement with Heritage Foods Retail Limited.

During the financial year ended March 31, 2016, the capital reserve of Rs.1874.58 Crore recognized due to demerger of retail division, pursuant to the scheme of arrangement with Future Enterprises Limited (Formerly Known as Future Retail Limited).

The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the managing board.

Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including loans and borrowings, foreign currency receivables and payables.

The Company manages market risk through treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowing strategies.

i Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. In order to optimize the interest cost, treasury performs a comprehensive corporate interest rate risk management by balancing the borrowings from commercial paper, short term loan, working capital loan and non fund facilities from banks.

The Company is not exposed to significant interest rate risk as at the respective reporting dates.

ii Foreign Currency Risk

The Company is exposed to exchange fluctuation risk for its purchase from overseas suppliers in various foreign currencies.

The Company follows established risk management policies including the use of derivatives like foreign exchange forward contracts to hedge exposures to foreign currency risk.

iii Credit Risk

Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to Rs.228.06 Crore and Rs.114.87 Crore as of March 31, 2017 and March 31, 2016 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the Company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the Company uses expected credit loss model to assess the impairment loss or gain. The Company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and the Company''s historical experience for customers.

1. Capital Management

For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to Shareholders, return capital to Shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.

In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017 and March 31, 2016.

2. Employee Benefits - Gratuity

As per Ind AS 19 the disclosures as defined in the Accounting Standard are given below:

3. Segment Reporting

The Company is primarily engaged in the business of "Retail", which in terms of Ind AS 108 on "Segment Reporting" constitutes a single reporting segment.

4. Related Party Disclosures

Disclosure as required by Ind AS 24 and Companies act, 2013. Related Party Disclosures are given below:

1 List of Related Parties A Ultimate Holding Company

i Bharti Enterprises (Holding) Private Limited (upto May 18, 2016)

ii Bharti Enterprises Limited (upto May 18, 2016)

B Holding Company

Cedar Support Services Limited (upto May 18, 2016)

C Enterprises over which Key Management Personnel are able to exercise significant influence

i Bansi Mall Management Company Private Limited

ii Bharti Airtel Limited

iii Bharti Enterprises Limited

iv Future Enterprises Limited (formerly known as Future Retail Limited)

v Future Ideas Company Limited

vi Future Lifestyle Fashions Limited

vii Future Sharp Skills Limited

viii Retail Light Techniques India Limited

ix Work Store Limited (formerly known as Staples Future Office Products Limited)

x Cedar Support Services Limited (from May 18, 2016))

D Entity able to Exercise significant influence.

Future Corporate Resources Limited (from May 18, 2016)

E Key Management Personnel

i Mr. Kishore Biyani (from May 2, 2016)

ii Mr. Rakesh Biyani (from May 2, 2016)

iii Mr. C. P. Toshniwal (from May 2, 2016)

iv Mr. Virendra Samani (from May 2, 2016)

v Mr. Manish Sabnis (from August 1, 2015 to May 2, 2016)

vi Mr. Craig Wadsworth Wimsatt (upto July 31, 2015)

vii Mr. Anupam Goyal (upto May 2, 2016)

F Relatives of Key Management Personnel

i Mrs. Bhavika Samani

5 Significant Related Party Transactions

A Sale of Goods and Services includes Bharti Enterprises Limited Rs .Nil (2016: Rs.0.01 Crore), Future Lifestyle Fashions Limited Rs.94.94 Crore (2016: Rs. Nil).

B Purchases of Goods and Services includes Future Corporate Resources Limited Rs.138.90 Crore (2016: Rs. Nil), Future Lifestyle Fashions Limited Rs.163.24 Crore (2016: Rs. Nil), Future Enterprises Limited Rs.878.67 Crore (2016: Rs. Nil).

C Security Deposit given Future Enterprises Limited Rs.75.00 Crore (2016: Rs. Nil).

