PROSPECTUS Please read section 60 of the Companies Act, 1956 100% Book Built Issue Dated May 3, 2011

FUTURE VENTURES INDIA LIMITED

(The Company was originally incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 under the Companies Act, 1956, in Tamil Nadu. The Company was converted into a private company on September 17, 2001 and consequently, its name was changed to Subhikshith Finance & Investments Private Limited. Subsequently, the name of the Company was changed to Future Ventures India Private Limited on August 9, 2007 and the word private was deleted on September 7, 2007 upon the Company ceasing to be a private limited company. For details of changes in the name and registered office of the Company, please refer to History and Certain Corporate Matters beginning on page 146) Registered Office: Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060 Contact Person: Manoj Gagvani, Company Secretary and Head - Legal Tel: (91 22) 3084 2200; Fax : (91 22) 3084 2201; E-mail: [email protected]; Website: www.futureventures.in PROMOTERS OF THE COMPANY: KISHORE BIYANI, FUTURE CAPITAL INVESTMENT PRIVATE LIMITED, FUTURE CORPORATE RESOURCES LIMITED, FUTURE KNOWLEDGE SERVICES LIMITED, PIL INDUSTRIES LIMITED (FORMERLY KNOWN AS PANTALOON INDUSTRIES LIMITED ) AND PANTALOON RETAIL (INDIA) LIMITED PUBLIC ISSUE OF 75,00,00,000 EQUITY SHARES OF ` 10 EACH (EQUITY SHARES) OF FUTURE VENTURES INDIA LIMITED (THE COMPANY OR THE ISSUER) FOR CASH AT A PRICE OF ` 10 PER EQUITY SHARE AGGREGATING UP TO ` 75,000 LAKHS (THE ISSUE). THE ISSUE WILL CONSTITUTE 47.58% OF THE POSTISSUE PAID-UP CAPITAL OF THE COMPANY THE FACE VALUE OF THE EQUITY SHARES IS ` 10 EACH In case of revision in the Price Band, the Bid/Issue Period will be extended for at least three additional working days after revision of the Price Band subject to the Bid/Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be widely disseminated by notification to the Bombay Stock Exchange Limited (BSE) and the National Stock Exchange of India Limited (NSE), by issuing a press release, and also by indicating the change on the website of the BRLMs, CBRLMs and at the terminals of the Syndicate Members. This is an issue for more than 25% of the post-Issue capital in accordance with Rule 19(2)(b)(i) of the Securities Contracts Regulations Rules, 1957 (SCRR). The Issue is being made through the Book Building Process wherein not more than 50% of the Issue shall be allocated on a proportionate basis to Qualified Institutional Buyers (QIB) Bidders. 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only, and the remainder of the QIB Portion shall be available for allocation on a proportionate basis to all QIB Bidders, including Mutual Funds, subject to valid Bids being received at or above the Issue Price. Further, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Potential investors may participate in the Issue through an Application Supported by Blocked Amount (ASBA) process providing details about the bank account which will be blocked by the Self Certified Syndicate Banks (SCSBs) for the same. For details please see the section entitled Issue Procedure beginning on page 432. RISK IN RELATION TO THE FIRST ISSUE This being the first issue of Equity Shares of the Company, there has been no formal market for the Equity Shares of the Company. The face value of the Equity Shares is ` 10 each and the Issue Price is 1 time of the face value. The Issue Price (has been determined and justified by the BRLM and the Company as stated under the paragraph on Basis of Issue Price) should not be taken to be indicative of the market price of the Equity Shares after the listing. No assurance can be given regarding an active or sustained trading in the Equity Shares nor regarding the price at which the Equity Shares will be traded after listing. IPO GRADING This Issue has been rated by Credit Analysis and Research Limited as CARE IPO Grade 3/5 indicating average fundamentals. The IPO grade is assigned on a five point scale from 1 to 5, with IPO grade 5/5 indicating strong fundamentals and IPO grade 1/5 indicating poor fundamentals. For details see the section titled General Information beginning on page 62. GENERAL RISKS Investments in equity and equity-related securities involve a high degree of risk and investors should not invest any funds in this Issue unless they can afford to take the risk of losing their investment. Investors are advised to read the Risk Factors carefully before taking an investment decision in this Issue. For taking an investment decision, investors must rely on their own examination of the Company and the Issue including the risks involved. The Equity Shares offered in the Issue have not been recommended or approved by the Securities and Exchange Board of India (SEBI), nor does SEBI guarantee the accuracy or adequacy of this Prospectus. Specific attention of the investors is invited to the section entitled Risk Factors beginning on page 12. ISSUERS ABSOLUTE RESPONSIBILITY The Company, having made all reasonable inquiries, accepts responsibility for and confirms that this Prospectus contains all information with regard to the Company and the Issue, which is material in the context of the Issue, that the information contained in this Prospectus is true and correct in all material aspects and is not misleading in any material respect, that the opinions and intentions expressed herein are honestly held and that there are no other facts, the omission of which make this Prospectus as a whole or any of such information or the expression of any such opinions or intentions misleading in any material respect. LISTING AGREEMENT The Equity Shares offered through this Prospectus are proposed to be listed on the BSE and the NSE. The Company has received an in-principle approval from the BSE and the NSE, for the listing of the Equity Shares pursuant to letters dated September 30, 2010 and October 15, 2010, respectively. For the purposes of the Issue, the Designated Stock Exchange is the Bombay Stock Exchange Limited.
BOOK RUNNING LEAD MANAGERS REGISTRAR TO THE ISSUE

ENAM SECURITIES PRIVATE LIMITED 801/ 802, Dalamal Tower Nariman Point Mumbai 400 021 Tel: (91 22) 6638 1800 Fax: (91 22) 2284 6824 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.enam.com Contact Person: Anurag Byas SEBI Registration No.: INM000006856

JM FINANCIAL CONSULTANTS PRIVATE LIMITED 141, Maker Chambers III Nariman Point Mumbai 400 021, Tel: (91 22) 6630 3030 Fax: (91 22) 2204 7185 Email: fvil.ipo @jmfinancial.in Investor Grievance [email protected] Website: www.jmfinancial.in Contact Person: Lakshmi Lakshmanan SEBI Registration No: INM000010361

Email:

KOTAK MAHINDRA CAPITAL COMPANY LIMITED First floor, Bakhtawar 229, Nariman Point Mumbai 400 021 Tel: (91 22) 6634 1100 Fax: (91 22) 2284 0492 E-mail: [email protected] Investor Grievance E-mail: [email protected] Website: www.kmcc.co.in Contact Person: Chandrakant Bhole SEBI Registration No.: INM000008704

LINK INTIME INDIA PRIVATE LIMITED C-13, Pannalal Silk Mills Compound L.B.S. Marg, Bhandup (West) Mumbai 400 078 Tel: (91 22) 2596 0320 Fax: (91 22) 2596 0329 Email: [email protected] Website: www.linkintime.co.in Contact Person: Sachin Achar SEBI Registration No. : INR000004058

BID/ISSUE OPENED ON APRIL 25, 2011

BID/ISSUE PROGRAMME BID/ISSUE CLOSED (FOR QIB BIDDERS) ON APRIL 27, 2011 BID/ISSUE CLOSED (FOR RETAIL INDIVDUAL BIDDERS AND NON-INSTITUTIONAL BIDDERS) ON APRIL 28, 2011

TABLE OF CONTENTS SECTION I: GENERAL .............................................................................................................................................1 DEFINITIONS AND ABBREVIATIONS ...............................................................................................................1 PRESENTATION OF FINANCIAL INDUSTRY AND MARKET DATA ............................................................. 9 FORWARD LOOKING STATEMENTS ............................................................................................................... 11 SECTION II: RISK FACTORS ............................................................................................................................... 12 SECTION III: INTRODUCTION ........................................................................................................................... 39 SUMMARY OF INDUSTRY ................................................................................................................................. 39 SUMMARY OF BUSINESS .................................................................................................................................. 44 SUMMARY FINANCIAL INFORMATION ......................................................................................................... 51 THE ISSUE ............................................................................................................................................................. 61 GENERAL INFORMATION ................................................................................................................................. 62 CAPITAL STRUCTURE ....................................................................................................................................... 71 OBJECTS OF THE ISSUE ..................................................................................................................................... 82 BASIS FOR ISSUE PRICE..................................................................................................................................... 86 STATEMENT OF TAX BENEFITS ...................................................................................................................... 89 SECTION IV: ABOUT THE COMPANY ............................................................................................................ 101 INDUSTRY .......................................................................................................................................................... 101 BUSINESS ........................................................................................................................................................... 116 REGULATIONS AND POLICIES ....................................................................................................................... 137 HISTORY AND CERTAIN CORPORATE MATTERS ...................................................................................... 146 MANAGEMENT.................................................................................................................................................. 162 SUBSIDIARIES ................................................................................................................................................... 179 BUSINESS VENTURES ...................................................................................................................................... 184 PROMOTERS AND PROMOTER GROUP ........................................................................................................ 194 GROUP COMPANIES ......................................................................................................................................... 210 RELATED PARTY TRANSACTIONS ............................................................................................................... 227 DIVIDEND POLICY ............................................................................................................................................ 228 SECTION V: FINANCIAL STATEMENTS ........................................................................................................ 229 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION ........................................................................................................................................................ 348 SECTION VI: LEGAL AND OTHER INFORMATION .................................................................................... 362 OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS ........................................................... 362 GOVERNMENT APPROVALS .......................................................................................................................... 410 OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................................ 412 TERMS OF THE ISSUE ....................................................................................................................................... 423 ISSUE STRUCTURE ........................................................................................................................................... 426 ISSUE PROCEDURE ........................................................................................................................................... 430 RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ...................................................... 458 SECTION VII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION .................................................... 459 SECTION VIII: OTHER INFORMATION ......................................................................................................... 487 MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION .............................................................. 487 DECLARATION .................................................................................................................................................. 490 SECTION IX: ANNEXURE ................................................................................................................................... 491

SECTION I: GENERAL DEFINITIONS AND ABBREVIATIONS Unless the context otherwise indicates or implies the following terms have the meaning given below. References to any legislation, act or regulation shall be to such terms as amended from time to time. General Term We, us the Company, our Company, the Issuer and FVIL Subsidiaries Description Unless the context otherwise requires, refers to Future Ventures India Limited and its Subsidiaries on a consolidated basis, as described in this Prospectus Future Ventures India Limited, a company incorporated under the Companies Act, 1956 and having its registered office at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060 The subsidiaries of the Company being Aadhaar Retailing Limited, Indus-League Clothing Limited, Indus Tree Crafts Private Limited, Future Consumer Enterprises Limited, Future Consumer Products Limited and Lee Cooper (India) Limited

Company Related Terms Term Adjusted Net Worth Description The total assets of the Company, less all its liabilities including loan capital; provided that traded / liquid investments will be marked to market and unlisted / illiquid investments will be valued at the lower of cost or fair market value. With reference to any specific fiscal year, the Adjusted Net Worth means the Adjusted Net Worth calculated as per the last audited balance sheet of the Company, unless specified otherwise. The articles of association of the Company, as amended from time to time The statutory auditors of the Company, Deloitte Haskins & Sells, Chartered Accountants The Board of Directors of the Company or any duly constituted committees thereof The policy formulated by the Company and approved by the Board of Directors on August 10, 2010, setting out the guidelines pursuant to which the Company shall make its investments Entities in which the Company exercises operational control or has significant influence, by virtue of being the promoter or by acquiring interest therein Core Investment Company as defined under the RBI notification no. RBI/2010-11/168 DNBS (PD) CC. No. 197/03.10.001/2010-11 dated August 12, 2010 as amended RBI Circular No. DNBS (PD) CC. No. 197/03.10.001/2010-11 dated August 12, 2010 Core Investment Companies (Reserve Bank) Directions, 2011 issued by RBI on January 5, 2011 The Consulting and Advisory Services Agreement dated February 20, 2008 between the Company and Future Capital Holdings Limited, as amended through the amendment agreement dated August 10, 2010 FVIL Employees Stock Option Plan 2011 The Future Group of companies Companies, firms, ventures promoted by the Promoters, irrespective of whether such entities are covered under Section 370(1)(B) of the Companies Act or not Master Service Agreement dated January 25, 2011 entered by the Company with Future Corporate Resources Limited The Memorandum of Association of the Company, as amended

Articles/ Articles Association Auditors

of

Board/ Board of Directors Business and Investment Policy Business Ventures CIC CIC Circular CIC Guidelines Consulting and Advisory Services Agreement ESOP Scheme Future Group Group Companies Master Service Agreement Memorandum / Memorandum of Association

Term Mentoring Services Agreement NBFC Promoters

Promoter Group

Registered Office Treasury Assets

Description Mentoring Services Agreement dated August 10, 2010 entered by the Company with Pantaloon Retail (India) Limited A non-banking financial company as defined under the RBI Act and registered with the RBI under applicable laws in India The promoters of the Company being Kishore Biyani, Future Capital Investment Private Limited, Future Corporate Resources Limited, Future Knowledge Services Limited, PIL Industries Limited (formerly known as Pantaloon Industries Limited) and Pantaloon Retail (India) Limited Unless the context otherwise requires, refers to such persons and entities which constitute the Promoter Group of the Company and a list of which is provided in the section entitled Promoters and Promoter Group beginning on page 194 The registered office of the Company located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060 Assets that are intended to be held for 365 days or less on the date on which investment is made

Issue Related Terms Term Allotment/Allot /Allotted Allottee Application Supported by Blocked Amount/ ASBA ASBA Account Description Unless the context otherwise requires, means the allotment of Equity Shares pursuant to this Issue to the successful Bidders A successful Bidder to whom the Equity Shares are Allotted An application, whether physical or electronic, used by all the Bidders to make a Bid authorising the SCSB to block the Bid Amount in their ASBA Account maintained with the SCSB An account maintained by the ASBA Bidder with the SCSB and specified in the ASBA Bid cum Application Form for blocking an amount mentioned in the ASBA Bid cum Application Form The form, whether physical or electronic, used by a Bidder to make a Bid, through the ASBA process, which contains an authorisation to block the Bid Amount in an ASBA Account and will be considered as the application for Allotment for the purposes of the Red Herring Prospectus and the Prospectus. Prospective investors in the Issue who intend to Bid/apply through ASBA The form used by the ASBA Bidders to modify the quantity of Equity Shares or the Bid Amount in any of their ASBA Bid cum Application Forms or any previous ASBA Revision Form(s) The banks, which are clearing members and registered with SEBI in terms of the Securities and Exchange Board of India (Bankers to an Issue) Regulations, 2006 and with whom the Escrow Account will be opened, in this case being Axis Bank Limited, Dhanlaxmi Bank Limited, The Hongkong and Shanghai Banking Corporation Limited, ICICI Bank Limited and State Bank of India The basis on which Equity Shares will be Allotted to Bidders under the Issue and which is described in the section entitled Issue Procedure Basis of Allotment beginning on page 455 An indication to make an offer during the Bid/Issue Period by a Bidder pursuant to submission of the Bid cum Application Form to subscribe to the Equity Shares of the Company at a price within the Price Band, including revisions and modifications thereto The highest value of the optional Bids indicated in the Bid cum Application Form The form used by a Bidder (which, unless expressly provided, includes the ASBA Bid cum Application Form by an ASBA Bidder, as applicable) to make a Bid and which will be considered as the application for Allotment for the purposes of the Red Herring Prospectus

ASBA Bid Application Form

cum

ASBA Bidder ASBA Revision Form

Banker(s) to the Issue/ Escrow Collection Bank(s)

Basis of Allotment

Bid

Bid Amount Bid cum Application Form

Term Bid /Issue Closing Date Bid/Issue Opening Date Bidder Bid/Issue Period

Book Building Process/ Method BRLMs/Book Running Lead Managers Business Day CAN/Confirmation Allotment Note Cap Price CBRLMs/ Co-Book Running Lead Managers Controlling Branches

of

Cut-Off Price

Designated Branches

Designated Date

Designated Exchange Draft Red Prospectus

Stock Herring

Description For QIB Bidders: April 27, 2011 For Retail Individual Bidders and Non-Institutional Bidders: April 28, 2011 April 25, 2011 Any prospective investor who makes a Bid pursuant to the terms of the Red Herring Prospectus and the Bid cum Application Form The period between the Bid/Issue Opening Date and the Bid/Issue Closing Date inclusive of both days and during which prospective Bidders can submit their Bids including any revisions thereof The book building process as provided under Schedule XI of the SEBI Regulations, in terms of which the Issue is being made The Book Running Lead Manager to the Issue, in this case being Enam Securities Private Limited, JM Financial Consultants Private Limited and Kotak Mahindra Capital Company Limited Any day on which the commercial banks in Mumbai are open for business Note or advice or intimation of Allotment sent to the successful Bidders indicating the Equity Shares Allotted after Basis of Allotment has been approved by the Designated Stock Exchange The higher end of the Price Band, above which the Issue Price will not be finalized and above which no Bids will be accepted The Co-Book Running Lead Managers to the Issue, in this case being Edelweiss and ISec Such branches of the SCSBs which coordinate with the BRLMs, the CBRLMs, the Registrar to the Issue and the Stock Exchanges and a list of which is available on the website of SEBI at http://www.sebi.gov.in Issue Price, finalized by the Company in consultation with the BRLMs. Only Retail Individuals Bidders, are entitled to bid at the Cut-Off Price, for a Bid Amount not exceeding ` 2,00,000. No other category of Bidders are entitled to bid at the Cut-Off Price Such branches of the SCSBs which shall collect the ASBA Bid cum Application Form used by ASBA Bidders and a list of which is available on the website of SEBI at http://www.sebi.gov.in /pmd/scsb.pdf The date on which funds are transferred from the Escrow Account or the amount blocked by the SCSB is transferred from the ASBA Account, as the case maybe, to the Public Issue Account, or Refund Account, as appropriate, after the Prospectus is filed with the ROC, following which the Board of Directors shall Allot Equity Shares to successful Bidders The Bombay Stock Exchange Limited The Draft Red Herring Prospectus dated August 13, 2010 issued in accordance with Section 60B of the Companies Act and the SEBI Regulations, filed with SEBI and which does not contain complete particulars of the price at which the Equity Shares are offered and the size of the Issue Edelweiss Capital Limited NRIs from jurisdictions outside India where it is not unlawful to make an issue or invitation under the Issue and in relation to whom the Red Herring Prospectus constitutes an invitation to subscribe for the Equity Shares offered herein. Enam Securities Private Limited Equity shares of the Company of face value of ` 10 each, unless otherwise specified in the context thereof An account opened with an Escrow Collection Bank(s) and in whose favour the Bidder (excluding the ASBA Bidders) will issue cheques or drafts in respect of the Bid Amount when submitting a Bid

Edelweiss Eligible NRI(s)

Enam Equity Shares Escrow Account

Term Escrow Agreement

Description An agreement entered into by the Company, the Registrar to the Issue, the BRLMs, the CBRLMs, the Syndicate Members and the Escrow Collection Bank(s) for collection of the Bid Amounts and where applicable, refunds of the amounts collected to the Bidders (excluding the Bidders applying though ASBA) on the terms and conditions thereof The Bidder whose name appears first in the Bid cum Application Form or Revision Form or the ASBA Bid cum Application Form or the ASBA Revision Form The lower end of the Price Band, below which the Issue Price will not be finalized and below which no Bids will be accepted ICICI Securities Limited The public issue of 75,00,00,000 Equity Shares of ` 10 each of the Issuer for cash at a price of ` 10 per Equity Share aggregating up to ` 75,000 lakhs. The final price at which Equity Shares will be issued and Allotted in terms of the Red Herring Prospectus and the Prospectus, in this case being ` 10 The agreement dated August 13, 2010 between the Company, the BRLMs and the CBRLMs, pursuant to which certain arrangements are agreed to in relation to the Issue JM Financial Consultants Private Limited Kotak Mahindra Capital Company Limited Allahabad Bank A mutual fund registered with SEBI pursuant to the SEBI (Mutual Funds) Regulations, 1996, as amended from time to time 5% of the QIB Portion or 1,87,50,000 Equity Shares available for allocation to Mutual Funds only, out of the QIB Portion Proceeds from the Issue less Issue related expenses. For further information about use of the Issue proceeds and the Issue expenses, see the section Objects of the Issue beginning on page 82 of this Prospectus All Bidders that are not QIBs or Retail Individual Bidders and who have Bid for Equity Shares for an amount more than ` 2,00,000 (but not including NRIs other than Eligible NRIs) The portion of this Issue being not less than 11,25,00,000 Equity Shares available for allocation to Non-Institutional Bidders The price band with a minimum price (Floor Price) of ` 10 and the maximum price (Cap Price) of ` 11, per Equity Share including any revisions thereof. The Price Band and the minimum Bid lot size for the Issue will be decided by the Company in consultation with the BRLMs and advertised, at least two Working Days prior to the Bid/Issue Opening Date, in all editions of Financial Express in the English language, all editions of Jansatta in the Hindi language and Mumbai edition of Navshakti in the Marathi language with wide circulation The date on which the Company in consultation with the BRLMs finalize the Issue Price This Prospectus dated May 3, 2011 to be filed with the ROC in accordance with Section 60 of the Companies Act, containing, inter alia, the Issue Price that is determined at the end of the Book Building Process, the size of the Issue and certain other information An account opened with the Banker(s) to the Issue to receive monies from the Escrow Accounts and from the SCSBs from the bank accounts of the ASBA Bidders for the Issue on the Designated Date One day prior to the Bid/Issue Closing Date after which the Syndicate and the designated branches of the SCSBs will not accept any Bids from the QIBs, being April 27, 2011 for the Issue The portion of the Issue to public being not more than 37,50,00,000 Equity Shares required to be allocated to QIBs Public financial institutions as defined in Section 4A of the Companies Act, scheduled commercial banks, mutual funds registered with SEBI, foreign institutional investors

First Bidder Floor Price I-Sec Issue Issue Price Issue Agreement JM Financial Kotak Monitoring Agency Mutual Funds Mutual Funds Portion Net Proceeds

Non-Institutional Bidders

Non-Institutional Portion Price Band

Pricing Date Prospectus

Public Issue Account

QIB Bid/Issue Closing Date QIB Portion Qualified Institutional Buyers or QIBs

Term

Red Herring Prospectus

Refund Account(s)

Refund Bank Refunds through electronic transfer of funds Registrar /Registrar to the Issue Retail Individual Bidders

Description and sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with the Insurance Regulatory and Development Authority, provident funds with a minimum corpus of ` 2,500 lakhs, pension funds with a minimum corpus of ` 2,500 lakhs, National Investment Fund set up by the Government of India and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India. The Red Herring Prospectus dated April 16, 2011 issued in accordance with Section 60B of the Companies Act which does not have complete particulars on the price at which the Equity Shares are offered and the size of the Issue. The Red Herring Prospectus will be filed with the ROC at least three days before the Bid/Issue Opening Date and will become a Prospectus after filing with the ROC after the Pricing Date Account(s) opened with an Escrow Collection Bank from which refunds if any, of the whole or part of the Bid Amount (excluding the Bidders applying though ASBA) if any, of the whole or part of the Bid Amount shall be made Axis Bank Limited Refunds through NECS, Direct Credit, NEFT, RTGS or the ASBA process, as applicable Link Intime India Private Limited Individual Bidders (including HUFs applying through their karta and Eligible NRIs) who have not Bid for Equity Shares for an amount of more than ` 2,00,000 in any of the Bidding options in the Issue The portion of the Issue to the public being not less than 26,25,00,000 Equity Shares available for allocation to Retail Individual Bidder(s) The form used by the Bidders (which, unless expressly provided, includes the ASBA Revision Form), to modify the quantity of Equity Shares or the Bid Amount in any of their Bid cum Application Forms or any previous Revision Form(s) A banker registered with SEBI under the SEBI (Bankers to an Issue) Regulations, 1994 and offers services of ASBA, including blocking of bank account and a list of which is available on the website of SEBI at http://www.sebi.gov.in The BSE and the NSE The BRLMs, the CBRLMs and the Syndicate Members The agreement entered into between the Company and the Syndicate in relation to the collection of Bids (excluding Bids from the Bidders applying though ASBA) in this Issue Kotak Securities Limited The slip or document issued by the Syndicate Members or the SCSB (only on demand), as the case may be, to the Bidder as proof of registration of the Bid The BRLMs, the CBRLMs and the Syndicate Member The agreement entered between the members of the Syndicate and the Company All days other than Sunday or a public holiday (except during Bid/Issue Period where a working day means all days other than a Saturday, Sunday or a public holiday), on which commercial banks in Mumbai are open for business

Retail Portion Revision Form

Self Certified Syndicate Bank/ SCSB Stock Exchanges Syndicate Syndicate Agreement

Syndicate Member TRS or Transaction Registration Slip Underwriters Underwriting Agreement Working Day

Industry Related Terms Term Doubtful asset Description (i) A term loan, or (ii) A lease asset, or (iii) A hire purchase asset, or (iv) Any other asset which remain a sub-standard asset for a period exceeding 18 months

Term KYC Loss asset

Owned Funds

Standard asset

Subordinated debt

Sub-standard asset

Tier I Capital

Tier II Capital

Description Know Your Customer (i) An asset which has been identified as loss asset by NBFC or its internal or external auditor or by the RBI during the inspection of NBFC, to the extent that it is not written off by the NBFC; and (ii) An asset which is adversely affected by a potential threat of non-recoverability due to either erosion in the value of security or non availability of security or due to any fraudulent act or omission on the part of the borrower Paid up equity capital, preference shares which are compulsorily convertible into equity, free reserves, balance in share premium account; capital reserve representing surplus arising out of sale proceeds of asset, excluding reserves created by revaluation of assets; less accumulated loss balance, book value of intangible assets and deferred revenue expenditure, if any The asset in respect of which no default in repayment of principal or payment of interest is perceived and which does not disclose any problem nor carries more than normal risk attached to the business A fully paid up capital instrument, which is unsecured and is subordinated to the claims of other creditors and is free from restrictive clauses and is not redeemable at the instance of the holder or the without the consent of the supervisory authority of NBFC authority. The book value of such instrument is subjected to discounting as prescribed in the Prudential Norms Directions (a) an asset, which has been classified as non-performing asset for a period not exceeding 18 months; (b) an asset where the terms of the agreement regarding interest and / or principal have been renegotiated or rescheduled or restructured after commencement of operations, until the expiry of one year of satisfactory performance under the renegotiated or rescheduled or restructured terms. An infrastructure loan shall, however, be classified as a sub-standard asset only in accordance with the provisions of paragraph 23 of the Non-Banking Financial (Non - Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 Owned fund as reduced by investment in shares of other NBFCs and in shares, debentures, bonds, outstanding loans and advances including hire purchase and lease finance made to and deposits with subsidiaries and companies in the same group exceeding, in aggregate, ten % of the owned fund Includes the following (i) preference shares other than those which are compulsorily convertible into equity; (ii) revaluation reserves at discounted rate of 55%; (iii) general provisions and loss reserves to the extent these are not attributable to actual diminution in value or identifiable potential loss in any specific asset and are available to meet unexpected losses, to the extent of one-and-one-fourth % of risk weighted assets; (iv) hybrid debt capital instruments; and (v) subordinated debt, to the extent the aggregate does not exceed Tier-I capital

Conventional/General Terms Term AS AY BSE CDSL CEO CFO CIN Companies Act Depositories Act Depository Depository Participant Description Accounting Standards issued by the Central Government Assessment Year Bombay Stock Exchange Limited Central Depository Services (India) Limited Chief Executive Officer Chief Financial Officer Corporate Identity Number The Companies Act, 1956, as amended from time to time The Depositories Act, 1996, as amended from time to time A body corporate registered under the SEBI (Depositories and Participants) Regulations, 1996, as amended from time to time A depository participant as defined under the Depositories Act

Term DIN EGM EPS FDI FEMA FII Financial Year Year/FY/ Fiscal FIPB FVCI GIR Number Government/ GOI HUF IND AS IRR I.T. Act Indian GAAP IPO MICR NECS NEFT Non Residents/NR NRE Account NRI/Non-Resident Indian /Fiscal

NRO Account NSDL NSE OCB/ Overseas Corporate Body

p.a./ P.A P/E Ratio PAN PAT PIO/ Person of Indian Origin RBI Reserve Bank of India Act/ RBI Act ROC/ Registrar of Companies RONW

Description Director Identification Number Extraordinary General Meeting Earnings Per Share Foreign Direct Investment Foreign Exchange Management Act, 1999, as amended from time to time and the regulations framed there under Foreign Institutional Investor, as defined under SEBI (Foreign Institutional Investor) Regulations, 1995, registered with SEBI under applicable laws in India. The period of twelve months ended March 31 of that particular year, unless otherwise stated Foreign Investment Promotion Board, Government of India A Foreign Venture Capital Investor registered with SEBI under SEBI (Foreign Venture Capital Investors) Regulations, 2000, as amended General Index Registry Number The Government of India Hindu Undivided Family Indian Accounting Standards converged with International Financial Reporting Standards Internal Rate of Return The Income Tax Act, 1961, as amended from time to time Generally Accepted Accounting Principles in India Initial Public Offering Magnetic Ink Character Recognition National Electronic Clearing System National Electronic Funds Transfer A person resident outside India, as defined under FEMA and includes a Non-Resident Indian Non-Resident External Account A person resident outside India, who is a citizen of India or a Person of Indian origin and shall have the same meaning as ascribed to such term in the Foreign Exchange Management (Deposit) Regulations, 2000 as amended from time to time Non-Resident Ordinary Account National Securities Depository Limited The National Stock Exchange of India Limited A company, partnership, society or other corporate body owned directly or indirectly to the extent of at least 60% by NRIs including overseas trusts, in which not less than 60% of beneficial interest is irrevocably held by NRIs directly or indirectly and which was in existence on October 3, 2003 and immediately before such date had taken benefits under the general permission granted to OCBs under FEMA. OCBs are not allowed to invest in this Issue Per annum Price/Earnings Ratio Permanent Account Number Profit after tax Person of Indian Origin and shall have the same meaning as is ascribed to such term in the Foreign Exchange Management (Investment in Firm or Proprietary Concern in India) Regulations, 2000, as amended from time to time Reserve Bank of India The Reserve Bank of India Act, 1934, as amended from time to time The Registrar of Companies, Maharashtra located at 100, Everest, Marine Drive, Mumbai 400 002 Return on Net Worth

Term Rs./ ` / INR RTGS SCRA SCRR SEBI SEBI Act SEBI Regulations SEBI Regulations SICA VCF VP Takeover

Description Indian Rupees Real Time Gross Settlement Securities Contracts (Regulation) Act, 1956, as amended from time to time Securities Contracts (Regulation) Rules, 1957, as amended from time to time The Securities and Exchange Board of India constituted under the SEBI Act, 1992 The Securities and Exchange Board of India Act, 1992, as amended from time to time SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 as amended from time to time The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulations, 1997, as amended from time to time The Sick Industrial Companies (Special Provisions) Act, 1985 A venture capital fund registered under the SEBI (Venture Capital Fund) Regulations, 1996 Vice President

PRESENTATION OF FINANCIAL INDUSTRY AND MARKET DATA All references to India contained in this Prospectus are to the Republic of India and all references to the U.S. are to the United States of America. Financial Data Unless stated otherwise, the financial data in this Prospectus is derived from the audited consolidated financial statements, prepared in accordance with Indian GAAP the Companies Act and restated in accordance with the SEBI Regulations, and included in this Prospectus. In this Prospectus, any discrepancies in any table between the total and the sums of the amounts listed are due to rounding off. All decimals have been rounded off to two decimal points. The current financial year of the Company commences on April 1 and ends on March 31 of the next year, so all references to particular financial year, unless stated otherwise, are to the 12 months period ended on March 31 of that year. All numbers in this Prospectus have been represented in lakhs or in whole numbers, where the numbers have been too small to present in lakhs. There are significant differences between Indian GAAP, US GAAP and IND AS. The reconciliation of the financial statements to IND AS or US GAAP financial statements has not been provided. The Company has not attempted to explain those differences or quantify their impact on the financial data included herein, and it is urged that you consult your own advisors regarding such differences and their impact on the Companys financial data. Accordingly, the degree to which the Indian GAAP financial statements included in this Prospectus will provide meaningful information is entirely dependent on the readers level of familiarity with Indian accounting practices. Any reliance by persons not familiar with Indian accounting practices on the financial disclosures presented in this Prospectus should accordingly be limited. Currency and Units of Presentation All references to Rupees, or Rs. or ` or INR are to Indian Rupees, the official currency of the Republic of India. All references to US$, U.S.$, USD or US Dollars are to United States Dollars, the official currency of the United States of America. Definitions For definitions, please see the section entitled Definitions and Abbreviations beginning on page 1. In the section Main Provisions of Articles of Association beginning on page 461, defined terms have the meaning given to such terms in the Articles. Industry and Market Data Unless stated otherwise, industry and market data used in this Prospectus has been obtained or derived from publicly available information as well as industry publications and sources. Industry publications generally state that the information contained in those publications has been obtained from sources believed to be reliable but that their accuracy and completeness are not guaranteed and their reliability cannot be assured. Accordingly, no investment decision should be made on the basis of such information. Although industry data used in this Prospectus is reliable, it has not been independently verified by the Company or the BRLMs or the CBRLMs. Similarly, internal reports, which we believe to be reliable, have not been verified by any independent sources. The extent to which the market and industry data used in this Prospectus is meaningful depends on the readers familiarity with and understanding of the methodologies used in compiling such data. There are no standard data gathering methodologies in the industry in which the Company conducts its business, and methodologies and assumptions may vary widely among different industry sources. This Prospectus contains translations of U.S. Dollar and other currency amounts into Indian Rupees that have been presented solely to comply with the requirements of item (VIII) sub-item (G) of Part A of Schedule VIII of the SEBI

Regulations. It should not be construed as a representation that such currency amounts could have been, or can be converted into Indian Rupees, at any particular rate or at all. The exchange rates of the respective foreign currencies as on March 31, 2007, March 31, 2008, March 31, 2009, March 31, 2010 and March 31, 2011 are provided below: Currency 1 USD* 1 HKD** March 31, 2011 44.65 5.76 Exchange rate as on (in `) March 31, 2010 March 31, 2009 March 31, 2008 45.14 50.95 39.97 5.79 6.54 5.15

March 31, 2007 43.59 5.56

*Source: www.rbi.org.in ** Source: www.oanda.com

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FORWARD LOOKING STATEMENTS This Prospectus contains certain forward-looking statements. These forward-looking statements generally can be identified by words or phrases such as aim, anticipate, believe, expect, estimate, intend, objective, plan, project, shall, will, will continue, will pursue or other words or phrases of similar import. Similarly, statements that describe the Companys strategies, objectives, plans or goals are also forward-looking statements. All forward-looking statements are subject to risks, uncertainties and assumptions about the Company that could cause actual results to differ materially from those contemplated by the relevant forward-looking statement. Actual results may differ materially from those suggested by the forward-looking statements due to various risks or uncertainties. Important factors that could cause actual results to differ materially from the expectations of the Company include, but are not limited to, the following: limited experience in creating, building, acquiring, investing in and operating innovative and emerging businesses in consumption-led sectors; inadequate due diligence in connection with the business ventures; inability to source business opportunities effectively; adverse developments in consumption-led sectors; difficult conditions for our Business Ventures any increase in interest rates or inflation; a slowdown in economic growth in India political instability, terrorist attacks, civil unrest and other acts of violence or war involving India and other countries ; natural disasters in India or in countries in the region or globally, including in Indias neighbouring countries; prevailing regional or global economic conditions; and other significant regulatory or economic developments in or affecting India or its retails and other consumption-led sectors or industries. For further discussion of factors that could cause the actual results to differ from the expectations, please see the sections entitled Risk Factors, Business and Managements Discussion and Analysis of Financial Condition and Results of Operations on beginning pages 12, 116 and 350, respectively. By their nature, certain market risk disclosures are only estimates and could be materially different from what actually occurs in the future. As a result, actual gains or losses could materially differ from those that have been estimated. Forward-looking statements reflect the current views as of the date of this Prospectus and are not a guarantee of future performance. Neither the Company, the Directors, the Underwriters nor any of their respective affiliates have any obligation to update or otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the occurrence of underlying events, even if the underlying assumptions do not come to fruition. The Company, the BRLMs and the CBRLMs will ensure that investors in India are informed of material developments until the time of the grant of listing and trading permission by the Stock Exchanges.

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SECTION II: RISK FACTORS An investment in Equity Shares involves a high degree of risk. You should carefully consider all the information in this Prospectus, including the risks and uncertainties described below, before making an investment in the Equity Shares. These risks and uncertainties are not the only risks that we currently face. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also have a material adverse effect on our business, results of operations and financial condition. If any of the following risks, or other risks that are not currently known or are deemed immaterial, actually occur, our business, results of operations and financial condition could suffer, the price of Equity Shares could decline, and you may lose all or part of your investment. Unless otherwise stated in the relevant risk factors set forth below, we are not in a position to specify or quantify the financial or other implications of any of the risks mentioned herein. In making an investment decision, prospective investors must rely on their own examination of the Company and the terms of the Issue, including merits and risks involved. This Prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including considerations described below and in the section entitled Forward-looking Statements beginning on page 11. To obtain a better understanding of our business, you should read this section in conjunction with other sections of the Prospectus, including the sections entitled Business, Managements Discussion and Analysis of Financial Condition and Results of Operations and Financial Statements beginning on pages 116, 350 and 230 respectively, together with all other financial information contained in this Prospectus. Unless otherwise stated, the financial data in this section is derived from our audited consolidated financial statements prepared in accordance with Indian GAAP and restated in accordance with the SEBI Regulations. Internal Risk Factors Risks relating to our Business 1. Certain of the Companys Directors and Promoters are involved in the criminal proceedings. The Subsidiaries, Promoters, Directors, Business Ventures and Group Companies are involved in certain legal proceedings. These proceedings if determined adversely could have material adverse effect on our business, financial condition and results of operations. Certain of our Directors and Promoters are involved in the following criminal proceedings, which are pending at different levels of adjudication before various courts, tribunal and statutory authorities: (a) Litigation involving Directors of the Company Kishore Biyani Our Promoter and Managing Director, Kishore Biyani, is involved in 13 criminal proceedings, which are pending at different levels of adjudication. Anil Harish Our Director, Anil Harish, is involved in seven criminal proceedings, which are pending at different levels of adjudication. (b) Litigation involving Promoters Kishore Biyani For a summary of litigation proceedings against Kishore Biyani, please see the section entitled -

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Litigation involving Directors - Kishore Biyani on page 369. Pantaloon Retail (India) Limited One of our Promoters, Pantaloon Retail (India) Limited, is involved in 16 criminal proceedings, which are pending at different levels of adjudication. An adverse outcome in these proceedings could have a material adverse effect on the ability of our Promoters and Directors to serve the Company, as well as on our business, prospects, financial condition and results of operations. Furthermore, there are certain outstanding legal proceedings against the Promoters, the Directors, the Subsidiaries, the Business Ventures and the Group Companies. These proceedings are pending at different levels of adjudication before various courts, enquiry officers, and arbitrators. Brief details of such outstanding litigation as of the date of the Prospectus are as follows: Sr. No. Nature of cases No. of outstanding cases Amount involved (in ` lakhs) 92.10 2.10 21.52 36.41 1,333.70 2,290.93 18.00 21.88 27.27 1,299.00 65.00 2,427.86 982.00 1,359.69 1.78 83.05 45.00 2,374.85 178.51 295.57 1.23 133.07

Against the Company 1. Nil Against the Subsidiaries 1. Civil proceedings 2. Criminal proceedings 3. Consumer proceedings 4. Tax proceedings 5. Labour proceedings 6. Arbitration proceedings 7. Tax/stamp duty appeals Against the Promoters 1. Civil proceedings 2. Tax proceedings 3. Labour proceedings 4. Criminal proceedings 5. Consumer proceedings 6. Arbitration proceedings 7. Stamp duty related proceedings 8. Tax/stamp duty appeals Against the Directors 1. Civil proceedings 2. Criminal proceedings 3. Consumer proceedings Against the Group Companies 1. Civil proceedings 2. Labour proceedings 3. Criminal Cases 4. Consumer Cases 5. Arbitration proceedings 6. Tax/stamp duty appeals Against the Business Ventures 1. Civil proceedings 2. Tax proceedings 3. Consumer proceedings 4. Tax/stamp duty appeals

9 9 3 3 1 3 27 2 14 29 77 3 5 11 3 20 1 45 32 10 94 1 18 7 10 2 4

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An adverse outcome in the aforesaid proceedings, involving the Directors, the Promoters, the Subsidiaries, the Business Ventures and the Group Companies could have a material adverse effect on our business, prospects, financial condition and results of operations. Further, any adverse outcome in this proceeding may affect the reputation and standing of the Company and may impact future business. We cannot assure you that these matters will be settled in favour of the relevant Directors, Promoters, Subsidiaries, Business Ventures and Group Companies or that no further liability will arise out of these claims. For further details of outstanding litigations, please see the section entitled Outstanding Litigations and Material Developments beginning on page 364. 2. We have limited experience in creating, building, acquiring, investing in and operating innovative and emerging businesses in consumption led sectors in India and there can be no assurance that we will achieve our business objective. We were incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 and undertook the business of non-deposit taking NBFC. Subsequent to our acquisition by Pantaloon Future Ventures Limited in July 2007, we started undertaking the business of investing in, and operating, innovative businesses in consumption-led sectors. We, therefore, have limited experience in creating, building, acquiring, investing in and operating innovative and emerging businesses in consumption led sectors in India, which may increase our vulnerability to various associated risks. The various risks involved in our business include: (i) (ii) (iii) execution risks arising from the inability of our Business Venture(s) to execute its business plans; operational risks associated with operation of each of the Business Ventures; market risk resulting from adverse movement in interest rates or equity prices or industry/ sector performance; liquidity risk; equity risk arising from our investments in Business Ventures; and credit risk.

(iv) (v) (vi)

We cannot assure you that we would be able to address the aforestated risks adequately, or at all. We are also subject to business risks and uncertainties associated with any new business enterprise, including the risk that we will not achieve our business objective and that the value of your investment in us could decline substantially. In particular, our success and results of operations will depend on many factors, including, but not limited to, the following: the availability of opportunities for the acquisition and unlocking of value, through exiting our investments in the Business Ventures or otherwise; the success and financial performance of business ventures in which we are engaged; the continued development and growth of consumption-led sectors in India; and general economic conditions. Moreover, we would also rely on assistance from Pantaloon Retail (India) Limited for providing mentoring to the Business Ventures and Future Capital Holdings Limited to, amongst other things, advise on mergers and acquisitions and exit strategies in relation to the Business Ventures. We cannot assure you that the assistance that we receive from Pantaloon Retail (India) Limited and Future Capital Holdings Limited would be adequate, or whether we would receive such assistance from them in a timely manner, or at all.

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3.

The due diligence process we will undertake in connection with our business ventures may not reveal all the facts that may be relevant in connection with such ventures. Before deciding to participate in any business venture, we will conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to such venture. When conducting due diligence, we may be required to evaluate important and complex issues, including business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisers, accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of opportunity. Nevertheless, when conducting due diligence and making an assessment regarding an opportunity, we rely on the resources available to us, including information provided by the investee asset and, in some circumstances, third-party investigations. The due diligence investigation that we will carry out with respect to any opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such opportunity. Moreover, such an investigation will not necessarily result in our decision regarding the opportunity being successful. Further, some due diligence processes could encounter long delays, thus significantly increasing costs for conducting the due diligence.

4.

If we are unable to source business opportunities effectively, we may not achieve our financial objectives. Our ability to achieve our financial objectives will depend on our ability to identify, evaluate and accomplish participation in suitable companies. Accomplishing this result on a cost-effective basis is largely a function of our networking capabilities, management of the investment process and access to financing sources on acceptable terms. In addition to monitoring the performance of our existing assets, members of our management team and finance professionals may also be called upon to provide managerial assistance to our Business Ventures. These demands on their time may distract them or slow our rate of business sourcing. To grow our business, we will need to hire, train, supervise and manage new employees and to implement information technology and other systems capable of effectively accommodating our growth. However, we cannot assure you that any such employees will contribute to the success of our business or that we will implement such systems effectively. Our failure to source business opportunities effectively could have a material adverse effect on our business, financial condition and results of operations. Additionally, the success of the business strategies followed by us will depend upon our success in analyzing and correctly interpreting market and other data. It also is possible that the strategies used by us in the future may be different from those presently in use. No assurance can be given that our analyses of market and other data or the strategies we use or plans in future to use will be successful under various market conditions.

5.