D Managerial Remuneration includes Mr. Kishore Biyani Rs.2.39 Crore (2016: Rs. Nil), Mr. Rakesh Biyani Rs. 2.38 Crore (2016: Rs. Nil). Key Managerial Personnel Remuneration includes Mr. C. P. Toshniwal Rs. 2.12 Crore (2016: Rs. Nil), Mr. Virendra Samani Rs.0.35 Crore (2016: Rs. Nil), Mr. Craig Wadsworth Wimsatt Rs. Nil (2016: Rs.1.56 Crore), Mr. Manish Sabnis Rs.0.09 Crore (2016: Rs. 0.64 Crore), Mr. Anupam Goyal Rs.0.60 Crore (2016: Rs. Nil).

The Company had received approval of the Board and Shareholders for issuance of 90,00,000 Equity Shares of Rs.2 each for offering to eligible employees of the Company under Employee Stock Option Scheme (FRL ESOP 2016). During the year the Company has granted 13,24,071 options at a price of Rs.10 per option plus all applicable taxes, as may be levied in this regard on the Company. Out of the options granted 19,758 cancelled. The options to be granted, would vest over a maximum period of 3 years or such other period as may be decided by the Human Resources, Nomination and Remuneration Committee from the date of grant based on specified criteria.

6. Leases

Operating Lease

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases payable not later than one year is Rs.1,121.75 Crore (2016: Rs.863.00 Crore), payable later than one year but not later than five year is Rs.2,970.49 Crore (2016: Rs.2,761.33 Crore) and payable later than five years is Rs.1,359.72 Crore (2016: Rs.1,457.26 Crore).

Finance Lease

The Company has entered into finance lease arrangements for fixed assets. The future minimum lease rental obligation under non-cancellable finance leases payable not later than one year is Rs.0.33 Crore (2016: Rs. Nil), payable later than one year but not later than five year is Rs.0.81 Crore (2016: Rs. Nil) and payable later than five years is Rs. Nil.

7. Contingent Liabilities

Claims Against the Company Not Acknowledged as Debts, In respect of Income Tax Rs. Nil (2016: Rs.0.70 Crore, 2015: Rs.0.70 Crore), Value Added Tax Rs.20.99 Crore (2016: Rs.14.19 Crore, 2015: Rs.3.06 Crore), Letter of Credit Rs.475.85 Crore, Others Rs.75.04 Crore (2016: Rs.48.90 Crore, 2015: Rs.1.24 Crore) and Other money for which the Company is Contingently Liable, Corporate Guarantees Given Rs.3237.50 Crore.

There are various labour, legal metrology, food adulteration and cases under other miscellaneous acts pending against the Company, the liability of which cannot be ascertained. However, management does not expect significant or material liabilities devolving on the Company.

8. Pursuant to the levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from June 1, 2007 by the Finance Act, 2010, the Company based on legal advice, challenged the levy through Retailers Association of India and its retrospective application. The Hon''ble Supreme Court had passed an interim order dated October 14, 2011. In compliance of this order Company has made an aggregate deposit of Rs.39.71 Crore in respect of the liability for such service tax for the period from June 1, 2007 up to September 30, 2011. From October 1, 2011, the Company is accounting and paying for such service tax regularly as per directives of the Supreme Court. Accordingly the Company has not made provision of Rs.79.42 Crore for the period June 1, 2007 to September 30, 2011 which would be appropriately recognized on final determination.

9. Security clause in respect to Secured Borrowings Long Term Borrowings

i Rs. Nil (2016: Rs. Nil, 2015: Rs.54.00 Crore) are secured by First Pari-Passu charge on Fixed Assets (excluding specific fixed assets charged in favour of exclusive charge lenders), carries coupon rate of 10.90% per annum.

ii Rs.1.14 Crore (2016: Rs. Nil, 2015: Rs. Nil) Finance Lease Obligation secured by Lease Assets.

Short Term Borrowings includes Working Capital Loans from Banks

i Rs.977.59 Crore (2016: Rs.918.20 Crore, 2015: Rs. Nil) is secured by (a) First Pari-Passu Charge on Current Assets of the Company (b) Second Pari-Passu Charge on Card Receivables (c) Secured by Corporate Guarantee of Future Enterprises Limited. Average Interest Rate 11.14% (2016: 11.52%).

ii Rs. Nil (2016: Rs. Nil, 2015: Rs.240.00 Crore) are secured by first Pari-Passu charge on current assets. Further secured by corporate guarantee from erstwhile parent company, Bharti Ventures Limited and carries an interest rate of 10.30%.

10. unsecured Short Term Loans from Bank

i Rs. Nil (2016: Rs.50.00 Crore, 2015: Rs.96.40 Crore) carries Interest Rate Nil (2016: 9.80 %, 2016: 10.35 %).

ii Rs.100.00 Crore (2016: Rs. Nil, 2015: Rs. Nil) Commercial Paper carries Interest Rate 8.40%.

11. Composite Scheme of Arrangement

A The Composite Scheme of Arrangement between the Company and Future Enterprises Limited ("Formerly Known As Future Retail Limited") (FEL) and their respective shareholders and creditors under the Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (''the Scheme''), for Demerger of Retail Business Undertaking of FEL into the Company and Demerger of the Retail Infrastructure Business Undertaking of the Company into FEL with effect from Appointment Date October 31, 2015 (as defined in the Scheme) has been given effect on May 1, 2016 (Effective Date). Pursuant to the Scheme, the paid up equity share capital has been reduced and reorganized to 4,34,78,261 Equity shares of Rs.2/- each. Further, all the assets and liabilities pertaining to Retail Business undertaking of FEL has been transferred to and vested in the Company. Accordingly, on May 18, 2016 the Company issued 42,78,60,296 Equity Shares to the shareholders holding shares on May 12, 2016 in FEL as per the Scheme. Further, all the assets and liabilities pertaining to Retail Infrastructure Business Undertaking of the Company has been transferred to and vested in FEL and accordingly, on May 18, 2016 FEL issued 4,34,78,261 equity shares to the shareholders holding shares on May 12, 2016 in the Company as provided in the Scheme.

As per the provisions of the Composite Scheme of Arrangement, the Company issued 10% Optionally Convertible Debentures, convertible at the option of the Company within a period of 18 months from May 1, 2016, being the date of allotment, at a price which shall be determined in accordance with Preferential issue guidelines under SEBI (ICDR) Regulations.

The Shareholders and OCD holders of Bharti Group have agreed to share with the respective companies (i.e. the Company & Future Enterprises Limited) an upside on the realization out of the shares of the two companies, subject to certain broad terms and conditions.

B 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 to 394 and sections 100 to 103 of the Companies Act, 1956 and/or sections 230 to 232 and Section 66 of the Companies Act, 2013 (as applicable) and Section 52 of the Companies Act, 2013, inter-aliainvolving demerger of the Retail Business Undertaking of HFL, through its wholly owned subsidiary HFRL, into the Company, was sanctioned by the Hon''ble National Company Law Tribunal, Mumbai Bench vide its order dated May 11, 2017 and the Hon''ble National Company Law Tribunal, Hyderabad Bench vide its order dated May 3, 2017.

Pursuant to the Scheme, the Retail Business Undertaking of HFL, through its wholly owned subsidiary HFRL, has been transferred to and vested in the Company with effect from March 31, 2017. The Scheme provided for issue of 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). However, as on March 31, 2017, pending sanction of the Scheme by the Hon''ble National Company Law Tribunal, the shares were pending to be allotted.

On May 11, 2017 the Hon''ble National Company Law Tribunal, Mumbai Bench sanctioned the scheme of arrangement between the Company and Heritage Foods Retail Limited ("HFRL"), the Retail Business Undertaking of HFRL stands transferred to and vested in the Company.

The acquisition would inter-alia achieve the following objectives as stated in the Scheme of Arrangement :

a. consolidation of the retail operations of FRL and HFRL;

b. unlocking of value;

c. synergies expected to bring in cost savings in the marketing, selling and distribution expenses for FRL.

12. Events after the Reporting Period

At Board Meeting held on April 20, 2017 the Board of Directors of the Company, Bluerock eServices Private Limited (''BSPL'' or ''Second Demerged Company'') and Praxis Home Retail Private Limited (''PHRPL'' or ''Resulting Company'') respectively approved ''The Scheme'' under Sections 230 to 232 read with Section 66 of Companies Act, 2013 and other applicable provision of the Companies Act, 2013 subject to necessary approvals. 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 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, to the shareholders of the Company for every 20 fully paid up shares of Rs.2/- each held by the shareholders in the Company. Post issue of such shares, the equity shares of PHRPL would be listed on the stock exchanges (subject to listing permission) and the shareholding pattern of PHRPL would be identical to that of the Company.