We will rely on Future Capital Holdings Limited to provide us with various types of advisory services, on Pantaloon Retail (India) Limited to assist us and our Business Ventures in strategic growth and business development plans and on Future Corporate Resources Limited for providing support and other services. If Future Capital Holdings Limited, Pantaloon Retail (India) Limited or Future Corporate Resources Limited do not perform as expected, our business could be materially and adversely affected. We have entered into a Consultancy and Advisory Services Agreement with Future Capital Holdings Limited, a Mentoring Services Agreement with Pantaloon Retail (India) Limited and a Master Service Agreement with Future Corporate Resources Limited. For further details on the Consulting and Advisory Services Agreement, the Mentoring Services Agreement and the Master Service Agreement, please see the section entitled History and Certain Corporate Matters beginning on page 146. Pursuant to the Consultancy and Advisory Services Agreement, we will rely on Future Capital Holdings Limited in various respects, including for research services and recommendations in relation to treasury assets, supporting resource mobilisation for Business Ventures, advising on mergers, acquisitions and exit strategies. Our performance will depend on Future Capital Holdings Limiteds ability to provide such services successfully which is correlated to a significant extent upon the experience of Future Capital Holdings Limiteds personnel. There can be no guarantee that these persons will not resign, join competitors or form competing companies. The loss of key members of the Future Capital Holdings

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Limiteds team may have an adverse effect on our performance. Pursuant to the Mentoring Services Agreement, we will rely on Pantaloon Retail (India) Limited to provide us with the capability to mentor the growth of our business ventures. Having access to and utilizing Pantaloon Retail (India) Limiteds extensive knowledge, of consumer behaviour and spending patterns, is a key element of our strategy. We believe that our relationship with Pantaloon Retail (India) Limited and the Future Group is a key differentiator for us, and any adverse variations to this relationship could result in a material negative impact on us and/or our Business Ventures. Pursuant to the Master Service Agreement we will avail certain support and other services from Future Corporate Resources Limited in respect of certain business activities, such as governance, risk mitigation, human relation policies and information technology, guidance regarding corporate legal compliance and advice on fund raising avenues. Any deficiency on the part of Future Corporate Resources Limited in rendering these services could have an adverse impact on our business operations. 6. We operate in a highly competitive market for business opportunities and may not be able to identify or participate in business opportunities that satisfy our financial objectives. Any delay or inability to participate in suitable business opportunities may have an adverse effect on our financial condition and results of operations. Competition for opportunities in consumption-led sectors is based on a variety of factors, including our performance and reputation, investor perception of managements vision, focus and alignment of interests and our quality of service. There are relatively few barriers to entry impeding new entrants in our lines of business, resulting in increased competition. We compete for business opportunities with a number of other providers of medium- to long- term capital, including public and private sector banks, mutual funds, financial institutions and other NBFCs. We also expect to face competition from other participants in consumption-led sectors in sourcing and securing business opportunities. Some of our competitors are substantially larger and have considerably greater financing resources than those available to us. Competitors also may have a lower cost of funds and many have access to funding sources that are not available to us. In addition, certain of our competitors may have greater risk appetites or different risk assessment policies than ours, which could encourage them to consider a wider variety of opportunities, establish more relationships and more quickly build their market share. Also, some of our competitors may have greater technical, marketing and other resources and greater experience in our lines of business than us, enabling them to secure opportunities at lower prices or to otherwise incentivize the sellers. They may also recruit our business professionals away from us, Pantaloon Retail (India) Limited or Future Capital Holdings Limited. As a result of this competition, there is no assurance that we will be able to identify and participate in attractive business opportunities that satisfy our financial objective, including as to price, or that we will be able fully to deploy our available capital. Delays that we may encounter in the selection, acquisition, development and sale of assets could adversely affect returns for our shareholders. If we are not able to compete effectively, our financial condition and results of operations will be adversely affected. There also can be no assurance that our Business Ventures will be able to compete effectively with other companies in the sectors in which they are involved. 7. We have not entered into any definitive agreements to utilize the proceeds of the Issue and may not deploy the Issue proceeds immediately following the Issue. We intend to use the net proceeds of the Issue as described in the section entitled Objects of the Issue beginning on page 82. We have not yet identified opportunities nor have we entered into any definitive agreements to utilize the proceeds of the Issue. Although our primary focus will be on long-term opportunities, we may also explore opportunistic short-term opportunities where we anticipate prospects for attractive returns. Pending utilization of the net proceeds of the Issue for the purposes described in the section entitled Objects of the Issue beginning on page 82, we intend to temporarily invest the funds in quality interest bearing liquid instruments including deposits with banks and other debt securities. For further details, please see the section entitled Objects of the Issue beginning on page 82. 8. We have not yet identified any opportunities for investing the net proceeds of the Issue.

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We intend to use the net proceeds of the Issue as described in the section entitled Objects of the Issue beginning on page 82. We have not yet identified any opportunities for investing the net proceeds of the Issue. Although our primary focus will be on long-term opportunities, we may also explore opportunistic short-term opportunities where we anticipate prospects for attractive returns. Pending utilization of the net proceeds of the Issue for the purposes described in the section entitled Objects of the Issue beginning on page 82, we intend to temporarily invest the funds in quality interest bearing liquid instruments including deposits with banks and other debt securities. For further details, please see the section entitled Objects of the Issue beginning on page 82. In the event that we are unable to identify suitable opportunities for investing the net proceeds of the Issue, we may not be able to achieve our business objectives, which may have a material adverse effect on our business and results of operations. Additionally, in the event that we are unable to utilise the net proceeds of the Issue towards the Objects of the Issue within three years from the date of Allotment of Equity Shares in the Issue, we will have to distribute the unutilised portion of the net proceeds of the Issue to the shareholders of the Company. For further details, please see the risk factor entitled, Delay in utilisation of the Net Proceeds towards the objects of the Issue beyond three years would require us to distribute the unutilised portion of the Net Proceeds to our shareholders, which may materially adversely affect our business strategy, operations and financial condition. The methodology of such distribution is uncertain at this stage and our inability to do so may subject us to regulatory action. on page 28 and the section entitled Objects of the Issue - Utilisation of Issue Proceeds on page 83. 9. We have significant investments in our Subsidiaries. The valuation for our investment in certain Subsidiaries was based on management estimates. We have significant investments in our Subsidiaries. Other than the valuation reports obtained for our investments in Indus-League Clothing Limited, Future Consumer Products Limited and Future Consumer Enterprises Limited, the valuation for our initial investment, and further investments, in the Subsidiaries was based on management estimates. As such valuation was not undertaken by independent experts; we cannot assure you that these valuations were an accurate reflection of the worth of these Subsidiaries. Any inaccuracy in arriving at such valuations may have an adverse impact on our ability to exit such investments profitably, or at all, which may have a material adverse effect on our financial condition and results of operation. 10. A significant portion of our net worth is comprised of intangible assets. As at December 31, 2010, out of our consolidated net worth (excluding revaluation reserves) of ` 73,827.68 lakhs, intangible assets (including goodwill on consolidation) aggregated to ` 49,292.92 lakhs. The intangible assets, other than goodwill on consolidation, have been stated at cost less accumulated amortization; whereas goodwill on consolidation has been tested for impairment. For further details of our net worth, intangible assets and significant accounting policies, please refer to the section entitled Financial Statements beginning on page 230. 11. Our funding requirements and utilization of Net Proceeds of the Issue have not been appraised by any bank or financial institution and are based on management estimates. Our funding requirements and utilization of Net Proceeds of the Issue are based on management estimates and have not been appraised by any bank or financial institution. All figures included in the section entitled Objects of the Issue beginning on page 82 are based on our own estimates and there has been no appraisal of these figures by any independent agency. In addition to monitoring the utilization of the Net Proceeds of the Issue by the Monitoring Agency, we intend to rely on our internal systems and controls to monitor the use of such proceeds. Furthermore, the deployment of funds is entirely at the discretion of our management and our Board of Directors, subject to monitoring by the Monitoring Agency. 12. Our business strategy is focused on consumption-led sectors in India, and adverse developments in these sectors could materially affect our financial performance. Our strategic focus on opportunities in consumption-led sectors in India may not be successful. The

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performance of these sectors is sensitive to changes in consumer spending habits and preferences and our success depends on our ability to anticipate and respond to these changing consumer trends. International companies, as well as newly emerging domestic companies entering the Indian consumption-led sectors, may change consumption patterns. Foreign investment and interest rate fluctuations could also impact the growth of the consumption-led sectors. Consumption-led industries are also predominantly dependent on the rise in household income levels; the recent growth of income levels in India has been due to the general growth of the economy and may not be sustainable in the future. For further details, please see the section entitled Risks relating to the Indian Economy - A slowdown in economic growth in India could cause our business to suffer on page 35. 13. We depend on the knowledge and experience of our Managing Director and other key managerial personnel for our growth and profitability. The loss of their services may have a material adverse effect on our business, financial condition and results of operations. We depend on the management skills, guidance and industry contacts of our Managing Director, Kishore Biyani for managing our current operations, development of business strategy and monitoring its successful implementation, and meeting future challenges. Our finance professionals, lead by our Chief Investment Officer, possess substantial experience and expertise in sourcing business opportunities, are responsible for locating and executing our participation in assets, and have significant relationships with the institutions which are the source of many of our business opportunities. Additionally, our key management personnel perform a crucial role in conducting our day to day operations and execution of our strategy. An increase in the rate of attrition for our experienced employees, may adversely affect our growth strategy. We cannot assure you that we would be able to succeed in recruiting additional personnel or retaining current personnel, as the market for qualified finance professionals is extremely competitive. The loss of the services of such personnel, or our Managing Director and our inability to hire and retain additional qualified personnel may have an adverse effect on our business, financial condition and results of operations. We cannot assure you that we will be successful in recruiting and retaining a sufficient number of personnel with the requisite skills or to replace those personnel who leave. Further, we cannot assure you that we will be able to re-deploy and re-train our personnel to keep pace with continuing changes in our business. Additionally, if our finance professionals join competitors or form competing companies, our ability to source appropriate business opportunities may be impaired, which may result in loss of significant business opportunities or adversely affect assets we already have acquired. We propose to provide access to our Business Ventures to the experience and expertise of Pantaloon Retail (India) Limited in the consumption-led sectors and have entered into a Mentoring Services Agreement for the same. Additionally, we propose to seek advice from Future Capital Holdings Limited, amongst other things, in relation to mergers and acquisitions and exit strategies. Pantaloon Retail (India) Limited or Future Capital Holdings Limiteds inability to retain skilled personnel may impair their ability to advise us appropriately, which may have a material adverse effect on our growth strategies. 14. We may undertake investments in, or acquisitions of, business opportunities, which may expose us to additional risks and uncertainties. We intend, subject to market conditions and other considerations, to grow our business by investing in business opportunities in the consumption-led sectors, which may result in expanding operations in existing lines of business or expose us to new lines of business, such as vocational education and mega food park. To the extent we undertake investments in, or acquisitions of, business opportunities, we will face various risks and uncertainties including risks associated with, (i) onerous conditions in the agreements entered into by us for investment in business opportunities; (ii) the required investment of capital and other resources, and (iii) the possibility that we have insufficient expertise to engage in such activities profitably or without incurring inappropriate amounts of risk. For further details of our share purchase agreements, please see the section entitled History and Certain Corporate Matters on page 146. Entry into any new lines of business may subject us to new laws and regulations with which we are not familiar, or from which we are currently exempt, and may lead to increased litigation and regulatory risk. If a new business generates insufficient revenues or if we are unable to efficiently manage our expanded

18

operations, our results of operations will be materially and adversely affected. In the case of Business Ventures, we are subject to additional risks and uncertainties in that we may be dependent upon, and subject to liabilities, losses or reputational damage relating to, systems, controls and personnel that are not under our control. 15. Our revenue and operating results will fluctuate, particularly as we cannot predict the timing of realization events such as exit from any of the Business Ventures or other factors such as changes in value of our investment or dividends paid by the Business Ventures. Accordingly, our performance in a specific period should not be relied upon as being indicative of performance in future periods. Our revenue, net income and cash flow will be highly variable because our financial results will be affected by the timing of our exit from any of the Business Ventures, which may make it difficult for us to achieve steady earnings growth and may cause the price of our Equity Shares to fluctuate. The timing and receipt of income and gains generated by the sale of Business Ventures is event-driven and thus highly variable, which will contribute to the volatility of our revenue. We may also experience fluctuations in our results due to a number of other factors, including changes in the values of our investments in the Business Ventures, changes in the amount of distributions, dividends or interest paid by the Business Ventures, changes in our operating expenses, the degree to which we encounter competition and general economic and market conditions. These fluctuations could lead to significant volatility in the price of our Equity Shares. We cannot predict when, or if, any realization of investments in the Business Ventures will occur and even if a Business Venture proves to be profitable, it may be several years before any profits can be realized in cash (or other proceeds). If we were to have a realization event in a particular quarter, it could have a significant impact on our revenues and profits for that particular quarter which might not be replicated in subsequent quarters. As a result of these variables, performance in a specific period should not be relied upon as being indicative of performance in future periods. 16. We could acquire interests in companies that we do not control. Certain decisions of or risks taken by, majority stakeholders or managements of such companies, may impair the value of our assets and materially and adversely affect our financial condition, results of operations and cash flow. Although we intend to exercise operational control or influence in the businesses we promote or in which we acquire interests, we may however acquire interests in certain companies that we do not control or influence in a significant manner. We may also acquire interests in large-sized assets, which involve certain complexities and risks that are not encountered in small- and medium-sized assets, and we may dispose of a portion of these majority equity interests over time in a manner that results in a minority holding. Further, our shareholding in a business venture may be diluted if such business venture raises additional capital through issue of equity or equity-linked instruments. Such investments will be subject to the risk that the company may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests. If any of the foregoing were to occur, the value of our investments could decrease and our financial condition, results of operations and cash flow could be materially and adversely affected. 17. The ranking of our interests in certain assets of our Business Ventures may be junior to that of other stakeholders. In the event of dissolution or winding up of such Business Venture, the Business Venture may not have adequate assets for repaying amounts in respect of our interests after payments are made to the holders of securities that rank senior to the interests held by us. In some cases, the companies in which we have interests may have existing indebtedness or equity securities, or may be permitted to incur indebtedness or to issue equity securities, that rank senior to our interest. By their terms, such instruments may provide that their holders are entitled to receive payments of dividends, interest or principal on or before the dates on which payments are to be made in respect of our assets. In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of a company in which we have interests, holders of securities ranking senior to our interests would typically be entitled to receive payment in full before distributions could be made in respect of our interest. After repaying senior security holders, the company may not have any remaining assets to use for repaying amounts owed in

19

respect of our interests. To the extent that any assets remain, holders of claims that rank equally with our assets would be entitled to share on an equal and rateable basis in distributions that are made out of those assets. Also, during periods of financial distress or following insolvency, our ability to influence a companys affairs and to take actions to protect our assets may be substantially less than that of any senior creditors. 18. Our and our Business Ventures reputation is important to our business and any adverse impact on the same may have a material adverse impact on our business, results of operations and financial condition. Our ability to source business opportunities and to invest in them depends on our reputation and the reputation of our Promoter, Kishore Biyani and the Future Group. We would rely on the industry contacts and network of Kishore Biyani and the Future Group in sourcing business opportunities. Any adverse event relating to our Company, Kishore Biyani or the Future Group, or a perception of any such adverse event, including allegations in publicly accessible media (even if such adverse event, perception or allegation ultimately proves to be baseless and does not have any financial impact) may have a negative impact on our reputation, which may adversely affect our ability to source, and invest in, suitable business opportunities. Further, our Business Ventures undertake businesses in the consumption-led sectors, which involves direct interaction with retail customers who are sensitive to their brand image. In response to any negative perception of our or Business Ventures brand image, the sale of products sold by our Business Ventures may be reduced, which may adversely affect our business, prospects, results of operations and financial condition. 19. The interests of our Promoter or certain directors may conflict with our interests or with the best interests of our other shareholders. Any inappropriate resolution of such conflicts may adversely affect our business, results of operations and/ or the interests of our other shareholders. Our Managing Director and Promoter, Kishore Biyani is also the managing director of, and controls, Pantaloon Retail India Limited and, Future Capital Holdings Limited. Kishore Biyani is also a director of other entities belonging to the Future Group. The directors common between the Company, Future Capital Holdings Limited and Pantaloon Retail India Limited are the following: (a) Kishore Biyani is a common director between the Company, Future Capital Holdings Limited and Pantaloon Retail (India) Limited; G.N. Bajpai is a common director between the Company and Future Capital Holdings Limited; and Anil Harish is a common director between the Company and Pantaloon Retail (India) Limited.

(b)

(c)

In case of a conflict between us and Pantaloon Retail (India) Limited or Future Capital Holdings Limited or any other Future Group entity, our Promoter or Directors may favour such other companies over us. Further, our Promoter, Kishore Biyani and Directors may need to devote time to other Future Group entities and may, consequently, not be able to dedicate the time and attention necessary to fulfil their obligations as Promoters/ Directors of the Company. If any such actual, or perceived, conflicts of interests are not resolved suitably, our business, results of operations and/or the interest of our other shareholders may be adversely affected. 20. Conflicts of interest may arise in relation to our business sourcing opportunities and our failure to deal with them appropriately could damage our reputation and adversely affect our business. As we expand the number and scope of our Business Ventures, we could increasingly confront potential conflicts of interest relating to our business sourcing activities. Various entities within the Future Group have overlapping business objectives and potential conflicts may arise with respect to decisions regarding

20

how to allocate business opportunities among those entities. In addition, holders of our Equity Shares may perceive conflicts of interest in other circumstances, such as decisions made in relation to assets in which the Future Group may have had, currently has or will in the future have significant interests, as well as where we or business ventures in which we participate enter into transactions with other Future Group entities. It is possible that potential or perceived conflicts of interest could give rise to losses, investor dissatisfaction, litigation or regulatory enforcement actions. Other Future Group entities also will be free to compete with us for business opportunities in consumption-led sectors. 21. Under Indian GAAP, our assets will be recorded at book value, as a result of which our financial statements will not reflect the fair market value of our assets. A significant part of our assets is expected to consist of illiquid investments, the fair value of which is not readily determinable. Subject to limited exceptions, we are required by our accounting policies under Indian GAAP to record the book value of our investments, and therefore our financial statements will not reflect the fair market value of our investments. As a consequence, our financial statements will not serve as an indicator of the growth and performance of our assets. As such valuations, and particularly valuations of unlisted assets, are inherently uncertain and may be based on estimates; our determinations of fair value may differ materially from the values that would be assessed if a ready market for these assets existed. There can be no assurance that we will be able to obtain the fair value assigned to an asset if we are able to sell the asset at approximately the time at which we determine its fair value. Our Adjusted Net Worth could be adversely affected if our determinations regarding the fair value of our assets were to be materially different from the values that we ultimately realize upon a disposal. 22. We will depend upon our risk management systems, and any shortcoming or deficiency in these systems or their implementation may have a material adverse impact upon on our business, results of operations and financial condition. We believe that effective risk management is important for the success of our operations, and hence have developed a risk management process to monitor, evaluate and manage the principle risks we assume in conducting our operations. The principal risks to which we will be exposed are execution risk, operational risk, market risk, liquidity risk, credit risk and. equity risk. We will be exposed to these risks directly, to the extent that these risks may directly affect the value of our interests in Business Ventures and any other assets, and indirectly, to the extent that they may affect the value of the assets underlying Business Ventures. We cannot assure that the same would assist in managing our risks effectively, or that we would be able to adapt and scale up these processes to meet the challenges posed by expansion of our business activities. Any shortcoming or deficiency in our risk management systems, or implementing the systems while taking decision, may expose us to unanticipated losses, which would have a material adverse effect on our business, results of operations and financial condition. 23. Difficult conditions for our Business Ventures can adversely affect us in many ways, including by reducing the value or performance of any Business Venture that we acquire. Our capital growth is derived principally from gains on our assets. Therefore, any difficult condition which adversely affects the performance of any Business Venture that we acquire could have a bearing on our performance. For example: a company having limited financial resources and being unable to meet its obligations, may reduce the likelihood of our monetizing our asset; a company having a shorter operating history, narrower product lines and smaller market shares than larger businesses may render it more vulnerable to competitors actions and market conditions, as well as general economic downturns; a company depending on the management talents and efforts of a small group of persons, so that the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on such a company and, in turn, on us;

21

a company facing litigation or regulatory actions that threaten its business or financial condition; mismanagement or fraud on the part of employees of or third parties involved with any entities in which we have interests, resulting in our suffering a partial or total loss of the amounts invested in that entity; and defaults or cross defaults in respect of a Business Ventures indebtedness, which could diminish the value of our asset. If any of the above risks were to materialize in respect of one or more of our Business Ventures, the value of our portfolio would be adversely affected. 24. Acquiring interests in Business Ventures through illiquid securities involves a substantial degree of risk. A significant proportion of our investments in the Business Ventures will involve acquiring securities that are not publicly traded. In some cases, we may be prohibited by contract or by applicable securities laws from selling such securities for a period of time. Our ability to dispose of our investments in the Business Ventures is also dependent on the financial markets. Under certain conditions, we may be forced either to sell our investments at lower prices than we had expected to realize or defer, potentially for a considerable period of time, sales that we had planned to make. In some cases, it may not be possible to sell our investments profitably on account of changes in industry dynamics and government regulations or the performance of a Business Venture that we propose to exit. If we are unable to liquidate our investments when we wish, we may be unable to participate in other more lucrative opportunities, which may have a material adverse effect on our business strategy and results of operations. 25. Due to absence of readily available market price for the securities of the Business Ventures, the valuation of such securities determined by us may be inaccurate. The market prices may not be readily available for the securities of the Business Ventures and the value of such investments will ordinarily be determined based on fair valuations determined by the Board of Directors of the Company or external consultants. Out of 16 investments made by the Company since July 2007, it had obtained valuations for undertaking investments in three of the companies. Such companies for which valuation reports were obtained are Indus-League Clothing Limited, Future Consumer Products Limited and Future Consumer Enterprises Limited. Any valuations of the securities of a Business Venture determined by us prior to our investment in such Business Venture or prior to the sale of any of our investments may not be accurate as such securities may not be readily marketable. Due to the difficulty in valuing these securities and the absence of an active trading market for these investments, we may not be able to realize these securities true value or may have to delay their sale in order to do so. In addition, we will rely to some extent on information provided by such Business Ventures, which may not necessarily be timely which may pose additional risk. 26. We will rely on third parties to enable us to invest in suitable business opportunities and our inability to retain suitably qualified and experienced advisers may result in us participating in inappropriate or risky business opportunities, which could have a material adverse effect on our financial condition and results of operations. In order to finalise our investment in a business opportunity, we will procure the services of various third party advisers, including third party valuers, property agents, surveyors, environmental consultants, lawyers, accountants and other advisers. Our inability to retain suitably qualified and experienced advisers may result in us participating in inappropriate or risky business opportunities, which could have a material adverse effect on our financial condition and results of operations. 27. Our Board of Directors may change our financial objectives, operating policies and strategies without prior notice or shareholder approval. Our Board of Directors has the authority to modify our financial objectives and certain of our operating

22

policies and strategies without prior notice (except as required by law) and without shareholder approval. However, absent shareholder approval, we may not change the nature of our business so as to cease to be, or withdraw our election as, an NBFC. We cannot predict the effect that any changes to our current financial objectives, operating policies or strategies would have on our business, operating results and the price of our Equity Shares. 28. We may be subject to liability and adverse tax consequences upon the disposal of assets. In connection with the disposition of assets, we may be required to give representations, warranties and indemnities in respect of those assets and to pay damages to the extent that any such representations, warranties or indemnities are or become inaccurate. We may become involved in claims, disputes or litigation concerning such representations, warranties and indemnities and may be required to make payments to third parties as a result of such claims, disputes or litigation. We may also be subject to tax consequences upon the disposition of assets, including potential double taxation relating to assets through special purpose vehicles, taxation on capital gains and other forms of tax that could be applicable to such dispositions. 29. We are subject to third-party litigation risk that could result in significant liabilities and reputational harm which could materially adversely affect our business and results of operations. In general, our assets may expose us to the risk of litigation if our interest in or management of any asset is alleged to involve or constitute negligence, misconduct or default. Further, we may be subject to litigation arising from investor dissatisfaction with the performance of our Business Ventures or from allegations that we improperly exercised control or influence over our assets. In addition, we are exposed to the risks of litigation or investigation relating to transactions which presented conflicts of interest that were allegedly not properly addressed. In such actions, we may be obligated to bear legal, settlement and other costs (which may be in excess of available insurance coverage or indemnity to which we may be entitled). If we are required to incur all or a portion of such costs arising out of litigation or other proceedings, our business results of operations, financial condition and liquidity could be materially and adversely affected. 30. Currently we do not have any plans to pay dividends and shareholders may not receive distributions from any sale of our Business Ventures. Our objective is to create, build, acquire, invest in and operate Business Ventures in India. The payment of dividends will not form a central part of our investment objective, but we may choose to distribute dividends as and when we consider appropriate. For further details regarding the dividend policy, please see the section entitled Dividend Policy on page 229. We primarily intend to re-deploy any profits and cash flows from our Business Ventures in new business opportunities and currently do not intend to pay dividends on the Equity Shares in the foreseeable future, even though we may have distributable reserves. Since we do not anticipate paying dividends on our Equity Shares, the investment opportunity presented to prospective investors in the Issue will depend on the increase, if any, in the market value of our Equity Shares, which cannot be assured. Furthermore, dividends paid by our Business Ventures in the past should not be considered as indicative of future returns or income for us. 31. The Managing Director of our Company, Mr. Kishore Biyani, is also involved in the management of other Future Group companies and is chairman of Future Capital Holdings Limited. His involvement in Pantaloon Retail (India) Limited, Future Capital Holdings Limited or other Future Group companies could reduce his participation in the management of our Company, which may have a material adverse effect on our business. The Managing Director of our Company, Kishore Biyani, is also the managing director of our advisor, Pantaloon Retail (India) Limited, chairman of our consultant, Future Capital Holdings Limited and is involved in the management of other Future Group Companies. Therefore, there may be situations in which Kishore Biyani is unable to allocate sufficient time to our Company or effectively participate in the management of our Company, which could have a material adverse effect on our business.

23

32.

We have entered and will continue to enter into related party transactions. We have entered and may continue to enter into related party transactions. For the nine month period ended December 31, 2010, we had entered into related party transactions on a consolidated basis as detailed in the following table:

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Particulars Receivables outstanding (including inter-corporate deposits and interest) Payables balance outstanding Loans taken outstanding Dividend income Interest income Loan/advances given during the period Amount repaid during the period Issue of equity shares Trade advance given and settled during the period Fees for services Reimbursement of expenses Rent expenses Royalty income Sale of assets/investment Purchase of asset/investment Investment in equity/preference shares Sales Purchases

Amount (In ` lakhs) 20,806.95 926.48 2,560.36 15.60 456.44 7,425.00 10,775.00 25,000.00 1,350.00 182.00 3.08 23.32 87.50 302.79 12,005.00 11.25 27,733.87 1.08

For further details of our historical related party transactions, please see the section entitled Financial Statements beginning on page 230. For details of related party transactions following the date of our last audited balance sheet, please see the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations Related Party Transactions beginning on page 361. While we believe that all such transactions have been conducted on an arms length basis, there can be no assurance that we could not have achieved more favourable terms had such transactions been entered into with unrelated parties. 33. Our Business Ventures primarily operate in the consumption-led industry and their ability to maintain their market share will depend on their ability to identify and introduce popular and contemporary products. The success of our Business Ventures depends upon their ability to forecast, anticipate and respond to changing consumer preferences and trends in a timely manner. Any failure by them to identify and respond to such emerging trends in consumer preferences could have a material adverse effect on their business and profitability and consequently our investment in such Business Ventures. Further, any inability on our part to understand prevailing global trends or to forecast changes in a timely manner may affect the growth prospects of our Business Ventures. 34. The business of majority of our Business Ventures depends on their ability to obtain and retain quality retail spaces. Majority of our Business Ventures do not own the retail stores operated by them. They take property through leases which may not be renewed on commercially acceptable terms, or at all. Increase in rents, termination of their leases or disputes that may arise with store owners may result in closure of their stores, thus affecting their business and profitability and consequently our investment in such Business Ventures. Further, any adverse impact on the title or ownership rights of landlords from whose premises our Business Ventures operate their stores may impede business, operations and profitability of the Business Ventures.

24

35.

The success of our Business Ventures is dependent on their procurement systems, supply chain management and efficient logistics, and any disruption in the same may affect their business adversely. Inefficient supply chain management and information technology systems could adversely affect availability of merchandise at the stores of the Business Ventures, may result in increase of operating costs and the requirement for working capital. Ensuring shelf availability for the products warrants quick turnaround time and high level of coordination with the suppliers, the warehouses and the stores of our Business Ventures. Further, our Business Ventures rely on various third party suppliers to source the raw materials for their products. Any Business Ventures inability to maintain its relationship with the existing suppliers or attract additional high-quality and cost-efficient suppliers, may have an adverse impact on its operations and financial condition. Additionally, each Business Venture depends on various third parties for the transportation of goods to their respective retail outlets and any disruption to the transportation network may impair the operations of such Business Venture. We cannot assure you that our current suppliers or transportation networks would continue to perform efficiently.

36.

The trademarks of our Business Ventures are very significant for their business and any inability to protect them adequately would result in an erosion of their business value and adversely impact their business operations. Generating and maintaining brand recognition is a significant element of the business strategy of our Business Ventures. Whilst they own some of the trademarks such as AND, Global Desi, Anita Dongre, BIBA, Indigo Nation, Jealous, Urban Yoga, Urbana, Smith & Jones, Chings Secret, they are licensed users for certain other trademarks used by them. As their business depends on brand recognition, adequate protection of the trademarks is of critical significance for their business. In the event they are unable to adequately protect their trademarks from any third party claims or infringement, their business operations may be adversely impacted. Further, they may also be required to litigate in order to protect the intellectual property of their trademark and brands or to prevent unauthorized use of the same. Any such litigation could be time consuming and costly and the outcome cannot be guaranteed. In addition, they may not be able to detect any unauthorized use or take appropriate and timely steps to protect their intellectual property rights.

37.

Our Business Ventures face the risk of potential liabilities from lawsuits or claims by their consumers. Our Business Ventures may face the risk of legal proceedings and claims being brought against them by their customers for any defective product sold or any deficiency in services to them. Our Business Ventures could face liabilities should their customers face any loss or damage due to any unforeseen incident such as fire or accidents in their stores, which could cause financial or other damage to their customers. Any commencement of lawsuits as envisaged above against our Business Ventures could result in financial loss or reduction in sales of such Business Venture, which may have a material adverse effect on our business, financial condition and results of operations.

38.

Losses on account of shrinkage can negatively impact the profitability of our Business Ventures. Shrinkage in the retail industry business is defined as loss in inventory on account of a combination of employee theft, shoplifting, vendor fraud, credit card fraud and administrative errors. Any increase in shrinkage levels at the existing or future retail outlets of any Business Ventures may have a material adverse effect on its results of operations.

39.

Our Business Ventures face competition from existing and potential domestic and international competitors that may adversely affect their competitive position and their profitability. Significant additional competition in the consumption-led industry may result in reduced prices for the products sold by a Business Venture, thereby negatively affecting the revenues and profitability of such Business Venture. Further, the increased presence of foreign brands in recent years in various segments of the consumption-led sectors, such as fashion, home products and FMCG has resulted increased

25

competition. We cannot assure you that our Business Ventures will be able to compete with large multinational players. 40. Quality concerns and any negative publicity could adversely impact the business of a Business Venture. The business of our Business Ventures is dependent on the trust their customers have in the quality of their merchandise. Any goods sold by a Business Venture to its customers which do not comply with the quality specifications or standards prevalent in the business or market segment in which such Business Venture operates, may result in customer dissatisfaction and adverse publicity. Any negative publicity regarding a Business Venture, its products, mishaps at its outlets or on account of any other unforeseen events could adversely affect such Business Ventures reputation which may have an adverse impact on its sales and profitability. 41. Our Business Ventures operating in the food processing business segment are subject to food industry risks that could adversely affect their operating results. In our food processing business segment, we are subject to food industry risks which include, but are not limited to, food spoilage or food contamination, shifting consumer preferences, food processing regulations, and consumer product liability claims. The liability which could result from these risks may not always be covered or could exceed liability insurance related to product liability and food safety matters maintained by our Business Venture. Our Business Ventures operating in the food processing business segment could be adversely affected if consumers lose confidence in the safety and quality of food products sold by them and are discouraged from buying such products. The occurrence of any of the matters described above could have a material adverse effect on such Business Venture, which may adversely affect our revenues and operating results. 42. Certain of our Group Companies have incurred losses during the last three financial years and the equity shares of one of our listed Group Companies are infrequently traded. Certain of our Group Companies have incurred losses during last three fiscal years (as per their respective audited standalone financial statements), as set forth below: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. Name of the Group Company Profit/ (Loss) after tax (In ` lakhs, except as specified otherwise) Fiscal 2008 Fiscal 2009 Fiscal 2010 (0.29)(1) (0.59)(2) (0.20) 21.96 (11,390) N.A. (1.28) (0.29) (0.23)(5) 3.24 (18.45) (9,197) (4.39) (4) (149.68) (43.38) (0.10) 11.11 (0.39)(6) (319.40) (305.98) (3,292.46) (4,659.77) (1,868.12) (1.10) (0.95) (11,073) (0.76) (4,241.48) (2.93) (1.66) (43.07)

9. 10. 11. 12. 13. 14. 15.

Agre Developers Limited (formerly known as Future Mall Management Limited) Akar Estate Finance Private Limited Anchor Investment & Trading Private Limited(3) Axon Development Solutions Limited Bansi Mall Management Company Private Limited ESES Commercial Private Limited Erudite Knowledge Services Limited FCH Securities & Advisors Limited (formerly known as Ambit Investment Advisory Company Limited) FLSL Distribution Services Limited Fashion Global Retail Limited Future Agrovet Limited Future Axiom Telecom Limited Future Capital Financial Services Limited Future E-Commerce Infrastructure Limited Future Hospitality Management Limited

(99.68) (313.51)(7) (525.88) (973. 35) (959.87)(8) (1.09)(9)

(2.06) (203.83) (27.30) (6,591.40) 2,490. 26 (1,394.29) (0.74)

26

Sr. No. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.

Name of the Group Company

32. 33.

34. 35. 36.

Future Human Development Limited Future Ideas Realtors India Limited Future Learning and Development Limited Future Media (India) Limited Future Mobile and Accessories Limited Future Outdoor Media Solutions Limited Future Supply Chain Solutions Limited Future Value Retail Limited Futurebazaar India Limited Galaxy Entertainment Corporation limited Home Solutions Retail (India) Limited(17) Kshitij Property Solutions Private Limited Manz Retail Private Limited Myra Mall Management Company Limited Rural Fairprice Wholesale Limited Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited) Shendra Advisory Services Private Limited Splendor Fitness Private Limited (formerly known as Talwalkars Pantaloon Fitness Private Limited) Weavette Texstyles Limited Winner Sports Limited Whole Wealth Limited(20)
(1) (2) (3)

Profit/ (Loss) after tax (In ` lakhs, except as specified otherwise) Fiscal 2008 Fiscal 2009 Fiscal 2010 (0.27)(10) (0.40) (1.87) (0.12)(11) (0.20) (0.14) N.A. (15.52)(12) (208.27) (655.19)(13) (767.38) (562.87) (124.01) (312.93) (307.02) (0.31) (14) (4.46) (244.53) 24.24 23.71 (18.86) (0.42) 5,059.86(15) 474.05(16) (13.53) 24.05 (364.53) (1,940.51) (1,999.92) (6,059.11) (573.46) (362.13) (243.75) (26.55) (17.44) 270.01 (135.69) 342.18 (77.49) (36.94) 538.78 (0.35)(18) (39.37) (76.33) (114.49)

(38.18) (152.31)

(22.00) (187.23)

(4.95) (429.66)

(38.85) (0.16)(19) (27,45,537)

(164.54) (40.59) 23,82,451

(41.45) (215.79) 26,83,338

The figures are for the period between March 10, 2008 to March 31, 2008. The figures are for the period March 10, 2008 to March 31, 2009. The whole figures are in United States Dollars. The company was incorporated on August 16, 2007 and the first financial year for the company was from August 16, 2007 to December 31, 2008 and the financial year of the company ends on December 31 of each year. (4) The figures are for the period between April 25, 2008 to March 31, 2009. (5) The figures are for the period between March 10, 2008 to March 31, 2008. (6) The figures are for the period between December 19, 2008 to March 31, 2009. (7) The figures are for the period of nine months ended on March 31, 2008. (8) The figures are for the period between May 25, 2007 and March 31, 2008. (9) The figures are for the period between March 31, 2007 to March 31, 2008. (10) The amount provided is for the nine-month period ended March 31, 2008. (11) The figures are for the period between November 5, 2007 and March 31, 2008. (12) The figures are for the period between April 10, 2008 and March 31, 2009. (13) The figures are for the nine month period ended on March 31, 2008. (14) The figures are for the period between April 10, 2008 and March 31, 2009. (15) The financials are for the period between April 1, 2009 and June 30, 2010. (16) The financial year ends in nine months. (17) The fiscal year of the company ends on June 30 of each year. (18) The figures are for the period between September 1, 2009 to March 31, 2010. (19) The company was incorporated on June 1, 2007 and the first financial year for the company was from June 1, 2007 to March 31, 2008. (20) The whole figures for Whole Wealth Limited are in Hong Kong Dollars and the financial year ends on June 30 of each year.

Further, equity shares of one of listed Group Companies, Galaxy Entertainment Corporation Limited are infrequently traded. For a detailed description of our Group Companies, please see the section entitled Group Companies beginning on page 210. 43. During the 12 months preceding the date of the Draft Red Herring Prospectus, we have issued Equity Shares to various persons including certain Promoters at a price which may be lower than the Issue

27

Price. In the twelve months preceding the date of the Draft Red Herring Prospectus, our Company has issued Equity Shares to our Promoters at a price that may be lower than the Issue Price, as set forth below: Date of Issue Name of the Allottee Category No. of Equity Shares 1,94,00,000 12,20,00,000 2,10,00,000 4,50,00,000 10,00,00,000 15,00,00,000 Issue price (`) 10 10 10 10 10 10

January 30, 2010 January 30, 2010 January 30, 2010 March 4, 2010 May 29, 2010 August 6, 2010

Future Corporate Resources Limited Pantaloon Industries Limited Manz Retail Private Limited Future Corporate Resources Limited Future Capital Investment Private Limited Pantaloon Retail (India) Limited

Promoter Promoter Group Company Promoter Promoter Promoter

For further details regarding such allotments, please see the section entitled Capital Structure Notes to Capital Structure Share Capital History on page 71. 44. If we are unable to obtain required approvals and licenses in a timely manner, our business and operations may be adversely affected. We may from time to time, require certain approvals, licenses, registrations and permissions for undertaking our business for which we may be required to make applications in the future. If we fail to obtain any of these approvals or licenses, or renewals thereof, in a timely manner, or at all, our business could be adversely affected. Presently, the applications regarding registration of our trademark under classes 16, 35, 36, 39 and 42 are pending for approval. For further details please see the section entitled Government Approvals beginning on page 412. 45. If we incur debt, we would be subject to certain important consequences which may increase the risk of investing in our Company. As of the date of this Prospectus, we have no outstanding indebtedness. However, subject to applicable laws and guidelines, we may in the future borrow from and/ or issue debt securities to, banks, insurance companies and other lenders in compliance with prudential limits approved by our Board. Lenders will have claims on our assets that are superior to the claims of our shareholders and we may grant a security interest in our assets in connection with our borrowings. In the case of a liquidation event, those lenders would receive proceeds before our shareholders. In addition, borrowings, also known as leverage, magnify the potential for gain or loss on amounts invested and, therefore, increase the risks associated with investing in our securities. Our ability to service any debt that we incur will depend largely on our financial performance and will be subject to prevailing economic conditions and competitive pressures. 46. Delay in utilisation of the Net Proceeds towards the objects of the Issue beyond three years would require us to distribute the unutilised portion of the net proceeds of the Issue to our shareholders, which may materially adversely affect our business strategy, operations and financial condition. The methodology of such distribution is uncertain at this stage and our inability to do so may subject us to regulatory action. We intend to invest the net proceeds of the Issue as soon as practicable, in accordance with our investment objectives and details provided in the section entitled Objects of the Issue beginning on page 82. Utilisation of net proceeds of the Issue is dependent upon various factors beyond our control, such as prevalent market conditions, competition for opportunities in consumption-led sectors, developments in consumption-led sectors and the general economic condition throughout the world, especially India. Prior to the time that we have fully invested the net proceeds of the Issue, they may temporarily be invested in quality interest bearing liquid instruments including deposits with banks and other debt securities.

28

However, in the event that we are unable to utilise the net proceeds of the Issue towards the Objects of the Issue within three years from the date of Allotment of Equity Shares in the Issue, we shall distribute the unutilised portion of the net proceeds of the Issue to the shareholders of the Company as on the record date specified for the same, subject to compliance with the Companies Act and other applicable provisions of law. Such distribution of unutilised portion of the net proceeds of the Issue to our shareholders may have a material adverse effect on our business strategy, operations and financial condition. The methodology of distribution of the unutilised portion to the shareholders has not been determined at this stage and our inability to do so may subject us to regulatory action. For further details, please see the section entitled Objects of the Issue - Utilisation of Issue Proceeds on page 83. 47. We are subject to supervision and regulation by the RBI as an NBFC, material changes in the regulations that govern us could cause our business to suffer and the price of our Equity Shares to decline. We are registered with the RBI as a non-public deposit accepting/holding, non-banking financial company and hence, our business activities will be regulated by RBI regulations applicable to systemically important non-deposit taking, non-banking financial companies. We are also subject to the RBIs guidelines on financial regulation of NBFCs, including capital adequacy and exposure norms. As our business expands, we will become increasingly subject to these norms. The NBFC regulations could change in the future and may require us to restructure our activities, incur additional costs or otherwise could adversely affect our business, our future financial performance and the price of our Equity Shares. In addition, we are subject generally to changes in regulations and government policies and accounting principles. Further, foreign investment in our company is subject to certain conditions, including the type of activities that we can undertake. As per the present regulations governing foreign investment in NBFCs, we are allowed to undertake only 18 specified activities. If we wish to undertake any activities outside this specified list of activities we are required to obtain prior approval of the FIPB for any foreign investment in our Company. For further information, please see the section entitled Regulations and Policies beginning on page 137. 48. The Company has experienced negative cash flows for Fiscal 2006. Any negative cash flows in the future could adversely affect our results of operations and financial condition. The Company had a negative cash flow aggregating ` 52,000 for Fiscal 2006. Any negative cash flows in the future could adversely affect our results of operations and financial condition. 49. Our contingent liabilities not provided for could adversely affect our financial condition. The details of our contingent liabilities not provided for, for the nine months ended December 31, 2010 and Financial Years 2010, 2009 and 2008 are detailed in the table set forth below: (In ` lakhs) As at March 31, 2008 0.00 10.54 0.00

Particulars Outstanding guarantees given by the bank Proportionate Share of outstanding guarantees given by the bank on behalf of Joint Ventures Proportionate Share of Other Contingent liabilities in subsidiaries and joint venture

As at December 31, 2010 3,907.40 0.00 1,894.04

As at March 31, 2010 5.90 0.00 733.86

As at March 31, 2009 9.00 1.90 5.71

If these contingent liabilities fully materialize, our financial condition could be adversely affected. 50. We may be registered as a CIC in the future which may subject us to certain restrictions. We are currently registered as an NBFC with RBI. If in the future we are required to be registered as a CIC in terms of the CIC Circular read with the CIC Guidelines, we would have to comply with certain

29

restrictive conditions. In terms of the CIC Circular read with the CIC Guidelines, such restrictive conditions include (i) maintaining adjusted net worth (as defined in the CIC Guidelines) at 30% or more of the aggregate risk weighted assets on the balance sheet and risk adjusted value of the off-balance sheet items as on the date of the last audited balance sheet; and (ii) outside liabilities (as defined in the CIC Guidelines) not exceeding 2.5 times the adjusted net worth. 51. We have not made any provisions for the decrease in the value of our investments. We have not made any provision for decrease in the value of investments, which could result into mismatch between realisable value and book value of our investments. Further, if provision is made in future on account of permanent decrease in value of these investments, our profits would reduce to the extent of such provision. This may have an adverse impact on our results of operations and financial conditions. 52. In the past, Pantaloon Retail (India) Limited made promises during the initial public offering of its equity shares but was unable to perform as per those promises. Pantaloon Retail (India) Limited had undertaken an initial public offering in 1992 where they had made following promises in relation to objects and financial performance, which it was unable to perform: Promise To open 7 retail stores Performance 2 retail stores were opened within the time frame promised in the prospectus. Five additional retail stores were opened with a delay of 9 months. ` 480.80 lakhs No dividend declared in 1992-1993

Opening up of retail stores

Estimated turnover of 1992 -1993 Future prospects

` 1,160.00 lakhs Expected to generate adequate profits and declare dividends from 1992-1993 onwards

53.