The Scheme is inter-alia subject to the approval of the shareholders and regulatory authorities and would be given effect on receipt of requisite approvals from the applicable statutory authorities.

Since the appointed Date for the demerger of the Home Retail Business is August 1, 2017, the assets and liabilities of the Home Retail Business as on August 1, 2017 would get transferred to and vested in PHRPL. In view of this, the impact of the demerger on the financial statements of the Company cannot be determined.


Mar 31, 2016

1. Leases

The Company has entered into operating lease arrangements for fixed assets and premises. The future minimum lease rental obligation under non-cancellable operating leases in respect of these assets and Lease term for which the company intend to occupy the premises is the Lease Rent payable not later than one year is Rs. 863.00 Crore (2015: Rs. 73.52 Crore), payable later than one year but not later than five year is Rs. 2,761.33 Crore (2015: Rs. 303.28 Crore) and payable later than five years is Rs. 1,457.26 Crore (2015: Rs. 1,378.52 Crore).

C. Significant Related Party Transactions

i. Sale of Goods and Services includes Bharti Enterprises Limited Rs. 0.01 Crore (2015: Rs. Nil), Bharti AXA General Insurance Company Limited Rs. Nil (2015: Rs. 0.10 Crore), Bharti Airtel Limited Rs. Nil (2015: Rs. 0.19 Crore).

ii. Purchases of Goods and Services includes Bharti Enterprises (Holding) Private Limited Rs. Nil (2015: Rs. 10.62 Crore), Bharti Enterprises Limited Rs. Nil (2015: Rs. 0.55 Crore), Bharti Airtel Limited Rs. Nil (2015: Rs. 6.12 Crore), Nile Tech Limited Rs. Nil (2015: Rs. 4.61 Crore), Bharti Reality Holding Limited Rs. Nil (2015: Rs. 1.16 Crore), Bharti Airtel Services Limited Rs. Nil (2015: Rs. 0.11 Crore), Bharti AXA General Insurance Company Limited Rs. Nil (2015: Rs. 0.88 Crore), Airtel M Commerce Services Limited Rs. Nil (2015: Rs. 0.00 Crore), Nxtra Data Limited Rs. Nil (2015: Rs. 1.94 Crore), Field Fresh Foods Private Limited Rs. Nil (2015: Rs. 2.16 Crore).

iii. Purchase of Fixed Assets includes Nxtra Data Limited Rs. Nil (2015: Rs. 0.17 Crore), Bharti Airtel Limited Rs. Nil (2015: Rs. 0.00 Crore).

iv. Repayment of Unsecured Loan includes Bharti Ventures Limited Rs. Nil (2015: Rs. 133.00 Crore).

v. Refund of Security Deposit Bharti Airtel Limited Rs. Nil (2015: Rs. 0.53 Crore),

vi. Managerial Remuneration includes Mr. Craig Wadsworth Wimsatt Rs. 1.56 Crore (2015: Rs. 0.73 Crore), Mr. Raj Kumar Jain Rs. Nil (2015: Rs. 2.52 Crore), Mr. Manish Sabnis Rs. 0.64 Crore (2015: Rs. Nil).

2. capital and Other commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. Nil Crore (2015: Rs. 23.70 Crore).

3. Deferred Tax

The Company follows Accounting Standard (AS-22) "Accounting for taxes on Income", as notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014. The significant component of deferred tax includes timing difference on account of unabsorbed depreciation and losses. In view of virtual certainty as laid down by the Standard, the Company has not recognized deferred tax assets (net) in its books as on the balance sheet date.

There are various labour, legal metrology, food adulteration and cases under other miscellaneous acts pending against the Company, the liability of which cannot be ascertained. However, management does not expect significant or material liability devolving on the Company.