We are unable to provide the details of promise versus performance of one of our listed Group Companies, being Galaxy Entertainment Corporation Limited. In the past, one of our Group Companies namely, Galaxy Entertainment Corporation Limited (Galaxy) had undertaken an initial public offer of their equity shares. Galaxy Entertainment Corporation Limited was acquired by our Promoters from the erstwhile promoters of Galaxy subsequent to its initial public offering of equity shares. We do not have access to the offer documents and other records of Galaxy. We are, therefore, unable to provide details on the promises made and the performance achieved by Galaxy.

54.

The Companys management changed in 2007 and the present Promoters of the Company will not be liable for the acts of its erstwhile promoters. The Company was originally incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 by R. Sankar and V. Thirumalai. The management and control of the Company was taken over by Pantaloon Future Ventures Limited through a share purchase agreement dated July 3, 2007. Currently, our Promoters are Kishore Biyani, Future Capital Investment Private Limited, Future Corporate Resources Limited, Future Knowledge Services Limited, PIL Industries Limited and Pantaloon Retail (India) Limited. Whilst the present Promoters will not be liable for the acts of the erstwhile promoters of the Company, we cannot assure you that any acts of the former promoters will not have any adverse effect on the Company.

55.

We will be required to prepare our financial statements in accordance with IND AS effective from April

30

1, 2013. There can be no assurance that our adoption of IND AS will not adversely affect our reported results of operations or financial condition and any failure to successfully adopt IND AS by April 1, 2013 could have an adverse effect on the price of the Equity Shares. Based on current timeline announced for IND AS convergence for Indian companies, the Company estimates that the earliest that it would need to prepare annual and interim financial statements under IND AS would be the financial period commencing from April 1, 2013. There is currently a significant lack of clarity on the adoption of and convergence with IND AS and we currently do not have a set of established practices on which to draw on in forming judgments regarding its implementation and application, we have not determined with any degree of certainty the impact that such adoption will have on our financial reporting. There can be no assurance that our financial condition, results of operations, cash flows or changes in shareholders equity will not appear materially different under IND AS than under Indian GAAP. As we transition to IND AS reporting, we may encounter difficulties in the ongoing process of implementing and enhancing our management information systems. Moreover, there is increasing competition for the small number of IND AS-experienced accounting personnel as more Indian companies begin to prepare IND AS financial statements. There can be no assurance that our adoption of IND AS will not adversely affect our reported results of operations or financial condition and any failure to successfully adopt IND AS by April 2013 could have an adverse effect on the price of the Equity Shares. 56. The Group Companies, subsidiary and associate of the Company have unsecured debt that is repayable on demand. The amount of the unsecured loans, which are repayable on demand, availed by the Group Companies, subsidiary and associate of the Company and which are outstanding as per their latest audited financial statements for the indicated financial period are provided in the following table: Sr. No. 1. Name of the Subsidiary/ Associate/ Group Company FCH Securities and Advisors Limited (Formally known as Ambit Investment Advisory Company Limited) Future Capital Holding Limited Future Learning and Development Limited Future Human Development Limited Future Consumer Products Limited AND Design India Limited
# *

Relationship with the Company Group Company

Amount (` in Lakh) 267.00# 2500.00# 649.54# 3,500.00# 50.00* 0.19*

2. 3. 4. 5. 6.

Group Company Group Company Group Company Subsidiary Associate

As at March 31, 2010. As at December 31, 2010.

In the event that the lenders of such loans call in these loans, they would need to find alternative sources of financing, which may not be available on commercially reasonable terms or at all. 57. We are a member of the Future group and utilise the trademark Future and Future Group as a part of our corporate identity. As of the date of this Prospectus, the applications regarding registration of our trademark under classes 16, 35, 36, 39 and 42 are pending. We have entered into a Master License Agreement dated August 10, 2010 (the Master License Agreement) with Future Ideas Company Limited (Future Ideas), for the use of various Future Group trademarks (the Future Group Trademarks) for our business within India. In accordance with the Master License Agreement, we are required to pay a royalty of ` 100.00 lakhs p.a. for Fiscal 2011 which increases incrementally to ` 244.00 lakhs for Fiscal 2015. The Master License Agreement is valid from August 10, 2010 until terminated in accordance with the terms thereof. For further details of the Master License Agreement, please see the section entitled History and Certain Corporate Matters - Material Agreements - Master License Agreement between the Company and Future Ideas Company Limited on page 152. We cannot assure you that the Master License Agreement would not be terminated or renewed on commercially acceptable terms, or at all, after Fiscal 2015. We operate in a

31

competitive environment, where generating brand recognition will be a significant part of our business and growth strategy. In the event that the Master License Agreement is terminated, we may need to change our trademarks. Any such change could require us to incur additional costs and may adversely impact our business, financial condition and results of operation. Infringement of the Future Group Trademarks, for which we may not have any immediate recourse, may adversely affect our ability to conduct our business, as well as affect our reputation, and consequently, our results of operations. 58. The Company does not own its registered office and corporate office. The registered office of the Company is located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060, which is not owned by the Company. The Company has been permitted by Pantaloon Retail (India) Limited to use the said premises through letter dated November 26, 2008. The Company cannot assure you that it will able to renew the arrangement for using the premises on which its Registered Office is located on commercially acceptable term, or at all. In the event that the Company is required to vacate these premises, it would be required to make arrangements for new offices and other infrastructure, which may have an adverse affect on the costs of operation of the Company. External Risk Factors Risks relating to the Issue and the Equity Shares 59. Difficult market conditions can adversely affect our business in many ways, including by reducing the value or performance of our investments in the Business Ventures or by reducing our ability to raise or deploy capital, each of which could negatively impact our net income and cash flow and adversely affect our financial condition. Our business is materially affected by conditions in the global financial markets and economic conditions throughout the world (especially India) that are outside our control, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws, commodity prices, currency exchange rates and controls and national and international political circumstances. In the event of a market downturn, each of our Business Ventures could be affected in different ways, which may have an adverse impact on their business performance. Our and/ or our Business Ventures profitability may also be adversely affected by fixed costs and the possible inability to scale back other costs within a time frame sufficient to match any decreases in revenue relating to changes in market and economic conditions. Moreover, our financial condition may be affected by reduced opportunities to exit and realize value from our Business Ventures and by the fact that we may not be able to find suitable business opportunities for investment. Additionally, during periods of adverse economic conditions, we may have difficulty accessing financial markets, which could make it more difficult or impossible for us to obtain funding for additional investments. A general market downturn, or a specific market dislocation, may result in lower investment returns, which would adversely affect our revenues. 60. We will be exposed to risks associated with changes in interest rates. The level and volatility of general interest rate fluctuations may have a substantial adverse impact on the value of our Business Ventures, the value of our Equity Shares and our rate of return on invested capital. A reduction in the interest spreads on any debt investments could also have an adverse impact on our income. An increase in interest rates could increase our interest expense, thereby decreasing our income. In addition, if interest rates were to rise, the attractiveness of our Equity Shares relative to other securities or investment products could decrease. 61. After this Issue, our Equity Shares may experience price and volume fluctuations or an active trading market for our Equity Shares may not develop. The price of the Equity Shares may fluctuate after this Issue as a result of several factors, including, among

32

other things, volatility in the Indian and global securities markets, the results of our operations and performance, the performance of our competitors, developments in the Indian retail and consumption-led sectors, changing perceptions in the market about participation in these sectors, adverse media reports on us or the Indian consumption-led sectors, changes in the estimates of our performance or recommendations by financial analysts, significant developments in Indias economic liberalization and deregulation policies and significant developments in Indias fiscal regulations. There has been no public market for the Equity Shares and an active trading market for the Equity Shares may not develop or be sustained after this Issue. Further, the price at which the Equity Shares are initially traded may not correspond to the Issue Price. The share prices of companies participating in business assets can fluctuate significantly, which subjects an investment in our Equity Shares to substantial volatility. For example, shares of such companies often trade at discounts to their net asset values and our Equity Shares may also trade at a discount. We cannot predict whether the Equity Shares will trade above, at or below our Adjusted Net Worth. The risk of loss associated with this characteristic may be greater for investors expecting to sell Equity Shares purchased in this Issue soon after the Issue. 62. Conditions in the Indian securities market may affect the price or liquidity of the Equity Shares. The Indian securities markets are smaller than securities markets in more developed economies and the regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in the more developed economies. Indian stock exchanges have in the past experienced substantial fluctuations in the prices of listed securities. Further, the Indian stock exchanges have experienced volatility in the recent times. The Indian stock exchanges have also experienced problems that have affected the market price and liquidity of the securities of Indian companies, such as temporary exchange closures, broker defaults, settlement delays and strikes by brokers. In addition, the governing bodies of the Indian stock exchanges have from time to time restricted securities from trading, limited price movements and restricted margin requirements. Further, disputes have occurred on occasion between listed companies and the Indian stock exchanges and other regulatory bodies that, in some cases, have had a negative effect on market sentiment. If similar problems occur in the future, the market price and liquidity of the Equity Shares could be adversely affected. A closure of, or trading stoppage on, the BSE or the NSE also could adversely affect the trading price of the Equity Shares. 63. The Equity Shares issued pursuant to the Issue may not be listed on the BSE and the NSE in a timely manner, or at all, and any trading closures at the BSE and the NSE may adversely affect the trading price of our Equity Shares. In accordance with Indian law and practice, permission for listing and trading of the Equity Shares issued pursuant to the Issue will not be granted until after the Equity Shares have been issued and allotted. Approval for listing and trading will require all relevant documents authorising the issuing of Equity Shares to be submitted and there could therefore be a failure or delay in listing the Equity Shares on the BSE and the NSE. Any failure or delay in obtaining such approval would restrict your ability to dispose of your Equity Shares. The regulation and monitoring of Indian securities markets and the activities of investors, brokers and other participants differ, in some cases significantly, from those in Europe and the U.S. The BSE and the NSE have in the past experienced problems, including temporary exchange closures, broker defaults, settlements delays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the market price and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic and international markets. A closure of, or trading stoppage on either of the BSE and the NSE could adversely affect the trading price of the Equity Shares. 64. You will not be able to sell immediately on an Indian stock exchange any of the Equity Shares you purchase in the Issue.

33

The Equity Shares will be listed on the BSE and the NSE. Pursuant to Indian regulations, certain requirements must be fulfilled before the Equity Shares can be listed and trading may commence. Investors book entry, or demat, accounts with depository participants in India are expected to be credited within two working days of the date on which the basis of allotment is approved by the BSE and NSE. Thereafter, upon receipt of final approval from the BSE and the NSE, trading in the Equity Shares is expected to commence within seven working days of the date on which the basis of allotment is approved by the Designated Stock Exchange. We cannot assure you that the Equity Shares will be credited to investors demat accounts, or that trading in the Equity Shares will commence, within the time periods specified above. 65. Additional issuances of equity may dilute your holdings. Any future issuance of our Equity Shares or securities linked to our Equity Shares may dilute your shareholding in our Company. Any issuance of Equity Shares may dilute the holdings of our existing shareholders. After the completion of the Issue, our Promoters will own, directly and indirectly, approximately 29.79% of our outstanding Equity Shares. Sales of a large number of our Equity Shares by our Promoters could adversely affect the market price of our Equity Shares. Similarly, the perception that any such primary or secondary sale may occur could adversely affect the market price of our Equity Shares. 66. There are restrictions on daily movements in the price of the Equity Shares, which may adversely affect a shareholders ability to sell, or the price at which it can sell, the Equity Shares at a particular point in time. The price of our Equity Shares will be subject to a daily circuit breaker imposed by all stock exchanges in India which does not allow transactions beyond a certain level of volatility in the price of the Equity Shares. This circuit breaker operates independently of the index-based market-wide circuit breakers generally imposed by the SEBI on Indian stock exchanges. The percentage limit on our circuit breaker is set by the stock exchanges based on the historical volatility in the price and trading volume of the Equity Shares. The stock exchanges do not inform us of the percentage limit of the circuit breaker from time to time, and may change it without our knowledge. This circuit breaker effectively limits upward and downward movements in the price of the Equity Shares. As a result, shareholders ability to sell the Equity Shares, or the price at which they can sell the Equity Shares, may be adversely affected at a particular point in time. 67. Investors may be subject to Indian taxes arising out of capital gains on the sale of the Equity Shares. Under current Indian tax laws and regulations, capital gains arising from the sale of equity shares in an Indian company are generally taxable in India. Any gain realised on the sale of listed equity shares on a stock exchange held for more than 12 months will not be subject to capital gains tax in India if Securities Transaction Tax (STT) has been paid on the transaction. STT will be levied on and collected by a domestic stock exchange on which the equity shares are sold. Any gain realised on the sale of equity shares held for more than 12 months to an Indian resident, which are sold other than on a recognised stock exchange and on which no STT has been paid, will be subject to long term capital gains tax in India. Further, any gain realised on the sale of listed equity shares held for a period of 12 months or less will be subject to short term capital gains tax in India. Capital gains arising from the sale of the Equity Shares will be exempt from taxation in India in cases where the exemption from taxation in India is provided under a treaty between India and the country of which the seller is resident. Generally, Indian tax treaties do not limit Indias ability to impose tax on capital gains. As a result, residents of other countries may be liable for tax in India as well as in their own jurisdiction on a gain upon the sale of the Equity Shares. In addition, changes in the terms of tax treaties or in their interpretation, as a result of renegotiations or otherwise, may affect the tax treatment of capital gains arising from a sale of Equity Shares. 68. A third party could be prevented from acquiring control of us because of anti-takeover provisions under Indian law. There are provisions in Indian law that may delay, deter or prevent a future takeover or change in control of

34

the Company. Under the takeover regulations, an acquirer has been defined as any person who, directly or indirectly, acquires or agrees to acquire shares or voting rights or control over a company, whether individually or acting in concert with others. Although these provisions have been formulated to ensure that interests of investors/shareholders are protected, these provisions may also discourage a third party from attempting to take control of the Company. Consequently, even if a potential takeover of the Company would result in the purchase of the Equity Shares at a premium to their market price or would otherwise be beneficial to its shareholders, such a takeover may not be attempted or consummated because of Indian takeover regulations. Risks relating to the Indian Economy 69. A slowdown in economic growth in India could cause our business to suffer. We are incorporated in India, and substantially all of our assets and employees are located in India. As a result, we are highly dependent on prevailing economic conditions in India and our results of operations are significantly affected by factors influencing the Indian economy. A slowdown in the Indian economy could adversely affect our business, including our ability to grow our assets, the quality of our assets, and our ability to implement our strategy. Factors that may adversely affect the Indian economy, and hence our results of operations, may include: any increase in Indian interest rates or inflation; any scarcity of credit or other financing in India; prevailing income conditions among Indian consumers and Indian corporations; volatility in, and actual or perceived trends in trading activity on, India's principal stock exchanges; variations in exchange rates; changes in Indias tax, trade, fiscal or monetary policies; political instability, terrorism or military conflict in India or in countries in the region or globally, including in Indias various neighbouring countries; natural disasters in India or in countries in the region or globally, including in Indias neighbouring countries; prevailing regional or global economic conditions, including in Indias principal export markets; and other significant regulatory or economic developments in or affecting India or its retail and other consumption-led sectors or industries. Any slowdown in the Indian economy or in the growth of the sectors we participate in or future volatility in global commodity prices could adversely affect our borrowers and contractual counterparties. This in turn could adversely affect our business and financial performance and the price of our Equity Shares. 70. Political instability or changes in the government could delay the liberalization of the Indian economy and adversely affect economic conditions in India generally, which could impact our financial results and prospects. Since 1991, successive Indian governments have pursued policies of economic liberalization, including significantly relaxing restrictions on the private sector. Nevertheless, the role of the Indian central and state governments in the Indian economy as producers, consumers and regulators has remained significant. The

35

leadership of India has changed many times since 1996. The current central government, which came to power in May 2009, is headed by the Indian National Congress and is a coalition of several political parties. Although the current government has announced policies and taken initiatives that support the economic liberalization policies that have been pursued by previous governments, the rate of economic liberalization could change, and specific laws and policies affecting banking, finance and NBFC companies, foreign investment and other matters affecting investment in our securities could change as well. Additionally, as economic liberalization policies have been a major force in encouraging private investment in retail and other consumption-led sectors, any change in these policies could have a significant impact on infrastructure development, business and economic conditions in India. 71. The financial markets in India are not as developed as in other countries. The financial markets in India are still at a nascent stage of development in respect of complex financial instruments. Currently, structured instruments and products are not widely used in the Indian financial markets, and as a result we may not have access to various financial instruments and strategies that could potentially reduce our risk. 72. Instability in financial markets could materially and adversely affect our results of operations and financial condition. The Indian economy and financial markets are significantly influenced by worldwide economic, financial and market conditions. Any financial turmoil, especially in the U.S. or Europe, may have a negative impact on the Indian economy. Although economic conditions differ in each country, investors reaction to any significant developments in one country can have adverse effects on the financial and market conditions in other countries. A loss in investor confidence in the financial systems, particularly in other emerging markets, may cause increased volatility in Indian financial markets. The global financial turmoil, an outcome of the sub-prime mortgage crisis which originated in the United States of America, led to loss in investor confidence in worldwide financial markets. Indian financial markets have also experienced the contagion effect of the global financial turmoil, evident from sharp decline in SENSEX, BSEs benchmark index. Any prolonged financial crisis may have an adverse impact on the Indian economy and us, thereby resulting in a material and adverse effect on our business, operations, financial condition, profitability and price of our Equity Shares. 73. Difficulties faced by banks, financial institutions or NBFCs or the Indian financial sector generally could cause the price of our Equity Shares to decline. We are exposed to the risks of the Indian financial sector which in turn may be affected by financial difficulties and other problems faced by Indian financial institutions. Certain Indian financial institutions have experienced difficulties during recent years, particularly in managing risks associated with their portfolios and matching the duration of their assets and liabilities, and some co-operative banks have also faced serious financial and liquidity crises in the past. Any major difficulty or instability experienced by the Indian financial sector could create adverse market perception, which in turn could adversely affect the price of our Equity Shares. 74. Terrorist attacks, civil unrest and other acts of violence or war involving India and other countries could adversely affect the financial markets and our business. Terrorist attacks and other acts of violence or war may negatively affect the Indian markets on which our Equity Shares will trade and also adversely affect the worldwide financial markets. These acts may also result in a loss of business confidence, impede travel and other services and ultimately adversely affect our business. In addition, any deterioration in relations between India and Pakistan might result in investor concern about stability in the region, which could adversely affect the price of our Equity Shares. India has also witnessed civil disturbances in recent years and it is possible that future civil unrest as well as other adverse social, economic and political events in India could have a negative impact on the value of

36

share prices generally as well as the price of our Equity Shares. Such incidents could also create a greater perception that investment in Indian companies involves a higher degree of risk and could have an adverse impact on our business and the price of our Equity Shares. 75. Natural disasters could have a negative impact on the Indian economy and cause our business to suffer. India has experienced significant natural disasters such as earthquakes, a tsunami, floods, drought, fires and spread of pandemic diseases such as the H5N1 avian flu and the H1N1 swine flu, in the past few years. The extent and severity of these natural disasters determines their impact on the Indian economy and infrastructure. Future natural calamities could have a negative impact on the Indian economy, adversely affecting our business and the price of our Equity Shares. Prominent Notes: 1. Our Company was originally incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 under the Companies Act, 1956. We became a private limited company on September 17, 2001 and the name of our Company was subsequently changed to Subhikshith Finance & Investments Private Limited. The name of our Company was again changed to Future Ventures India Private Limited on August 9, 2007 and the word private was deleted on September 7, 2007 upon the Company ceasing to be a private limited company. For details of changes in the name and registered office of our Company, please refer to History and Certain Corporate Matters beginning on page 146 of this Prospectus. Public issue of 75,00,00,000 Equity Shares of ` 10 each of the Company for cash at a price of ` 10 per Equity Share aggregating up to ` 75,000 lakhs (the Issue). The net worth of the Company (excluding revaluation reserves) was ` 82,908.25 lakhs as of December 31, 2010 as per its audited standalone restated financial statements. The net worth of the Company (excluding revaluation reserves) was ` 73,827.68 lakhs as of December 31, 2010 as per its audited consolidated restated financial statements. For further details please see the section entitled Financial Statements beginning on page 230. The net asset value per Equity Share of ` 10 each was ` 10.03 as of December 31, 2010 as per our audited standalone restated financial statements. The net asset value per Equity Share of ` 10 each was ` 8.94 as of December 31, 2010 as per our audited consolidated restated financial statements. For further details please see the section entitled Financial Statements beginning on page 230. The average cost of acquisition of the equity shares by our Promoters is as follows: Name of the Promoter Future Capital Investment Private Limited Future Corporate Resources Limited Future Knowledge Services Limited PIL Industries Limited Pantaloon Retail (India) Limited Average Cost of Acquisition (`) 10 10 10.10 10 10

2.

3.

4.

5. Sr. No. 1. 2. 3. 4. 5.

The average cost of acquisition has been calculated by dividing the aggregate amount paid by the Promoters to acquire the Equity Shares held by them with the aggregate number of Equity Shares held by the Promoters. 6. For the nine month period ended December 31, 2010, we entered into related party transactions on a consolidated basis as detailed in the following table: Sr. No. 1. Particulars Receivables outstanding (including inter-corporate deposits and interest) Amount (In ` lakhs) 20,806.95

37

Sr. No. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18.

Particulars Payables balance outstanding Loans taken outstanding Dividend income Interest income Loan/advances given during the period Amount repaid during the period Issue of equity shares Trade advance given and settled during the period Fees for services Reimbursement of expenses Rent expenses Royalty income Sale of assets/investment Purchase of asset/investment Investment in equity/preference shares Sales Purchases

Amount (In ` lakhs) 926.48 2,560.36 15.60 456.44 7,425.00 10,775.00 25,000.00 1,350.00 182.00 3.08 23.32 87.50 302.79 12,005.00 11.25 27,733.87 1.08

For details of the related party transactions entered into by the Company, please see the section entitled Financial Statements Annexure XXV- Related Party Transactions on page 340. 7. The Company had earlier filed a draft red herring prospectus dated February 21, 2008 (the DRHP 2008) with SEBI for a proposed initial public offer of 373,61,56,300 Equity Shares in accordance with the Securities and Exchange Board of India (Disclosure and Investor Protection Guidelines), 2000. SEBI had, through its letter dated September 4, 2008 (the SEBI Observations Letter) provided its observations on the DRHP 2008. However, due to adverse market conditions and other considerations, the Company did not to proceed with the proposed initial public offer and the validity of the SEBI Observations Letter expired on December 3, 2008. Investors may contact any of the BRLMs or the CBRLMs for any complaints, information or clarifications pertaining to the Issue.

8.

38

SECTION III: INTRODUCTION SUMMARY OF INDUSTRY The Companys ability to successfully implement its business strategy, growth and expansion plans may be affected by various factors. The Companys business overview, strengths and strategies must be read along with the risk factors provided in the section entitled Risk Factors beginning on page 12. Growth in Indian Economy India has witnessed a sustained average growth of 6 % in GDP since 1991. Despite the global economic recession in 2008, in 2009-10 the Indian GDP grew by 7.2%. The Indian economy has shown an expected resilience, with no failed financial institutions, no industry wide bankruptcies, no massive layoffs, no significant increase in consumer loan defaults, Indias public sector has shown amazing resilience to withstand the turbulence in the environment. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009) India Gross domestic product (INR 000 millions)

29,670

32,490

35,650

38,930

41,550

44,530

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

GDP at factor cost, 2004-2005 prices (Source: Indian Economic Survey 2009) The Indian economy was the 12th largest in the world in 2008 and is poised to become the 4th largest in by 2030. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). The Indian consumption market With increase in per capita income the per capita consumption in India has been steadily increasing as illustrated below:

39

Per capita income and consumption: 2004-2005 prices (INR)

Per capita income Per capita consumption 37,328 35,695 40,745 23,626

29,745

32,012

34,533

17,620

18,909

20,168

21,841

23,012

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

(Source: Indian Economic Survey 2009) Consumption has played a bigger role in Indias growth story than in other developing countries in Asia. At an earlier stage, India has entered a virtuous long term cycle in which rising incomes lead to increasing consumption, which, in turn, creates more business opportunities and employment, further fueling GDP and income growth. This is further highlighted by Indias resilience to global economic recession which illustrates the importance of domestic consumption for sustainable growth in India. Indias GDP is poised for an average growth of 8-9% which will fuel private consumption. The estimated growth in GDP and private consumption is given below:
9.7%

GDP Growth
9.1% 7.9% 8.5% 6.1% 6.1% 7.0% 7.0% 8.1% 7.2% 7.5% 7.5% 7.5% 8.5% 8.5% 9.0% 9.0%

9.3%

7.1% 6.3% 5.6% 2.9% 1.6% 5.2%

Private Consumption

FY2006

2007

2008

2009

2010Q1

2010Q2

2010

2011P

2012P

2013P

2014P

2015P

GDP is estimated to be US$ 1777 billion and consumption is set to double by 2015. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009) Key characteristics of the Indian consumer market: Growing Aspiring Middle Class and High Income Segment: Rising incomes have lead to a higher proportion of aspiring middle class households. India is expected to experience tremendous consumption growth in its booming middle class and upper classes.

40

The expected change in income demorgraphics is given in the chart below: Increasing Income Levels
100% 80% 60% 40% 20% 0% 6 1985 Globals (> US $25000) Aspirers (US $2250 - 5000) 41 18 2 1995 1 4 2005 Strivers (US $12500 - 25000) Deprived (<US $2250) 1 19 2 2015 2 93 80 43 32 9 2025 54 35

22 36

Seekers (US $5000- 12500)

Predominantly young consumers: 72% of Indian population constitutes of people below 39 years, with 32% between 20-39 years having high consumption potential. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). Reducing Dependency Ratio: With greater diversity of employment opportunities across the country and greater mobility of work force, dependency ratio is reducing. Rising Literacy Levels: The literacy rate in India is expected to touch almost 90% by 2013 from present 70%; with female literacy touching 83% from present 69%. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). Future consumption growth will be driven by both urban and rural markets. India has one of the largest consumer base in the world with approximately 500 million consumers over 18 years of age (excluding Below Poverty Line families) across urban and rural India. Of this, urban India constitutes approximately 230 million consumers. By 2021, there maybe more than 125 cities having population in excess of 1 million and another 500 having population between 5,00,000 and 1 million which will offer significant opporunities in the consumption space. (source: Consumer Trends for 2010, and beyond, October 6, 2009, Technopak).

41

The expected growth in consumption in urban and rural markets is given in the chart below:

GDP: US$ 1,050 Billion

GDP: US$ 1,485 Billion

Private Consumption US $650 Billion Retail: US $410 Billion

Private Consumption US $890 Billion Retail: US $535 Billion

Rural US $225 Billion 54%

Urban US $185 Billion 46%

Rural US $278 Billion 52%

Urban US $257 Billion 48%

2008 2013(P) (Source: Consumer Trends for 2010, and beyond, October 6, 2009, Technopak) The growth in private consumption by USD 240 bn in 2013 will be lead by USD 125 bn in the retail sector. Urban market would account for 58% of the growth in the retail sector. Indian consumers waking up to their aspirations beyond basic needs Against the above backdrop of positive changes in demographics and economic activity, consumers have the capacity to spend, wants to spend and now they have more options to spend. The consumption basket is expanding to include many more products on which discretionary income can be used. While in 1991, consumption was more on broader basic requirements, it is now focused on lifestyle and aspirational products. These categories on which consumers are spending more on are Education, Healthcare, Food services, home and mobiles and travel and tourism. (Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) The key consumption categories and the projected growth are given in the table below: Value in US$ Bn SIZE 2014 339 58 45 47 47 42 36 39 21 18 15 18 8

CATEGORY Food & Grocery Healthcare Apparel & Home Textiles Housing Education Telecom Jewelry & Watches Personal Transport Travel & Leisure CDIT Home -Furniture ,Furnishing Personal Care Eating Out

SIZE 2009 270 36 34 33 30 26 26 25 13 12 11 10 5

42

CATEGORY Footwear Health & Beauty Services

SIZE 2009 4 1

SIZE 2014 6 2

(Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009)

43

SUMMARY OF BUSINESS Overview We are a part of the Future Group. The Future Group is a business group, led by Kishore Biyani, focusing on consumption-led businesses in India and is also one of Indias leading organized multi-format retailers. Pantaloon Retail (India) Limited, the flagship company of the Future Group, has incubated, nurtured and brought to maturity several businesses and formats, including Future Capital Holdings Limited, Future Generali Insurance, Future Supply Chain, Future Agrovet, Future Media, Future Brands, Future Bazaar, Pantaloons, Central, Big Bazaar, Food Bazaar, Home Town and E-zone. We seek to create, build, acquire, invest in and operate innovative and emerging businesses in growing consumption-led sectors in India, which we define as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. Within the consumption-led sectors, we intend to focus primarily on opportunities in the business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home products, (v) rural distribution and (vi) vocational education. We intend to exercise operational control or influence in the business ventures that we promote or in which we acquire interests. In addition to allocating and providing capital, we intend to create, operationally manage and strategically mentor these businesses, which we refer to as the Business Ventures. As of the date of this Prospectus, we have 14 Business Ventures, six of which are our subsidiaries. Out of our 14 Business Ventures, we have indirect shareholding in three of our Business Ventures and one of our Subsidiaries is a step-down subsidiary. For further details of our Business Ventures and Subsidiaries, please see the sections entitled Business Ventures and Subsidiaries beginning on pages 184 and 179, respectively. We seek to enable our Business Ventures to conceptualize and implement their growth and development strategies and to help them convert ideas and insights into viable business propositions. We intend to be a long-term owner, operator and/or partner of the Business Ventures and seek to create value as an active shareholder by deploying the consumer insights, operating skills and capabilities available to us as a part of the Future Group. We seek to access opportunities at various stages of the enterprise growth cycle, from nascent to more mature businesses, with a view towards medium to long-term value creation for our shareholders. We intend to provide the Business Ventures with access to a wide range of resources within the Future Group. Pantaloon Retail (India) Limited, along with other arms of the Future Group, is expected to assist the Company in providing mentoring to the Business Ventures, to actively assist their strategic growth and business development plans. We have entered into a Mentoring Services Agreement with Pantaloon Retail (India) Limited to provide mentoring services to us and/ or the Business Ventures. For further details of the Mentoring Services Agreement, please see the section entitled History and Certain Corporate Matters Mentoring Services Agreement on page 151. Additionally, we have entered into a Consulting and Advisory Services Agreement with Future Capital Holdings Limited under which it will, amongst other things, support resource mobilisation in investee companies, advise on mergers and acquisitions and exit strategies and provide research services in relation to Treasury Assets. For further details of the Consulting and Advisory Services Agreement, please see the section entitled History and Certain Corporate Matters Consulting and Advisory Services Agreement on page 150. We have also entered into a Master Service Agreement with Future Corporate Resources Limited for providing support and other services related to business activities, such as governance, risk mitigation, human relation policies and information technology, guidance regarding corporate and legal compliance and advice on fund raising. For further details of the Master Service Agreement, please see the section entitled History and Certain Corporate Matters Master Service Agreement on page 151. We expect that the capabilities of Pantaloon Retail (India) Limited, Future Capital Holdings Limited and Future Corporate Resources Limited will help us create, develop and generate long term value from our Business Ventures. We were incorporated on July 10, 1996, with the name Subhikshith Finance & Investments Limited. Following the acquisition of Subhikshith Finance & Investments Limited in July 14, 2007 by Future Value Retail Limited (earlier known as Pantaloon Future Ventures Limited), a wholly owned subsidiary of Pantaloon Retail (India) Limited, we changed our name to Future Ventures India Private Limited. We are now a public limited company and are regulated by the RBI as a systemically important non-deposit accepting NBFC.

44

As at the date of the Prospectus, we had the following Business Ventures: 1. Fashion (i) (ii) (iii) AND Designs India Limited, a womens apparel business; Biba Apparels Private Limited, a womens apparel business; Holii Accessories Private Limited, a joint venture with Hidesign India Private Limited which is a manufacturer and retailer of fashion accessories such as leather handbags and wallets; Indus-League Clothing Limited, a designer, manufacturer and retailer of ready-made garments under various brands, such as Indigo Nation, John Miller, Scullers and Urban Yoga ; Celio Future Fashion Limited, a joint venture with a global brand of mens apparel and accessories based in France; Lee Cooper (India) Limited, a manufacturer and retailer of Lee Cooper-branded products; and Turtle Limited, manufacturer, distributor, exporter and retailer of mens wear products.

(iv)

(v)

(vi) (vii) 2.

Home Products Indus Tree Crafts Private Limited, a social entrepreneurship which distributes hand crafted furniture and home accessories under the brand Mother Earth.

3.

Food Processing Capital Foods Exportts Private Limited, a food processing company having development and manufacturing capabilities in various processed food products, such as instant noodles, sauces, chutneys and microwavable rice and curries under various brands, including Chings Secret, Smith & Jones, Raji, Mama Marie and Kaeng Thai.

4.

FMCG (i) Future Consumer Enterprises Limited, a company engaged in product development, designing, branding and distribution of FMCG products under brands such as Tasty Treat, Clean Mate, Care Mate, Premium Harvest and Fresh and Pure; and Future Consumer Products Limited, a company engaged in product development, designing and branding of FMCG products under the brand Sach.

(ii)

5.

Rural distribution Aadhaar Retailing Limited, a rural and semi-urban retailer of agricultural products and consumer products.

6.

Others (i) Amar Chitra Katha Private Limited, produces publications and animated films, which are both educational and entertaining (Edutainment) and organizes and conducts Edutainment oriented theatrical productions. SSIPL Retail Limited, a retailer of Nike branded products, manufacturer of sports footwear and apparel and a manufacturer and distributor of footwear.

(ii)

For further details of our Business Ventures, please see the section entitled Business Ventures on page 184.

45

Strengths Synergy with the Future Group The Future Group is a leading Indian business group promoted by Kishore Biyani which focuses on consumptionled businesses. The Future Group has successfully demonstrated the ability to identify, incubate and grow various consumption-led businesses in India like Pantaloon Retail (India) Limited, Future Capital Holdings Limited, Future Media, Future Brands, Future Supply Chain and Future Bazaar, and we expect to derive benefits from our strategic relationship with it. We also expect to have access to the expertise of the Future Groups management team, whose deep understanding of Indias consumption-led sectors we intend to utilize in evaluating and monitoring our Business Ventures. In addition, we also believe that we will have access to industry contacts, brand building and publicity skills and the network of the Future Group, which we anticipate will aid us in effectively advising and managing our Business Ventures. We believe that access to the following attributes of the Future Group provide us with a competitive advantage: Track record of incubating and growing businesses coupled with proven execution skills in creating one of the largest organized multi-format retail networks in India: The Future Group has conceptualised, supported and developed, various consumption-led business concepts such as Pantaloons, Central, Big Bazaar, Food Bazaar and Home Town, which enjoy wide brand recognition and customer loyalty. A key element of the Future Groups growth has been its strategy of actively mentoring its projects and we also expect to benefit from access to such mentoring capabilities. We also intend to leverage the execution skills of the Future Group, including its operational and managerial skills, to facilitate the management and growth of our Business Ventures, which we believe we already have done for certain of our existing Business Ventures. We will continue to access the experienced pool of finance, operating and investment professionals belonging to the Future Group for providing guidance and mentoring to the Business Ventures. Deep understanding of the Indian consumption-led sectors and the evolving needs of the Indian consumer: As one of Indias leading retail groups with over 12 years of organized retail experience, the Future Group has developed a deep understanding of the consumption-led sectors and businesses in India, including consumer aspirations. The Future Groups presence across multiple retail formats presents us with opportunities to source ideas which could be converted into successful businesses. We expect that access to these insights will enable us to effectively evaluate opportunities in our target sectors and formulate appropriate growth strategies for our Business Ventures. Business sourcing opportunities: We believe that, because of its market presence, and successful track record of establishing new business formats, the Future Group will have access to a range of business opportunities in consumption-led sectors in India that we expect to be able to access. In addition, we also expect to have access to the industry contacts and the network of various Future Group entities to aid us in sourcing additional business opportunities. The Future Group network has already helped us source opportunities with respect to certain of our Business Ventures, such as Biba Apparels Private Limited, AND Designs India Limited, Indus Tree Crafts Private Limited and Capital Foods Exportts Private Limited. Relationship with Pantaloon Retail (India) Limited and the Future Group: We have entered into a Mentoring Services Agreement with Pantaloon Retail (India) Limited, pursuant to which Pantaloon Retail (India) Limited would provide mentoring services to us and/ or the Business Ventures. The assistance to be provided by Pantaloon Retail (India) Limited would include, amongst other things, insights into consumer behaviour, advice regarding business strategy, review or development of business plans for the Business Ventures, guidance in development of new businesses, products and/ or distribution strategies, assistance in sourcing products and materials, and assistance in brand building and marketing of products. Furthermore, Pantaloon Retail (India) Limited would provide assistance and advise to the Company in formulating strategies regarding exit from the Business Ventures and investment in consumption-led sectors, and undertaking due diligence on the Business Opportunities. We also have the option of nominating professionals from Pantaloon Retail (India) Limited to the boards of our Business Ventures to manage and monitor them in a more comprehensive manner. We would also have access to a pool of experienced professionals in the employment of Pantaloon Retail (India) Limited and other Future Group companies, such as:

46

(i)

Kailash Bhatia Kailash Bhatia is the CEO and a director of Pantaloon Retail (India) Limited. He has previous experience of approximately 30 years in the fashion industry and was a co-founder of ColorPlus brand. Prior to joining Pantaloon Retail (India) Limited, he has worked with Color Plus Fashion Private Limited, Weekender, Arvind Mills Limited and Mafatlal Industries Limited.

(ii)

Vibha Rishi Vibha Rishi is the Group Strategy and Consumer Director of the Future Group. She is responsible for marketing, communication and customer strategy of the group companies. She is employed with Future Corporate Resources Limited. She holds a masters degree in business administration from the Faculty of Management Studies, University of Delhi. Vibha Rishi has previously worked with Tata Administrative Services and PepsiCo.

(iii)

Damodar Mall Damodar Mall is the Director Integrated Food Strategy of the Future Group. He is responsible for overall food and FMCG strategies for the Future Group. He is employed with Future Corporate Resources Limited. He has previous experience of approximately 20 years in the FMCG and food industry. He was a cofounder of DMart, a supermarket chain based in Mumbai. He holds a bachelors degree in technology from the Indian Institute of Technology, Mumbai and post graduate diploma in management from the Indian Institute of Management, Bangalore. Damodar Mall has previously worked with Hindustan Unilever Limited.

(iv)

Santosh Desai Santosh Desai is the Managing Director and CEO of Future Brands India Limited. He has approximately 21 years of experience in the advertising industry. He holds a post graduate diploma in management from the Indian Institute of Management, Ahmedabad. Santosh Desai has previously worked as President with McCann-Erickson, India. He has also been keynote speaker at various advertising forums within and outside India and has also addressed the management teams of several multinationals on advertising related matters. Additionally, we have also entered into a Consulting and Advisory Services Agreement with Future Capital Holdings Limited and Master Service Agreement with Future Corporate Resources Limited. Under the Consulting and Advisory Services Agreement, Future Capital Holdings Limiteds responsibilities include supporting resource mobilisation in investee companies and advising on mergers and acquisitions and exit strategies, and providing research services in relation to Treasury Assets. In terms of Master Service Agreement, Future Corporate Resources Limited will provide support and other services to the Company.

Uniquely positioned to access opportunities in consumption-led sectors Whilst we would have access to the experience and industry networks of the Future Group, all Business Opportunities would be independently evaluated by our Investment Management Team and approved by us. This would provide us with a unique perspective for evaluating Business Opportunities which are closely aligned to our investment philosophy and which may have significant potential for growth on account of consumer demand in the businesses they operate. Moreover, our business model of acquiring interest and managerial control in companies, rather than operating such companies directly, provides us with an opportunity of participating in growth of consumption-led sectors with mitigated exposure to attendant operational risks. Additionally, within the consumption-led sectors, we have presence or seek to establish our presence in business opportunities belonging to diverse segments comprising of fashion, home products, food processing, FMCG, rural distribution, vocational education and edutainment, which reduces our exposure to risks associated with, or downturns that may afflict, any particular segment.

47

Access to diverse growth businesses through long-term and liquid investment opportunities We believe that there are a number of business opportunities in India that for a variety of reasons offer the potential for long-term growth. For example, due to rapidly rising income levels in India and the resultant changes in consumption patterns, consumption-led industries are considered to have high growth potential. We will look to explore opportunities for capital across entities operating in consumption-led sectors and will seek to offer our shareholders access to the potential growth prospects presented by these opportunities. Brand equity of certain of our Business Ventures We intend to focus on consumption-led sectors and brand recognition is a significant element of successfully operating in the consumption-led sectors. Certain of our Business Ventures have been successful in creating distinct brands. We believe that AND Designs India Private Limited (AND Designs) and Biba Apparels Private Limited (Biba) have established themselves as recognisable retailers of womens apparel. AND Designs has established womens apparel brands catering to various segments of the market including AND, Anita Dongre Inter Pret, Anita Dongre Timeless, GRASSROOT and Globaldesi. In addition to its established presence in womens ethnic wear segment in India, Biba has also established Meena Bindra brand which caters to the price-conscious segments of the market. Indus-League Clothing Limited designs, manufactures and retails ready-made garments under various recognisable brand names including Indigo Nation, John Miller, Scullers and Urban Yoga. Lee Cooper (India) Limited and Indus Tree Crafts Private Limited market their products under Lee Cooper and Mother Earth, respectively, which are well recognised within their respective business segments. Chings Secret and Smith & Jones brands of Capital Foods Exportts Private Limited are well recognised for processed food products. The brand equity of our Business Ventures provides them with a wider access to the markets within their respective business segments. It also provides them with an ability to leverage the existing brand equity to launch new brands and/ or products. We believe the strength of the brands established by our Business Ventures is testimonial to their commitment to provide quality products to customers. Experienced management team Our business is supported by a talented and experienced pool of finance, operating and investment professionals with a variety of backgrounds in finance, accounting and retailing, including our CEO, K. K. Rathi; our President (Food Processing), Praveen Dwivedi; our Vice-President (Investments), Meenakshi Maheshwari; our Vice-President (Finance), Gopal Bihani and our Company Secretary & Head-Legal, Manoj Gagvani. The brief biographies of our key employees are detailed below: (i) Krishan Kant Rathi Krishan Kant Rathi, our CEO, holds a bachelors degree in commerce and is a qualified chartered accountant and company secretary with approximately 25 years of professional experience. He has prior experience in corporate finance, strategic business planning and investment advisory, which was acquired in reputable organisations such as KEC International Limited, H&R Johnson (India) Limited, Pantaloon Retail (India) Limited and Motilal Oswal Private Equity Advisors Private Limited. He has previously worked as Group CFO with Pantaloon Retail (India) Limited where he was responsible for strategic planning, mergers and acquisitions, treasury management and corporate governance. Krishan Kant Rathi is also a director of various companies including Future Generali India Life Insurance Company Limited, Future Generali India Insurance Company Limited, Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited), FCH Centrum Direct Limited, FCH Centrum Wealth Managers Limited and Future Capital Holdings Limited. He joined the Company in March 2010. (ii) Praveen Dwivedi Praveen Dwivedi, our President (Food Processing), holds a bachelors degree in commerce, a masters degree in commerce and has undertaken a certificate programme on general management, supply chain

48

management and strategic planning from Wharton Business School. He has approximately 26 years of experience in FMCG, setting-up food and agricultural products related retail venture for fresh produce and pan India integrated warehousing and logistics infrastructure for diversified products. He has previously worked with ITC Limited and Namdhari Farm Fresh Private Limited. He has been working with the Company since November 2010. (iii) Meenakshi Maheshwari Meenakshi Maheshwari, our Vice-President (Investments), holds a bachelors degree in commerce and is a qualified Chartered Accountant with approximately 19 years of experience in financial accounting, due diligence and transaction advisory. She has worked in senior management positions with organisations such as Ernst & Young, KPMG and Ferrier Hodgson Limited, where she has assisted private equity and strategic investors in evaluation of their investment decisions. Meenakshi Maheshwari has also assisted investors and lenders in post-investment monitoring, review and restructuring of investee companies. She has also worked with Godrej GE Appliances Limited, an FMCG company. She joined the Company in April 2010. (iv) Gopal Bihani Gopal Bihani, our Vice-President (Finance) is a qualified chartered accountant and has approximately 12 years of experience in consumption-led and manufacturing sectors. He has been working with the Future Group since 2005. Prior to joining our Company, Gopal Bihani has worked as CFO for different business formats and companies of the Future Group, such as Aadhaar Retailing Limited, Food Bazaar (a division of Pantaloon Retail (India) Limited) and GJ Future Fashion Limited (Gini & Jony). Gopal Bihani has previously worked with H&R Johnson (India) Limited and Indian Council for International Amity. He has experience in accounting and financial management, strategic business planning and execution, conducting operational monitoring, establishing management reporting system, ERP implementation for retail and manufacturing companies, investor relationship management and compliance. He joined the Company in June 2010. (v) Manoj Gagvani Manoj Gagvani, our Company Secretary & Head-Legal, has bachelors degrees in commerce and law and is a qualified company secretary. He has previously worked with Excel Industries Limited, Nilkamal Limited and Pidilite Industries Limited and has experience of approximately 22 years in corporate secretarial and legal functions. He has been associated with the Company since June 2008. In addition to our key managerial employees detailed above, we also rely on the experience of the following key managerial employees of certain of our Subsidiaries: (i) Devendra Chawala Devendra Chawala is the CEO of Future Consumer Enterprises Limited. He holds a bachelors degree in engineering (production) and a masters degree in business administration (marketing management) from Symbiosis Institute of Business Management. He has been advising the Company in relation to brand management and has also been advising the Business Ventures engaged in product development, designing, branding and distribution of FMCG products. He has approximately 16 years of experience in marketing, brand management and supply chain management and has previously worked with Asian Paints Limited, Hindustan Coca Cola Beverages Limited and Reliance Retail Limited. (ii) Rachna Agarwal Rachna Agarwal is the CEO of Indus-League Clothing Limited. She holds a bachelors degree in science (economics) from St. Xaviers College, Kolkata and a post-graduate diploma in business management from the Indian Institute of Management, Ahmedabad. She has been advising the Business Ventures engaged in fashion retailing. She has approximately 18 years of experience in brand management, information systems management, and logistics and supply chain management.

49

(iii)

Raminder Singh Rekhi Raminder Singh Rekhi is the CEO of Aadhaar Retailing Limited. Pursuant to the letter dated June 1, 2010 issued by Pantaloon Retail (India) Limited, he has been deputed to Aadhaar Retailing Limited as the CEO for a period of one year commencing from June 15, 2010. During the term of deputation, the remuneration is to be paid by Pantaloon Retail (India) Limited. He holds a bachelors degree in arts and a post graduate diploma in rural management from the Institute of Rural Management, Anand. He has approximately 20 years of experience in the retail sector. He has previously worked with Pantaloon Retail (India) Limited and prior to joining Aadhaar Retailing Limited; he was the CEO of Indus Tree Crafts Private Limited for approximately two years.

Strategy Focus on consumption-led sectors in India We believe that we will be able to enhance our return on assets by focusing on consumption-led businesses in India. We intend to focus primarily on opportunities in the business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home products, (v) rural distribution and (vi) vocational education. We believe that our target sectors will benefit from the rapidly rising income levels in India and the resultant changes in consumption patterns. Accordingly, we will focus on sourcing opportunities in industries which are consumer driven and have high growth potential. Our strategy is not to concentrate our businesses, but to consider opportunities across various segments within consumption-led sectors. Actively operate and manage our Business Ventures We intend to promote or hold a significant stake in our Business Ventures, and to exert operational control or influence over them through, among other methods, maintaining board or senior executive representation as well as placing persons in management or advisory roles. We expect to influence business strategy and decision-making of our Business Ventures through operational management and the exercise of customary shareholders rights commensurate with the level and type of our participation in the business. We will also pursue appropriate longerterm value creation strategies, which may include unlocking value in our Business Ventures through public market or private sales after taking into account factors such as the stage of development of the relevant Business Venture and general market conditions. We also propose to provide the Business Ventures with access to expertise and experience of Pantaloon Retail (India) Limited and have entered into the Mentoring Services Agreement with Pantaloon Retail (India) Limited to facilitate the same. Diversify our businesses Although our focus will be on consumption-led sectors, we may also diversify into other potential high growth sectors. We intend to participate in emerging businesses, including those within consumption-led sectors, both through building new businesses directly and partnering with other companies to develop or grow Business Ventures jointly. We also intend to participate in more mature opportunities in companies which we believe have unrecognized growth potential, or are undervalued or in which we believe we can identify hidden assets or recovery potential. We believe that this approach will position us to perform well in a variety of market conditions and add complementary assets to our business. Our goal is to manage and mentor our Business Ventures with a view to achieving long-term growth, although we may also consider short-term opportunities where we see prospects for attractive returns. In determining the opportunities we will pursue, Investment Committee and Investment Management Team will focus on the optimal outcomes for our Business Ventures generally over a period of several years rather than on the near-term impact on our revenue, profits or cash flow. It is our strategy to extract optimal capital growth in our Business Ventures while managing risks, with a view to providing an acceptable return on assets. To this end, we will seek opportunities that demonstrate clear growth prospects and talented and committed management.

50

SUMMARY FINANCIAL INFORMATION Unconsolidated Statement of Assets and Liabilities, as Restated (INR in Lakhs) Particulars Annexure 31-Dec10 31-Mar10 As At 31-Mar09 31-Mar08 31Mar07 7.23 (6.86) 0.37 0.37 0.00 31Mar06 7.27 (6.73) 0.54 0.54 0.00

A. Fixed Assets Gross Block Less: Depreciation Net Block Total Fixed Assets (A) B. Deferred Tax Asset (Net) (B) C. Investments (C) D. Current Assets, Loans & Advances Cash and Bank Balances Other Current Assets Total Current Assets, Loans and Advances (D) E. Liabilities and Provisions Current Liabilities Provisions Total Liabilities Provisions (E)

VI 40.97 (23.47) 17.50 17.50 XI 3.74 56.50 (25.77) 30.73 30.73 1.22 58.67 (14.84) 43.83 43.83 2.53 35.12 (2.08) 33.04 33.04 (0.93)

VII

74,241.95

45,398.32

27,885.19

30,903.95

0.00

0.00

VIII IX

50.15 9,380.91 9,431.06

1134.96 11,900.84 13,035.80

715.37 6,994.60 7,709.97

128.39 12,406.05 12,534.44

34.95 17.56 52.51

27.21 22.84 50.05

X X and

238.80 547.20 786.00

45.06 489.90 534.96

141.53 151.38 292.91

7473.03 29.83 7,502.86

0.65 8.11 8.76

0.65 6.97 7.62

F. Net Worth (A) + (B)+ (C) + (D) - (E)

82,908.25

57,931.11

35,348.61

35,967.64

44.12

42.97

G. Represented By: Share Capital (including Share 82,624.37 57,624.37 36,884.37 36,384.37 29.37 29.37 V Application) Reserves and Surplus 5.79 5.79 5.79 5.79 5.79 5.68 V Statutory Reserve Fund 372.24 338.59 3.48 3.48 3.48 3.25 V Surplus in Profit and Loss 36.53 0.00 0.00 0.00 5.48 4.67 II Account Debit Balance in Profit & 0.00 (37.64) (1545.03) (426.00) 0.00 0.00 II Loss Account Miscellaneous Expenditure (to (130.68) 0.00 0.00 0.00 0.00 0.00 the extent not written off or adjusted) Net Worth 82,908.25 57,931.11 35,348.61 35,967.64 44.12 42.97 The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

51

Unconsolidated Statement of Profit and Loss, as Restated (INR in Lakhs) For the Years Ended 31-Mar31-Mar313109 08 MarMar07 06 (389.52) 507.54 3.12 2.77 79.05 0.64 2.40 1.16 8.14 0.27 0.25 0.49 0.00 0.06 0.00 0.00 (302.33) 508.51 5.77 4.42 234.00 463.82 0.00 12.76 0.00 80.45 819.56 11.41 2.14 0.00 1.20 1.65 0.00 0.13 1.02 0.60 1.76 0.00 0.21 1.23

Particulars

Annexure

Income from Operations Interest on Deposits Other Income Profit on Sale of Assets Total Income Employee Costs Administrative and Other Expenses Interest and Financing Charges Depreciation Provision for Non-Performing Assets Total Expenditure Net Profit/(Loss) Taxation Before

XII XIII

Period Ended 31-Dec10 843.80 0.22 0.00 0.00 844.02 333.46 321.87 11.56 4.53 0.00

31-Mar10 2575.34 0.38 0.00 0.00 2575.72 300.77 161.55 0.00 11.56 0.00

XIV XV

VI XIX

671.42 172.60

473.88 2101.84

710.58 (1,012.91)

913.56 (405.05)

4.00 1.77

3.80 0.62

Provision for Taxation - Current Tax Less : Excess provision relating to earlier years no longer required written back - Deferred Tax - Fringe Benefit Tax Net Profit/(Loss) after Taxation as per Audited accounts Less : Adjustments on account of restatement Provision for Current tax Net Profit/(Loss) Taxation, as restated after

67.30 (60.45)

425.00

0.00

25.00

0.61

0.23

(2.52) 0.00 168.27

1.32 0.00 1675.52

(3.46) 3.05 (1,012.50)

0.93 0.50 (431.48)

0.00 0.00 1.16

0.00 0.00 0.39

60.45 107.82

(166.98) 1,842.50

106.53 (1,119.03)

0.00 (431.48)

0.00 1.16

0.00 0.39

Less: Transfer to Reserve Fund (As per 45-IC of RBI Act) Transfer to General Reserve Fund Add: -Surplus/(Deficit) brought forward from previous year, as

33.65 0.00

335.11 0.00

0.00 0.00

0.00 0.00

0.23 0.12

0.08 0.04

(37.64)

(1545.03)

(426.00)

5.48

4.67 4.40

52

Particulars

Annexure

Period Ended 31-Dec10 36.53

31-Mar10

For the Years Ended 31-Mar31-Mar3109 08 Mar07 (1,545.03) (426.00) 5.48

31Mar06 4.67

restated Balance transferred to Balance Sheet

(37.64)

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

53

Unconsolidated Statement of Cash flows, as Restated As Per Accounting Standard 3 Cash Flow Statements (INR in Lakhs) For the Years Ended 31-Mar31-Mar313109 08 MarMar07 06 (1012.91) (405.05) 1.77 0.62

Particulars

Period Ended 31-Dec-10 172.60

31-Mar10 2101.84

Net Profit/ (Loss) Before Tax as per Audited Accounts

Adjustments for: Depreciation Interest Charges Provision for Non-Performing Assets (Net of write back) (Profit) /Loss on Sale of Assets (Net) Interest Income Dividend Income Loss/(Profit) on sale of Investments Provision for Standard Assets Miscellaneous Expenditure Written Off Operating Profit/(Loss) Before Working Capital Changes Adjustment for: (Increase)/Decrease in Receivables (Increase)/Decrease in Other Current Assets and Misc. expenditure (to the extent not written off or adjusted) Increase/(Decrease )in Current Liabilities and Provisions Cash Generated Operations from/(used in) 0.00 2598.30 0.00 (4425.50) 0.00 5613.79 0.00 (12230.37) 5.70 0.24 2.88 0.54 4.53 11.56 0.00 1.76 (810.43) (33.58) (0.01) 18.42 0.00 (635.15) 11.56 0.00 0.00 2.04 (828.20) (46.69) (1700.83) 0.00 0.00 (460.28) 12.76 0.00 0.00 0.00 (856.24) (241.67) 1408.38 0.00 0.00 (689.68) 2.14 11.41 (0.27) (0.06) (216.62) (271.68) (19.88) 0.00 0.00 (900.01) 0.13 0.00 0.77 0.00 (5.52) 0.00 0.00 0.00 0.00 (2.85) 0.21 0.00 0.74 0.06 (3.93) 0.00 0.00 0.00 0.04 (2.26)

198.72

(104.86)

(7319.30)

7474.97

1.54

0.83

2161.87

(4990.64)

(2395.19)

(5655.41)

4.63

1.99

(Direct Taxes Paid)/Refund received Add: Dividend Received Add; Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase of Fixed Assets Proceeds from Sale of Fixed Assets Investment in Fixed Deposits ( net of withdrawals) Purchase of Investments Sale of Investment Net Cash (used in)/ from Investing Activities (B)

(83.67) 33.58 651.64 2,763.42

(250.26) 46.69 686.62 (4507.59)

(5.14) 241.67 658.80 (1499.86)

(36.21) 271.68 88.62 (5331.32)

(0.57) 0.00 3.63 7.69

(0.01) 0.00 3.69 5.67

(2.36) 9.30 0.00 (31,732.01) 2,888.40 (28,836.67)

(1.38) 0.87 0.00 (41201.20) 25388.89 (15812.82)

(23.55) 0.00 0.00 (28422.34) 30032.73 1586.84

(35.12) 0.37 28.77 (74892.41) 44008.33 (30890.06)

0.00 0.05 (2.38) 0.00 0.00 (2.33)

0.00 0.07 (0.26) 0.00 0.00 (0.19)

54

Particulars

Period Ended 31-Dec-10

31-Mar10

For the Years Ended 31-Mar31-Mar3109 08 Mar07 0.00 500.00 0.00 (11.41) 36355.00 0.00 0.00 0.00 0.00

31Mar06 0.00 0.00 (6.00)

Cash Flow from Financing Activities Interest Paid Proceeds from Issue of Equity Shares Increase/ (Decrease) in Bank Borrowings Net Cash (used in) / from Financing Activities (C ) Net (Decrease)/ Increase in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents At the Beginning of the Period/Year Cash and Cash Equivalents At the End of the Period/Year Net (Decrease)/ Increase in Cash & Cash Equivalents Note: Cash and Cash Equivalents at the Beginning of the Period/Year Less: Investment in Fixed Deposits (Long Term) Cash and Cash Equivalents at the Beginning of the Period/Year Cash and Cash Equivalents at the End of the Period/Year Less: Investment in Fixed Deposits (Long Term) Cash and Cash Equivalents at the End of the Period/Year

(11.56) 25000.00 0.00

0.00 20740.00 0.00

24,988.44

20740.00

500.00

36343.59

0.00

(6.00)

(1,084.81)

419.59

586.98

122.21

5.36

(0.52)

1,134.96 50.15

715.37 1134.96

128.39 715.37

6.18 128.39

0.82 6.18

1.34 0.82

(1,084.81)

419.59

586.98

122.21

5.36

(0.52)

1,134.96 0.00 1,134.96

715.37 0.00 715.37

128.39 0.00 128.39

34.95 28.77 6.18

27.21 26.39 0.82

27.47 26.13 1.34

50.15 0.00 50.15

1134.96 0.00 1134.96

715.37 0.00 715.37

128.39 0.00 128.39

34.95 28.77 6.18

27.21 26.39 0.82

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

55

Consolidated Statement of Assets and Liabilities, as Restated (INR in Lakhs) Particulars Annexure A. Fixed Assets Gross Block Less: Depreciation Net Block Capital Work in progress Total Fixed Assets (A) B. Deferred Tax Asset (Net) (B) C. Goodwill on consolidation (C) D. Investments (D) E. Current Assets, Loans & Advances Receivables Inventories Cash and Bank Balances Other Current Assets Total Current Advances (E) Assets, Loans and Dec 31, 2010 30,347.64 (5,209.03) 25,138.61 336.48 25,475.09 86.33 31,598.60 11,213.41 As at March 31, 2010 14,048.30 (3,421.57) 10,626.73 161.84 10,788.57 37.57 22,877.74 10,092.89 March 31, 2009 8,295.54 (833.98) 7,461.56 129.90 7,591.46 2.53 1,372.01 22,197.87 March 31, 2008 7,485.81 (154.26) 7,331.55 69.01 7,400.56 0.00 1,282.87 26,866.51

VI

XV VII VIII

IX X XI XII

19,207.01 11,099.76 758.67 10,517.43 41,582.87

14,498.68 10,122.69 1,852.04 12,833.60 39,307.01

538.22 3,868.28 1,287.53 5,035.57 10,729.60

22.22 2,510.17 400.11 13,524.21 16,456.71

F. Minority interest (F) G. Liabilities and Provisions Secured Loans Unsecured Loans Current Liabilities Provisions Deferred Tax Liability (net) Total Liabilities and Provisions (G ) H.Net Worth (A)+(B)+(C)+(D)+(E)-(F)(G) I. Represented By: Share Capital Reserves and Surplus Revaluation Reserve Statutory Reserve Fund Debit Balance in Profit & Loss Account Less: Miscellaneous Expenditure (to the extent not written off or adjusted) Net Worth

3,709.22

7,414.96

878.40

1,179.37

XIII XIII XIV XIV XV

14,416.67 3,359.82 13,660.46 957.33 0.00 32,394.28 73,852.80

11,351.52 5,526.65 7,591.93 672.73 32.06 25,174.89 50,513.93

810.91 4,764.77 4,270.35 172.77 404.78 10,423.58 30,591.49

860.18 4,849.25 9,426.29 118.80 24.10 15,278.62 35,548.66

V V V V II

82,624.37 5.79 25.12 372.23 (9,044.03) (130.68) 73,852.80

57,624.37 5.79 25.71 338.58 (7,480.52) 0.00 50,513.93

36,884.37 5.79 0.00 3.48 (6,302.15) 0.00 30,591.49

36,384.37 5.79 0.00 3.48 (844.98) 0.00 35,548.66

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

56

Consolidated Statement of Profit and Loss, as Restated (INR in Lakhs) For the Years Ended March 31, 2010 12,389.36 733.36 (318.49) 0.00 256.81 8.69 2,297.73 0.00 2,423.82 17,791.28 12,417.64 2,408.57 3,028.14 1,042.29 862.33 (0.13) 19,758.84 (1,967.56) 0.00 March 31, 2009 12,017.91 1,004.72 (1,408.38) 0.00 263.59 92.43 4.39 0.63 1,089.18 13,064.47 12,523.05 2,037.88 2,698.85 220.06 700.35 0.00 18,180.19 (5,115.72) (31.55) March 31, 2008 5.50 507.54 0.00 0.00 0.00 0.64 1.73 0.06 0.00 515.47 6.41 81.85 820.79 12.84 3.27 0.00 925.16 (409.69) 0.00

Particulars

Annexure

Sale of Retail Merchandise Income from Investing Activity Profit/(Loss) on trading securities Royalty Other Operating Income Interest on Deposits Other Income Profit on Sale of Assets Proportionate Share in Joint Ventures Total Income Cost of Goods Sold (including Accretion/ Decretion to Inventory) Employee Costs Administrative and Other Expenses Interest & Financing Charges Depreciation Less : Transfer from Revaluation Reserve Total Expenditure Profit/ (Loss) before Prior Period items Add/(Less):Proportionate share of prior period items in a Joint Venture Expenses relating to earlier years Net Profit / (Loss) Before Taxation Less :Provision for Taxation - Income Tax - Excess provision relating to earlier years no longer required written back - Deferred Tax - Fringe Benefit Tax -Proportionate share in a Joint venture -Provision for income tax relating to earlier years Net Profit/ (Loss) before Adjustments [Add/(Less)] Adjustments: (Refer Note A (1) in Annexure IV) Expenses relating to earlier years Provision for Income Tax relating to earlier years Net Adjustments Restated Net Profit/ (Loss) after Taxation -Add/(Less): Share in Associates Add/(Less): Minority Interest Net Profit/ (Loss) after share of Associates & Minority interest -Surplus/(Deficit) brought forward from

XVI XVI

XVII

XVIII XIX XX XXI VI

Period Ended Dec 31, 2010 37,134.86 716.51 0.01 87.50 101.45 10.21 246.55 0.00 1,673.15 39,970.24 28,301.45 3,535.41 6,753.97 1,747.09 1,808.52 (1.13) 42,145.31 (2,175.07) 0.00

(2,175.07) 248.30 (60.45) (74.05) 0.00 0.00 0.00 (2,288.87)

(1,967.56) 425.13

(5,147.27) 0.00

(409.69) 25.03

(265.79) 0.00 0.15 7.07 (2,134.12)

378.15 33.89 1.48 0.00 (5,560.79)

1.24 0.54 0.00 0.00 (436.50)

0.00 (60.45) (60.45) (2,349.32) 259.22 622.43 (1,467.67) (7,480.52)

0.00 174.05 174.05 (1,960.07) 36.87 1022.17 (901.03) (6,302.14)

31.55 (106.53) (74.98) (5,635.77) (947.37) 1,125.97 (5,457.17) (844.98)

0.00 0.00 0.00 (436.50) (415.46) 1.50 (850.46) 5.48

57

Particulars

Annexure

Period Ended Dec 31, 2010 (62.19) 33.65 (9,044.03)

For the Years Ended March 31, 2010 57.75 335.10 (7,480.52) March 31, 2009 0.00 0.00 (6,302.15) March 31, 2008 0.00 0.00 (844.98)

previous year Add: Adjustment on Acquisition of subsidiaries Add: Transfer to Reserve Fund (As per 45IC of RBI Act) Balance transferred to Balance Sheet

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

58

Consolidated Statement of Cash flows as Restated (INR in Lakhs) For the Years Ended March 31, 2010 (1,967.56) March 31, 2009 (5,115.72) March 31, 2008 (409.69)

Particulars

Restated Loss before Tax & before Prior period items Restatement Adjustments affecting Cash Flow: Add/(Less): Expenses of earlier years written off Restated Loss before Tax and After Restatement Adjustments Adjustments for: Depreciation Interest & Financial Charges Provision for Non-Performing Assets (Net of write back) (Profit)/Loss on Sale of Assets (Net) Interest Income Proportionate Share in Interest Income of Joint Venture Dividend Income Gain on Disposal of Subsidiary Gain on Disposal of Associates Gain on Disposal of Joint Ventures Loss/(Profit) on sale of Investments Preliminary expenses written off Sundry Balances written off Provision for Doubtful Loans & Advances Bad Debts Written Off Provision for sales returns & discounts Provision for Standard Assets Provision No Longer Required Written Back Unrealised foreign exchange loss / (gain) Bad Debts Written Off Out of Provision Operating Profit Before Working Capital Changes Adjustment for: (Increase)/Decrease in Inventory (Increase)/Decrease in Trade & other Receivables Increase/(Decrease )in Current Liabilities and Provisions Cash Generated from/(used in) Operations Direct Taxes Paid/Refund received

Period Ended Dec 31, 2010 (2,175.07)

0.00 (2,175.07)

0.00 (1,967.56)

(31.55) (5,147.27)

0.00 (409.69)

1,808.52 1,598.12 0.00 63.56 (693.14) (0.69) (33.58) (51.75) 0.00 0.00 (0.01) 0.03 0.01 50.00 86.21 97.86 18.43 (13.43) 4.72 0.00 759.79

862.20 865.73 0.00 49.44 (692.14) 0.00 (46.69) 0.00 (1,321.18) (852.19) 318.49 0.00 0.00 53.45 0.00 0.00 0.00 0.00 0.00 7.00 (2,723.45)

700.35 220.06 (4.39) (0.63) (855.48) 0.00 (241.67) 0.00 0.00 0.00 1,408.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (3,920.65)

3.27 12.85 (0.27) (0.06) (216.62) 0.00 (271.68) 0.00 0.00 0.00 (19.88) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (902.08)

(158.30) 4,802.21 4,561.55

1,663.21 (4,742.06) (1,817.84)

(1,358.11) 8,196.00 (5,174.58)

(2,510.17) (13,383.58) 9, 480.48

9,965.25 (264.67)

(7,620.14) (449.40)

(2,257.34) (23.49)

(7,315.35) (65.83)

59

Particulars

Dividend Income Direct Tax Paid Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase/Acquisition of Fixed Assets Sale of Fixed Assets Purchase of Investment Investment in / (Refund of) Deposits Sale of Investments Interest Income Dividend received by a subsidiary from its associates Net Cash (used in)/ from Investing Activities (B) Cash Flow from Financing Activities Interest Paid Proceeds from Borrowings Proceeds from Share Application Money Proceeds from Issue of Equity Shares Repayment of Borrowings Financial Charges Net Cash from Financing Activities (C ) Net (Decrease)/Increase Equivalents (A+B+C) in Cash & Cash

Period Ended Dec 31, 2010 33.58 (5.19) 651.63 10,380.60 (16,393.97) 12.90 (20,755.86) 12.01 2,888.40 15.09 15.60 (34,205.83) (1,535.82) 5,927.12 0.00 25,000.00 (6,704.14) 0.00 22,687.16 (1,138.07)

For the Years Ended March 31, 2010 46.69 0.00 597.49 (7,425.36) (3,066.44) 1661.05 (23,172.81) (19.14) 15,568.88 0.00 0.00 (9,028.46) 0.00 0.00 0.00 20,740.00 (3,335.28) (865.73) 16,538.99 85.17 March 31, 2009 241.67 0.00 655.61 (1,383.55) (1,040.80) 2.00 (27,694.15) 0.00 30,032.72 0.00 0.00 1,299.77 (220.06) 0.00 825.00 500.00 (133.74) 0.00 971.20 887.42 March 31, 2008 271.68 0.00 88.59 (7,020.91) (7,403.76) 0.36 (71,270.43) 0.00 44,008.32 0.00 0.00 (34,665.51) (12.85) 5709.43 0.00 36355.00 0.00 0.00 42051.58 365.16

Cash and Cash Equivalents At the Beginning of the Year Add : Adjustment on acquisition and Disposal of Subsidiaries and Joint Ventures during the year (Net) Cash and Cash Equivalents At the End of the Year Net (Decrease)/ Increase in Cash & Cash Equivalents

1,832.90 56.72

1,287.53 460.20

400.11 0.00

34.95 0.00

751.55 (1,138.07)

1,832.90 85.17

1,287.53 887.42

400.11 365.16

Reconciliation of cash and cash Equivalents with amounts reflected in Balance Sheet: Particulars Period Ended Dec 31, 2010 751.55 7.12 758.67 For the Years Ended March 31, 2010 1,832.90 19.14 1,852.04 March 31, 2009 1,287.53 0.00 1,287.53 March 31, 2008 400.11 0.00 400.11

Cash and Cash Equivalents as above Add: Bank deposits not considered as Cash Equivalent Cash and Cash Equivalents as per Balance Sheet

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

60

THE ISSUE

The Issue

75,00,00,000 Equity Shares of Face Value of ` 10 each aggregating up to ` 75,000 lakhs

Of which A) QIB Portion(1) Not more than 37,50,00,000 Equity Shares Of which Available for allocation to Mutual Funds only (5% of the QIB Portion 1,87,50,000 Equity Shares Balance for all QIBs including Mutual Funds 35,62,50,000 Equity Shares B) Non-Institutional Portion C) Retail Portion Equity Shares outstanding prior to the Issue Equity Shares outstanding after the Issue Use of Net Proceeds Not less than 11,25,00,000 Equity Shares Not less than 26,25,00,000 Equity Shares 82,62,43,700 Equity Shares 1,57,62,43,700 Equity Shares See the section entitled Objects of the Issue beginning on page 82 for information about use of the Net Proceeds

Allocation to all categories shall be made on a proportionate basis.

(1)

Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the QIB Portion, the Non-Institutional Portion or the Retail Portion, would be allowed to be met with spill-over from other category or a combination of categories, at the discretion of the Company, in consultation with the BRLMs and the Designated Stock Exchange. Note: The Company has received an approval from the FIPB vide letter dated January 20, 2011, for foreign equity participation of up to 25.13% (increasing by 25% from the existing 0.13%) by way of issue and allotment of equity shares in the initial public offer of the Company to FIIs and NRIs under the portfolio investment scheme. As per the approval, the initial FDI inflow by the foreign collaborator/investor would be ` 30,000 lakhs (approximately).

61

GENERAL INFORMATION The Company was originally incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 and commenced business on August 2, 1996. The Company became a private limited company on August 10, 2001 and consequently changed its name to Subhikshith Finance & Investments Private Limited (Subhikshith). The Registrar of Companies, Tamil Nadu issued a fresh certificate of incorporation on September 17, 2001. The name of the Company was changed from Subhikshith Finance & Investments Private Limited to Future Ventures India Private Limited through a special resolution passed at the EGM of the Company held on July 19, 2007. The fresh certificate of incorporation consequent on change of name was granted by the ROC to the Company on August 9, 2007. Further, upon ceasing to be a private limited company, the word private was deleted through a special resolution at the EGM of the Company held on August 10, 2007. The fresh certificate of incorporation consequent on change of name was granted by the ROC to the Company on September 7, 2007. For further details please refer to the section titled History and Certain Corporate Matters beginning on page 146. Registered Office Future Ventures India Limited Knowledge House Shyam Nagar Off Jogeshwari Vikhroli Link Road Jogeshwari (E), Mumbai 400 060 Tel.: (91 22) 3084 2200 Fax: (91 22) 3084 2201 Email: [email protected] Corporate Identity Number: U67120MH1996PLC192090 Website: www.futureventures.in Address of the Registrar of Companies The Company is registered with the ROC, Maharashtra situated at: 100, Everest Marine Drive Mumbai 400 002 Tel: (91 22) 2281 2639 Fax: (91 22) 2281 1977 Email: [email protected] The Board of Directors The Board of Directors consists of: Name G. N. Bajpai Designation Chairman, Non executive and Independent Director Managing Director DIN 00946138 Address 131, Shaan Apartments K.D. Marg, Opp. Kirti College Prabhadevi, Mumbai 400 028 406, Jeevan Vihar Manav Mandir Road Mumbai 400 006 13, CCI Chambers, 1st Floor Dinshaw Wacha Road, Churchgate Mumbai 400 020 D 814 Paradise Raheja Vihar, Powai

Kishore Biyani

00005740

Anil Harish

Non-Executive and Independent Director

00001685

Anand Balasundaram

Non-Executive Director

and

Non-Independent

02792009

62

Name Jagdish Shenoy

Designation Non-executive and Independent Director

DIN 01754643

Address Mumbai 400 072 Atmaram Bhuvan, Plot No. 250, Room No.11 Station Road, Wadala (West) Mumbai 400028

For further details of the Directors, please see the section entitled Management beginning on page 162. Company Secretary and Compliance Officer Manoj Gagvani Company Secretary and Head-Legal Knowledge House Shyam Nagar Off Jogeshwari Vikhroli Link Road Jogeshwari (E), Mumbai 400 060 Tel.: (91 22) 3084 2200 Fax: (91 22) 3084 2201 Email: [email protected] Investors can contact the Compliance Officer or the Registrar to the Issue in case of any pre- or post-Issue related problems, such as non-receipt of letters of Allotment, credit of Allotted shares in the respective beneficiary account and refund orders. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch or collection centre where the application was submitted. All grievances relating to the ASBA process may be addressed to the Registrar to the Issue with a copy to the relevant SCSB, giving full details such as name, address of applicant, application number, number of Equity Shares applied for, amount paid on application and designated branch or the collection centre of the SCSB where the ASBA Bid cum Application Form was submitted by the ASBA Bidder. Book Running Lead Managers Enam Securities Private Limited 801/ 802, Dalamal Tower Nariman Point Mumbai 400 021 Tel: (91 22) 6638 1800 Fax: (91 22) 2284 6824 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.enam.com Contact Person: Anurag Byas SEBI Registration No.: INM000006856 JM Financial Consultants Private Limited 141, Maker Chambers III Nariman Point Mumbai 400 021 Tel: (91 22) 6630 3030 Fax: (91 22) 2204 7185 Email: [email protected] Investor Grievance Email: [email protected] Website: www.jmfinancial.in Contact Person: Lakshmi Lakshmanan SEBI Registration No: INM000010361 Kotak Mahindra Capital Company Limited First floor, Bakhtawar 229, Nariman Point Mumbai 400 021 Tel: (91 22) 6634 1100 Fax: (91 22) 2284 0492 E-mail: [email protected] Investor Grievance E-mail: [email protected] Website: www.kmcc.co.in Contact Person: Chandrakant Bhole SEBI Registration No.: INM000008704

63

Co-Book Running Lead Managers Edelweiss Capital Limited 3rd Floor, Express Towers Nariman Point Mumbai 400 021 Tel: (91 22) 4086 3535 Fax: (91 22) 4086 3610 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.edelcap.com Contact Person: Dipti Samant SEBI Registration No.: INM0000010650 Syndicate Member Kotak Securities Limited 3rd Floor, Nirlon House, Dr. Annie Besant Marg Near Passport Office, Worli Mumbai 400 025 Tel: (91 22) 6652 9191 Fax: (91 22) 6661 7046 E-mail: [email protected] Website: www.kotak.com Contact Person: Umesh Gupta SEBI Registration No.: BSE - INB010808153 NSE - INB230808130 Legal Counsel to the Issue Amarchand Mangaldas & Suresh A. Shroff & Co. 5th Floor, Peninsula Chambers Peninsula Corporate Park Ganpatrao Kadam Marg Lower Parel Mumbai 400013 Tel: (91 22) 2496 4455 Fax: (91 22) 2496 3666 Registrar to the Issue Link Intime India Private Limited C-13, Pannalal Silk Mills Compound LBS Marg, Bhandup (W) Mumbai 400 078 Tel: (91 22) 2596 0320 Fax: (91 22) 2596 0329 E-mail: [email protected] Investor Grievance Email: [email protected] Website: www.linkintime.co.in Contact Person: Sachin Achar SEBI Registration No: INR000004058 ICICI Securities Limited ICICI Centre H.T. Parekh Marg Churchgate, Mumbai 400 020 Tel: (91 22) 2288 2460 Fax: (91 22) 2282 6580 Email: [email protected] Investor Grievance Email: [email protected] Website: www. icicisecurities.com Contact Person: Gaurav Gupta SEBI Registration No: INM000011179

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Statutory Auditors Deloitte Haskins & Sells Chartered Accountants ASV N Ramanas Tower 52, Venkatnarayana Road T. Nagar, Chennai 600 017 Tel: (91 44) 6688 5000 Fax: (91 44) 6688 5100 Firm Registration No.: 008072S IPO Grading Agency This Issue has been graded by Credit Analysis and Research Limited as CARE IPO Grade 3/5 indicating average fundamentals. The credit rating letter and the rationale are annexed to this Prospectus. Experts Except the reports of the Auditors dated March 26, 2011 and the statement of tax benefits dated May 3, 2011 and the report of Credit Analysis and Research Limited in respect of the IPO grading of this Issue annexed herewith to this Prospectus, the Company has not obtained any opinions from an expert as per the Companies Act. Bankers to the Company Allahabad Bank 37, Mumbai Samachar Marg Fort Mumbai 400 023 Contact Person: Sunil Kumar Jain Tel: (91 22) 2266 2018/ 2266 1119 Fax: (91 22) 2266 1935 Email:[email protected] Website: www.allahabadbank.in HDFC Bank Limited Process House, 2nd Floor Kamla Mills Compound SB Marg, Lower Parel Mumbai 400 013 Contact Person: Sourabh Jain Tel: (91 22) 2490 2913/ 2496 1616 / 2498 8484 (Ext. 3510) Fax: (91 22) 2496 3994/ 8135 Email: [email protected] Website: www.hdfcbank.com

Yes Bank 9th Floor, Nehru Centre Discovery of India Dr. Annie Besant Road, Worli Mumbai 400 018 Contact Person: Surbhi Wahi Tel: (91 22) 6669 9208 Fax: (91 22) 2490 1128 E mail: [email protected] Website: www.yesbank.in Bankers to the Issue and Escrow Collection Banks Axis Bank Limited Universal Insurance Building Sir P. M. Road, Fort Mumbai 400 001 Contact Persons: Rajesh Khandelwal Roshan Mathias Rakesh Waghmare Dhanlaxmi Bank Limited Janmabhoomi Bhavan Janmabhoomi Marg Mumbai 400 001 Contact Person: Venkataraghavan T A Tel: (91 22) 2202 2535/ 6154 1857 Fax: (91 22) 2287 1637/ 6154 1725 Email: [email protected]

65

Tel: (91 22) 6610 7353/ 7339/ 7265 Fax: (91 22) 2283 5785 Email: [email protected] [email protected] [email protected] Website: www.axisbank.com The Hongkong and Shanghai Banking Corporation Limited Shiv Building, Plot No. 139 140B, Western Express Highway Sahar Road Junction, Vile Parle (E) Mumbai 400 057 Contact Person: Swapnil Pavale Tel: (91 22) 4035 7458 Fax: (91 22) 4035 7657 Email: [email protected] Website: www.hsbc.co.in State Bank of India CMP Centre, 31 Mahal Ind Estate Andheri (E) Mumbai 400 093 Contact Person: Ejaz Hussain Tel: (91 22) 2681 4805 Fax: (91 22) 2687 5060 Email: [email protected] Website: www.statebankofindia.com Self Certified Syndicate Banks

Website: www.dhanbank.com

ICICI Bank Limited Capital Markets Division 30, Mumbai Samachar Marg Mumbai 400 001 Contact Person: Viral Bharani Tel: (91 22) 6631 0312/ 13/ 22/ 25 Fax: (91 22) 6631 0350/ 2261 1138 Email: [email protected] Website: www.icicibank.com

The list of banks that have been notified by SEBI to act as SCSB for the ASBA Process are provided on website of SEBI at http://www.sebi.gov.in/pmd/scsb.html. For details on designated branches of SCSBs collecting the ASBA bid cum Application Form, please refer to the SEBI website. Monitoring Agency Allahabad Bank Industrial Finance Branch, 37, Mumbai Samachar Marg Fort, Mumbai 400 023 Tel: (91 22) 2270 2745/ 46/ 47 Fax: (91 22) 2270 2733 Contact Person: Anil Kumar Rana Email: br.mumifb@ allahabadbank.in Website: www.allahabadbank.in Statement of inter se allocation of Responsibilities between the BRLMs and the CBRLMs for the Issue The following table sets forth the distribution of responsibility and co-ordination for various activities amongst the BRLMs and the CBRLMs: Sr. Activities No. 1. Capital structuring with the relative components and formalities etc. 2. Coordinator Enam, JM Enam Financial, Kotak Due diligence of the Companys operations / management / business Enam, JM Enam plans/legal documents etc. Due diligence of the Company including its Financial, Kotak Responsibility

66

Sr. No.

Activities operations/management/ business/plans/legal, etc. Drafting and design of the Draft Red Herring Prospectus and of statutory advertisements including a memorandum containing salient features of the Prospectus. The BRLMs shall ensure compliance with stipulated requirements and completion of prescribed formalities with the Stock Exchanges, the RoC and SEBI including finalisation of the Prospectus and RoC filing. Drafting and approval of all publicity material other than statutory advertisement as mentioned in (2) above including corporate advertisement, brochure, etc. Appointment of intermediaries Registrar(s), Advertising Agency and Bankers to the Issue Appointment of other intermediaries, i.e. Printers

Responsibility

Coordinator

3.

Enam, JM Kotak Financial, Kotak

4. 5. 6.

Enam, JM JM Financial, Kotak Enam, JM Enam Financial, Kotak Enam, JM Enam Institutional Marketing Strategy Finalisation of the list of institutional investors for one to one meetings Financial, Kotak, Edelweiss, I-Sec in consultation with the Company. Preparation of road show presentation and other marketing materials Enam, JM JM Financial, Kotak, Edelweiss, I-Sec

7.

8. 9. 10.

Non-institutional and Retail marketing of the Issue, which will cover, inter alia: Finalize centers for holding conference for brokers etc Finalise media, marketing and PR strategy Follow up on distribution of publicity and issue materials including form, prospectus and deciding on the quantum of the Issue material Finalise Collection orders Managing the Book and Co-ordination with Stock Exchanges

Enam, JM JM Financial, Kotak Pricing Enam, JM Enam Financial, Kotak The post bidding activities including management of escrow accounts, co- Enam, JM JM ordination of non-institutional allocation, intimation of allocation and Financial, Kotak dispatch of refunds to bidders etc. The post Issue activities of the Issue will involve essential follow up steps, which must include Finalization of listing of instruments and dispatch of certificates and refunds, with the various agencies connected with the work such as Registrars to the Issue, Bankers to the Issue and the bank handling refund business. BRLM shall be responsible for ensuring that these agencies fulfill their functions and enable him to discharge this responsibility through suitable agreements with the Issuer Company.

Credit Rating As this is an issue of Equity Shares, credit rating is not required for the Issue. Trustee As this is an issue of Equity Shares, the appointment of a trustee is not required. Book Building Process The book building, in the context of the Issue, refers to the process of collection of Bids on the basis of the Red Herring Prospectus within the Price Band, which will be decided by the Company, in consultation with the BRLMs, and advertised at least two days prior to the Bid/Issue Opening Date. The Issue Price is finalised after the Bid / Issue Closing Date. The principal parties involved in the Book Building Process are:

67

the Company; the BRLMs; the CBRLMs; the Syndicate Members who are intermediaries registered with SEBI or registered as brokers with BSE/NSE and eligible to act as Underwriters. The Syndicate Members are appointed by the BRLMs; the SCSBs; the Registrar to the Issue; and the Escrow Collection Banks. The Issue is being made through the Book Building Process whereby not more than 50% of the Issue shall be available for allocation on a proportionate basis to QIBs, 5% of the QIB Portion shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allotment on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. Not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid bids being received at or above the Issue Price. In accordance with the SEBI Regulations, QIBs Bidding in the QIB Portion are not allowed to withdraw their Bid(s) after the QIB Bid/Issue Closing Date. For further details, please see the section entitled Terms of the Issue beginning on page 425. The Company will comply with the SEBI Regulations and any other ancillary directions issued by SEBI for this Issue. In this regard, the Company has appointed the BRLMs and the CBRLMs to manage the Issue and procure subscriptions to the Issue. The process of Book Building under the SEBI Regulations is subject to change from time to time and the investors are advised to make their own judgment about investment through this process prior to making a Bid or application in the Issue. Illustration of Book Building and Price Discovery Process (Investors should note that this example is solely for illustrative purposes and is not specific to the Issue and excludes the ASBA process.) Bidders can bid at any price within the price band. For instance, assume a price band of ` 20 to ` 24 per share, issue size of 3,000 equity shares and receipt of five bids from bidders, details of which are shown in the table below. A graphical representation of the consolidated demand and price would be made available at the bidding centres during the bidding period. The illustrative book below shows the demand for the shares of the issuer company at various prices and is collated from bids received from various investors. Bid Quantity 500 1,000 1,500 2,000 2,500 Bid Amount (`) 24 23 22 21 20 Cumulative Quantity 500 1,500 3,000 5,000 7,500 Subscription 16.67% 50.00% 100.00% 166.67% 250.00%

The price discovery is a function of demand at various prices. The highest price at which the issuer is able to issue the desired number of shares is the price at which the book cuts off, i.e., ` 22 in the above example. The issuer, in consultation with the book running lead managers, will finalise the issue price at or below such cut-off price, i.e., at

68

or below ` 22. All bids at or above this issue price and cut-off bids are valid bids and are considered for allocation in the respective categories. Steps to be taken by the Bidders for Bidding: 1. Check eligibility for making a Bid (please see the section entitled Issue Procedure Who Can Bid? on page 433); Ensure that you have a demat account and the demat account details are correctly mentioned in the Bid cum Application Form; Except for Bids on behalf of the Central or State Governments and the officials appointed by the courts, for Bids of all values. Ensure that you have mentioned your PAN Client ID and DP ID in the Bid cum Application Form. In accordance with the SEBI Regulations, PAN would be the sole identification number for participants transacting in the securities market, irrespective of the amount of transaction (please see the section entitled Issue Procedure Permanent Account Number on page 450); Ensure that the Bid cum Application Form and ASBA Bid cum Application Form is duly completed as per instructions given in this Prospectus and in the Bid cum Application Form and ASBA Bid cum Application Form; Bids by QIBs will only have to be submitted to the BRLMs and CBRLMs and/or their affiliates, other than Bids by QIBs who Bid through ASBA process, who shall submit the Bids to the Designated Branches of the SCSBs; and ASBA Bidders will have to submit Bids (physical form) to the Designated Branches. ASBA Bidders should ensure that their bank accounts have adequate credit balance at the time of submission to the SCSB to ensure that the ASBA Bid cum Application Form is not rejected.

2.

3.

4.

5.

6.