4. Pursuant to the levy of service tax on renting of immovable properties given for commercial use, retrospectively with effect from June 1, 2007 by the Finance Act, 2010, the company based on legal advice, challenged the levy through Retailers Association of India and its retrospective application. The Hon''ble Supreme Court had passed an interim order dated October 14, 2011. In compliance of this order company has made an aggregate deposit of Rs. 39.60 Crore in respect of the liability for such service tax for the period from June 1, 2007 up to September 30, 2011. From October 1, 2011, the company is accounting and paying for such service tax regularly as per directives of the Supreme Court. Accordingly the company has not made provision of Rs. 79.20 Crore for the period June 1, 2007 to September 30, 2011 which would be appropriately recognized on final determination.

5. Security clause in respect to Secured Long Term Borrowings includes Term Loans from Banks

Rs. Nil (2015: Rs. 54.00 Crore) are secured by First Pari-Passu charge on Fixed Assets (excluding specific fixed assets charged in favour of exclusive charge lenders), carries coupon rate of 10.90% per annum.

6. Security clause in respect to Secured Short Term Borrowings includes Working Capital Loans from Banks

i) Rs. 918.20 Crore (2015: Rs. Nil) is transferred as part of the Retail Business Undertaking and is proposed to be secured by (a) First Pari-Passu Charge on Current Assets (excluding credit/debit card receivables) (b) Second Pari-Passu charge on Credit / Debit Card Receivables of all the Stores. Currently the borrowings are secured by the second charge on Fixed Assets of Future Enterprises Limited as assets are acquired subject to prior charge.

ii) Rs. Nil (2015: Rs. 240.00 Crore) are secured by first Pari-Passu charge on current assets. Further secured by corporate guarantee from erstwhile parent company, Bharti Ventures Limited and carries an interest rate of 10.30%.

7. Unsecured Short Term Loans from Bank Rs. 50.00 Crore (2015: Rs. 96.40 Crore) carries interest rate 9.80% (2015-10.35%).

8. Composite Scheme of Arrangement

The Composite Scheme of Arrangement between the Company and erstwhile Future Retail Limited (now known as Future Enterprises Limited) ("FEL") and their respective shareholders and creditors under the Sections 391 to 394 read with Sections 100 to 104 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (''the Scheme''), for Demerger of Retail Business Undertaking of FEL into the Company and Demerger of the Retail Infrastructure Business Undertaking of the Company into FRL with effect from Appointment Date of October 31, 2015 (as defined in the Scheme) has been given effect on May 01, 2016 (Effective Date).

Pursuant to the Scheme, the paid up equity share capital has been reduced and reorganized to 4,34,78,261 Equity shares of Rs. 2/- each. Further, all the assets and liabilities pertaining to Retail Business Undertaking of FEL has been transferred to and vested in the Company. Accordingly, on May 18, 2016 the Company issued 42,78,60,296 Equity Shares to the shareholders holding shares on May 12, 2016 in FEL as per the Scheme. Further, all the assets and liabilities pertaining to Retail Infrastructure Business Undertaking of the Company has been transferred to and vested in FEL and accordingly, on May 18, 2016 FEL issued 4,34,78,261 equity shares to the shareholders holding shares on May 12, 2016 in the Company as provided in the Scheme.

9. As per the provisions of the Scheme, the Company issued new Optionally Convertible Debentures having coupon rate of 10% p.a. as on Effective Date of Scheme, convertible at the option of the Company within a period of 18 months from the date of allotment at a price which shall be determined in accordance with Preferential issue guidelines under SEBI (ICDR) Regulations.

10. The Shareholders and OCD holders of Bharti Group have agreed to share with the respective companies (i.e. Company & FEL) an upside on the realization out of the shares of the two companies, subject to certain broad terms and conditions.

11. a. The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency exposures relating to the underlying transactions and firm commitments. The Company does not enter into any derivative instruments for trading and speculative purposes. Forward contracts (In USD & EURO) outstanding as at March 31, 2016 are Rs. 60.09 Crore (2015: Rs. Nil).

b. As of balance sheet date, the company has net foreign currency exposures (In USD & EURO) that are not hedged by derivative instruments or otherwise amounting to Rs. 59.00 Crore (2015: Rs. 0.90 Crore).

12. Figures for the previous year have been reworked, regrouped, rearranged and reclassified wherever necessary without any restatement on account of demerged business and merger effect given in the current year, figures are not comparable with the previous year.

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