Underwriting Agreement After the determination of the Issue Price but prior to filing of the Prospectus with the ROC, we intend to enter into an Underwriting Agreement with the Underwriters for the Equity Shares proposed to be offered through this Issue. It is proposed that pursuant to the terms of the Underwriting Agreement, the BRLMs and CBRLMs shall be responsible for bringing in the amount devolved in the event that their respective Syndicate Members do not fulfill their underwriting obligations. The obligations of the Underwriters shall be several and subject to certain conditions to closing, as specified in the Underwriting Agreement. The Underwriters have indicated their intention to underwrite the following number of Equity Shares: Name and Address of the Underwriters Enam Securities Limited 801/ 802, Dalamal Tower Nariman Point Mumbai 400 021 JM Financial Consultants Private Limited 141, Maker Chambers III Nariman Point, Mumbai 400 021 Kotak Mahindra Capital Company Limited First floor, Bakhtawar 229, Nariman Point, Mumbai 400 021 Edelweiss Capital Limited 14th Floor, Express Towers Indicative Number of Equity shares to be Underwritten 15,00,00,000 Amount Underwritten (` lakhs) 15,000.00

15,00,00,000

15,000.00

14,99,99,900

14,999.99

15,00,00,000

15,000.00

69

Name and Address of the Underwriters Nariman Point Mumbai 400 021 ICICI Securities Limited ICICI Centre H.T. Parekh Marg Churchgate, Mumbai 400 020 Kotak Securities Limited 3rd Floor, Nirlon House Dr. Annie Besant Marg Near Passport Office, Worli Mumbai 400 025

Indicative Number of Equity shares to be Underwritten

Amount Underwritten (` lakhs)

15,00,00,000

15,000.00

100

0.01

The above mentioned amount is indicative underwriting and this would be finalized after the pricing and actual allocation of the Equity Shares. In the opinion of the Board of Directors (based on a certificate given by the Underwriters), the resources of the above mentioned Underwriters are sufficient to enable them to discharge their respective underwriting obligations in full. The above-mentioned Underwriters are registered with SEBI under Section 12(1) of the SEBI Act or registered as brokers with the Stock Exchange(s). On May 3, 2011, the Board of Directors of the Company has accepted and entered into the Underwriting Agreement mentioned above on behalf of the Company. Allocation amongst the Underwriters may not necessarily be in proportion to their underwriting commitments. Notwithstanding the above table, the BRLMs, the CBRLMs and the Syndicate Member shall be responsible for ensuring payment with respect to Equity Shares allocated to investors procured by them. In the event of any default in payment, the respective Underwriter, in addition to other obligations defined in the Underwriting Agreement, will also be required to procure subscriptions for/subscribe to Equity Shares to the extent of the defaulted amount. Notwithstanding the foregoing, the Issue is also subject to obtaining (i) the final approval of the ROC after the Prospectus is filed with the ROC; (i) final listing and trading approvals of the Stock Exchanges, which the Company shall apply for after Allotment.

70

CAPITAL STRUCTURE The share capital of the Company as at the date of this Prospectus is set forth below: (In `, except share data) Aggregate Value at Aggregate Value Face value at Issue Price A) AUTHORISED SHARE CAPITAL 5,00,00,00,000 Equity Shares of ` 10 each B) ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL BEFORE THE ISSUE 82,62,43,700 Equity Shares of ` 10 each C) PRESENT ISSUE IN TERMS OF THIS PROSPECTUS 75,00,00,000 Equity Shares of face value of ` 10 each D) ISSUED, SUBSCRIBED AND PAID UP EQUITY SHARE CAPITAL AFTER THE ISSUE 1,57,62,43,700 Equity Shares of ` 10 each fully paid up shares F) SHARE PREMIUM ACCOUNT Before the Issue After the Issue 50,00,00,00,000

8,26,24,37,000

7,50,00,00,000

7,50,00,00,000

15,76,24,37,000

15,76,24,37,000

Nil Nil

Changes in Authorised Share Capital 1. The initial authorised share capital of ` 1,00,00,000 divided into 10,00,000 Equity Shares was increased to ` 5,00,00,000 divided into 50,00,000 Equity Shares pursuant to the resolution of the shareholders dated August 10, 2007. The authorised share capital of the Company was further increased from ` 5,00,00,000 divided into 50,00,000 Equity Shares to ` 30,00,00,00,000 divided into 3,00,00,00,000 Equity Shares through a resolution passed by the members of the Company at the EGM held on October 11, 2007. The authorised share capital of the Company was further increased from ` 30,00,00,00,000 divided into 3,00,00,00,000 Equity Shares to ` 50,00,00,00,000 divided into 5,00,00,00,000 Equity Shares through a resolution passed by the members of the Company at the EGM held on February 5, 2008.

2.

3.

Notes to Capital Structure 1. (a) Share Capital History The following is the history of the equity share capital and securities premium account of the Company:
No. of Equity Shares Allotted 700 Face Issue Nature of Cumulative Value Price Consideration no. of Equity (`) (`) Shares Cumulative Paid-up Equity share capital (`) Cumulative Share Premium (`) Nature of Allotment

Date of allotment of the Equity Shares August 9, 1996

10

10 Cash

700

7,000 Nil

Issue of shares on subscription to Memorandum

71

Date of allotment of the Equity Shares

No. of Equity Shares Allotted

Face Issue Nature of Cumulative Value Price Consideration no. of Equity (`) (`) Shares

Cumulative Paid-up Equity share capital (`)

Cumulative Share Premium (`)

Nature of Allotment

November 16, 1996 December 5, 1996 June 25, 1997 September 23, 1997 September 25, 1997 February 26, 2002 October 11, 2007 November 28, 2007 January 28, 2008 March 28, 2008 July 23, 2008 January 30, 2010 March 4, 2010 May 29, 2010 August 6, 2010
1

58,000 10,000 1,83,000 72,000 22,000 (52,000)1 47,06,300 22,20,43,700 3,68,00,000 10,00,00,000 50,00,000 16,24,00,000 4,50,00,000 10,00,00,000 15,00,00,000

10 10 10 10 10 10 10 10 10 10 10 10 10 10 10

10 Cash 10 Cash 10 Cash 10 Cash 10 Cash - 10 Cash 10 Cash 10 Cash 10 Cash 10 Cash 10 Cash 10 Cash 10 Cash 10 Cash

58,700 68,700 2,51,700 3,23,700 3,45,700 2,93,700 50,00,000 22,70,43,700 26,38,43,700 36,38,43,700 36,88,43,700 53,12,43,700 57,62,43,700 67,62,43,700 82,62,43,700

5,87,000 Nil 6,87,000 Nil 25,17,000 Nil 32,37,000 Nil 34,57,000 Nil 29,37,000 Nil 5,00,00,000 Nil 227,04,37,000 Nil 263,84,37,000 Nil 363,84,37,000 Nil 368,84,37,000 Nil 531,24,37,000 Nil 576,24,37,000 Nil 676,24,37,000 Nil 826,24,37,000 Nil

and Articles of Association Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment

Buy back of 50,000 Equity Shares from M.J. Raman and 2,000 Equity Shares from K. Sivaprakasam, respectively.

2. (a)

History of the Equity Share Capital held by the Promoters Details of the build up of the Promoters shareholding in the Company:
No. of Equity Shares Issued/Transferred 18,00,000 10,00,00,000 Cumulative No. Face Total Issue / of Equity Value Acquisition (`) Price (`) Shares Future Capital Investment Private Limited 18,00,000 10 1,80,00,000 10,18,00,000 10 100,00,00,000 Nature of Consideration Nature of Transaction

Date of Allotment / Transfer January 28, 2008 May 29, 2010

Cash Cash

Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Purchase

January 30, 2010 March 4, 2010 March 11, 2010

1,94,00,000 4,50,00,000 36,45,000

Future Corporate Resources Limited 1,94,00,000 10 19,40,00,000 6,44,00,000 6,80,45,000 10 10 45,00,00,000 3,64,50,000

Cash Cash Cash

Future Knowledge Services Limited

72

Date of Allotment / Transfer August 6, 2010 January 30, 2010 August 6, 2010 N.A.

No. of Equity Shares Issued/Transferred 2,77,93,700

Cumulative No. of Equity Shares 2,77,93,700

Face Value (`) 10

Total Issue / Acquisition Price (`) 28,08,00,000

Nature of Consideration Cash

Nature of Transaction Purchase

PIL Industries Limited (formerly known as Pantaloon Industries Limited) 12,20,00,000 12,20,00,000 10 122,00,00,000 Cash Pantaloon Retail (India) Limited 15,00,00,000 10 1,50,00,00,000 Kishore Biyani N.A.

Preferential Allotment Preferential Allotment N.A. N.A.

15,00,00,000

Cash

Nil

Nil

N.A.

(b)

Details of Promoters contribution and Lock-in: The Promoters shall contribute Equity Shares in the Issue constituting not less than 20% of the post-Issue capital, which shall be locked in for a period commencing from the date of Allotment in the Issue and shall remain locked-in for a period of (i) three years thereafter, or (ii) three years from the date of complete utilization of the Net Proceeds, or (iii) three years from the date when the Net Proceeds or any part thereof are distributed to the shareholders of the Company in the manner indicated in the section entitled Objects of the Issue beginning on page 82, whichever is later. The requirement regarding lock-in of the Equity Shares for the period of three years from the date of commencement of commercial production shall not be applicable as the Company is not a manufacturing company. The Equity Shares constituting Promoters contribution shall be eligible therefor in terms of the SEBI Regulations. As of the date of this Prospectus, the Promoters hold 46,96,38,700 Equity Shares which constitutes 57% of the pre-Issue paid-up equity share capital of the Company. Out of the aggregate shareholding of the Promoters of 46,96,38,700 Equity Shares, the Promoters have acquired 46,78,38,700 Equity Shares during the one year preceding the date of the Draft Red Herring Prospectus at a price which may be lower than the Issue Price of which 43,64,00,000 Equity Shares (the Available Contribution Shares) are available to be contributed towards minimum Promoters contribution. The Promoters have provided the difference between (a) the acquisition price of Equity Shares to be contributed towards minimum Promoters contribution from the Available Contribution Shares and (b) the Cap Price, for an amount aggregating ` 2,998.12 lakhs. The said amount have been brought into an escrow account at least one day prior to the Bid/Issue Opening Date and will be utilised in accordance with the SEBI Regulations if the conditions specified in Regulation 33(1)(b) of the SEBI Regulations are not complied with. However, since the Issue Price is lower than the Cap Price, the difference between the Issue Price and the Cap Price lying to the credit of the escrow account will be refunded to the Promoters. The Company confirms that the Equity Shares constituting minimum Promoters contribution in the Issue, which shall be locked-in for three years, is eligible for minimum Promoters contribution in terms of the SEBI Regulations. The details of the Equity Shares, which shall be locked-in for a period commencing from the date of Allotment in the Issue and shall remain locked-in for a period of (i) three years thereafter, or (ii) three years from the date of complete utilization of the Net Proceeds, or (iii) three years from the date when the Net Proceeds or any part thereof are distributed to the shareholders of the Company in the manner indicated in the section entitled Objects of the Issue beginning on page 82, whichever is later, are set forth in the table below:

Name of the Promoter

Date of Acquisiti on and when made fully paid-up

Nature of Allotment/ Transfer

Nature of Consideratio n (Cash)

No. of Equity Shares

Face Valu e (`)

Issue/ Acquisitio n Price per Equity Share (`)

Percentag e of preIssue paid-up capital

Percentag e of postIssue paid-up capital

73

Name of the Promoter

Future Capital Investment Private Limited PIL Industries Limited (formerly known as Pantaloon Industries Limited) Pantaloon Retail (India) Limited Total

Date of Acquisiti on and when made fully paid-up May 29, 2010

Nature of Allotment/ Transfer

Nature of Consideratio n (Cash)

No. of Equity Shares

Face Valu e (`)

Issue/ Acquisitio n Price per Equity Share (`)

Percentag e of preIssue paid-up capital

Percentag e of postIssue paid-up capital

Allotment

Cash

4,32,48,740

10

10

5.23

2.74

January 30, 2010

Allotment

Cash

12,20,00,000

10

10

14.77

7.74

August 6, 2010

Allotment

Cash

15,00,00,000

10

10

18.15

9.52

31,52,48,740

38.15

20

The minimum Promoters contribution has been brought to the extent of not less than the specified minimum lot and from the persons defined as Promoters under the SEBI Regulations. The Promoters contribution constituting not less than 20% post-Issue paid-up equity share capital shall be locked-in for a period commencing from the date of Allotment in the Issue and shall remain locked-in for a period of (i) three years thereafter, or (ii) three years from the date of complete utilization of the Net Proceeds, or (iii) three years from the date when the Net Proceeds or any part thereof are distributed to the shareholders of the Company in the manner indicated in the section entitled Objects of the Issue beginning on page 82, whichever is later. (c) Details of pre-Issue Equity Share capital locked in for one year: In addition to the 20% of the post-Issue equity shareholding of the Company held by the Promoters and locked in for three years as specified above, the entire pre-Issue equity share capital will be locked-in for a period of one year from the date of Allotment. (d) Other requirements in respect of lock-in: The Equity Shares held by the Promoters may be transferred to and amongst the Promoter Group or to a new promoter or persons in control of the Company, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations as applicable. The Equity Shares held by person other than the Promoters prior to the Issue may be transferred to any other person holding Equity Shares which are locked-in along with the Equity Shares proposed to be transferred, subject to continuation of the lock-in in the hands of the transferees for the remaining period and compliance with the SEBI Takeover Regulations, as applicable. The Equity Shares held by the Promoters which are locked-in for a period of three years from the date of Allotment in the Issue can be pledged with any scheduled commercial bank or public financial institution as collateral security for loans granted by such banks or institution, provided that the pledge of Equity Shares can be created when the loan has been granted by such bank or financial institution for financing one or more of the objects of the Issue and pledge of Equity Shares is one of the terms of sanction of the loan. The Equity Shares held by the Promoters which are locked-in for a period of one year from the date of

74

Allotment in the Issue can be pledged with any scheduled commercial bank or public financial institution as collateral security for loans granted by such bank or financial institution, provided that the pledge of the Equity Shares is one of the terms of sanction of the loan. 3. The shareholding pattern of the Company The table below presents the shareholding pattern of the Company as on the date of filing this Prospectus:
Total No. of Shares held in Dematerialized Form Total Shareholding as a % of total No. of Shares As a As a % % of of (A+B) (A+B+C) Shares pledged or otherwise encumbered Number of shares As a % of Total No. of Shares

Category of Shareholder

No. of Shareholders

Total No. of Shares

A. 1.

Shareholding of Promoter and Promoter Group Indian Individuals / Hindu Undivided Family Central Government / State Government(s) Bodies Corporate Financial Institutions Any Other (Specify) Sub Total (A1) Foreign Individuals / (Non-Resident Individuals/ Foreign Individuals) Bodies Corporate Institutions Any Other (Specify) Sub Total (A2) Total shareholding of Promoter Promoter Group (A1) + (A2) and

490,638,700

388,838,700

490,638,700

388,838,700

59.38 59.38

59.38 59.38

2.

490,638,700

388,838,700 59.38 59.38 -

B. 1.

Public Shareholding Institutions Mutual Funds / UTI Financial Institutions/ Banks Central Government/ State Government(s) Venture Capital Funds Insurance Companies FIIs Foreign Venture Capital Investors Any Other (specify) Sub Total (B1)

25.62 0.37 14.34 0.16 0.12 0.00 40.62 0 0 0 0 0 0 0

0.00 0.00 0.00 0.00 0.00 0.00 0.00

2.

Non-Institutions Bodies Corporate Individual shareholders holding nominal share capital up to Rs. 1 lakh Individual shareholders holding nominal share capital in excess of Rs. 1 lakh Any Other (Specify) (i) Directors/Relative (ii) Clearing Members (iii) Trusts (iv) NRIs (v) NRN Sub Total (B2)

98 746 605 1 3 2 1,455

211,680,221 3,067,871 118,496,908 1,300,000 1,025,000 35,000 335,605,000

191,030,221 3,042,871 110,796,408 1,300,000 1,025,000 35,000 307,229,500

25.62 0.37 14.34 0.16 0.12 0.00 40.62

75

Category of Shareholder

No. of Shareholders

Total No. of Shares

Total No. of Shares held in Dematerialized Form

Total Shareholding as a % of total No. of Shares As a As a % % of of (A+B) (A+B+C)

Shares pledged or otherwise encumbered Number of shares As a % of Total No. of Shares 0.00 0.00 -

Total Public shareholding (B1) + (B2) Total (A) + (B) C. Shares held by Custodians and against which Depository Receipts have been issued Total (A) + (B) + (C)

1,455 1,461 -

335,605,000 826,243,700 -

307,229,500 696,068,200 -

40.62 100.00 -

40.62 100.00 -

0 0 -

1,461

826,243,700

696,068,200

100.00

100.00

0.00

4. (a) Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.

Equity Shares held by top 10 shareholders As of the date of the Prospectus: Name of the Shareholders Pantaloon Retail (India) Limited PIL Industries Limited Future Capital Investment Private Limited Bennett Coleman And Company Limited* Future Corporate Resources Limited Future Knowledge Services Limited Mixon Holdings Private Limited Manz Retail Private Limited Gujarat Fluorochemicals Limited Aman Overseas Private Limited No. of Equity Shares held 15,00,00,000 12,20,00,000 10,18,00,000 10,00,00,000 6,80,45,000 2,77,93,700 2,50,00,000 2,10,00,000 1,50,00,000 1,50,00,000 Percentage of shareholding 18.15 14.76 12.32 12.10 8.23 3.36 3.02 2.54 1.81 1.81

* Bennett Coleman And Company Limited is a significant shareholder of the Company.

(b) Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. (c) Sr. No.

As of 10 days prior to the date of this Prospectus: Name of the Shareholders Pantaloon Retail (India) Limited PIL Industries Limited Future Capital Investment Private Limited Bennett Coleman And Company Limited Future Corporate Resources Limited Future Knowledge Services Limited Mixon Holdings Private Limited Manz Retail Private Limited Gujarat Fluorochemicals Limited Aman Overseas Private Limited No. of Equity Shares held 15,00,00,000 12,20,00,000 10,18,00,000 10,00,00,000 6,80,45,000 2,77,93,700 2,50,00,000 2,10,00,000 1,50,00,000 1,50,00,000 Percentage of shareholding 18.15 14.76 12.32 12.10 8.23 3.36 3.02 2.54 1.81 1.81

As of two years prior to the date of the Prospectus: Name of the shareholder No. of Equity Shares held Percentage

76

Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 5.

Name of the shareholder Bennett Coleman and Company Limited Pantaloon Future Ventures Limited Mixon Holdings Private Limited (formerly known as AGB Holdings Private Limited) Utpal Hemendra Sheth Gujarat Fluorochemicals Limited Sarika Poddar Hirathakurdas Jhamtani Nilesh Swaroop Lodha and Mukesh Chetram Agarwal Investrick Securities India Private Limited SVG Fashions Limited Employee stock option scheme

No. of Equity Shares held 10,00,00,000 2,77,93,700 2,50,00,000 1,50,00,000 1,50,00,000 1,62,50,000 1,12,00,000 1,05,00,000 1,00,00,000 80,00,000

Percentage 27.11 7.54 6.78 4.07 4.07 4.41 3.04 2.85 2.71 2.17

We have an employee stock option scheme in force titled FVIL Employees Stock Option Plan 2011, which is applicable to the employees* of the Company: ESOP scheme Outstanding Options Nil Remarks

FVIL Employees Stock Option Plan 2011 (ESOP Scheme)

The special resolution passed by the Company at its AGM dated August 10, 2010 approved the grant of up to 5,00,00,000 equity shares (including up to 1,00,00,000 equity shares in aggregate for non-executive directors including independent directors on the Board) of face value of ` 10 each. As per the resolution, the maximum number of stock options under the ESOP Scheme to any employee in any financial year shall not exceed 1% of the paid-up equity share capital of the Company. Details 1,32,80,000 ` 10 Nil Nil 1,32,80,000 Equity Shares Nil Nil Nil 1,32,80,000 Please see Note Nil

Particulars Options granted Exercise price of options Total options vested Options exercised Total number of equity shares that would arise as a result of full exercise of options already granted Options forfeited/ lapsed/ cancelled Variations in terms of options Money realised by exercise of options Options outstanding (in force) Person wise details of options granted to i) Directors and key managerial personnel ii) Any other employee who received a grant in any one year of options amounting to 5% or more of the options granted during the year iii) Identified employees who are granted options, during any one year equal to exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant Fully diluted EPS on a pre-Issue basis pursuant to issue of equity shares on exercise of options calculated in accordance with Accounting Standard (AS) 20 Earning Per Share Vesting schedule

Nil

N.A.

Schedule

Percentage

of

77

Particulars

Lock-in

Impact on profits of the last three years Where the company has calculated the employee compensation cost using the intrinsic value of the stock options, the difference between the employee compensation cost so computed and the employee compensation that shall have been recognised if it had used the fair value of options, shall be disclosed. The impact of this difference on profits and on EPS of the company shall also be disclosed. Weighted average exercise prices and weighted average fair values of options shall be disclosed for options whose exercise price either equals or exceeds or is less than the market price of the stock. A description of the method and significant assumptions used during the year to estimate the fair values of options, including the following weighted average information: (i) risk free interest rate; (ii) expected life; (iii) expected volatility; (iv) expected dividend; and (v) the price of the underlying share in market at the time of option grant The impact on profits and on the EPS of the last three years if the company had followed policies specified in clause 13 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 in respect of options granted in the last three years. The intention of the holders of shares allotted on exercise of options granted under ESOS or allotted under ESPS, to sell their shares within three (3) months after the date of listing of shares in such IPO (aggregate number of shares intended to be sold by option holders), if any, has to be disclosed. In case of ESOS the same shall also be disclosed regardless of whether the shares arise out of options exercised before or after the IPO.

Details the Options which shall vest At the end of one 30% of the year from the aggregate number date of grant of of the options the options granted At the end of two 30% of the years from the aggregate number date of grant of of the options the options granted At the end of 40% of the three years from aggregate number the date of grant of options granted of the options The Equity Shares arising out of exercise of the vested options would not be subject to any lock-in period after such exercise N.A. N.A.

N.A.

N.A.

N.A.

N.A.

*Employee includes (i) permanent employee of the Company working in India or out of India; or (ii) a director of the Company, whether a whole time director or not; or (iii) an employee, as defined in sub-clause (i) or (ii) above, of a Subsidiary, in India or out of India, or of a Holding Company (as defined in the ESOP Scheme), (iii) such other entities or individuals as may be permitted by applicable laws, but excluding (a) an employee who is a promoter or belongs to the promoter group; (b) a director who either by himself or through his relatives or through any body corporate, directly or indirectly holds more than 10% of the issued and subscribed share of the Company.

78

Note:

Sr.No A. 1. 2. B. 1. 2. 3. 4. 5. 6. 7. 6.

Name of the Directors and Key Managerial Personnel Directors G N Bajpai B Anand Key Managerial Personnel Krishan Kant Rathi Praveen Dwivedi Manoj Gagvani Gopal Bihani Meenakshi Maheshwari Devendra Chawla Raminder Singh Rekhi

Number of options granted 2,50,000 10,00,000 82,00,000 5,00,000 2,50,000 2,50,000 2,50,000 5,00,000 5,00,000

The Company, the Directors, the BRLMs and the CBRLMs have not entered into any buy-back arrangements and/or safety net facility for the purchase of Equity Shares from any person. Except Meenakshi Maheshwari who holds 12,500 Equity Shares in her former name, Minakshi Sahay, none of the Directors or key managerial personnel holds any Equity Shares in the Company. None of the directors of the Promoters hold any Equity Shares in the Company. Except as stated below, the Promoters, Directors and their immediate relatives, directors of the Promoters and the Promoter Group entities have not undertaken any transaction of Equity Shares during a period of six months preceding the date on which the Draft Red Herring Prospectus is filed with SEBI:
Name of the Director/ Promoter/ Promoter Group Future Corporate Resources Limited Date of the Transaction No. of Equity Shares Aggregate Transaction Price (`) Transaction Price per Equity Share (`) 10.00 Nature of the Transaction Name of the Transferor / Transferee

7.

8.

Sr. No.

1.

March 2010

11,

36,45,000

3,64,50,000

Purchase

2.

Future Value Retail Limited Future Knowledge Services Limited

August 2010 August 2010

6,

2,77,93,700

28,08,00,000

10.10

Sale

3.

6,

2,77,93,700

28,08,00,000

10.10

Purchase

17,55,000 Equity Shares purchased from Bang Securities Private Limited and 18,90,000 Equity Shares purchased from Wallfort Share & Stock Brokers Private Limited Future Knowledge Services Limited Future Value Retail Limited

9.

Except as stated below, the Company has not issued any Equity Shares during a period of one year preceding the date of the Draft Red Herring Prospectus at a price lower than the Issue price: Date Name of the Allottee Future Corporate Category No. of Equity Shares 1,94,00,000 Face Value 10 Issue Price per Equity Shares (`) 10 Reasons

January

Promoter

Preferential

79

Date

Name of the Allottee Resources Limited Pantaloon Industries Limited Manz Retail Private Limited Future Corporate Resources Limited Future Capital Investment Private Limited Pantaloon Retail (India) Limited

Category

No. of Equity Shares

Face Value

Issue Price per Equity Shares (`)

Reasons

30, 2010 January 30, 2010 January 30, 2010 March 4, 2010 May 29, 2010 August 6, 2010 10.

Allotment Promoter 12,20,00,000 10 10 Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment Preferential Allotment

Group Company Promoter

2,10,00,000 4,50,00,000

10 10

10 10

Promoter

10,00,00,000

10

10

Promoter

15,00,00,000

10

10

No person connected with the Issue shall offer any incentive, whether direct or indirect, in any manner, whether in cash, kind, services or otherwise, to any Bidder. None of the Equity Shares held by the Promoters are pledged. The Company has not raised any bridge loan against the proceeds of the Issue. For details on use of proceeds, please see the section entitled Objects of the Issue beginning on page 82. The Issue is being made through a Book Building Process wherein not more than 50% of the Issue shall be available for allocation on a proportionate basis to Qualified Institutional Buyers, not less than 15% of the Issue shall be available for allocation on a proportionate basis to Non Institutional Bidders and not less than 35% of the Issue shall be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. 5% of the QIB Portion shall be available for allocation to Mutual Funds only and the remaining QIB Portion shall be available for allocation to the QIB Bidders including Mutual Funds subject to valid Bids being received at or above the Issue Price. Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the QIB Portion, the Non-Institutional Portion or the Retail Portion, would be allowed to be met with spill-over from other category or a combination of categories, at the discretion of the Company, in consultation with the BRLMs and the Designated Stock Exchange. A Bidder cannot make a Bid for more than the number of Equity Shares offered through the Issue, subject to the maximum limit of investment prescribed under relevant laws applicable to each category of Bidder. An oversubscription to the extent of 10% of the Issue can be retained for the purposes of rounding off to the nearest multiple of minimum Allotment lot. As on the date of the Prospectus, other than the options granted under the ESOP Scheme, there are no outstanding warrants, options or rights to convert debentures, loans or other financial instruments into the Equity Shares. The Company does not propose to undertake any further issue of capital whether by way of issue of bonus shares, preferential allotment, rights issue or in any other manner during the period commencing from submission of this Prospectus to SEBI until the Equity Shares issued pursuant to the Issue have been listed. The Company presently does not intend or propose to alter the capital structure for a period of six months from the Bid/Issue Opening Date, by way of split or consolidation of the denomination of Equity Shares or

11. 12.

13.

14.

15.

16.

17.

18.

80

issue of Equity Shares (including any issue of securities convertible into or exchangeable, directly or indirectly, for Equity Shares) on a preferential basis or issue of bonus or rights or further public issue of Equity Shares or qualified institutions placement otherwise. However, if the Company enters into acquisitions, joint ventures or other arrangements, the Company may, subject to necessary approvals, consider raising additional capital to fund such activity or use Equity Shares as currency for acquisition or participation in such joint ventures. 19. There will be only one denomination of the Equity Shares of the Company unless otherwise permitted by law and the Company shall comply with such disclosure and accounting norms as may be specified by SEBI from time to time. As on the date of the Prospectus, the Company had 1,461 members. None of the Promoters, Promoter Group and Group Companies will participate in the Issue. As on the date of the Prospectus, the Company has not issued any Equity Shares out of revaluation reserves or for consideration other than cash. Further, as on the date of the Prospectus, the Company has not issued any Equity Shares in terms of any scheme approved under Sections 391-394 of the Companies Act. Equity Shares being issued in this Issue will be fully paid up at the time of Allotment failing which no allotment shall be made. The Company has not entered into any financing arrangements whereby the Promoter Group, the directors of the Promoters, and Directors and their immediate relatives have financed the purchase by any other person of the Equity Shares of the Company other than in the normal course of business of financing the entity, during the period of six months preceding the date of filing of the Draft Red Herring Prospectus.

20. 21. 22.

23.

24.

81

OBJECTS OF THE ISSUE The objects of the Issue are the following: (a) (b) (c) To create, build, invest in or acquire, and operate Business Ventures; For general corporate purposes; and To meet the issue expenses and achieve the benefits of listing on the Stock Exchanges.

The details of the proceeds of the Issue are summarized in the table below: Particulars Proceeds from the Issue Issue Related Expenses Net Proceeds The intended use of the Net Proceeds of the Issue is summarized in the table below. Requirement of Funds To create, build, invest in or acquire, and operate Business Ventures General corporate purposes TOTAL In ` lakhs 53,135.56 17,711.85 70,847.41 In ` lakhs 75,000.00 4,152.59 70,847.41

The main objects clause and the objects incidental or ancillary to the main objects clause of the Companys Memorandum of Association enable the Company to undertake its existing activities and the activities for which the funds are being raised in the Issue. The funds requirement detailed above has not been appraised by any bank, financial institution or other independent agency and is based on management estimates. The intended use of proceeds as described above is based on the current plans as envisaged by the management of the Company. In view of the dynamic and competitive environment of the industry in which the Company operates and depending on the availability of suitable investment opportunities, costs and market conditions, the above plans may be revised at the discretion of management. Means of Finance The entire requirement of funds towards objects of the Issue will be met from the Net Proceeds of the Issue. Details of the Use of Proceeds Create, build, invest in or acquire, and operate Business Ventures In accordance with the business objectives and strategy of the Company as described in this Prospectus, the Company seeks to create, build, invest in or acquire, and operate innovative and emerging businesses in Indias rapidly growing consumption-led sectors, which it defines as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. In addition to allocating and providing capital, the Company intends to create, operationally manage and/or strategically mentor these businesses, which it refers to as its Business Ventures. The Company intends to exercise operational control or influence in the business ventures that it promotes or in which it acquire interests. The Company seeks to pursue opportunities at various stages of the enterprise growth cycle, from nascent to more mature businesses, with a view towards medium- to long-term value creation for its shareholders. Further, the Company may utilise the Net Proceeds for undertaking follow-on investments in the existing Business Ventures and other short-term business opportunities wherever appropriate. We propose to undertake investments through various mechanisms including investing in equity, equity-linked instruments and/ or debt.

82

The management expects to deploy the Net Proceeds into short term opportunities immediately upon completion of the Issue and would gradually deploy proceeds into Business Ventures. The cost of the Companys participation in Business Ventures and other assets would also include costs for advisors, consultants, auditors, legal counsel, brokerage, custody and other costs attributable to such opportunities. Please also refer to the sections entitled Business Overview, Business Strategy and Business Business Sourcing Process beginning on pages 116, 122 and 123, respectively, for more details. General Corporate Purposes The Company intends to deploy the balance Net Proceeds aggregating ` 17,711.85 Lakhs for general corporate purposes, including but not limited to, brand building exercises, business promotional and development activities or any other purposes as approved by the Board and subject to compliance with the necessary provisions of the Companies Act. Estimated Issue Expenses The expenses of the Issue include, among others, brokerage, underwriting and management fees, printing and distribution expenses, legal fees, advertisement and marketing expenses and listing fees. The estimated Issue expenses are as follows: Expenses In ` lakhs 1,825.75 1,171.15 418.05 737.65 4,152.59 Expense break-up(1) % of total Issue % of total expenses Issue size 43.97 2.43 28.20 1.56 10.07 0.56 17.76 0.98 100.00 5.54

Lead management fees, brokerage and underwriting commissions Advertising and marketing expenses Printing and stationery Others (Registrars fee, Monitoring Agencys fees, IPO grading agency fees, legal fee, listing fee, insurance, etc.) Total estimated Issue expenses Utilisation of Issue Proceeds

The Company undertakes to utilise the Net Proceeds within three years from the date of Allotment of Equity Shares in the Issue. In the event any part of the Net Proceeds is not utilised towards the Objects of the Issue within three years from the date of Allotment of Equity Shares in the Issue, the Company shall distribute the unutilised portion of the Net Proceeds to the shareholders of the Company as on the record date specified for the same, subject to compliance with the Companies Act and other applicable provisions of law. The methodology of distribution of the unutilised portion to the shareholders shall be in conformity with applicable laws and regulations and may be in an appropriate manner, such as buyback of equity shares, reduction or restructuring of capital, special dividend or a combination thereof. The Board of Directors shall finalise the mode of repayment prior to the expiry of the said period of three years. The details of modalities of repayment, the record date for the purpose and other details shall be provided to the shareholders through public announcement and informing the stock exchanges on which the Equity Shares are listed at that time. Disclosure of acquisitions The Company shall inform public of any acquisition undertaken by it through an announcement and intimation to the stock exchanges on which the Equity Shares are listed. On consummation of a successful acquisition, the following details of the target company shall be disclosed in the announcements regarding the acquisition and to the stock exchanges:

83

(i)

material details of the business undertaken by the target company, except the details which are either confidential or the disclosure whereof may be prejudicial to the interests of the target company; relationship, if any, of the target company with the Promoters and/or Promoter Group; and the impact of the acquisition on the Company.

(ii) (iii)

Further, the aforesaid disclosure requirement would be applicable till the earlier of when the Net Proceeds are utilized or the Net Proceeds or any part thereof as applicable, is distributed to the shareholders of the Company in the manner disclosed in this section, as the case maybe. Prior approval of the shareholders The Company shall obtain prior approval of the shareholders of the Company before undertaking any acquisition, where the quantum of such acquisition exceeds 20% of the Net Proceeds. The notice for such shareholders meeting shall contain the following details of the target company, except details which are either confidential or disclosure whereof may be prejudicial to the interests of the target company or where such disclosure may be restricted by law or any regulatory authority in any legal proceedings: (i) (ii) (iii) (iv) financials of the target company for five fiscal years prior to the date of the shareholders meeting; relationship, if any, of the target company with the promoters and/ or promoter group of the Company; valuation for acquiring the target company; and the impact of the acquisition on the Company.

The aforesaid requirement of the shareholders approval would be applicable till such time that the Net Proceeds are utilized or the Net Proceeds or any part thereof, as applicable, are distributed to the shareholders of the Company in the manner disclosed in this section, as the case maybe. Monitoring of utilization of funds The Company has appointed Allahabad Bank as the Monitoring Agency for the Issue, in terms of the SEBI Regulations. The Monitoring Agency along with the Board will monitor the utilisation of the proceeds of the Issue. The Board shall monitor the utilization of the Net Proceeds of the Issue. The Company will disclose the details of the utilization of the Net Proceeds, including interim use, under a separate head in the financial statements of the Company specifying the purpose for which such proceeds have been utilized or otherwise disclosed as per the disclosure requirements of the listing agreements with the Stock Exchanges, and in particular clauses 43A and 49 of the listing agreement. In compliance with the SEBI Regulations, until the proceeds of the Issue have been entirely utilized, the monitoring agency shall file a monitoring report with the Company on a half yearly basis, which report together with the managements comments thereon shall be placed by the Company before the Audit Committee. The Company shall disclose to the Audit Committee, the uses and application of funds under the heads as specified above, on a quarterly basis as a part of the quarterly declaration of financial results. Further, on an annual basis, the Company shall prepare a statement of funds utilized for purposes other than those stated above, if any, and place it before the Audit Committee. Such disclosure shall be made only until such time that the full money raised through the Issue has not been fully spent. This statement shall be certified by the statutory auditors of the Company. The Audit Committee shall make appropriate recommendations to the Board to take up steps in this matte Appraisal Report None of the activities for which the Net Proceeds will be utilised have been financially appraised and the estimates mentioned above are based on internal estimates of the Company.

84

Working Capital Requirement The Net Proceeds will not be used to meet the working capital requirements of the Company as it expects to have internal accruals to meet its existing working capital requirements. Shortfall in Issue Proceeds In the event of any shortfall, the quantum of funds to be deployed in Business Ventures by the Company would be reduced accordingly. Interim Use of Proceeds The management of the Company, in accordance with the policies established by the Board, will have flexibility in deploying the proceeds received from the Issue. Pending utilization of the proceeds of the Issue for the purposes described above, we intend to temporarily invest the funds in quality interest bearing liquid instruments including deposits with banks and other debt securities. Such investments would be in accordance with the business and investment policies approved by the Board of Directors or the Executive Committee from time to time. Except as disclosed in the Prospectus, including with respect to the payment of service fee to the Consultant, which is also one of our Promoters, no part of the Net Proceeds is intended to be paid by the Company as consideration to the Promoters, the Directors, the Companys key managerial personnel or companies promoted by the Promoters except in the ordinary course of business.

85

BASIS FOR ISSUE PRICE The Issue Price of ` 10 has been determined by the Company, in consultation with the BRLMs, on the basis of the assessment of market demand for the offered Equity Shares by the Book Building Process. The face value of the Equity Shares is ` 10 each and the Issue Price is 1 time of the face value. Qualitative Factors Some of the qualitative factors which form the basis for computing the prices are: Synergy with the Future Group Uniquely positioned to access opportunities in consumption-led sectors Access to diverse growth businesses through long-term and liquid investment opportunities Brand equity of certain of our Business Ventures Experienced management team For further details regarding some of the qualitative factors, which form the basis for computing the Issue Price, please see the sections entitled Risk Factors and Business - Strengths beginning on pages 12 and 118, respectively. Quantitative Factors 1. (a) Basic and Diluted Earnings per share (EPS) - Standalone Weight 3 2 1

Period Basic and Diluted EPS (`) Fiscal 2010 0.46 Fiscal 2009 (0.30) Fiscal 2008 (0.50) 0.05 Weighted Average Nine months ended December 0.01* 31, 2010 *Not Annualised

Note: Basic & Diluted Earnings per Share = Restated Net Profit/ (Loss) after Tax / Weighted average no. of equity shares outstanding during the period/year. (b) Basic and Diluted Earnings per share (EPS) - Consolidated Weight 3 2 1

Period Basic and Diluted EPS (`) Fiscal 2010 (0.23) Fiscal 2009 (1.49) Fiscal 2008 (0.98) (0.78) Weighted Average Nine months ended December (0.20)* 31, 2010 *Not Annualised

Note: Basic & Diluted Earnings per Share = Restated Net Profit/ (Loss) after tax & share of Associates and minority interest / Weighted average no. of equity shares outstanding during the

86

period/year. (i) EPS calculations have been done in accordance with Accounting Standard 20 notified by the Central Government of India under the Companies (Accounting Standards) Rules, 2006 -Earning per share. The face value of each Equity Share is ` 10.

(ii) 2. Sr. No. 1. 2. 3.

#

Price Earnings Ratio (P/E) in relation to the Issue price of ` 10 per share Particulars P/E ratio based on basic and diluted EPS for the Fiscal 2010 at the Issue Price: P/E ratio based on Weighted average EPS at the Issue Price: Industry P/E
There are no listed companies with similar business in India *As the EPS is negative

Standalone 21.74 200.00 N.A.#

Consolidated -* -* N.A.#

3.

(a)

Return on Networth (RoNW) Standalone RoNW (%) 3.18 (3.17) (1.20) 0.33 0.13* Weight 3 2 1

Period Fiscal 2010 Fiscal 2009 Fiscal 2008 Weighted Average Nine months ended December 31, 2010
*Not Annualised

(b)

Return on Networth (RoNW) Consolidated RoNW (%) (1.78) (17.84) (2.39) (7.24) (1.99)* Weight 3 2 1

Period Fiscal 2010 Fiscal 2009 Fiscal 2008 Weighted Average Nine months ended December 31, 2010
*Not Annualised

4.

Minimum Return on Net Worth after Issue needed to maintain Pre-Issue EPS for the year ended March 31, 2010, at the Issue Price on basic and diluted EPS of 4.59% and (2.44)% based on standalone and consolidated financial statements respectively. Net Asset Value NAV (Consolidated) as at December 31, 2010 NAV (Standalone) as at December 31, 2010 Issue Price NAV (Consolidated) after the Issue NAV (Standalone) after the Issue : ` 8.94 per Equity Share : ` 10.03 per Equity Share : ` 10 per Equity Share : ` 9.44 per Equity Share : ` 10.02 per Equity Share

5.

6.

Comparison with other listed companies

87

There are no listed companies with similar business in India, hence this comparison is not possible. The Issue Price of ` 10 has been determined by the Company, in consultation with the BRLMs, on the basis of assessment of market demand for the Equity Shares offered through the Book Building Process and is justified based in view of the qualitative and quantitative parameters. For further details, please see the section entitled Risk Factors beginning on page 12 and the financials of the Company including important profitability and return ratios, as set out in the section entitled Financial Statements beginning on page 230.

88

STATEMENT OF TAX BENEFITS May 3, 2011 Future Ventures India Limited 5th Floor, A Wing, Equinox Business Park, Old Swan Mill Compound, LBS Marg, Kurla (W), Mumbai: 400 070. Dear Sirs, Initial Public Offer of Equity Shares Prospectus Tax benefits We refer to the proposed Initial Public Offer of the shares of Future Ventures India Limited, (the company). We enclose herewith the statement showing the current position of tax benefits available to the company and to its shareholders as per the provisions of the Income-tax Act, 1961 and the Wealth-tax Act, 1957 for inclusion in the Prospectus for the proposed initial public offer of shares. The current position of tax benefits available to the company and to its shareholders is provided for general information purposes only. In view of the individual nature of tax benefits, each investor is advised to consult its own tax consultant with respect to the specific tax implications arising out of its participation in the issue. Unless otherwise specified, sections referred to below are sections of the Income-tax Act, 1961 (the Act). All the provisions set out below are subject to conditions specified in the respective sections. The tax benefits mentioned below are restricted to the provisions of the Income Tax Act, 1961 and Wealth Tax Act, 1957 presently in force and no discussion is made from the perspective of Direct Tax Code which is proposed to be implemented from 1st April 2012. We hereby give our consent to include enclosed statement regarding the tax benefits available to the company and to its shareholders in the Prospectus for the proposed initial public offer of equity shares which the company intends to submit to the Securities and Exchange Board of India. LIMITATIONS Our views expressed in the statement enclosed are based on the facts and assumptions indicated above. No assurance is given that the revenue authorities / courts will concur with the views expressed herein. Our views are based on the existing provisions of law and its interpretation, which are subject to change from time to time. We do not assume responsibility to update the views consequent to such changes. The views are exclusively for the use of Future Ventures India Limited and shall not, without our prior written consent, be disclosed to any other person. Yours faithfully,

Deloitte Haskins & Sells Encl:

89

STATEMENT OF TAX BENEFITS AVAILABLE TO FUTURE VENTURES INDIA LIMITED (THE COMPANY) AND ITS SHAREHOLDERS A. SPECIAL TAX BENEFITS TO THE COMPANY NIL B. GENERAL TAX BENEFITS TO THE COMPANY These benefits are available to all companies after fulfilling certain conditions as required in the respective Act. 1. In accordance with section 10(34), dividend income (referred to in section 115-O) received by the company will be exempt from tax. Income received in respect of the units of mutual fund specified under section 10(23D) or income received in respect of units from administrator of the specified undertakings or income received in respect of units from the specified company is exempt from tax in the hand of the company, under section 10(35) of the Act. In accordance with section 32 of the Act, the company is entitled to claim depreciation on specified tangible (being Buildings, Plant & Machinery, Computer and Vehicles) and intangible assets (being Knowhow, Copyrights, Patents, Trademarks, Licenses, Franchises or any other business or commercial rights of similar nature) owned by it and used for the purpose of its business. In case of any new plant and machinery (other than ships and aircraft) that is acquired and installed by the company engaged in the business of manufacture or production of any article or thing, the company will be entitled to a further sum equal to twenty per cent of the actual cost of such machinery or plant subject to conditions specified in section 32 of the Act. The unabsorbed depreciation, if any, can be adjusted against any other income and can be carried forward for set-off with the income of future years. 4. In accordance with section 35D, the company is eligible for deduction in respect of specified preliminary expenditure incurred by the company in connection with extension of its undertaking or in connection with setting up a new unit for an amount equal to 1/5th of such expenses for each of the five successive previous years beginning with the previous year in which the extension of the undertaking is completed or the new unit commences production or operation, subject to conditions and limits specified in that section. In accordance with section 35DDA, the company is eligible for deduction in respect of payments made to its employees in connection with his voluntary retirement for an amount equal to 1/5th of the amount so paid for that previous year, and the balance in four equal instalments for each of the succeeding previous years subject to conditions specified in that section. In case of loss under the head Profit and Gains from Business or Profession, it can be set-off with other income under Section 71 and the excess loss, if any can be carried forward and set-off against future business income of the next eight assessment years under section 72 of the Act. The amount of tax paid under section 115JB by the company, for any assessment year beginning on or after 1st April 2006, will be available as credit for ten years succeeding the assessment year in which Minimum Alternative Tax credit becomes allowable in accordance with the provisions of section 115JAA of the Act.

2.

3.

5.

6.

7.

90

8.

If the company invests in the equity shares of another company, as per the provisions of section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. However such income shall be taken into account in computing the Minimum Alternative Tax on book profit payable under section 115JB of the Act. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be set-off against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be the lower of: (a) 20 per cent (plus applicable surcharge and education cess and secondary & higher education cess) of the capital gains as computed after indexation of the cost. or 10 per cent (plus applicable surcharge and education cess and secondary & higher education cess) of the capital gains as computed without indexation.

9.

10.

11.

(b)

Tax on distributed profits of domestic companies under section 115-O The tax rate is 15% (plus applicable surcharge and education cess and secondary & higher education cess) Per sub-section (1A) to section 115O, the domestic company will be allowed to set-off the dividend received from its subsidiary company during the financial year against the dividend distributed by it, while computing the Dividend Distribution Tax (DDT) if: the dividend is received from its subsidiary; the subsidiary has paid the DDT on the dividend distributed; the domestic company is not a subsidiary of any other company. Provided that the same amount of dividend shall not be taken into account for reduction more than once. For the purpose of this sub-section, a company shall be a subsidiary of another company, if such other company holds more than half in nominal value of the equity share capital of the company. Tax Rates for the Financial Year 2010-11 The tax rate is 30%. The surcharge at the rate of 7.5% is applicable, only if the total income exceeds ` 1 Crore.

91

Education cess and secondary & higher education cess is 3%. Tax Rates for the Financial Year 2011-12 The tax rate is 30%. The surcharge at the rate of 5% is applicable, only if the total income exceeds ` 1 Crore. Education cess and secondary & higher education cess is 3%. C. SPECIAL TAX BENEFITS TO THE SHAREHOLDERS OF THE COMPANY NIL D. GENERAL TAX BENEFITS TO THE SHAREHOLDERS OF THE COMPANY These benefits are available to the shareholders of any company after fulfilling certain conditions as required in the respective Act. (I) A. Under the Income-tax Act Residents 1. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. Under Section 10(32) of the Act, any income of minor children clubbed in the total income of the parent under section 64(1A) of the Act will be exempted from tax to the extent of ` 1,500 per minor child. Shares of the company held as capital asset for a period of more than twelve months preceding the date of transfer will be treated as a long term capital asset. In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax including equity shares offered for Sale under this issue which is subject to securities transaction tax at the time of sale. However in case of a corporate shareholder, such income shall be taken into account in computing the Minimum Alternate Tax on book profit, payable under section 115JB of the Act. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company and on which securities transaction tax is not payable, the tax payable on the capital gains shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed ` 50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains
1

2.

3.

4.

As prescribed in Finance Bill 2011

92

of the year in which the specified asset is transferred. 5. In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family on which securities transaction tax is not payable, shall be exempt from capital gains tax, if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available, if the individual or Hindu Undivided Familyowns more than one residential house, other than the new residential house, on the date of transfer of the shares; or purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares;

and the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property.

If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be setoff against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be the lower of: (a) 20 per cent (plus education cess and secondary & higher education cess) of the capital gains as computed after indexation of the cost or

7.

8.

93

(b)

10 per cent (plus education cess and secondary & higher education cess) of the capital gains as computed without indexation.

Tax Rates for the Financial Year 2010-11: For Individuals, HUFs, BOl and Association of Persons: Slab of income (`) 0 160,000 160,001 500,000 500,001 800,000 800,001 and above Nil 10% 20% 30% Rate of tax (%)

Notes: (i) (ii) (iii)

In respect of women residents below the age of 65 years, the basic exemption limit is ` 190,000. In respect of senior citizens resident in India, the basic exemption limit is ` 240,000. Education cess and secondary & higher education cess will be levied at the rate of 3 % of Income tax.
2

Tax Rates for the Financial Year 2011-12 : For Individuals, HUFs, BOl and Association of Persons: Slab of income (`) 0 180,000 180,001 500,000 500,001 800,000 800,001 and above Nil 10% 20% 30% Rate of tax (%)

Notes: (i) (ii) (iii) (iv)

In respect of women residents below the age of 60 years, the basic exemption limit is ` 190,000. In respect of senior citizens resident in India, the basic exemption limit is ` 250,000. In respect of very senior citizens resident in India (individuals who are 80 years or more), the basis exemption limit is ` 500,000. Education cess and secondary & higher education cess will be levied at the rate of 3 % of Income tax.

As prescribed in Finance Bill 2011

94

B.1

Non-Residents 1. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. In accordance with section 48, capital gains arising out of transfer of capital assets being shares in the company acquired in foreign currency, shall be computed by converting the cost of acquisition, expenditure in connection with such transfer and the full value of the consideration received or accruing as a result of the transfer into the same foreign currency as was initially utilised in the purchase of the shares and the capital gains computed in such foreign currency shall be reconverted into Indian currency, such that the aforesaid manner of computation of capital gains shall be applicable in respect of capital gains accruing/arising from every reinvestment thereafter and sale of shares or debentures of an Indian company including the Company. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company and on which securities transaction tax is not payable, the tax payable on the capital gains shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed ` 50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 5. In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family and on which securities transaction tax is not payable, shall be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available if the individual or Hindu Undivided Familyowns more than one residential house, other than the new residential house, on the date of transfer of the shares; or purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares;

2.

3.

4.

and

the income from such residential house, other than the one residential house

95

owned on the date of transfer of the original asset, is chargeable under the head Income from house property. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be setoff against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the Non Resident shareholder has an option to be governed by the provisions of the Tax Treaty, if they are more beneficial than the domestic law, wherever India has entered into Double Taxation Avoidance Agreement with the relevant country for avoidance of double taxation of income. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus applicable surcharge and education cess and secondary & higher education cess) and (ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income. In accordance with section 112, the tax on capital gains on transfer of listed shares, where the transaction is not subject to securities transaction tax, held as long term capital assets will be at the rate of 20% (plus applicable surcharge and education cess) with the benefit of indexation and at the rate of 10 % (plus applicable surcharge and education cess) without the benefit of indexation. A non-resident will not be eligible for adopting the indexed cost of acquisition and the indexed cost of improvement for the purpose of computation of long-term capital gain on sale of shares. However, a view is possible based on the proviso to section 112 and recent rulings that in case of listed securities or units, such gains could be taxed at 10% (plus applicable surcharge and education cess and secondary & higher education cess) without the benefit of indexation. B.2 Non-Resident Indians Further, a Non-Resident Indian has the option to be governed by the provisions of Chapter XII-A of the Income-tax Act, which reads as under: 1. In accordance with section 115D r.w.s 115E, income from investment or income from long-term capital gains on transfer of assets other than specified asset shall be taxable at the rate of 20% (plus education cess and secondary & higher education cess). Income

7.

8.

9.

96

by way of long term capital gains in respect of a specified asset (as defined in Section 115C(f) of the Act), shall be chargeable at 10% (plus education cess and secondary & higher education cess) . However, in accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. 2. In accordance with section 115F, subject to the conditions and to the extent specified therein, long-term capital gains arising from transfer of shares of the company acquired out of convertible foreign exchange, and on which securities transaction tax is not payable, shall be exempt from capital gains tax, if the net consideration is invested within six months of the date of transfer in any specified asset. If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration shall be exempt In accordance with section 115G, it is not necessary for a Non-Resident Indian to file a return of income under section 139(1), if his total income consists only of investment income earned on shares of the company acquired out of convertible foreign exchange or income by way of long-term capital gains earned on transfer of shares of the company acquired out of convertible foreign exchange, and the tax has been deducted at source from such income under the provisions of Chapter XVII-B of the Income-tax Act. Under section 115H of the Act, where a Non-Resident Indian becomes assessable as a resident in India, he may furnish a declaration in writing to the Assessing Officer along with his return of income under section 139 for that assessment year to the effect that the provisions of Chapter XII-A shall continue to apply to him in relation to such investment income derived from the specified assets for that assessment year and for every subsequent assessment year until the transfer or conversion into money of such assets. In accordance with section 115-I, where a Non-Resident Indian opts not to be governed by the provisions of Chapter XII-A for any assessment year, his total income for that assessment year (including income arising from investment in the company) will be computed and tax will be charged according to the other provisions of the Income-tax Act. In accordance with section 10(34), dividend income declared, distributed or paid by the company (referred to in section 115-O) will be exempt from tax. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company on which securities transaction tax is not payable, shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed ` 50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred.

3.

4.

5.

6.

7.

97

8.

In accordance with section 54F, long-term capital gains arising on the transfer of the shares of the company held by an individual or Hindu Undivided Family on which securities transaction tax is not payable, shall be exempt from capital gains tax if the net consideration is utilised, within a period of one year before, or two years after the date of transfer, in the purchase of a new residential house, or for construction of a residential house within three years. Such benefit will not be available if the individual or Hindu Undivided Familyowns more than one residential house, other than the new residential house, on the date of transfer of the shares; or purchases another residential house, other than the new residential house, within a period of one year after the date of transfer of the shares; or constructs another residential house, other than the new residential house, within a period of three years after the date of transfer of the shares;

and the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head Income from house property.

If only a part of the net consideration is so invested, so much of the capital gains as bears to the whole of the capital gain the same proportion as the cost of the new residential house bears to the net consideration shall be exempt. If the new residential house is transferred within a period of three years from the date of purchase or construction, the amount of capital gains on which tax was not charged earlier, shall be deemed to be income chargeable under the head Capital Gains of the year in which the residential house is transferred. 9. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be setoff against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the NRI shareholder has an option to be governed by the provisions of the tax treaty, if they are more beneficial than the domestic law wherever India has entered into Double Taxation Avoidance Agreement (DTAA) with the relevant country for avoidance of double taxation of income. In accordance with section 111A, capital gains arising from the transfer of a short term asset being an equity share in a company and such transaction is subject to securities transaction tax, the tax payable on the total income shall be the aggregate of (i) the amount of income-tax calculated on such short term capital gains at the rate of 15% (plus education cess and secondary & higher education cess) and (ii) the amount of incometax payable on the balance amount of the total income as if such balance amount were the total income.

10.

11.

C.

Foreign Institutional Investors (FIIs) 1. In accordance with section 10(34), dividend income declared, distributed or paid by the

98

company (referred to in section 115-O) will be exempt from tax in the hands of Foreign Institutional Investors (FIIs). 2. In accordance with section 10(38), any income arising from the transfer of a long term capital asset being an equity share in a company is not includible in the total income, if the transaction is subject to securities transaction tax. In accordance with section 115AD, FIIs will be taxed at 10% (plus applicable surcharge and education cess) on long-term capital gains, if securities transaction tax is not payable on the transfer of the shares and at 15% (plus applicable surcharge and education cess and secondary & higher education cess) on short-term capital gains arising on the sale of the shares of the company which is subject to securities transaction tax. Under section 196D(2) of the Act, no deduction of tax at source will be made in respect of income by way of capital gain arising from the transfer of securities referred to in section 115AD of the Act. In accordance with section 54EC, long-term capital gains arising on transfer of the shares of the company on which securities transaction tax is not payable, shall be exempt from tax if the gains are invested within six months from the date of transfer in the purchase of a long-term specified asset. The long-term specified assets notified for the purpose of investment are bonds of Rural Electrification Corporation Ltd. (REC) and National Highways Authority of India (NHAI). Investment in these specified assets cannot exceed ` 50 lakhs during any financial year. If only a part of the capital gain is so invested, the exemption would be limited to the amount of the capital gain so invested. If the specified asset is transferred or converted into money at any time within a period of three years from the date of acquisition, the amount of capital gains on which tax was not charged earlier shall be deemed to be income chargeable under the head Capital Gains of the year in which the specified asset is transferred. 6. As per the provision of section 71, if there is a loss under the head Capital Gains, it cannot be set-off with the income under any other head. Section 74 provides that the short term capital loss can be carried forward and set-off against both short term and long term capital gain of the next eight assessment years. But long term capital loss cannot be setoff against short term capital gain. The unabsorbed long term capital loss can be carried forward for next eight assessment years and can be set off against the long term capital gains in subsequent years. As per the provisions of section 90, the FII has an option to be governed by the provisions of the tax treaty, if they are more beneficial than the domestic law wherever India has entered into Double Taxation Avoidance Agreement with the relevant country for avoidance of double taxation of income.

3.

4.

5.

7.

D.

Persons carrying on business or profession in shares and securities. Income arising from carrying on business or profession in shares and securities would be taxable as Income from business or profession. The securities transaction tax paid in respect of securities transaction entered during the course of business will be available as deduction under section 36(1)(xv) while computing the taxable business income.

E.

Mutual Funds In accordance with section 10(23D), any income of:

99

(i)

a Mutual Fund registered under the Securities and Exchange Board of India Act, 1992 or regulations made there under; such other Mutual Fund set up by a public sector bank or a public financial institution or authorised by the Reserve Bank of India subject to such conditions as the Central Government may, by notification in the Official Gazette, specify in this behalf,

(ii)

- will be exempt from income-tax. F. Venture Capital Companies / Funds In accordance with section 10(23FB) any income of a venture capital company or venture capital fund (registered under the Securities and Exchange Board of India Act, 1992 and regulations made thereunder and notified in this behalf) from investment in a venture capital undertaking will be exempt from income tax. (II) Under the Wealth Tax Asset as defined under section 2(ea) of the Wealth-tax Act, 1957 does not include shares in companies and hence, these are not liable to wealth-tax.

100

SECTION IV: ABOUT THE COMPANY INDUSTRY Growth in Indian Economy India has witnessed a sustained average growth of 6% in GDP since 1991. Despite the global economic recession in 2008, in 2009-10 the Indian GDP grew by 7.2%. The Indian economy has shown an expected resilience, with no failed financial institutions, no industry wide bankruptcies, no massive layoffs, no significant increase in consumer loan defaults, Indias public sector has shown amazing resilience to withstand the turbulence in the environment. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009) India Gross domestic product (INR 000 millions)

29,670

32,490

35,650

38,930

41,550

44,530

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

GDP at factor cost, 2004-2005 prices (Source: Indian Economic Survey 2009) The Indian economy was the 12th largest in the world in 2008 and is poised to become the 4 th largest in by 2030. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). The Indian consumption market With increase in per capita income the per capita consumption in India has been steadily increasing as illustrated below:

101

Per capita income and consumption: 2004-2005 prices (INR)

Per capita income Per capita consumption 37,328 35,695 40,745 23,626

29,745

32,012

34,533

17,620

18,909

20,168

21,841

23,012

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

(Source: Indian Economic Survey 2009) Consumption has played a bigger role in Indias growth story than in other developing countries in Asia. At an earlier stage, India has entered a virtuous long term cycle in which rising incomes lead to increasing consumption, which, in turn, creates more business opportunities and employment, further fueling GDP and income growth. This is further highlighted by Indias resilience to global economic recession which illustrates the importance of domestic consumption for sustainable growth in India. Indias GDP is poised for an average growth of 8-9% which will fuel private consumption. The estimated growth in GDP and private consumption is given below:
9.7%

GDP Growth
9.1% 7.9% 8.5% 6.1% 6.1% 7.0% 7.0% 8.1% 7.2% 7.5% 7.5% 7.5% 8.5% 8.5% 9.0% 9.0%

9.3%

7.1% 6.3% 5.6% 2.9% 1.6% 5.2%

Private Consumption

FY2006

2007

2008

2009

2010Q1

2010Q2

2010

2011P

2012P

2013P

2014P

2015P

GDP is estimated to be US$ 1777 billion and consumption is set to double by 2015. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009) Key characteristics of the Indian consumer market: Growing Aspiring Middle Class and High Income Segment: Rising incomes have lead to a higher proportion of aspiring middle class households. India is expected to experience tremendous consumption growth in its booming middle class and upper classes. The expected change in income demographics is given in the chart below:

102

Increasing Income Levels

100% 80% 60% 40% 20% 0% 6 1985 Globals (> US $25000) Aspirers (US $2250 - 5000) 41 18 2 1995 1 4 2005 Strivers (US $12500 - 25000) Deprived (<US $2250) 1 19 2 2015 2 93 80 43 32 9 2025 54 35

22 36

Seekers (US $5000- 12500)

Predominantly young consumers: 72% of Indian population constitutes of people below 39 years, with 32% between 20-39 years having high consumption potential. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). Reducing Dependency Ratio: With greater diversity of employment opportunities across the country and greater mobility of work force, dependency ratio is reducing. Rising Literacy Levels: The literacy rate in India is expected to touch almost 90% by 2013 from present 70%; with female literacy touching 83% from present 69%. (Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009). Future consumption growth will be driven by both urban and rural markets. India has one of the largest consumer base in the world with approximately 500 million consumers over 18 years of age (excluding Below Poverty Line families) across urban and rural India. Of this, urban India constitutes approximately 230 million consumers. By 2021, there maybe more than 125 cities having population in excess of 1 million and another 500 having population between 5,00,000 and 1 million which will offer significant opportunities in the consumption space. (Source: Consumer Trends for 2010, and beyond, October 6, 2009, Technopak).

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The expected growth in consumption in urban and rural markets is given in the chart below:

GDP: US$ 1,050 Billion

GDP: US$ 1,485 Billion

Private Consumption US $650 Billion Retail: US $410 Billion

Private Consumption US $890 Billion Retail: US $535 Billion

Rural US $225 Billion 54%

Urban US $185 Billion 46%

Rural US $278 Billion 52%

Urban US $257 Billion 48%

2008 (Source: Consumer Trends for 2010, and beyond, October 6, 2009, Technopak)

2013(P)

The growth in private consumption by USD 240 bn in 2013 will be lead by USD 125 bn in the retail sector. Urban market would account for 58% of the growth in the retail sector. Indian consumers waking up to their aspirations beyond basic needs Against the above backdrop of positive changes in demographics and economic activity, consumers have the capacity to spend, wants to spend and now they have more options to spend. The consumption basket is expanding to include many more products on which discretionary income can be used. While in 1991, consumption was more on broader basic requirements, it is now focused on lifestyle and aspirational products. These categories on which consumers are spending more on are Education, Healthcare, Food services, home and mobiles and travel and tourism. (Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) The key consumption categories and the projected growth are given in the table below: Value in US$ Bn SIZE 2014 339 58 45 47 47 42 36 39 21 18 15 18 8

CATEGORY Food & Grocery Healthcare Apparel & Home Textiles Housing Education Telecom Jewelry & Watches Personal Transport Travel & Leisure CDIT Home -Furniture ,Furnishing Personal Care Eating Out

SIZE 2009 270 36 34 33 30 26 26 25 13 12 11 10 5

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CATEGORY Footwear Health & Beauty Services

SIZE 2009 4 1

SIZE 2014 6 2

(Source: Technopak Advisors, India Growth Story: Pyramid To Diamond Rise of Consuming Class, March 26, 2009) Food, Apparel, Household products, personal products and education constitute a significant portion of household expenditure respectively and are expected to continue to dominate the Indian consumption basket. APPAREL: Indian domestic apparel market is one of the fastest growing market in the world. It is expected to become one of the major consumption bases in near future. Out of the total domestic market size of US $ 40 Billion, Clothing contributes US $ 30 Billion, while rest US$10 billion is contributed by Textiles (Home textiles, Technical textiles and other textiles end-uses). The domestic market has shown a significant growth in past few years registering a Compounded Annual Growth Rate (CAGR) of ~13%. The domestic apparel market is expected to grow at around 9% in the next 5 years. Therefore, the industry needs to focus on the domestic market more intensely and understand the market dynamics in more detail in order to tap the complete potential. The structure of the Indian textile and apparel market is as follows:
Indian Textile and Apparel Market US $ 62 Billion INR 265,500 Crore

Domestic Market US $40 Billion INR 172,000 Crore

Exports US $22 Billion INR 93,500 Crore

Textiles US $10 Billion INR 43,500 Crore

Clothing US $30 Billion INR 128,500 Crore

Textiles US $12 Billion INR 50,000 Crore

Clothing US $10 Billion INR 43,500 Crore

The growth in the domestic apparel market is given in the chart below:

India domestic market

US$ Billion

9%

13%
30 36 48

22 2006

26

2007

2008

2011

2014

(Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak)

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The growth drivers for the domestic apparel market include favorable demographics, rising incomes, dropping dependency ratio, rising education levels, increasing urbanization and penetration of organized retail. Segments in Apparel: It is evident that the Indian consumer is ready for change, demanding options and looking out for product that suits and matches their needs and aspirations. With the back drop of changes, Indian apparel market is moving away from the traditional segmentation to a much deeper and wider segmentation based on consumer needs. Indian apparel market can be broken up into men, women and kids, but within each there are a number of segments that are emerging reflecting changing needs. Some of the segments that are potential opportunities to watch out for are: Mens wear: Mens wear is still the largest product category both in terms of volume and value. Of the total apparel market, mens wear section accounts for 40.2% share as compared to womens wear which accounts for 34.8% and kids wear accounting 24.9%. Volume growth in menswear increased from 3.8% in 2005, to 5.9% in 2007. The spurt in value growth has also been substantial from 11.8% in 2005 to 13.3% in 2007. (Source: India Retail Report, 2009, Images). Mens wear market is expected to be Rs 72,740 crores in 2010 and is expected to grow to Rs 1,15,840 crores by 2015 and 1,76,860 crores by 2020. (Source: Indian Textile and Apparel Compendium 2010) Womens wear: Womens formal wear and ethnic wear markets are still ruled by unorganized players. With more women expected to enter corporate world, both these segments are good opportunities because of the market size. Womens wear market is expected to be Rs 57,745 crores in 2010 and is expected to grow to Rs 1,17,000 cr by 2015 and 2,02,280 crores by 2020 (Source: Indian Textile and Apparel Compendium 2010) The details of the various segments in the womens apparel market is as follows:
2008 Womens wear Market of SEC A&B is INR 25,300 Crore
Formal Party Markets Market Nightw ear 1% 13% 17%

Urban Womens Wear Market

Ethnic Wear 47%

Casual Market 22%

(Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) Kids wear: Kids wear is a major category with few established players. Very few brands namely Lilliput, Gini and Jony, Catmoss, Benetton, Disney, Barbie. Some brands have extended into this category though not very successfully i.e. OYO by Spykar, Zapp by Raymond (closed down). It still holds a large opportunity which is clearly untapped. The details of the various segments in the kids apparel market are as follows:

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Kids Wear Market (32,000 Crore)

I-Body Suits

I-T-shirts

Frocks

T-shirts

Low ers

Jeans

Ethnic w ear

Low

Economy

Medium

Premium

Super Premium

(Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) Casual wear: Casual wear segments are expected to grow between 10-15% as compare to 9% growth of overall Indian Apparel Market. More than 50% of the clothes in this category are bought by youth (age 1330) Increase of buying frequency of casual wear is spurred by:Preference for more comfort wear Increase in employability Acceptance of Casual wear in work places The details of the various segments in the casualwear market are as follows:

Children

Casual Wear Shirts Trousers T-shirts Jackets Sweaters Jeans Total

Women

Mens Rs Crores 3290 2280 3300 560 130 2840 12400

Womens Rs Crores 690 150 1330 90 100 1240 4600

Men

(Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) Active wear / Exercise wear / Swim wear: Indians get more and more health conscious and look for sports & games to address this need. They are also looking to live fuller lives by participating a lot more in outdoor activities as a way to connect to family, friends and their unfulfilled aspirations. Active wear for various sports such as football, tennis, golf, rock-climbing, cricket, swimming is finally gaining acceptance. Exercise wear specially for gyming, exercising, walking and jogging is also becoming important besides apparel for more spiritual inclinations like yoga, meditation etc. Currently the market for active wear is estimated to be Rs 1100 crores and growing at 13%. While India is already home to brands like Reebok, Adidas, Nike and Puma who are showing tremendous growth figures, there still exists potential for brands

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focusing on specific sporting categories Besides brand based retailing, another important concept is the event centric merchandise retailing which is very popular in the sporting industry, for example FIFA apparel etc. (Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) Youth fashion / College fashion: There is also significant potential in youth fashion market as college going youngsters are getting more fashion conscious. Internationally there are brands like American Eagle Outfitters, Aeropostale, True religion etc. which are positioned as fashion labels specifically for the youth. In India there are approximately 11 Million Youth (15-24 years of age) in top consuming strata in 70 cities and this segment offers an opportunity for brands to position themselves for specific age groups like 13-19 years , 20-25 years etc. and establish their brands amongst these specific consumers. (Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) Branded Apparel: Total domestic textile and apparel market is expected to be at $52bn in 2010 out of which $36bn is expected to be Apparel, $4bn is Home Textile and $12bn Technical textiles. In 2015 the domestic textile and apparel market is expected to grow to $ 89bn with share of apparel is expected to be $61bn. In 2020 the total market is expected to be $140bn with share of apparel constituting $100bn. Organised apparel market stands at 17% in 2010 which is expected to grow to 25% in 2015 and 40% in 2020 of the total apparel market. (Source: Indian Textile and Apparel Compendium 2010) The main drivers of growth in domestic textile and apparel market is expected to be through increasing population, increasing income levels, rapid urbanization, improving demographics, increased organized players and increasing penetration of retailers into smaller cities. (Source: Indian Textile and Apparel Compendium 2010) Investments to enhance efficiencies- driven by international and domestic players in apparel More and more international brands and retailers looking at India as their next destination. The international brands / retailers bring with them superior technology and economies of scale across the supply chain. Domestic players are also looking to upgrade their existing systems. For example, Future Group is making investments with a view to sustain its potential growth in the Indian market and also looking at partnerships with global majors for improving supply chain scales and efficiencies. As a result, the productivity and efficiencies of domestic players will improve along with skill up gradation. (Source: Building Sustainable Businesses in the Growing Domestic Market, Technopak) FOOD AND FOOD PROCESSING: Indian Food Industry is estimated to be ~ $ 250bn in 2011. Food and Food products constitute ~ 40% of urban household spend and 50% of rural household spent (Source: Technopak). Food Processing: India, with a population of more than 1.1 billion, is one of the largest consumer markets in the world. Food consumption in India is expected to grow to 300 billion in dollar terms by 2015 from 200 billion in 2007. Food and Beverages is largest category in Indian 5 consumer spending and is expected to remain in the future. With agriculture at the core of Indian economy and more than two-thirds of the population dependent on farming, a developed Food Processing sector can be a strong link between agriculture and the consumers. Government's high priority to the sector coupled with a growing consumption-led demand is leading to a fast pace growth in the sector. (Source: Food processing and Agri business, 2009, KPMG) Processed food in India is estimated to be ~44% of the total food Industry by 2011 i.e.~ $110bn. (Source: Indian Food Industry-Opportunities Abound, Technopak, Dated: October 21, 2008). The level of processing in each segment is low relative to many other countries and India accounts for just around 1.5 percent of the global processed food trade. In India the level of processing for Fruit & vegetables is 2.2% as compared to 65% in United States and 23% in China.

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Ministry of food processing in their Vision 2015 document has estimated the size of the processed food sector to grow three fold, processing level of perishable to increase from 6% to 20%,value addition to increase from 20% to 35% and Indias share in global food trade to increase from 1.5% to 3%. Both the Central and State Governments have launched various initiatives and schemes to invite private sector participation in this sector. The key statistics of the Indian food and processing industry are as follows: INDIAN FOOD INDUSTRY : KEY STATISTICS 2002 -03 2006-07 2010-11* Food Industry size ($ billion ) 175 200 250 Food Processing Industry size ($ billion ) 70 85 110 % Food Processing Industry in total food industry 40% 43% 44% Size of organized sector in food processing industry ($ billion ) 13 23 37 % organized sector in food processing industry 19% 27% 36% (Source: Indian Food Industry-Opportunities Abound, Technopak, Dated: October 21, 2008) 2014-15* 300 150 50% 60 40%

The market segmentation of the food processing industry and the share of the organised sector is given in the table below: Segment Dairy Sector 15% F&V Meet & Poultry Processing 10% Fisheries Packaged foods 8% Beverages Staple foods 85%

Growth rate of the market Key segments

20%

20%

27%

Extent of processing Share of organized sector

value added milk products like butter, cheese and ghee 37% 15%

Raw F&V, Fruit pulps , canned fruits & pickles

Cattle, Buffalo & poultry

Marine Fisheries, Frozen products & Minces fish products

Noodles / Vermicelli

Fruit -based drinks & carbonated drinks

Sugar , wheat Flour & salt

2% 48%

1% 5%

12% 80% 77% 50%

Growth drivers in the Food and Food Processing Industry: Huge Production Base India has second largest arable land of 161 million hectares Largest irrigated land (55 million hectares) in the world. Largest producer of wheat (72 million tonnes), accounting for nearly 15% of global wheat production. Largest producer of pulses (15 million tonnes), accounting for nearly 21% of global pulse production. Largest producer of milk (96 million tons), accounting for nearly 17% of global milk production. Largest producer and exporter of spices. 2nd largest producer of tea, accounting for nearly 28% of the global tea production.

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2nd largest producer of rice (92 million tons), accounting for nearly 22% of global Rice production. 2nd largest producer of fruits (50 million tons) and vegetables (100 million tons). 2nd largest producer of sugarcane (296 million tons), accounting for nearly 21% of the global sugarcane production. 3rd largest producer of coarse grains (31 million tons), including maize, accounting for nearly 4% of the global coarse grain production. 3rd largest producer of edible oilseeds (25 million tons), accounting for nearly 7% of the global edible oilseed production. (Source: Ministry of Agriculture) Changing Demographics and rising disposable incomes This is the most important demand booster for the processed food in India. The proportion of the productive age group (15-59 years) is nearly 80 percent in India. This age groups propensity and ability to spend on quality processed food is higher. Higher incomes as more Indians join to middle class and upper class also impact the demand of processed food positively. Urbanization Changing lifestyle and increasing spend for snack-on-the-go is 2 responsible for a USD 3 billion and growing snack market. Haldirams, Frito Lays, ITC are quick to capture this market with products such as Masala Peanuts, Chips, Bhujia and Chaats. Functional Foods Functional Foods, Fresh or Processed Foods that claim to provide health benefits apart from serving the basic function of nutrition, are on the fast-growth path in India. Fabindia Organics, Organic Food retail outlets like 24 Letter Mantra and Godrej Agrovets Nature Basket have big plans in this segment. Organized Retail and Food Retail Organised Retail penetration Organised retail comprises of less than 5 percent of the total retail market in India, but is growing at over 20 percent. Food retailing, which constitutes 14 percent of the organised retailing, is also expected to benefit from the growth of organised retail and the demand for processed foods is expected to rise. Government Support: Indian government recognised the potential of Food Processing sector to the economy and has come up several initiatives to boost the quantity and quality of output in the sector. The vast discrepancy in output between the agriculture and food processing is a major cause for concern and government has increased the spending from INR 72.77 crore in 2002-03 to 159.78 crore in 2006-07 to increase the value of the output, share of global processed market and provide a fillip to the farmers income. Scheme for Infrastructure development o Food Parks: The government plans to set up Mega Food Parks so as to integrate the value chain comprising of farmers, processors and retailers. The move will help reduce wastage, maximise value addition and increase farmers income as they get a chance to sell the produce directly. The proposed mega-food parks will be between 10 and 100

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hectares in size and 30 locations across India had already been identified. The parks would be set up through private consultants with the government providing grants of up to INR 500 million each. Each mega food park will have a minimum catchment area of five districts. With a chain developing from the farm gate to the retail shelves with collection and distribution centres and central processing centres in between, where functions like sorting, grading and packaging along with irradiation, food incubation cum- development will take place, the food processing ministry hopes this initiative to be a commercial success. o Government plans to support Integrated Cold Chains including a value added centre to ensure that there is no missing link from farm gate to retailers/consumers, by increasing the grant assistance.

Scheme for Technology Upgradation/ Establishment/ Modernisation o Government provides a grant of 25 percent of the cost of plant & machinery and technical civil works subject to a maximum of INR 50 lakhs in general areas and INR 75 lakhs in difficult areas.

Scheme for setting up/ Upgradation of Quality Control/ Food testing Laboratory, R&D & promotional activities o o o o Setting up a network of laboratories to help in implementing quality regime for processed food. Higher level of assistance to research institutes like IITs and other central/state level institutes Assistance for organising promotional activities like workshops, seminars, exhibitions, fairs, surveys etc 50 percent subsidy to private companies, which set up quality testing laboratories and 100 percent subsidy for State governments that install new testing laboratories.

Scheme for strengthening of institutions o o o Establishment of National Institute of Food Technology, Entrepreneurship & Management (NIFTEM). Strengthening of State Nodal Agencies (SNA) Information Technology

Budget 2009 Support Measures 1. Agriculture: The measures will lead to stabilisation of rural demand. Agriculture will be made less dependent on the monsoon with increased focus on irrigation development. a. b. Agricultural credit flow at INR 287000 crore in FY09. Target for FY10 at INR 325000 crore. Continuation of interest subvention for short term farm loans up to INR 300000. Additional subvention of 1 percent in cases of timely debt servicing. Effective interest on farm loans thus 6 percent under new scheme. Period of earlier one off debt waiver increased by six months till 31st December 2009.

c.

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d.

Task force to be set up to look into debt burden of farmers due to private informal lending in Maharashtra. Allocation under Accelerated Irrigation Benefit Programme (AIBP) increased by 75 percent. Allocation under Rashtriya Krishi Vikas Yojana increased by 30 percent.

e. f. 2.

Improving Rural Demand: Increased allocation to National Rural Employment Guarantee Scheme by a whopping 144 percent to improve employment and consumption. Taxation: GST by April 2010 will lead to rationalisation and simplification of the tax structure at both the central and state level, removing the non-uniform VAT currently in place. Cold Chain: A deduction is allowed in respect of entire capital expenditure (other than the acquisition of any land or goodwill or financial instrument) incurred by the taxpayer engaged in the following businesses: setting up and operating cold chain facilities for specified products warehousing facilities for storage of agricultural produce

3.

4.

(Source: Food processing and Agri business, 2009, KPMG ) FMCG: FMCG is the 4th largest sector in the Indian economy. It has grown consistently over the last 3-4 years, including the last 12 months of economic slowdown. Indias FMCG sector is fragmented and a substantial part of the market comprises of unbranded and unpackaged products. We estimate the sector at US$ 25 billion (` 120,000 crores) at retail sales, in 2008. Based on current trends, growth is projected at 10-12% for the next 10 years; reaching an industry size of US$ 43 billion (` 206,000 crores) by 2013 and US$ 74 billion (` 355,000 crores) by 2018. Implementation of the Goods and Services Tax (GST) and opening up of Foreign Direct Investment (FDI) in retail can accelerate this growth. The FMCG industry details by category are given in the following chart:
Household Care 10% Tobacco 15% Personal Care 20% Lighting 2%

Food & Beverage 53%

(Source: FMCG Sector: The Road Ahead, July 23, 2009, Technopak) The growth drivers for FMCG are as follows: Income Growth and Under-penetration of FMCG products - Penetration of many product categories is very low, and with income growth, the market is set to grow over the coming years. Growth of Modern Retail - From US$ 410 billion in 2008 (` 2,000,000 crores), Indian retail is expected to grow to US$ 535 Billion by 2013 (` 2,600,000 crores) and US$ 755 billion by 2018 (` 3,600,000 crores) opening a huge market for the FMCG products.

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Innovative Rural Retail - Rural markets accounted for one third of total consumption pie in the country and is expected to grow at 3.6% over the next two decades. Corporate have launched various innovative retail formats such as DCM Shriram Hariyali Kisan Bazaar, ITC e- chaupal, Aadhaar Retaling etc have evolved to cater to the rural consumer base. Rural retail is expected to dominate the Indian retail industry with expected total market share of 50%. Implementation of GST - The proposed rate of 20% GST (12% at central and 8% at state level) can mean 10-12% reduction in retail prices of FMCG products. GST implementation can give a very significant growth fillip to the FMCG sector. (Source: FMCG Sector: The Road Ahead, July 23, 2009, Technopak) Education: As per industry analysis, nearly 75 to 80 million jobs will be created in India over the next five years. It is estimated that more than 70% of Indias incremental GDP and 60% of new jobs over the next five years are expected to be generated by the services sector. (Source: Case for Setting Up Sector Skill Councils in India, CII Technopak, April 21, 2009, Technopak). Vocational Training: The current vocational training infrastructure caters to just 2.5 million annually through the Directorate General of Employment and Training (DGET) and other departments. It is estimated that only 5% of the youth are single skill vocationally trained, as compared to 96% in Korea or even 22% in Botswana. Vocational Education Training (VET) Institutes today are characterized by structurally rigid and outdated centralized syllabi that do not have much sync with the prevailing market conditions. They impart skills that do not necessarily match industry requirements. Vocational training today does not equip people with the necessary soft skills. Other problems include the mismatch with demand, courses that are outdated and too long and lack scalability. This has resulted in a situation where there is a large enough labor force that is willing to work, but is not employable because of irrelevant skill sets. (source: Case for Setting Up Sector Skill Councils in India, CII Technopak, April 21, 2009, Technopak). The details of the growth opportunities in the vocational educational space across sectors are provided in the following table:

Industry sector

Market size 2008 US $ Billion)

Market size 2013 US $ Billion)

Retail 370 535 Healthcare 40 80 Hospitality & Tourism 102 142 Food & Agro 194 260 Textile & Apparel 53 91 * Doctors and nurses estimates are not considered in this dataset ** Estimated only for Organized Retail
(Source: Technopak Analysis)

Additional Direct Employment 2008 to 2013 (Million) 2 to 4 ** 3.5 to 4* 1.6 to 2 2 5 to 6

Percentage requiring vocational training (%)

90 20 65 -70 65 -70 80 -90

The Existing Regulatory Structure The prime responsibility of skill development in the country lies with the Ministry of Labor & Employment. The Directorate of Employment & Training (DGET), in the Ministry of Labor and Employment is the apex organization responsible for development and co-ordination at the State level for programmes relating to vocational training. Industrial Training Institutes are under the administrative and financial control of this Directorate. The DGET, along

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with the Labor Ministry, focuses on policy formation guiding skill development, and allocation of finance from government budgets to support the policy initiatives. Employment service is operated through a countrywide network of Employment Exchanges. The ITIs are under the administrative and financial control of State Governments or Union Territory Administrations. The DGET also operates Vocational Training Schemes in some of the specialized areas through field institutes under its direct control. Development of these programmes at a national level, particularly in the area concerning common policies, common standards and procedures, training of instructors and trade testing are the responsibility of the DGET But, the day-to-day administration of Employment Exchanges and ITIs rests with the State Governments/Union Territories Administration. The NCVT, an advisory non-statutory body, was set up by the Government of India in the year 1956. The Council has been entrusted with the responsibilities of prescribing standards and curriculum for Craftsmen Training, advising the Government of India on the overall policy and programmes, conducting the All India Trade Tests for award of the National Trade Certificates. The National Council is chaired by the Minister of Labor, with members representing the Central and State Government Departments, Employers and Workers Organizations, professional and learned bodies, All India Council for Technical Education, scheduled castes and scheduled tribes, All India Womens Organization, etc. A State Council for Vocational Training (SCVT) at the state level and Trade Committees have been established to assist the NCVT in the implementation of their mandate. Relevance of the National Skill Development Policy The Government aims to create 70 million jobs by 2012, and has constituted a National Skills Development Mission to execute the same. The Ministry of Labor & Employment announced that the final draft of the National Skill Development Policy will be tabled before the Union Cabinet for ratification. The policy envisions the establishment of a National Skills Development System with the following mission: The National Skills Development System is aimed at empowering all individuals through improved skills, knowledge and internationally recognized qualifications to enable access to decent employment, promote inclusive growth and ensure Indias competitiveness in the global market. The 10th Five Year Plan allocated ` 350 crores under the centrally sponsored scheme of vocationalization of secondary education. In the 11th Five Year Plan, ` 31,000 crores has been allocated to be spent on skill development in 20 areas of high growth such as automobiles, auto components, transportation, logistics, warehousing, packaging, travel & tourism, media & entertainment and healthcare services. The Planning Commission has recommended a PPP model to catalyze skill development through short term vocational courses ranging from 6 months to two years. Along with the up-gradation of the existing approximately 7,500 ITIs and Polytechnics, the policy aims to train one million people in the next five years; and then one million every year. The role of training and skills development effort in the country would be three fold: Firstly, in enhancing an individuals employability and ability to adopt to changing technologies and labor market demands; Secondly, in strengthening productivity, competitiveness, and supporting the process of economic growth; and Finally, the objective is to create employment opportunities by attracting FDI and business expansion based on the availability of relevant skills. (Source: Case for Setting Up Sector Skill Councils in India, CII Technopak, April 21, 2009, Technopak). Home Products: The furnishings and furniture market is estimated to be at Rs 85,000 crore (excluding home electronics) and is expected to grow at 10-12%. Nearly, 85% of the home furnishing industry is in the unorganized sector and remaining 15% is in the organised sector. The organized retail segment grew by about 13-15% last year. Some of the major segments in furniture industry are residential, office, contract and institutional. India has a rich and a

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diverse heritage of craftsmen and products, with the sector moving from the unorganised to organised, efficiencies in systems and processes and economies of scale are expected to lead to higher productivity and profitability. The main growth drivers for the industry include:

1.

Improving Consumer demographics: With increasing income levels, consumption of lifestyle products including furniture is on the rise. Consumers are creating greater demand in the sector through willingness to upgrade and to change frequently. Real Estate / Housing boom: Housing and Real Estate construction in India has staged a comeback after the economic slowdown in late 2008. Expansion of residential and commercial infrastructure across metros and smaller cities will fuel growth in the furniture and furnishings sector. Tourism / Hospitality industry growth: Increasing tourist inflow is leading to development in hospitality space and infrastructure creating demand for furniture and furnishings.

2.

3.

(Source: India Retail Report, 2009, Images) Rural Distribution: The rural markets offer a sea of opportunity for the retail sector. The urban rural split in consumer spending stands at 9:11 with rural India accounting for 55% of private consumption in the country. According to NCAER rural India is home to 720 mn consumers across 627,000 villages 17% of the villages account for 50% of the rural population. Even though urban markets are growing fast rural market cannot be ignored. With several states permitting retailers to purchase produce directly from the farmers, the farmers too are adapting to the new opportunity to cultivate assigned crops and take special care of the same, creating a huge opportunity for the rural distribution networks. Rural distributors among other things ,provides technical guidance, soil and water testing services to the farmers along with creating a organized platform for the farmer to sell his produce and providing complete solution under one roof to all the farmers needs. (Source: India Retail Report, 2009, Images) The Rural Supply Chain is given below:
Farms Inputs Farming Marketing/ Aggregator Processing Logistics (Food) Retail/Food Services Consumer Product Design Market Intelligence Distribution Marketing

Financial & Business Services

Transport Services/ Infrastructure

Quality Control

(Source: Food Processing: Market & Opportunities, KPMG)

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BUSINESS Overview We are a part of the Future Group. The Future Group is a business group, led by Kishore Biyani, focusing on consumption-led businesses in India and is also one of Indias leading organized multi-format retailers. Pantaloon Retail (India) Limited, the flagship company of the Future Group, has incubated, nurtured and brought to maturity several businesses and formats, including Future Capital Holdings Limited, Future Generali Insurance, Future Supply Chain, Future Agrovet, Future Media, Future Brands, Future Bazaar, Pantaloons, Central, Big Bazaar, Food Bazaar, Home Town and E-zone. We seek to create, build, acquire, invest in and operate innovative and emerging businesses in growing consumption-led sectors in India, which we define as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. Within the consumption-led sectors, we intend to focus primarily on opportunities in the business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home products, (v) rural distribution and (vi) vocational education. We intend to exercise operational control or influence in the business ventures that we promote or in which we acquire interests. In addition to allocating and providing capital, we intend to create, operationally manage and strategically mentor these businesses, which we refer to as the Business Ventures. As of the date of this Prospectus, we have 14 Business Ventures, six of which are our subsidiaries. Out of our 14 Business Ventures, we have indirect shareholding in three of our Business Ventures and one of our Subsidiaries is a step-down subsidiary. For further details of our Business Ventures and Subsidiaries, please see the sections entitled Business Ventures and Subsidiaries beginning on pages 184 and 179 respectively. We seek to enable our Business Ventures to conceptualize and implement their growth and development strategies and to help them convert ideas and insights into viable business propositions. We intend to be a long-term owner, operator and/or partner of the Business Ventures and seek to create value as an active shareholder by deploying the consumer insights, operating skills and capabilities available to us as a part of the Future Group. We seek to access opportunities at various stages of the enterprise growth cycle, from nascent to more mature businesses, with a view towards medium to long-term value creation for our shareholders. We intend to provide the Business Ventures with access to a wide range of resources within the Future Group. Pantaloon Retail (India) Limited, along with other arms of the Future Group, is expected to assist the Company in providing mentoring to the Business Ventures, to actively assist their strategic growth and business development plans. We have entered into a Mentoring Services Agreement with Pantaloon Retail (India) Limited to provide mentoring services to us and/ or the Business Ventures. For further details of the Mentoring Services Agreement, please see the section entitled History and Certain Corporate Matters Mentoring Services Agreement beginning on page 151. Additionally, we have entered into a Consulting and Advisory Services Agreement with Future Capital Holdings Limited under which it will, amongst other things, support resource mobilisation in investee companies, advise on mergers and acquisitions and exit strategies and provide research services in relation to Treasury Assets. For further details of the Consulting and Advisory Services Agreement, please see the section entitled History and Certain Corporate Matters Consulting and Advisory Services Agreement on page 150.We have also entered into a Master Service Agreement with Future Corporate Resources Limited for providing support and other services related to business activities, such as governance, risk mitigation, human relation policies and information technology, guidance regarding corporate and legal compliance and advice on fund raising. For further details of the Master Service Agreement, please see the section entitled History and Certain Corporate Matters Master Service Agreement on page 152. We expect that the capabilities of Pantaloon Retail (India) Limited, Future Capital Holdings Limited and Future Corporate Resources Limited will help us create, develop and generate long term value from our Business Ventures. We were incorporated on July 10, 1996, with the name Subhikshith Finance & Investments Limited. Following the acquisition of Subhikshith Finance & Investments Limited in July 14, 2007 by Future Value Retail Limited (earlier known as Pantaloon Future Ventures Limited), a wholly owned subsidiary of Pantaloon Retail (India) Limited, we changed our name to Future Ventures India Private Limited. We are now a public limited company and are regulated by the RBI as a systemically important non-deposit accepting NBFC.

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As at the date of the Prospectus, we had the following Business Ventures: 1. Fashion (i) (ii) (iii) AND Designs India Limited, a womens apparel business; Biba Apparels Private Limited, a womens apparel business; Holii Accessories Private Limited, a joint venture with Hidesign India Private Limited which is in the business of retailing fashion accessories such as leather handbags for women and wallets and other leather products under the brand name Holii; Indus-League Clothing Limited, a designer, manufacturer and retailer of ready-made garments under various brands, such as Indigo Nation, John Miller, Scullers and Urban Yoga ; Celio Future Fashion Limited, a joint venture with a global brand of mens apparel and accessories based in France; Lee Cooper (India) Limited, a manufacturer and retailer of Lee Cooper-branded products; and Turtle Limited, manufacturer, distributor, exporter and retailer of mens wear products.

(iv)

(v)

(vi) (vii) 2.

Home Products Indus Tree Crafts Private Limited, a social entrepreneurship which distributes hand crafted furniture and home accessories under the brand Mother Earth.

3.

Food Processing Capital Foods Exportts Private Limited, a food processing company having development and manufacturing capabilities in various processed food products, such as instant noodles, sauces, chutneys and microwavable rice and curries under various brands, including Chings Secret, Smith & Jones, Raji, Mama Marie and Kaeng Thai.

4.

FMCG (i) Future Consumer Enterprises Limited, a company engaged in product development, designing, branding and distribution of FMCG products under brands such as Tasty Treat , Clean Mate, Care Mate, Premium Harvest and Fresh and Pure; and Future Consumer Products Limited, a company engaged in product development, designing and branding of FMCG products under the brand Sach.

(ii)

5.

Rural distribution Aadhaar Retailing Limited, a rural and semi-urban retailer of agricultural products and consumer products.

6.

Others (i) Amar Chitra Katha Private Limited, produces publications and animated films, which are both educational and entertaining (Edutainment) and organizes and conducts Edutainment oriented theatrical productions. SSIPL Retail Limited, a retailer of Nike branded products, manufacturer of sports footwear and apparel, and a manufacturer and distributor of footwear.

(ii)

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For further details of our Business Ventures, please see the section entitled Business Ventures beginning on page 184. Strengths Synergy with the Future Group The Future Group is a leading Indian business group promoted by Kishore Biyani which focuses on consumptionled businesses. The Future Group has successfully demonstrated the ability to identify, incubate and grow various consumption-led businesses in India like Pantaloon Retail (India) Limited, Future Capital Holdings Limited, Future Media, Future Brands, Future Supply Chain and Future Bazaar, and we expect to derive benefits from our strategic relationship with it. We also expect to have access to the expertise of the Future Groups management team, whose deep understanding of Indias consumption-led sectors we intend to utilize in evaluating and monitoring our Business Ventures. In addition, we also believe that we will have access to industry contacts, brand building and publicity skills and the network of the Future Group, which we anticipate will aid us in effectively advising and managing our Business Ventures. We believe that access to the following attributes of the Future Group provide us with a competitive advantage: Track record of incubating and growing businesses coupled with proven execution skills in creating one of the largest organized multi-format retail networks in India: The Future Group has conceptualised, supported and developed, various consumption-led business concepts such as Pantaloons, Central, Big Bazaar, Food Bazaar and Home Town, which enjoy wide brand recognition and customer loyalty. A key element of the Future Groups growth has been its strategy of actively mentoring its projects and we also expect to benefit from access to such mentoring capabilities. We also intend to leverage the execution skills of the Future Group, including its operational and managerial skills, to facilitate the management and growth of our Business Ventures, which we believe we already have done for certain of our existing Business Ventures. We will continue to access the experienced pool of finance, operating and investment professionals belonging to the Future Group for providing guidance and mentoring to the Business Ventures. Deep understanding of the Indian consumption-led sectors and the evolving needs of the Indian consumer: As one of Indias leading retail groups with over 12 years of organized retail experience, the Future Group has developed a deep understanding of the consumption-led sectors and businesses in India, including consumer aspirations. The Future Groups presence across multiple retail formats presents us with opportunities to source ideas which could be converted into successful businesses. We expect that access to these insights will enable us to effectively evaluate opportunities in our target sectors and formulate appropriate growth strategies for our Business Ventures. Business sourcing opportunities: We believe that, because of its market presence, and successful track record of establishing new business formats, the Future Group will have access to a range of business opportunities in consumption-led sectors in India that we expect to be able to access. In addition, we also expect to have access to the industry contacts and the network of various Future Group entities to aid us in sourcing additional business opportunities. The Future Group network has already helped us source opportunities with respect to certain of our Business Ventures, such as Biba Apparels Private Limited, AND Designs India Limited, Indus Tree Crafts Private Limited and Capital Foods Exportts Private Limited. Relationship with Pantaloon Retail (India) Limited and the Future Group: We have entered into a Mentoring Services Agreement with Pantaloon Retail (India) Limited, pursuant to which Pantaloon Retail (India) Limited would provide mentoring services to us and/ or the Business Ventures. The assistance to be provided by Pantaloon Retail (India) Limited would include, amongst other things, insights into consumer behaviour, advice regarding business strategy, review or development of business plans for the Business Ventures, guidance in development of new businesses, products and/ or distribution strategies, assistance in sourcing products and materials, and assistance in brand building and marketing of products. Furthermore, Pantaloon Retail (India) Limited would provide assistance and advise to the Company in formulating strategies regarding exit from the Business Ventures and investment in consumption-led sectors, and undertaking due diligence on the Business Opportunities. We also have the option of nominating professionals from Pantaloon Retail (India) Limited to the boards of our Business Ventures to manage and monitor them in a more comprehensive manner.

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We would also have access to a pool of experienced professionals in the employment of Pantaloon Retail (India) Limited and other Future Group companies, such as: (i) Kailash Bhatia Kailash Bhatia is the CEO and a director of Pantaloon Retail (India) Limited. He has previous experience of approximately 30 years in the fashion industry and was a co-founder of ColorPlus brand. Prior to joining Pantaloon Retail (India) Limited, he has worked with Color Plus Fashion Private Limited, Weekender, Arvind Mills Limited and Mafatlal Industries Limited. (ii) Vibha Rishi Vibha Rishi is the Group Strategy and Consumer Director of the Future Group. She is responsible for marketing, communication and customer strategy of the group companies. She is employed with Future Corporate Resources Limited. She holds a masters degree in business administration from the Faculty of Management Studies, University of Delhi. Vibha Rishi has previously worked with Tata Administrative Services and PepsiCo. (iii) Damodar Mall Damodar Mall is the Director Integrated Food Strategy of the Future Group. He is responsible for overall food and FMCG strategies for the Future Group. He is employed with Future Corporate Resources Limited. He has previous experience of approximately 20 years in the FMCG and food industry. He was a cofounder of DMart, a supermarket chain based in Mumbai. He holds a bachelors degree in technology from the Indian Institute of Technology, Mumbai and post graduate diploma in management from the Indian Institute of Management, Bangalore. Damodar Mall has previously worked with Hindustan Unilever Limited. (iv) Santosh Desai Santosh Desai is the Managing Director and CEO of Future Brands India Limited. He has approximately 21 years of experience in the advertising industry. He holds a post graduate diploma in management from the Indian Institute of Management, Ahmedabad. Santosh Desai has previously worked as President with McCann-Erickson, India. He has also been keynote speaker at various advertising forums within and outside India and has also addressed the management teams of several multinationals on advertising related matters. Additionally, we have also entered into a Consulting and Advisory Services Agreement with Future Capital Holdings Limited and Master Service Agreement with Future Corporate Resources Limited. Under the Consulting and Advisory Services Agreement, Future Capital Holdings Limiteds responsibilities include supporting resource mobilisation in investee companies and advising on mergers and acquisitions and exit strategies, and providing research services in relation to Treasury Assets. In terms of Master Service Agreement, Future Corporate Resources Limited will provide support and other services to the Company. Uniquely positioned to access opportunities in consumption-led sectors Whilst we would have access to the experience and industry networks of the Future Group, all Business Opportunities would be independently evaluated by our Investment Management Team and approved by us. This would provide us with a unique perspective for evaluating Business Opportunities which are closely aligned to our investment philosophy and which may have significant potential for growth on account of consumer demand in the businesses they operate. Moreover, our business model of acquiring interest and managerial control in companies, rather than operating such companies directly, provides us with an opportunity of participating in growth of consumption-led sectors with mitigated exposure to attendant operational risks. Additionally, within the consumption-led sectors, we have presence or seek to establish our presence in business opportunities belonging to diverse segments comprising of fashion, home products, food processing, FMCG, rural distribution, vocational

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education and edutainment, which reduces our exposure to risks associated with, or downturns that may afflict, any particular segment. Access to diverse growth businesses through long-term and liquid investment opportunities We believe that there are a number of business opportunities in India that for a variety of reasons offer the potential for long-term growth. For example, due to rapidly rising income levels in India and the resultant changes in consumption patterns, consumption-led industries are considered to have high growth potential. We will look to explore opportunities for capital across entities operating in consumption-led sectors and will seek to offer our shareholders access to the potential growth prospects presented by these opportunities. Brand equity of certain of our Business Ventures We intend to focus on consumption-led sectors and brand recognition is a significant element of successfully operating in the consumption-led sectors. Certain of our Business Ventures have been successful in creating distinct brands. We believe that AND Designs India Private Limited (AND Designs) and Biba Apparels Private Limited (Biba) have established themselves as recognisable retailers of womens apparel. AND Designs has established womens apparel brands catering to various segments of the market including AND, Anita Dongre Inter Pret, Anita Dongre Timeless, GRASSROOT and Globaldesi. In addition to its established presence in womens ethnic wear segment in India, Biba has also established Meena Bindra brand which caters to the price-conscious segments of the market. Indus-League Clothing Limited designs, manufactures and retails ready-made garments under various recognisable brand names including Indigo Nation, John Miller, Scullers and Urban Yoga. Lee Cooper (India) Limited and Indus Tree Crafts Private Limited market their products under Lee Cooper and Mother Earth, respectively, which are well recognised within their respective business segments. Chings Secret and Smith & Jones brands of Capital Foods Exportts Private Limited are well recognised for processed food products. The brand equity of our Business Ventures provides them with a wider access to the markets within their respective business segments. It also provides them with an ability to leverage the existing brand equity to launch new brands and/ or products. We believe the strength of the brands established by our Business Ventures is testimonial to their commitment to provide quality products to customers. Experienced management team Our business is supported by a talented and experienced pool of finance, operating and investment professionals with a variety of backgrounds in finance, accounting and retailing, including our CEO, K. K. Rathi; our President (Food Processing), Praveen Dwivedi; our Vice-President (Investments), Meenakshi Maheshwari; our Vice-President (Finance), Gopal Bihani and our Company Secretary & Head-Legal, Manoj Gagvani. The brief biographies of our key employees are detailed below: (i) Krishan Kant Rathi Krishan Kant Rathi, our CEO, holds a bachelors degree in commerce and is a qualified chartered accountant and company secretary with approximately 25 years of professional experience. He has prior experience in corporate finance, strategic business planning and investment advisory, which was acquired in reputable organisations such as KEC International Limited, H&R Johnson (India) Limited, Pantaloon Retail (India) Limited and Motilal Oswal Private Equity Advisors Private Limited. He has previously worked as Group CFO with Pantaloon Retail (India) Limited where he was responsible for strategic planning, mergers and acquisitions, treasury management and corporate governance. Krishan Kant Rathi is also a director of various companies including Future Generali India Life Insurance Company Limited, Future Generali India Insurance Company Limited, Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited), FCH Centrum Direct Limited, FCH Centrum Wealth Managers Limited and Future Capital Holdings Limited. He joined the Company in March 2010.

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(ii)

Praveen Dwivedi Praveen Dwivedi, our President (Food Processing), holds a bachelors degree in commerce, a masters degree in commerce and has undertaken a certificate programme on general management, supply chain management and strategic planning from Wharton Business School. He has approximately 26 years of experience in FMCG, setting-up food and agricultural products related retail venture for fresh produce and pan India integrated warehousing and logistics infrastructure for diversified products. He has previously worked with ITC Limited and Namdhari Farm Fresh Private Limited. He has been working with the Company since November 2010.

(iii)

Meenakshi Maheshwari Meenakshi Maheshwari, our Vice- President (Investments), holds a bachelors degree in commerce and is a qualified Chartered Accountant with approximately 19 years of experience in financial accounting, due diligence and transaction advisory. She has worked in senior management positions with organisations such as Ernst & Young, KPMG and Ferrier Hodgson Limited, where she has assisted private equity and strategic investors in evaluation of their investment decisions. Meenakshi Maheshwari has also assisted investors and lenders in post-investment monitoring, review and restructuring of investee companies. She has also worked with Godrej GE Appliances Limited, an FMCG company. She joined the Company in April 2010.

(iv)

Gopal Bihani Gopal Bihani, our Vice-President (Finance) is a qualified chartered accountant and has approximately 12 years of experience in consumption-led and manufacturing sectors. He has been working with the Future Group since 2005. Prior to joining our Company, Gopal Bihani has worked as CFO for different business formats and companies of the Future Group, such as Aadhaar Retailing Limited, Food Bazaar (a division of Pantaloon Retail (India) Limited) and GJ Future Fashion Limited (Gini & Jony). Gopal Bihani has previously worked with H&R Johnson (India) Limited and Indian Council for International Amity. He has experience in accounting and financial management, strategic business planning and execution, conducting operational monitoring, establishing management reporting system, ERP implementation for retail and manufacturing companies, investor relationship management and compliance. He joined the Company in June 2010.

(v)

Manoj Gagvani Manoj Gagvani, our Company Secretary & Head-Legal, has bachelors degrees in commerce and law and is a qualified company secretary. He has previously worked with Excel Industries Limited, Nilkamal Limited and Pidilite Industries Limited and has experience of approximately 22 years in corporate secretarial and legal functions. He has been associated with the Company since June 2008.

In addition to our key managerial employees detailed above, we also rely on the experience of the following key managerial employees of certain of our Subsidiaries: (i) Devendra Chawala Devendra Chawala is the CEO of Future Consumer Enterprises Limited. He holds a bachelors degree in engineering (production) and a masters degree in business administration (marketing management) from Symbiosis Institute of Business Management. He has been advising the Company in relation to brand management and has also been advising the Business Ventures engaged in product development, designing, branding and distribution of FMCG products. He has approximately 16 years of experience in marketing, brand management and supply chain management and has previously worked with Asian Paints Limited, Hindustan Coca Cola Beverages Limited and Reliance Retail Limited. (ii) Rachna Agarwal Rachna Agarwal is the CEO of Indus-League Clothing Limited. She holds a bachelors degree in science

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(economics) from St. Xaviers College, Kolkata and a post-graduate diploma in business management from the Indian Institute of Management, Ahmedabad. She has been advising the Business Ventures engaged in fashion retailing. She has approximately 18 years of experience in brand management, information systems management, and logistics and supply chain management. (iii) Raminder Singh Rekhi Raminder Singh Rekhi is the CEO of Aadhaar Retailing Limited. Pursuant to the letter dated June 1, 2010 issued by Pantaloon Retail (India) Limited, he has been deputed to Aadhaar Retailing Limited as the CEO for a period of one year commencing from June 15, 2010. He holds a bachelors degree in arts and a post graduate diploma in rural management from the Institute of Rural Management, Anand. He has approximately 20 years of experience in the retail sector. He has previously worked with Pantaloon Retail (India) Limited and prior to joining Aadhaar Retailing Limited; he was the CEO of Indus Tree Crafts Private Limited for approximately two years. Strategy Focus on consumption-led sectors in India We believe that we will be able to enhance our return on assets by focusing on consumption-led businesses in India. We intend to focus primarily on opportunities in the business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home products, (v) rural distribution and (v) vocational education. We believe that our target sectors will benefit from the rapidly rising income levels in India and the resultant changes in consumption patterns. Accordingly, we will focus on sourcing opportunities in industries which are consumer driven and have high growth potential. Our strategy is not to concentrate our businesses, but to consider opportunities across various segments within consumption-led sectors. Actively operate and manage our Business Ventures We intend to promote or hold a significant stake in our Business Ventures, and to exert operational control or influence over them through, among other methods, maintaining board or senior executive representation as well as placing persons in management or advisory roles. We expect to influence business strategy and decision-making of our Business Ventures through operational management and the exercise of customary shareholders rights commensurate with the level and type of our participation in the business. We will also pursue appropriate longerterm value creation strategies, which may include unlocking value in our Business Ventures through public market or private sales after taking into account factors such as the stage of development of the relevant Business Venture and general market conditions. We also propose to provide the Business Ventures with access to expertise and experience of Pantaloon Retail (India) Limited and have entered into the Mentoring Services Agreement with Pantaloon Retail (India) Limited to facilitate the same. Diversify our businesses Although our focus will be on consumption-led sectors, we may also diversify into other potential high growth sectors. We intend to participate in emerging businesses, including those within consumption-led sectors, both through building new businesses directly and partnering with other companies to develop or grow Business Ventures jointly. We also intend to participate in more mature opportunities in companies which we believe have unrecognized growth potential, or are undervalued or in which we believe we can identify hidden assets or recovery potential. We believe that this approach will position us to perform well in a variety of market conditions and add complementary assets to our business. Our goal is to manage and mentor our Business Ventures with a view to achieving long-term growth, although we may also consider short-term opportunities where we see prospects for attractive returns. In determining the opportunities we will pursue, Investment Committee and Investment Management Team will focus on the optimal outcomes for our Business Ventures generally over a period of several years rather than on the near-term impact on our revenue, profits or cash flow. It is our strategy to extract optimal capital growth in our Business Ventures while managing risks, with a view to providing an acceptable return on assets. To this end, we will seek opportunities that

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demonstrate clear growth prospects and talented and committed management. Investment Policy We believe in applying a disciplined investment approach and building strong partnerships with highly motivated management teams and/ or promoters. When making investments, we seek out strong business models, attractive growth prospects, leading market positions and the ability to generate attractive returns. Within the broad investment parameters, we intend to participate in the consumption-led sectors through creation or acquisition of, or investment in, Business Opportunities. Our investment objective is to catalyse growth of emerging or potentially high growth Business Opportunities, through active participation and/ or advisory role. We would primarily focus on business segments of (i) fashion, (ii) FMCG, (iii) food processing, (iv) home products, (v) rural distribution and (v) vocational education. We may, however, evaluate and participate in other opportunistic investments in other high growth or potentially high growth business segments. We endeavour to aggregate various Business Ventures which belong to similar business segment and optimise utilisation of resources for such Business Ventures. All our investments shall be subject to the applicable exposure norms and prudential guidelines. The Reserve Bank of India has granted an exemption to the Company from complying with certain provisions of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 regarding single party/ group exposure norms for loan/ investments, subject to compliance with certain conditions. The exemption is subject to review of RBI after a period of one year from March 10, 2011. For further details of the exemption and our application for extension, please see the section entitled Government Approvals beginning on page 412. We propose to undertake investments through various mechanisms including investing in equity, equity-linked instruments and/ or debt. However, we intend to exercise operational and managerial control. We intend to ensure operational control through acquiring significant stakes in Business Opportunities or entering into contractual arrangements providing for strategically beneficial privileges. The ultimate objective of our investment policy is to capitalise on value creation in Business Ventures through long term participation or exiting the Business Ventures at a premium to our investment through public markets or private sales in appropriate circumstances. However, we do not intend to be governed by fixed timeframes or other shortterm considerations in respect of any such value creation efforts. Business Sourcing Processes Sourcing of Business Opportunities The Investment Management Team, headed by our Chief Executive Officer - K.K. Rathi, will source opportunities through a variety of channels, including their network of direct relationships with business groups, commercial and investment banks, and financial institutions. The Investment Management Team will also capitalise on its association with the Future Group to generate business opportunities in various consumption-led industries. The Investment Management Team is expected to take an active, hands-on approach to identifying opportunities and negotiating transactions, using its well qualified investment advisory and risk control teams. The Investment Management Team currently comprises of Chief Executive Officer - K.K. Rathi, Vice-President (Investments) - Meenakshi Maheshwari, Vice-President (Finance) - Gopal Bihani and Company Secretary & Head Legal - Manoj Gagvani. For further details of our employees, please see the section entitled Business - Strengths Experienced Management Team and Management - Key Managerial Personnel of the Company and Subsidiaries on pages 120 and 176, respectively. We believe that our Investment Management Team has the ability to make well informed qualitative judgements and perform rigorous quantitative analysis including risk assessment, which are critical in evaluation of Business Opportunities.

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Screening and evaluation Prior to recommending any opportunity, the Investment Management Team will conduct a pre-screening of the potential opportunity against our strategy and business philosophy and risk and return expectations. A preliminary evaluation will be conducted of the macroeconomic environment, the sector and industry outlook and the business plan of the potential opportunity. The Investment Management Team will also consider the degree to which a potential opportunity coincides with our strategy, including potential return on equity, diversification and appetite for risk. In deciding whether to recommend any opportunity, the Investment Management Team will conduct sensitivity analyses of various features of the transaction to assess projected returns. The Investment Management Teams evaluation process will be focused on fundamental research regarding opportunities to ensure that relationships between profit potential and risk are clearly understood. The Investment Management Team will conduct thorough reviews of various scenarios, including growth potential, discounted cash flows, comparable company metrics, industry analysis, quality of management and other value indicators. The Investment Management Team will also analyze the strategic fit of any potential opportunity with our objectives and business philosophy. Since we expect that many of our Business Ventures will not be in the form of liquid assets, we recognize the need to act rapidly if potential issues arise so that we can take remedial action. Consequently, the Investment Management Team will perform periodic analyses of the performance of our Business Ventures and will advise us on appropriate strategies with respect thereto. On screening and evaluation of a Business Opportunity, the Investment Management Team will prepare an evaluation memorandum regarding the Business Opportunity which may, inter alia, detail the following: (a) (b) (c) (d) (e) (f) description of the business; description of the promoters and existing shareholders; business prospects and SWOT analysis; financial analysis; summary of due diligence undertaken; declaration regarding compliance with prudential norms for the Company prescribed by the Reserve Bank of India or any other regulatory authority; and rationale for investment by the Company.

(g)

The evaluation memorandum would be presented to the Managing Director, Investment Committee or the Board of Directors, in accordance with the value of the investment and applicable approval limit. Approval Process Decision regarding investment in a Business Opportunity can be made by the Managing Director or the Investment Committee or the Board of Directors. Decisions regarding single capital commitment of up to ` 25 crores and aggregate capital commitment of up to ` 100 crores in a single Business Opportunity or follow-on investment in Business Venture, in which operational control is intended or exists, as applicable, can be approved by the Managing Director on recommendation of the Investment Management Team. For larger amounts, the Investment Committee has the authority to approve business opportunities in any particular asset class up to 25% of our Adjusted Net Worth and any single proposal up to 15% of our Adjusted Net Worth. Decisions of the Investment Committee on any business opportunity will be made by majority vote. The Investment

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Committee will comprise of one independent director and two non-independent directors. Currently, it comprises of Kishore Biyani (Chairman), G. N. Bajpai and B. Anand. The Chief Executive Officer shall be a permanent invitee to the Investment Committee. Additionally, the Investment Committee may also invite advisors with relevant experience to provide assistance in evaluating the Business Opportunities. However, any invitees shall not have voting rights. For further details of the Investment Committee, please see the section entitled Management Other Committees of the Board on page 173. Any proposals that are beyond the authority delegated to the Investment Committee or that result in (i) our exposure to any one sector exceeding 50% of Adjusted Net Worth at the time of investment, or (ii) our investment in illiquid assets exceeding 85% of Adjusted Net Worth ,will be approved by the Board of Directors. Before taking any final decision regarding approval of a Business Opportunity, we shall ensure adherence to the prudential norms prescribed by the Reserve Bank of India or any other regulatory/ statutory authority, and any other relevant regulatory norms and limits in accordance with the applicable law. Conflict management Business Opportunities shall be sourced by our Investment Management Team and recommended to the Managing Director, or Investment Committee, or the Board of Directors, as appropriate. If any such Business Opportunity is rejected by the Board of Directors, the same may be offered to entities belonging to the Future Group. Whilst we do not intend to invest in Business Opportunities directly recommended by the Future Group, our Investment Management Team may consult them or capitalise on their experience for sourcing Business Opportunities. Investment in any Business Opportunities will be based on an independent evaluation by our Investment Management Team and approval by the Managing Director, Investment Committee or the Board of Directors, as applicable. Any investments that we undertake in Business Opportunities recommended by, or held by any Future Group entity shall be conducted on an arms length basis. Any conflicts resulting from both our Company and any other Future Group entity being interested in investing in a Business Opportunity shall be resolved through consultation between one independent director to be assigned for such consultation by each of Pantaloon Retail (India) Limited and the Company. Risk management We believe that measuring, understanding and controlling risk is a dynamic and constantly evolving process, and we regard it as fundamental to our business. The principal risks to which we will be exposed are execution risk, operational risk, market risk, liquidity risk, credit risk and. equity risk. We will be exposed to these risks directly, to the extent that these risks may directly affect the value of our interests in Business Ventures and any other assets, and indirectly, to the extent that they may affect the value of the assets underlying Business Ventures. We intend to manage these risks at both the transaction and business asset levels. As regards transaction level risks, the Investment Committee will screen the business opportunities based on analysis of potential risk scenarios. As regards asset risk, we expect to place a cap on business asset types as well as on the size of each business opportunity. Certain categories of risk highlighted below are discussed in greater detail in the section entitled Managements Discussion and Analysis of Financial Condition and Results of Operations beginning on page 350. Execution risk Execution risk is the risk that a business in which we acquire an interest may not be able to execute its business plans. We seek to manage this risk by active participation in the management of the Business Ventures with support and assistance from Pantaloon Retail (India) Limited, and Future Capital Holdings Limited. We would undertake the following measures to address execution risks: (i) (ii) active participation in the management of the Business Ventures; monitoring supply and demand of goods and services produced, provided or sold by our Business Ventures; and

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(iii)

regular monitoring of under-performing Business Ventures by senior management and the Board of Directors.

Operational risk Operational risk arises from inadequate or failed internal operational control processes. We seek to manage this risk by implementing business policies which specify detailed operational procedures in respect of the business interests it acquires. We have developed internal controls for ourselves and our Business Ventures, such as exceptions reporting, periodic asset inspections, detailed management information systems, reporting and internal audits of critical systems to mitigate this risk. We are currently developing broader systems of internal and external audits and checks in order to further protect our Business Ventures and shareholders from potential risk. Market risk Market risk is the risk to earnings and capital growth arising from adverse movements in interest rates and equity prices, or industry or sector performance. We would attempt to address such risks by conducting peer group comparison and sectoral analysis for our proposed investments, close monitoring of investments and risk adjusted performance measurement and through the investment policy for evaluating Business Opportunities adopted by our Board of Directors. Our techniques and processes for managing the various components of market risk will continue to evolve in line with the relative significance of these risks in our balance sheet. Liquidity risk Liquidity risk arises from the absence of liquid resources, when funding loans and investments. This could be due to a decline in the expected liquidation price of our assets, or our inability to raise adequate resources at an appropriate price. We will seek to minimize this risk through a mix of strategies, including maintaining liquid treasury assets and following a forward-looking resource raising programme based on projected disbursements and maturing obligations. Equity risk We assess our Business Ventures before approval and disbursement for their risk-return profile. Any proposals that result in (i) our exposure to any one sector exceeding 50% of Adjusted Net Worth at the time of investment, or (ii) our investment in illiquid assets exceeding 85% of Adjusted Net Worth ,will be approved by the Board of Directors. These internal prudential guidelines also are subject to compliance with the RBI's exposure guidelines and prudential norms for NBFCs. In accordance with RBI regulations a non-deposit taking NBFC will be considered systemically important (an SINBFC) if it has total assets of ` 100 crores or more as per its last audited balance sheet. Since March 31, 2008, we have had total assets exceeding ` 100 crores and, consequently have been classified as an SI-NBFC. For further details of the requirements applicable to SI-NBFCs please refer to section entitled Regulations and Policies - NBFC Regulations on page 137. Credit risk Credit risk is the risk of loss in value of debt securities due default in payment by the issuer. We are subject to credit risk with respect to our Business Ventures. The Investment Committee will seek to help us mitigate credit risk by actively monitoring Business Ventures and the quality of the underlying assets. We will seek to minimize credit risk further by promoting and acquiring interests in Business Ventures that we believe are appropriately diversified for our needs by asset type, industry, the nature of the business and the life-cycle of the underlying assets. Additionally, we expect that the Investment Management Team will target business opportunities that, based on the Investment Management Teams analysis, have a low probability of capital depreciation.

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Business Ventures Our investments in Business Ventures comprises of equity shares, debentures and preference shares. In accordance with our investment policy, we have invested in Business Ventures within our preferred business segments in the consumption-led sectors. Our shareholding in the Business Ventures is as follows:
70.00%

Aadhaar Retailing Limited (Rural Distribution) Amar Chitra Katha Private Limited (Others) (Edutainment) AND Designs India Limited (Fashion) Biba Apparels Private Limited (Fashion) Capital Foods Exportts Private Limited (Food Processing) Future Consumer Enterprises Limited (FMCG) Future Consumer Products Limited (FMCG)
5.56%**

12.32%*

22.86%

28.30%

40.81%

Future Ventures India Limited

100%

90%

50.00%

Holii Accessories Private Limited (Fashion)

26.00%

SSIPL Retail Limited (Others) Turtle Limited (Fashion) Celio Future Fashion Limited (Fashion) Lee Cooper (India) Limited (Fashion)

52.53%

Indus Tree Crafts Private Limited (Home Products)

49.99%

85.70%

Indus-League Clothing Limited (Fashion)

100.00%

*On a fully diluted basis and 12.79% on an undiluted basis. **On a fully diluted basis and 6.57% on an undiluted basis

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As of the date of the Prospectus, we have interest in the following 14 Business Ventures: 1. Fashion (i) AND Designs India Limited (AND Designs) AND Designs caters to the womens apparel market, with focus on western wear. AND Designs was promoted in 1995 by Anita Dongre and others as a manufacturer and supplier of unbranded apparel to retail stores. The company opened its first retail store and also launched its prt line AND in 1999. Following the success of the AND brand, the company launched Anita Dongres premium label, Anita Dongre Inter Pret, a mix and match western wear fashion brand, Anita Dongre Timeless, a custom made occasion wear, GRASSROOT, an organic clothing line and Globaldesi, international fusion wear. AND Designs has also been involved in designing uniforms for various corporates. On November 30, 2008, we subscribed to 15.15% of the equity share capital and 100 fully convertible debentures of AND Designs. Pursuant to the conversion of the fully convertible debentures, we hold 22.86% of the issued and paid-up equity share capital of AND Designs as of the date of this Prospectus. We paid an aggregate consideration of ` 573.15 lakhs for acquiring 22.86% shareholding in AND Designs. In the year of our investment in AND Designs, it operated through 28 exclusive brand outlets and 113 multi-brand outlets, including 64 Future Group outlets, which have increased to 44 exclusive brand outlets and 158 multi-brand outlets, including 72 Future Group outlets, as of February 28, 2011. The sales and net profit after tax of AND Designs have increased at a CAGR of 57% and 157%, respectively from Fiscal 2008 to Fiscal 2010. For the nine month period ended December 31, 2010, AND Designs had sales of ` 5,781.27 lakhs and a net profit after tax of ` 669.69 lakhs. We have assisted AND Designs in developing its marketing strategy, which has, we believe, resulted in increased sales. (ii) Biba Apparels Private Limited (BAPL) BAPL was incorporated in 2002 and is involved in the designing and marketing of womens apparel. BAPL has an established presence in ethnic wear segment in India, which includes ethnic ensembles (salwar, kameez and dupatta), mix and match readymade clothing and unstitched fabric lengths. Apart from high-end designer apparel, BAPL also has Meena Bindra brand which caters to the price-conscious segments of the market. BAPL has also ventured into movie merchandising. On October 26, 2007, we acquired 6.53% of the equity share capital and 7,000 fully convertible debentures of `10,000 each of BAPL from Future Capital Holdings Limited for an aggregate consideration of ` 1,315 lakhs which included the conversion amount of ` 700.00 lakhs for the conversion of 7,000 fully convertible debentures (FCDs) and certain ancillary costs of investment. In September 2008, the said 7,000 FCDs were converted into 32,336 equity shares of BAPL and the interest receivable on FCDs aggregating ` 55.58 lakhs was capitalized towards the conversion amount of the FCDs. In September 2010, we made a further investment ` 299.92 lakhs in BAPL and acquired 9,200 equity shares of BAPL, thereby increasing our shareholding to 14.80%. Subsequently, in November 2010, we purchased 11,750 equity shares of BAPL from certain of its existing shareholders for an aggregate consideration of ` 375.00 lakhs. As of the date of this Prospectus, we held 28.30% of the issued and paid-up equity share capital of BAPL. We have entered into a share transfer cum purchase agreement dated December 20, 2010 (Biba Agreement) pursuant whereto we have the right, subject to certain conditions, to purchase

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additional 51,600 equity shares of BAPL for an aggregate consideration of ` 2,198.08 lakhs, which would result in increasing our shareholding in BAPL to 28.30%. Pursuant to the same, in April 2011, we have acquired additional 51,600 equity shares of BAPL from Sanjay Bindra and Punita Bindra resulting in increase of our shareholding to 28.30% in BAPL. For further details of the Biba Agreement, please see the section entitled History and Certain Corporate Matters Material Agreements on page 150. In the year of our investment in BAPL, it operated through 37 exclusive brand outlets and 96 multi-brand outlets, which have increased to 68 exclusive brand outlets and 133 multi-brand outlets, including 65 Future Group outlets, as of February 28, 2011. The net sales and net profit after tax of BAPL have increased at a CAGR of 22% and 26%, respectively from Fiscal 2008 to Fiscal 2010. For Fiscal 2010, BAPL had net sales of ` 9,887.85 lakhs and a net profit after tax of ` 810.64 lakhs. We believe that the womens apparel market is a large and growing segment of the apparel industry, and that the Future Group can provide support to assist BAPL grow its business even faster. The Future Group has helped BAPL enter into retailing new categories of apparel for price conscious consumers. The Future Group has also helped BAPL develop information systems to enable more effective reporting and improve operational efficiency. (iii) Holii Accessories Private Limited (Holii) Holii is joint venture between the Company and Hidesign India Private Limited which is in the business of retailing fashion accessories such as leather handbags for women and wallets and other leather products under the brand name Holii. In accordance with the subscription cum shareholders agreement dated November 5, 2009 between us, Hidesign India Private Limited and Holii Accessories Private Limited, we had acquired 5,000 equity shares, aggregating 50% of the equity shareholding of Holii, for a consideration of ` 0.50 lakhs. Subsequently, Holii issued 4,95,000 equity shares each to the Company and Hidesign India Private Limited for a consideration of ` 49.50 lakhs each. Thereafter, Holii issued 2,50,000 equity shares each to the Company and Hidesign India Private Limited. The Company paid a consideration of ` 25 lakhs for the said 2,50,000 equity shares of Holii. In January 2011, we acquired 10,00,000 equity shares of Holii for an aggregate consideration of ` 100 lakhs. As of the date of this Prospectus, we hold 50% of the issued and paid-up equity share capital of Holii. As of February 28, 2011, Holii operated through five exclusive brand outlets and 62 multi-brand outlets, including 21 Future Group outlets. For the nine month period ended December 31, 2010, Holii had sales and operating income of ` 302.67 lakhs and a net loss of ` 148.85 lakhs. Holii was conceived on the basis of consumer insight provided by Pantaloon Retail (India) Limited and Hidesign India Private Limited. We have assisted Holii in increasing market access by arranging for Holii to set up shops-in-shops in the Future Group outlets and devising the marketing strategy for Holii. (iv) Indus-League Clothing Limited (Indus-League) Indus-League is an established designer, manufacturer and retailer of ready-made garments. It retails its products through the brands; Indigo Nation, John Miller, Scullers, Urbana, Urban Yoga, Contra and Jealous. Indus-League has market presence in India, Sri Lanka, Middle East Asia, United Arab Emirates and Bahrain. We had pursuant to share purchase agreements dated March 26, 2008, with PIL Industries Limited (PIL) and Future Corporate Resources Limited (formerly PFH Entertainment Limited)

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purchased 14.28% of the equity share capital of Indus-League for an aggregate consideration ` 5,005 lakhs. Indus-League, thereafter, issued 93,63,961 equity shares to the Company on January 30, 2010 for an aggregate consideration of ` 9,822.79 lakhs. Additionally, during 2010, the Company has purchased 129,63,422 equity shares of Indus-League for an aggregate consideration of ` 23,455.72 lakhs. As of the date of this Prospectus we hold 85.70% of the issued and paid-up equity share capital of Indus-League. In the year of our investment in Indus-League, it operated through 80 exclusive brand outlets and 345 multi-brand outlets, including 96 Future Group outlets. As of February 28, 2011, IndusLeague operated through 88 exclusive brand outlets and 128 multi-brand outlets, including 81 Future Group outlets. The sales and net profit after tax of Indus-League have increased at a CAGR of 15% and 144%, respectively from Fiscal 2008 to Fiscal 2010. For the nine month period ended December 31, 2010, Indus-League had aggregate sales of ` 19,970.03 lakhs and net profit after tax of ` 368.18 lakhs. We believe that Indus-League is well positioned to grow its ready-made garment business rapidly, by leveraging Future Groups retail expertise and nationwide footprint. Certain Future Group companies have provided mentoring and guidance to Indus-League, through their respective employees who have significant experience in designing and retailing branded apparel. The Future Group has assisted Indus-League in identifying and appointing senior employees and implementation of SAP. We have helped Indus-League in redesigning its distribution strategy, which has resulted in reduced inventory levels and operational costs and assisted Indus-League in improving lifecycle management of its brands and merchandise. (v) Celio Future Fashion Limited (Celio) Celio was incorporated as a joint venture between Celio International, a France based mens apparel and accessories retailer, and Indus-League Clothing Limited (a Future Group entity), to retail mens apparel and accessories in the Indian market. Celio International is based in France and caters primarily to the continental European market, aiming to provide fashionable, affordable clothing through its nearly 400 points of presence across 25 countries. Celio was established to develop the Celio brand in India. We intend to leverage our retail expertise in developing Celios business and providing it with a strong distribution platform through the Future Group outlets, such as Pantaloons and Central. We acquired 49.99% stake in Celio from Indus-League Clothing Limited for ` 1,199.99 lakhs in terms of deed of adherence dated December 16, 2008. Thereafter, through deed of adherence dated January 30, 2010, we have transferred our shareholding in Celio to our subsidiary, Indus-League Clothing Limited for a consideration of ` 2,500.00 lakhs. As of the date of this Prospectus, IndusLeague Clothing Limited holds 49.99% of the issued and paid-up equity share capital of Celio. In the year of our investment in Celio, it operated through 2 exclusive brand outlets and 14 multibrand outlets of the Future Group, which have increased to 20 exclusive brand outlets and 70 multi-brand outlets, including 53 Future Group outlets, as of February 28, 2011. The net sales of Celio have increased by 244% from the year ended January 31, 2009 to the year ended January 31, 2010. For the eleven month period ended December 31, 2010, Celio had net sales of ` 3,018.30 lakhs and loss of ` 557.70 lakhs. (vi) Lee Cooper (India) Limited (Lee Cooper) Lee Cooper is a manufacturer and retailer of lifestyle products, including denims, trousers, jackets, shirts and shoes under the Lee Cooper brand. Lee Cooper has a 15 year exclusive license to

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manufacture and market Lee Cooper branded products in India in consideration of payment of a royalty of 3% of the annual turnover of Lee Cooper and a onetime know how fee of approximately ` 10.65 crores. In accordance with the agreement between Doserno Trading Limited, Vivat Holdings Limited and Lee Cooper, the royalty payment is paid to Doserno Trading Limited and Vivat Holdings Limited. The exclusive licensing agreement expires on December 31, 2021. Lee Cooper is a wholly owned subsidiary of Indus-League Clothing Limited. On March 26, 2008, the Company had purchased 21.67% and 50% of the then existing equity share capital and preference share capital, respectively of Lee Cooper from Future Corporate Resources Limited (formerly PFH Entertainment Limited) for a total consideration of ` 2,405.00 lakhs. Subsequently, PIL Industries Limited and Manz Retail Private Limited transferred 5,10,000 equity shares for an aggregate consideration of ` 959.32 lakhs and 9,00,000 equity shares for an aggregate consideration of ` 1,692.92 lakhs, respectively to the Company. Manz Retail Private Limited also transferred 41,00,000 preference shares of Lee Cooper to the Company for a consideration of ` 410 lakhs. Pursuant to the said transfer, the shareholding of the Company in Lee Cooper increased to 18,00,000 equity shares and 82,00,000 preference shares. Thereafter, the Company has transferred its entire equity and preference shareholding in Lee Cooper to its subsidiary, IndusLeague Clothing Limited for an aggregate consideration of ` 5,500.00 lakhs. As of the date of this Prospectus Indus-League Clothing Limited holds 100% of both the issued and paid-up equity share capital and the preference share capital, of Lee Cooper. In the year of our investment in Lee Cooper, it operated through 16 exclusive brand outlets, which has changed to one exclusive brand outlet and 285 multi-brand outlets, including 250 Future Group outlets, as of February 28, 2011. The sales and net profit after tax of Lee Cooper have increased at a CAGR of 44% and 46%, respectively from Fiscal 2008 to Fiscal 2010. For the nine month period ended December 31, 2010, Lee Cooper had aggregate sales of ` 7,116.99 lakhs and a net profit after tax of ` 434.86 lakhs. We have invested in Lee Cooper because we believe that there is a large domestic market for branded apparel due to the rising per capita income in India. We have helped Lee Cooper in redesigning its distribution strategy, which has resulted in reduced inventory levels and operational costs and assisted Lee Cooper in improving lifecycle management of its brands and merchandise. (vii) Turtle Limited (Turtle) Turtle is a Kolkata based manufacturer, distributor, exporter and retailer of menswear products, such as shirts, T-shirts, trousers and accessories like ties, cufflinks and handkerchiefs. Turtle retails its products under Turtle and Turtle Wood brands. In August 2007, it launched its value brand, London Bridge, to provide internationally styled menswear products to customers at affordable prices. On December 1, 2008, we acquired 26% of the equity share capital of Turtle for ` 1,133.44 lakhs. The Company transferred its entire shareholding in Turtle to its subsidiary, Indus-League Clothing Limited in two tranches of 11,40,000 equity shares and 4,20,000 equity shares in January 2010 and February 2010, respectively for an aggregate consideration of ` 1,820.00 lakhs. As of the date of this Prospectus, our subsidiary Indus-League Clothing Limited holds 26% and of the issued and paid-up equity share capital of Turtle. In the year of our investment in Turtle, it operated through 31 exclusive Turtle Wood brand outlets and 850 multi-brand outlets, which have increased to 46 exclusive Turtle Wood brand outlets, 1,550 multi-brand outlets and 80 Future Group outlets, as of February 28, 2011. For Fiscal 2010, Turtle had sales of ` 6,409.63 lakhs and net profit after tax of ` 291.15 lakhs. For the nine month period ended December 31, 2010, Turtle had aggregate sales of ` 5,910.25 lakhs

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and a net profit after tax of ` 266.34 lakhs. We believe that Future Group has significant potential to help Turtle grow its business by providing access to its retail expertise and nationwide footprint. 2. Home Products Indus Tree Crafts Private Limited (Indus Tree) Indus Tree is a social entrepreneurship engaged in the design, creation, domestic retailing and distribution, and export of a wide range of environmentally and socially sustainable products. Their products include apparel, personal accessories, furniture, handicrafts and home linen and are marketed under the brand Mother Earth. Most of the products sold by Indus Tree are hand crafted by rural artisans. Indus Tree has positioned its stores as a one stop solution for customers aspiring for an environmentally and socially sustainable lifestyle. Indus Tree was promoted to support rural livelihood and craft. It specializes in products made out of natural materials, such as river grass and banana bark yarned palm leaves. It sources products from a network of over 100 producers groups, providing them with contemporary designs. Indus Tree aims to work with rural craftspeople in a self-sustainable fashion and marketing the products created by them to urban markets all over the world. It is a member of the Fair Trade Forum - India. We subscribed to 38,000 equity shares of Indus Tree, constituting 43.18% of its issued and paid-up equity share capital, for ` 657.59 lakhs through share subscription agreement and shareholders agreements both dated December 1, 2008. Subsequently, we subscribed to a fresh issue of 17,336 equity shares for a consideration of ` 299.99 lakhs, thereby increasing our shareholding to 52.53%, which we continue to hold as of the date of this Prospectus. In the year of our investment in Indus Tree, it operated through four exclusive brand outlets and 16 multibrand outlets, which have increased to five exclusive outlets and 15 multi-brand outlets, including seven Future Group outlets, as of February 28, 2011. The sales of Indus Tree have increased at a CAGR of 34%, from Fiscal 2008 to Fiscal 2010. For the nine month period ended December 31, 2010, Indus Tree had aggregate sales of ` 726.29 lakhs and a net loss of ` 271.11 lakhs. We have invested in Indus Tree as we believe it can successfully tap the large market in India and overseas for aesthetic and affordable products created by blending indigenous crafts techniques with contemporary designs. Post our investment, we have helped Indus Tree to identify and recruit an experienced and suitable CEO, who had earlier worked in spearheading growth of one of the Future Group companies. We have also helped Indus Tree to improve its distribution network by providing it with access to the Future Group stores and are currently advising it on re-orientation of the marketing strategy. 3. Food Processing (i) Capital Foods Exportts Private Limited (Capital Foods Exportts) Capital Foods Exportts is a food processing company having development and manufacturing capabilities in various processed food products, such as instant noodles, sauces, chutneys and microwavable rice and curries. It markets its products under various brands, which include Chings Secret, Smith & Jones, Raji, Mama Marie and Kaeng Thai. Capital Foods Exportts has pan Indian distribution network of approximately 110 super stockists and 750 distributors and it also exports products to various countries including United States, United Kingdom, Singapore, Middle East Asia and Australia. Capital Foods Limited, a subsidiary of Capital Foods Exportts, has received an in-principle approval (no. F. No. 1-MFPI/08/Mega FP (Vol.II)) dated August 3, 2010 for establishing a mega foodpark from the Ministry of Food

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Processing Industries, Government of India (MOFPI). Capital Foods Limited is proposing to establish this foodpark at Kolar/ Tumkur in Karnataka under the Mega Food Parks Scheme of MOFPI. The park is being designed to provide integrated facility for food processing enterprises and to enable the farmers in the vicinity to sell their farm produce with minimum wastage and intermediation. We acquired 40.81% of the paid-up equity share capital of Capital Foods Exportts pursuant to a share purchase agreement dated February 18, 2010 with Indivision India Partners for an aggregate consideration of ` 4,511.25 lakhs including ` 11.25 lakhs towards ancillary cost of investment, which we continue to hold as of the date of this Prospectus. For the nine month period ended December 31, 2010, Capital Foods Exportts had sales of ` 1,224.82 lakhs and net profit after tax of ` 5.65 lakhs. (ii) Mega Food Parks (a) We, along with Jaffe Foods Industries Private Limited and Gujarat Enviro Protection and Infrastructure Limited, have submitted an expression of intent to the Ministry of Food Processing Industries, Government of India in February 2011 for setting up of a mega food park at Bakrol Village, Ahmedabad District, Gujarat. The total cost involved in setting up this project is estimated to be approximately ` 11, 210 lakhs. We, along with Keventer Agro Limited and certain other individuals, have submitted an expression of intent to the Ministry of Food Processing Industries, Government of India for setting up of a mega food park at Khelgaon, Bhagalpur District, Bihar in February 2011. The total cost involved in the project is estimated to be ` 15,330.56 lakhs.

(b)

4.

FMCG (i) Future Consumer Enterprises Limited (FCEL) Future Consumer Enterprises Limited is engaged in product development, designing, branding and distribution of FMCG products under brands such as Tasty Treat, Clean Mate, Care Mate, Premium Harvest and Fresh and Pure. FCEL currently markets its products through stores owned by the Future Group, such as Big Bazaar, Food Bazaar, KB Fairprice and Aadhaar. On August 2, 2010, the Company purchased 50,000 equity shares of FCEL, constituting 100% of its issued and paid-up equity share capital, from Future Brands Limited for an aggregate consideration of ` 5.00 lakhs. Subsequently, FCEL issued 100,00,000 equity shares to the Company on August 6, 2010 for an aggregate consideration of ` 16,000 lakhs. As of the date of this Prospectus we hold 100% of the issued and paid-up equity share capital of FCEL. For the nine month period ended December 31, 2010 FCEL had sales of ` 5,414 lakhs and a net loss of ` 749 lakhs. (ii) Future Consumer Products Limited (FCPL) FCPL is engaged in product development, designing, branding and distribution of FMCG products under the brand Sach. FCPLs products are currently sold through various Future Group outlets. On June 29, 2010, the Company purchased 9,00,000 equity shares of FCPL, constituting 90% of its issued and paid-up equity share capital, from Pantaloon Retail (India) Limited for an aggregate consideration of ` 2,000.00 lakhs, which the Company continues to hold as of the date of this Prospectus.

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For the nine month period ended December 31, FCPL had aggregate income from royalty of ` 131.25 lakhs and a net loss of ` 2.74 lakhs. 5. Rural distribution Aadhaar Retailing Limited (ARL) ARL is in the business of rural and semi-urban retail distribution of agricultural and consumer products for personal and household use, including apparel, seeds, fertilizers and FMCG products. ARL is proposing to establish franchisee outlets under hub and spoke model with existing centers to serve as hubs and the franchisees working as a spoke. In recognition of the growing market in rural and semi urban areas, we had purchased 70% of the equity share capital of ARL for an aggregate consideration of ` 3,018.00 lakhs from its promoter, Godrej Agrovet Limited on March 27, 2008. In January 2010, we subscribed to 52,50,000 shares of ARL at the premium of ` 40 per share for the total consideration of ` 2,625 lakhs. Further, in March 2010, we subscribed to 42,00,000 shares of ARL at the premium of ` 40 per share for the total consideration of ` 2,100 lakhs. In February 2011, we acquired 17,50,000 equity shares of ARL for an aggregate consideration of ` 875 lakhs. However, this did not result in any increase in our shareholding percentage in ARL as ARL had issued equity shares to all its shareholders in proportion to their existing shareholding. As of the date of the Prospectus, we continue to hold 70% of issued and paid-up equity share capital of ARL. ARL provides the Future Group with an opportunity to enlarge its footprint into rural retailing. We intend to utilize the retailing expertise within the Future Group to help ARL upgrade and scale its rural retail business by introducing new store formats and innovative selling initiatives. In the year of our investment in ARL, it operated through 62 exclusive brand outlets, which have changed to 51 exclusive outlets, as of February 28, 2011. The sales of ARL have increased at a CAGR of 311% from Fiscal 2008 to Fiscal 2010. For the nine month period ended December 31, 2010, ARL had aggregate sales of ` 4,741.44 lakhs and a loss of ` 1,884.65 lakhs. We have invested in ARL as we believe that ARL can provide us with an opportunity to participate in rural consumption sector. 6. Others (i) Amar Chitra Katha Private Limited (ACK) ACK is engaged in the business of education and entertainment by way of publishing printed materials and production of animated films and to organise and conduct theatrical production and entertainment of all kinds. It produces publications and animated films, which are both educational and entertaining (Edutainment). ACK publishes various childrens periodical magazines and books, such as Tinkle, a monthly comic magazine and Amar Chitra Katha, a comic series. ACKs products are targeted towards children up to the age of 15 years and its diverse products are offered through various mediums include new age media platforms. ACK operates two websites; www.amarchitrakatha.com, which is an online shop for childrens products and www.tinkleonline.com, which is a social networking website for children. ACK is also in the business of distribution through its subsidiary, India Book House, one of the largest distributors of books and magazines in India. We subscribed to 49,039 equity shares of ACK constituting 13.65% of its issued and paid-up equity share capital, for an aggregate consideration of ` 1,502.06 lakhs in terms of the share subscription agreement and shareholders agreement both dated March 1, 2011 (the ACK Agreements). Subsequently, ACK issued further equity shares to one of the other shareholders

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and consequently, as of the date of this Prospectus, we hold 12.79% of the paid-up equity share capital of ACK. Furthermore, in terms of the ACK Agreements, subject to fulfilment of the conditions subsequent as provided in the ACK Agreements, we shall subscribe to additional 73,559 equity shares of ACK for an aggregate consideration of ` 2,253.11 lakhs prior to June 30, 2011. For the Fiscal 2010, ACK had aggregate net sales of ` 1,076.29 lakhs and a net loss of ` 231.00 lakhs. We have invested in ACK as we believe that investment in ACK provides us with the opportunity to participate in the edutainment segment through partnership with a company that operates across the spectrum of edutainment with an established market leadership, strong brand and management team. (ii) SSIPL Retail Limited (SSIPL) SSIPL is a retailer of Nike branded products, a wholesaler of multi-brand footwear, sportswear and apparel, and a manufacturer and distributor of footwear. On December 17, 2007, we subscribed to 5.56%, on a fully diluted basis (6.57% on an undiluted basis), of the equity share capital of SSIPL for ` 1,000.06 lakhs. On March 14, 2011, we transferred our entire shareholding of 6.57% on an undiluted basis in SSIPL to our subsidiary, Indus-League Clothing Limited for the total consideration of ` 1,250.00 lakhs. For further details of the shareholding pattern of SSIPL, please see the section entitled Business Ventures beginning on page 184. As of February 28, 2011, SSIPL operated through 124 exclusive brand outlets. For Fiscal 2010 SSIPL had revenue of ` 33,371.01 lakhs and a profit of ` 404.25 lakhs. In addition to our current Business Ventures, we have fully divested certain of our investments as detailed in the following table: Name of the Business Venture divested by the Company Sankalp Retail Value Stores Private Limited FootMart Retail India Limited Star Shopping Centres Private Limited
*

Date of Divestment January 28, 2010 January 21, 2010 July 26, 2010

Name of the Transferee to whom Business Venture Divested Juhis Idea Mercantile Private Limited* Blessings Mercantile Private Limited Future Realtors (India) Private Limited

Equity shares and preference shares were sold by the Company.

We continue to evaluate other potential opportunities in sectors including branded apparel, food processing, FMCG, home products and vocational education. We cannot provide any assurances as to when, or whether, any of these opportunities will materialise. We have also deployed a portion of our capital in short term investments, including debt mutual funds. Human Resources Key members of our management team are Kishore Biyani, Managing Director; K. K. Rathi, Chief Executive Officer; our President (Food Processing), Praveen Dwivedi; Meenakshi Maheshwari, Vice- President (Investments); Gopal Bihani, Vice-President (Finance) and Manoj Gagvani, Company Secretary & Head - Legal. We intend to limit the number of personnel we employ since we expect to actively leverage the skills and resources of the Future Group.

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Competition We believe that a number of other entities will compete with us to access opportunities in consumption-led sectors in India. Our primary competitors are other providers of medium- to long-term capital, including private equity funds, public and private sector banks, mutual funds, financial institutions and other NBFCs. We expect to face competition from other participants in consumption-led sectors in sourcing and securing business opportunities. Our Business Ventures will compete with other companies in the sectors in which they are involved. Intellectual Property We have entered into a master license agreement dated August 10, 2010 (the Master License Agreement) with Future Ideas Company Limited for use of certain trademarks in relation to the Future Group (the Future Group Trademarks). In terms of Master License Agreement, Future Ideas Company Limited which is the proprietor of the Future Group Trademarks, has given us the right to use Future Group Trademarks (i) in communication to third party, (ii) in the stores in India, (iii) on our website and advertisement of our products. In accordance with the Master License Agreement, we are required to pay a royalty of ` 100.00 lakhs p.a. for Fiscal 2011 which increases incrementally to ` 244.00 lakhs p.a. for Fiscal 2015. The Master License Agreement is valid from August 10, 2010 until terminated in accordance with the terms thereof. For further details of the Master License Agreement, please see the section entitled History and Certain Corporate Matters - Material Agreements - Master License Agreement between the Company and Future Ideas Company Limited on page 152. Properties Our registered office is located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060. The property on which our registered office is situated is not owned by us. We have been permitted by Pantaloon Retail (India) Limited through consent letter dated November 26, 2008 to use the said property for our Registered Office.

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REGULATIONS AND POLICIES The following description is a summary of certain sector specific laws and regulations in India, which are applicable to us. The information detailed in this chapter has been obtained from publications available in the public domain. The regulations set out below are not exhaustive, and are only intended to provide general information to prospective investors and are neither designed nor intended to be a substitute for professional legal advice. Introduction We are registered with the Department on Non-Banking Supervision, Reserve Bank of India as a non-deposit taking Non-Banking Financial Institution. As such, the business activities of the Company are regulated by RBI regulations applicable to investment companies which are non-public deposit taking NBFCs. The following are significant regulations that affect the operations of the Company: I. NBFC Regulations The Reserve Bank of India Act, 1934 The RBI is entrusted with responsibility of regulating and supervising activities of NBFCs by virtue of power vested in Chapter III B of the Reserve Bank of India Act, 1934 (RBI Act). The RBI Act defines an NBFC under Section 45-I (f) as: a financial institution which is a company; a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; such other non-banking institution or class of such institutions as the RBI may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. Financial institution and non- banking institution have been defined under sections 45 I (c) and 45 I (e) of the RBI Act, respectively. The RBI has clarified through a press release (Ref. No. 1998-99/ 1269) dated April 8, 1999, that in order to identify a particular company as an NBFC, it will consider both the assets and the income pattern as evidenced from the last audited balance sheet of the company to decide its principal business. The company will be treated as an NBFC (a) if its financial assets are more than 50% of its total assets (netted off by intangible assets); and (b) income from financial assets should be more than 50% of the gross income. Both these tests are required to be satisfied as the determinant factor for principal business of a company. In terms of Section 45-IA of the RBI Act, no NBFC shall commence or carry on the business of a nonbanking financial institution without obtaining a certificate of registration (CoR). The NBFC must have a net owned fund of ` 200 lakhs to be considered for the grant of CoR by the RBI. The RBI also has the power to exempt certain NBFCs from the requirement of obtaining the CoR. Further, every NBFC is required to submit to the RBI a certificate, latest by June 30 every year, from its statutory auditor stating that it is engaged in the business of non-banking financial institution requiring it hold a CoR. Under Section 45 IC of the RBI Act, every NBFC must create a reserve fund and transfer thereto a sum not less than 20% of its net profit every year, as disclosed in the profit and loss account and before any dividend is declared. Such a fund is to be created by every NBFC irrespective of whether it is an NBFC not accepting/holding public deposit (NBFC-ND) or not. Further, no appropriation can be made from the fund by the NBFC except for the purposes specified by the RBI from time to time and every such

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appropriation shall be reported to RBI within 21 days from the date of withdrawal. Maintenance of liquid assets In exercise of powers conferred under section 45NC read with section 45-IB (1) of the RBI Act, the RBI through notification no.DFC.121/ED(G)-98 dated January 31, 1998,as amended has prescribed that every NBFC shall invest and continue to invest in unencumbered approved securities valued at price not exceeding the current market price of such securities an amount which shall, at the close of business on any day be not less than 10% in approved securities and the remaining in unencumbered term deposits in any scheduled commercial bank; the aggregate of which shall not be less than 15% of the public deposit outstanding at the last working day of the second preceding quarter. The RBI vide its circular RBI 2008-09/329 dated December 23, 2008 allowed systemically important NBFCs which are non- deposit-taking (NBFCs-ND-SI) to raise short- term foreign currency borrowings, under the approval route, subject to certain conditions. NBFCs-ND-SI with assets size of ` 10,000 lakhs and above were earlier permitted to raise funds by issuing perpetual debt instruments that could be included in their Tier 1 capital by the RBI circular RBI/2008-09/253 dated October 29, 2008. Prudential Norms The RBI has issued the Non Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, as amended by notification no. DNBS (PD) CC No.178/03.02.001/2010-2011 dated July 1, 2010 (the Prudential Norms Directions), which contain detailed directions on prudential norms for NBFCs-ND. The Prudential Norms Directions, inter alia, prescribe guidelines regarding income recognition, asset classification, provisioning requirements, constitution of audit committee, capital adequacy requirements, concentration of credit/investment and norms relating to infrastructure loans. The Prudential Norms Directions are not applicable to NBFCs being investment companies provided that such NBFC: is holding investments in the securities of its group/ holding/ subsidiary companies where the book value of such holding is not less than 90% of its total assets and it is not trading in such securities, is not accepting/holding public deposit, and is not a systemically important non-deposit taking NBFC. In terms of the Prudential Norms Directions, all NBFCs-ND with an asset size of ` 10,000 lakhs or more as per its last audited balance sheet will be considered as a systemically important NBFC-ND.RBI circular RBI/2008-09/491, dated June 4, 2009 has clarified that once an NBFC reaches an asset size of ` 10,000 lakhs or above, it shall come under the regulatory requirement for NBFCs-ND-SI as stated above, despite not having such assets as on the date of last balance sheet. Therefore, all non-deposit taking NBFCs may comply with RBI regulations issued to NBFC-ND-SI from time to time, as and when they attain an asset size of ` 10,000 lakhs, irrespective of the date on which such size is attained. Asset Classification The Prudential Norms Directions require that every NBFC shall, after taking into account the degree of well defined credit weaknesses and extent of dependence on collateral security for realisation, classify its lease/hire purchase assets, loans and advances and any other forms of credit into the following classes: Standard assets; Sub-standard assets; Doubtful assets; and

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Loss assets. Further, the class of assets referred to above shall not be upgraded merely as a result of rescheduling, unless it satisfies the conditions required for the upgradation. A NBFC-ND is required to make provisions against outstanding standard assets, sub-standard assets, doubtful assets and loss assets in the manner provided for in the Prudential Norms Directions. Exposure Norms The Prudential Norms Directions prescribes credit exposure limits for financial institutions in respect of the loans granted and investments undertake by an NBFC-ND-SI. A NBFC-ND-SI shall not lend money exceeding 15% of its owned funds to any single borrower and the lending to any single group of borrowers shall not exceed 25% of the NBFC-ND-SIs owned fund. As regards the investments, a NBFC-ND-SI shall not invest in the shares of a company exceeding 15% of its owned fund, while the investment in the shares of a single group of companies shall not exceed 25% of its owned funds. The loans and investments of NBFC-ND-SI taken together shall not exceed 25% of its owned funds to or in a single party and 40% of its owned funds to or in a single group of parties. However, the prescribed ceilings shall not be applicable on a NBFC-ND-SI for investments in the equity capital of an insurance company to the extent specifically permitted by the RBI. Any NBFC-ND-SI not accessing public funds, either directly or indirectly, may make an application to the RBI for modifications in the prescribed ceilings. Further, every NBFC-ND-SI is required to formulate a policy in respect of exposures to a single party/a single group of parties. Capital Adequacy Norms As per the Prudential Norms Directions, every NBFC-ND-SI is subject to capital adequacy requirements. A minimum capital ratio consisting of Tier I and Tier II capital of not less than 10% of its aggregate risk weighted assets on balance sheet and of risk adjusted value of off-balance sheet items is required to be maintained. Such ratio was required to be at least 12% by March 31, 2010 and shall be at least 15% by March 31, 2011. Also, the total of Tier II capital of non-deposit taking non-banking financial company shall not exceed 100% of Tier I capital. Asset Liability Management: The RBI has prescribed the Guidelines for Asset Liability Management (ALM) System in NBFCs (ALM Guidelines) that are applicable to all NBFCs. The NBFCs (engaged in and classified as equipment leasing, hire purchase finance, loan, investment and residuary non-banking companies) meeting the criteria ,inter alia, of asset base of ` 10,000 lakhs, irrespective of whether they are accepting / holding public deposits or not, are required to put in place an ALM system. The ALM system rests on the functioning of ALM information systems within the NBFC, ALM organization including Asset Liability Committee (ALCO) and ALM support groups, and the ALM process including liquidity risk management, management of marketing risk, funding and capital planning, profit planning and growth projection, and forecasting/ preparation of contingency plans. It is provided that the management committee of the board of directors or any other specific committee constituted by the board of directors should oversee the implementation of the system and reviews its functioning periodically. The ALM Guidelines mainly address Liquidity and Interest Rate risks. In case of structural liquidity, the negative gap (i.e. where outflows exceed inflows) in the 1 to 30/ 31 days time-bucket should not exceed the prudential limit of 15% of outflows of each time-bucket and the cumulative gap up to one year period should not exceed 15% of the cumulative cash outflows up to one year period. In case these limits are exceeded, the measures proposed for bringing the gaps within the limit, should be shown by a footnote in the relevant statement. Keeping in mind leveraged investments, and asset liability mismatches resulting from use of short term sources to fund NBFC activities, the RBI Guidelines dated August 1, 2008 have introduced a system of

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reporting for NBFCs-ND-SI in a prescribed format. The return is to comprise: Statement of short term dynamic liquidity Statement of structural liquidity and Statement of Interest Rate Sensitivity. Distribution of Mutual Funds products: In order to strengthen the NBFC sector, the RBI vide its circular RBI/2006-07/195 DNBS (PD) CC No. 84/03.10.27/2006-07 allowed NBFC to diversify in their business. The NBFCs maintaining minimum net owned fund of ` 10,000 lakhs, earning net profit as per the last two years audited balance sheet, maintaining CRAR of 10% (in the case of NBFC-ND) and the percentage of net NPA to net advances of the NBFCs are not more than three % are eligible to apply to market and distribute mutual fund products, as agents of mutual funds, with the prior approval of RBI for an initial period of two years and a review thereafter. From the operational perspective the NBFCs are required to adhere with SEBI guidelines/regulations, including their code of conduct, for distribution of mutual fund products. Guidelines on Fair Practices Code: The RBI has prescribed guidelines on fair practices (the Fair Practices Code) that should be framed and approved by the Board of Directors of all NBFCs. The Fair Practices Code further requires that it should be published and disseminated on the website of the NBFC. The Fair Practices Code includes the following requirements, which should be adhered to by NBFCs: Inclusion of necessary information affecting the interest of the borrower in the loan application form. Devising a mechanism to acknowledge receipt of loan applications and establishing a time frame within which such loan applications shall be disposed. Conveying, in writing, to the borrower the loan sanctioned and terms thereof. The acceptance of terms should be kept in its record by the NBFC. Giving notice to the borrower of any change in the terms and conditions and ensuring that changes are effected prospectively. Refraining from interfering in the affairs of the borrower except for the purposes provided in the terms and conditions of the loan agreement. Not resorting to undue harassment in the matter of recovery of loans. The Board of Directors of the NBFC should lay down the appropriate grievance redressal mechanism. Periodical review of the compliance of the Fair Practices Code and the functioning of the grievances redressal mechanism at various levels of management, a consolidated report whereof may be submitted to the Board of Directors. KYC Guidelines The RBI has extended the KYC guidelines to NBFCs and advised all NBFCs to adopt the same with suitable modifications depending upon the activity undertaken by them and ensure that a proper policy

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framework on KYC and Anti-Money Laundering measures is put in place. The KYC policies are required to have the following key elements, namely, customer acceptance policy, customer identification procedures, monitoring of transactions and risk management, adherence of KYC guidelines by the persons authorized by NBFCs including brokers/ agents, due diligence of persons authorized by NBFCs including brokers/ agents, customer service in terms of identifiable contact with persons authorized by NBFCs including brokers/ agents. Corporate Governance Guidelines Pursuant to a RBI Circular dated May 8, 2007 and the Master Circular Corporate Governance (No. DNBS (PD) CC No. 156 / 03.10.001 / 2009-10), all NBFC-ND-SI are required to adhere to certain corporate governance norms including constitution of an audit committee, a nomination committee, a risk management committee and certain other norms in connection with disclosure and transparency and connected lending. In furtherance of that, the RBI vide its circular RBI/2008-09/194 dated September 28, 2008 has advised all NDFC-ND, with asset size of Rs 5,000 lakhs and above but less than Rs 10,000 lakhs to submit a quarterly return on important financial parameters, within a period of one month from the close of the quarter. The procedure of filing the same online is given by the RBI circular RBI/2008-09/397 dated March 02, 2009. The RBI has also issued directions to the auditors of NBFCs vide its notification RBI/2008-09/193 dated September 23, 2008 (in supersession of the 1998 directions). The Non-Banking Financial Companies Auditors Report (Reserve Bank) Directions, 2008, as amended and consolidated in the Master Circular Non-Banking Financial Companies Auditors Report (Reserve Bank) Directions (No. DNBS(PD)CC No.146 /03.02.001/2009-10) has been issued to safeguard public interest and for the purpose of proper assessment of books of accounts of NBFCs. According to the RBI guidelines dated August 1, 2008, NBFCs-ND-SI are mandated to make certain additional disclosures in their Balance Sheet from the year ending March 31, 2009 relating to: Capital to Risk Assets Ratio (CRAR) Exposure to real estate sector, both direct and indirect; and Maturity pattern of assets and liabilities Rating by NBFCs The RBI now mandates, vide its notification RBI /2008-09 /372, dated February 04, 2009 that all NBFCs (both deposit taking and non-deposit taking) with asset size of Rs 10,000 lakhs and above will furnish information to the RBI, about downgrading / upgrading of assigned rating of any financial product issued by them, within fifteen days of such a change in rating. Norms for excessive interest rates In addition, the RBI had introduced RBI/ 2006-07/ 414 dated May 24, 2007 whereby RBI requested all NBFCs to put in place appropriate internal principles and procedures in determining interest rates and processing and other charges. In furtherance of that, the RBI has now issued certain directions vide its notification RBI/2008-09/337 dated January 02, 2009. According to these directions, the Board of each NBFC is required to adopt an interest rate model, which would determine the rate of interest charged for loans and advances. Disclosure of such rate of interest and approach for gradations of risk and rationale for charging different rate of interest to different categories of borrowers is necessary.

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Guidelines on Base Rate The RBI has, by its circular (RBI/2009-10/390/ DBOD No. Dir. BC 88/13.03.00/2009-10) dated April 9, 2010, effected a change from the system of benchmark prime lending rate to the system of base rate (Base Rate) with respect to loans made by scheduled commercial banks (other than regional rural banks). The Base Rate system will has come into effect from July 1, 2010. All categories of loans are required to be priced only with reference to the Base Rate; however, advances under the Differential Rates of Interest Scheme, loans to the banks own employees and loans to the banks depositors against their deposits may be priced without reference to the Base Rate. In terms of this circular, banks may not resort to lending at an interest rate below the Base Rate. Banks are required to review the Base Rate at least once every quarter with the approval of their boards of directors or their asset liability management committees. Core Investment Company A core investment company (CIC) means an NBFC which holds not less than 90% of its total assets in the form of investment in equity shares, preference shares, debt or loans in group companies. Further, its investments in the equity shares (including instruments compulsorily convertible into equity shares within a period not exceeding 10 years from the date of issue) in group companies constitutes not less than 60% of its net assets. A CIC does not trade in investments in shares, bonds, debentures, debt or loans in group companies except through block sale for the purpose of dilution or disinvestment. Further, it does not carry on any other financial activity referred to in Section 45I(c) and 45I(f) of the Reserve Bank of India Act, 1934. The Reserve Bank of India had issued guidelines vide notifications dated August 12, 2010 and January 5, 2011 to all CICs in terms of which systemically important CICs are required to be registered with RBI. II. Dealing in Securities Securities regulation in India takes place under the provisions of the SCRA, SEBI Act, the Depositories Act, 1996 and the rules and regulations promulgated thereunder. SCRA The SCRA seeks to prevent undesirable transactions in securities by regulating the business of dealing in securities and other related matters. The SCRA provides for grant of recognition for stock exchanges by the Central Government. Every recognized stock exchange is required to have in place a set of rules relating to its constitution and bye-laws for the regulation and control of contracts. The bye-laws normally provide inter alia for: the opening and closing of markets and the regulation of the hours of trade; the fixing, altering or postponing of days for settlements; the determination and declaration of market rates, including the opening, closing highest and lowest rates for securities; the terms, conditions and incidents of contracts, including the prescription of margin requirements, if any, and conditions relating thereto, and the forms of contracts in writing; the regulation of the entering into, making, performance, recession and termination of contracts, including contracts between members or between a member and his constituent.

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SEBI Act Pursuant to Section 12 of the SEBI Act, and the rules, regulations and guidelines issued by SEBI, a stockbroker, sub-broker and depository participant or any other intermediary associated with the securities market, may buy, sell or deal in securities only after obtaining a valid certificate of registration from SEBI in accordance with the applicable regulations. III. Insider Trading Insider Trading Regulations The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, as amended from time to time (Insider Trading Regulations) govern the law with respect to insider trading in India. The Insider Trading Regulations inter alia prohibit all insiders from dealing in securities of a listed company when the insider is in possession of unpublished price sensitive information (UPSI). It further prohibits an insider from communicating, counselling or procuring, directly or indirectly, any UPSI to any person who while in possession of such UPSI is likely to deal in such securities. Information is said to be price sensitive if it is likely to, directly or indirectly, materially affect the price of the securities of the company to which it relates. Under the Insider Trading Regulations, the concept of an insider is related to those of a connected person and a deemed connected person. A person is said to be connected to a company when he or she is a director, employee or officer in the company or stands in a professional or business relationship with the company and when he or she may reasonably be expected to have access to UPSI and includes inter alia market intermediaries, Merchant Bankers, share transfer agents, registrars to an issue, debenture trustees, brokers, Portfolio Managers, investment advisors. The Insider Trading Regulations further provide that all listed companies and organisations associated with the securities market including inter alia intermediaries as defined under the SEBI Act, asset management companies, trustees of mutual funds etc. should frame a code of internal procedures and conduct based on the Model Code of Conduct specified under the Insider Trading Regulations. IV. Applicable Foreign Investment Regime FEMA Regulations: Foreign investment in India is governed primarily by the provisions of the FEMA which relates to regulation primarily by the RBI and the rules, regulations and notifications thereunder, and the policy prescribed by the Department of Industrial Policy and Promotion, GoI which is regulated by the FIPB. The RBI, in exercise of its power under the FEMA, has notified the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 (FEMA Regulations) to prohibit, restrict or regulate, transfer by or issue of security to a person resident outside India. As laid down by the FEMA Regulations, no prior consent and approval is required from the RBI, for FDI under the automatic route within the specified sectoral caps. In respect of all industries not specified as FDI under the automatic route, and in respect of investment in excess of the specified sectoral limits under the automatic route, approval may be required from the FIPB and/or the RBI. Foreign Direct Investment: FDI in an Indian company is governed by the provisions of the FEMA read with the FEMA Regulations and the Consolidated Foreign Direct Investment Policy (Circular no. 1 of 2011) (FDI Policy) issued by the DIPP on April 1, 2011. The FDI Policy permits Indian companies to issue capital under the FDI route.

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Capital as defined under the FDI Policy means equity shares, compulsorily and mandatorily convertible preference shares and fully, compulsorily and mandatorily convertible debentures. FDI is permitted (except in the prohibited sectors) in Indian companies either through the automatic route or the government route, depending upon the sector in which FDI is sought to be made. Under the automatic route, no prior Government approval is required for the issue of securities by Indian companies/ acquisition of securities of Indian companies, subject to the sectoral caps and other prescribed conditions. Investors are required to file the required documentation with the RBI within 30 days of such issue/ acquisition of securities. Under the government route, prior approval from the FIPB is required. FDI for the items/ activities that cannot be brought in under the automatic route (other than in prohibited sectors) may be brought in through the approval route. Approvals are accorded on the recommendation of the FIPB, which is chaired by the Secretary, DIPP, with the Union Finance Secretary, Commerce Secretary and other key Secretaries of the Government of India as its members. As per the sector specific guidelines of the Government of India, the following relevant caps are presently applicable for FDI in NBFCs: (a) 100 % FDI investments are allowed under the automatic route in the following NBFC activities: Merchant banking; Underwriting; Portfolio Management Services; Investment Advisory Services; Financial Consultancy; Stock Broking; Asset Management; Venture Capital; Custodian Services; Factoring; Credit Rating Agencies; Leasing & Finance; Housing Finance; Forex Broking; Credit card business; Money changing Business; Micro Credit; and

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Rural Credit (b) Minimum Capitalisation Norms for fund based NBFCs: For FDI up to 51% - US$ 0.5 million to be brought upfront For FDI above 51% and up to 75% - US $ 5 million to be brought upfront For FDI above 75% - US $ 50 million out of which US $ 7.5 million to be brought upfront and the balance in 24 months (c) Minimum capitalization norm of US $ 0.5 million is applicable in respect of all permitted nonfund based NBFCs with foreign investment NBFCs that are 100% foreign-owned and have a minimum capitalization of USD 50 million can set up step down subsidiaries for specific NBFC activities, without any restriction on the number of operating subsidiaries and without bringing in additional capital Joint venture operating NBFCs that have 75% or less than 75% foreign investment will also be allowed to set up subsidiaries for undertaking other NBFC activities, subject to the subsidiaries also complying with the applicable minimum capitalisation norms as indicated herein. FDI in the NBFC sector is put on automatic route subject to compliance with guidelines of the RBI in this regard. RBI would issue appropriate guidelines in this regard.

(d)

(e)

(f)

Where FDI is allowed on an automatic basis without FIPB approval, the RBI would continue to be the primary agency for the purposes of monitoring and regulating foreign investment. In cases where FIPB approval is obtained, no approval of the RBI is required except with respect to fixing the issuance price, although a declaration in the prescribed form, detailing the foreign investment, must be filed with the RBI once the foreign investment is made in the Indian company. The foregoing description applies only to an issuance of shares by, and not to a transfer of shares of, Indian companies. Every Indian company issuing shares or convertible debentures in accordance with the RBI regulations is required to submit a report to the RBI within 30 days of receipt of the consideration and another report within 30 days from the date of issue of the shares to the non-resident purchaser. V. Laws relating to Employment Shops and Establishments legislations in various states The provisions of various Shops and Establishments legislations, as applicable, regulate the conditions of work and employment in shops and commercial establishments and generally prescribe obligations in respect of inter alia registration, opening and closing hours, daily and weekly working hours, holidays, leave, health and safety measures and wages for overtime work. Labour Laws We are required to comply with various labour laws, including the Minimum Wages Act, 1948, the Payment of Bonus Act, 1965, the Payment of Wages Act, 1936, the Payment of Gratuity Act, 1972, the Employees Provident Funds and Miscellaneous Provisions Act, 1952.

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HISTORY AND CERTAIN CORPORATE MATTERS Brief History of the Company The Company was originally incorporated as Subhikshith Finance & Investments Limited on July 10, 1996 and commenced business on August 2, 1996 in Tamil Nadu. The RBI granted a certificate of registration dated March 9, 1998 permitting the Company to carry on the business of a NBFC as a non-deposit taking company. The Company became a private limited company on August 10, 2001 and its name was consequently changed to Subhikshith Finance & Investments Private Limited (Subhikshith). The Registrar of Companies, Tamil Nadu issued a fresh certificate of incorporation on September 17, 2001. The RBI granted a certificate of registration dated June 18, 2007 consequent to the change of name permitting the Company to carry on the business of a NBFC as a non-deposit taking company. The Company was engaged in the business of granting loans and financing. On July 14, 2007 Pantaloon Future Ventures Limited (PFVL) (name has been changed to Future Value Retail Limited on November 16, 2009) the wholly owned subsidiary of Pantaloon Retail (India) Limited acquired 2,93,700 Equity Shares of face value ` 10 each, constituting 100% of the total issued, subscribed and paid-up share capital of Subhikshith through a share purchase agreement dated July 3, 2007 between PFVL, R. Sankar, V. Thirumalai and Subhikshith . In consideration of the purchase, PFVL paid an aggregate sum of ` 58 lakhs to R. Sankar and V Thirumalai. Pursuant to the acquisition, Subhikshith became a wholly owned subsidiary of PFVL. The Company changed its name from Subhikshith Finance & Investments Private Limited to Future Ventures India Private Limited through a special resolution passed at the EGM of the Company held on July 19, 2007. The fresh certificate of incorporation consequent on change of name was granted by the ROC to the Company on August 9, 2007. Further, upon ceasing to be a private limited company, the word private was deleted through a special resolution at the EGM of the Company held on August 10, 2007. The fresh certificate of incorporation consequent to the change of name was granted by the ROC to the Company on September 7, 2007. Changes in the Registered Office Date of the Resolution May 6, 2002 Details of Change The registered office of the Company was changed from Usha Sadan 165, Kutchery Road, Mylapore, Chennai 600 004 to New no. 17, (old No. 9), West Circular Road, Mandavelipakkam, Chennai 600 028 The registered office of the Company was changed from New no. 17, (old no. 9), West Circular Road, Mandavelipakkam, Chennai 600 028 to 202 (old no. 742) Anna Salai, Chennai 600 002 The registered office of the Company was changed from 202 (old no. 742) Anna Salai, Chennai 600 002 to Door No. 6/18, Plot No. 18/1, Nanganallur Co-operative Building Society, 17th Street, Nanganallur, Chennai 600 061 The registered office of the Company was changed Door No. 6/18, Plot No. 18/1, Nanganallur Co-operative Building Society, 17th Street, Nanganallur, Chennai 600 061 to Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060* Reasons for Change The changes in the registered offices were made to achieve greater operational efficiency. The changes in the registered offices were made to achieve greater operational efficiency. The changes in the registered offices were made to achieve greater operational efficiency. The changes in the registered offices were made to achieve greater operational efficiency.

August 2007

17,

February 15, 2008

November 26, 2008

The shifting of the registered office of the Company from the State of Tamil Nadu to the State of Maharashtra was allowed by an order dated February 24, 2009 passed by the Company Law Board, Chennai. The order dated February 24, 2009 was taken on record and the ROC Mumbai, issued a certificate of registration on April 28, 2009.

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Main Objects of the Company The main objects as contained in the Memorandum of Association include: 1. To carry on the business of an investment and holding company and to subscribe to the shares and securities being issued by companies and to generally do all activities and enter into all kinds of financial arrangements so as to enable mobilising of funds by and for such companies and ensuring liquidity for the investor investing in shares and securities issued by such companies and to invest money of the Company (or any of its subsidiaries) in any investments and to hold, sell or otherwise deal with investments or currencies or other financial assets and to carry on the business of investment company. To vary the investments and holdings of the Company as may from time to time be deemed desirable. To subscribe for, absolutely or conditionally, purchase or otherwise acquire and to hold, dispose of and trade in shares, stocks and securities of any other company whether Indian or foreign. To carry on the business of financiers, that is to say, to lend money either with or without security to such person or persons, firms, associations, companies, or bodies corporate and upon such terms and conditions as the Company thinks fit but the Company shall not do banking as defined in the Banking Regulation Act, 1949. To mobilise capital from financial investors and public markets and to manage the investment of such funds in business opportunities in India.

2. 3.

4.

5.

The objects incidental or ancillary to the attainment of the above main objects inter alia include: To promote or assist in promoting any company or companies in any part of the world and to subscribe shares therein or other securities thereof and to take part in the management, supervision or control of such businesses or operations of such companies pursuant to any shareholder agreements, or any other agreements or otherwise and to exercise any rights available to the Company pursuant to such agreements or otherwise and to appoint and remunerate any directors, administrators or accountants or other experts or agents for consideration or otherwise or for any other purpose which may seem directly or indirectly calculated to benefit the Company. Amendments to the MOA Date of shareholders approval November 1, 1997 Amendment A new clause, numbered as Clause 11, was added after Clause 10 of Other Objects. 11. To act as Recovery Agents to any individual, firm, association, body corporate, company, government, financial institutions, banks or any other person in connection with any sum due by an individual, firm, association, body corporate, company, government, financial institutions, banks or any other or any other person to any one of the above. August 10, 2007 V (a) The Authorised Share Capital of the Company shall be ` 5,00,00,000 (Rupees Five Hundred lakhs only) divided into 50,00,000 (Fifty lakhs) Equity Shares of ` 10/- (Rupees Ten) each, with the power to increase or reduce the capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association and to vary, modify, amalgamate or abrogate any such rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association of the Company. (b) Minimum Paid up capital of the Company shall be ` 5,00,000 (Rupees Five lakhs Only). V (a) The Authorised Share Capital of the Company shall be ` 30,00,00,00,000 (Rupees

October 11, 2007

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Date of shareholders approval

Amendment

Three Thousand Crores only) divided into 300,00,00,000 (Three Hundred Crores) Equity Shares of ` 10 (Rupees Ten) each, with the power to increase or reduce the capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association and to vary, modify, amalgamate or abrogate any such rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association of the Company. (b) Minimum Paid up capital of the Company shall be ` 5,00,000 (Rupees Five lakhs Only). February 5, 2008 V (a) the Authorised Share Capital of the Company shall be ` 5000,00,00,000 (Rupees Five Thousand Crores Only) divided into 500,00,00,000 (Five Hundred Crores) Equity Shares of ` 10 (Rupees Ten) each, with the power to increase or reduce the capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential, deferred, qualified or special rights, privileges or conditions as may be determined by or in accordance with the Articles of Association and to vary, modify, amalgamate or abrogate any rights, privileges or conditions in such manner as may for the time being be provided by the Articles of Association of the Company. (b) Minimum Paid up capital of the Company shall be ` 5,00,000 (Rupees Five lakhs Only) February 5, 2008 The existing sub-clause 1 and 2 under Clause III(A) of the main objects was substituted. The words and to act as Trustees and Managers of Financial portfolios for individuals, association of persons or bodies corporate, trust and do all acts necessary in carrying on such activity after the word foreign in the existing sub-clause 3 under Clause III(A) of the main objects was deleted. The existing sub-clause 4 and 5 under Clause III(A) of the main objects was substituted. The existing sub-clauses 6 and 7 under Clause III(A) of the main objects were deleted. A sub-clauses was inserted before the existing sub-clause 1, and the existing sub-clause 1 was renumbered as sub-clause 1A, under Clause III(B) of the incidental or ancillary objects. Four new sub-clauses were inserted after sub-clause 1A under Clause III(B) of the incidental or ancillary objects. One new sub-clause was inserted after existing sub-clause 2 under Clause III(B) of the incidental or ancillary objects. One new sub-clause was inserted after existing sub-clause 7 under Clause III(B) of the incidental or ancillary objects. November 2008 26, Clause II of the MOA was amended, vide special resolution passed at the EGM held on November 26, 2008 and pursuant to an order dated February 24, 2009 passed by the Company Law Board, Chennai, on account of the Registered Office of the Company being shifted to Maharashtra. The amended Clause II of the MOA is as follows: The Registered Office of the Company will be situated in the State of Maharashtra.

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Major Events The table below sets forth some of the major events and key milestones in the history of the Company: Fiscal Year 1996 1997 2001 2007 Milestones Incorporated as Subhikshith Finance & Investments Limited. Granted certificate of registration by the RBI to carry on the business of an NBFC as a non-deposit taking company. Converted from a public limited company to a private limited company. RBI granted a fresh certificate of registration to carry on business of a NBFC as a non-deposit taking company on change of name to Subhikshith Finance & Investments Private Limited. Subhikshith Finance & Investments Private Limited became a wholly-owned subsidiary of Pantaloon Future Ventures Limited (now known as Future Value Retail Limited). The name of the Company was changed to Future Ventures India Private Limited. Company was converted to a public limited company and the name of the Company was changed to Future Ventures India Limited. RBI granted a fresh certificate of registration to carry on the business of a NBFC as a nondeposit taking company on change of name to Future Ventures India Limited. Company entered into agreements to purchase securities of Biba Apparels Private Limited, Sankalp Retail Value Stores Private Limited and SSIPL Retail Private Limited. Company entered into agreements to purchase securities of Footmart Retail (India) Limited, Convergem Communications (India) Limited, Aadhaar Retailing Limited, Indus-League Clothing Limited, Lee Cooper (India) Limited, Celio Future Fashions Limited, Indus Tree Crafts Private Limited, AND Designs India Limited, Turtle Limited subject to completion of conditions precedent. Company entered into a consulting and advisory services agreement with Future Capital Holdings Limited. Company opted for conversion of 7,000 fully convertible debentures into equity shares of Biba Apparels Private Limited. Company entered into an agreement for purchase of securities of Star Shopping Centres Private Limited. The registered office of the Company was shifted from the State of Tamil Nadu to the State of Maharashtra. Company made investments in the equity shares and preference shares of Lee Cooper (India) Limited. Company increased its stake in Indus-League Clothing Limited and AND Designs India Limited. Company made investments in Holii Accessories Private Limited. Company transferred its entire shareholding in Celio Future Fashions Limited, Lee Cooper (India) Limited and Turtle Limited in favour of Indus-League Clothing Limited, a subsidiary of the Company. Company transferred its entire shareholding in Star Shopping Centres Private Limited in favour of Future Realtors (India) Private Limited and divested its stake in the aforesaid company in July, 2010. Company transferred its entire shareholding in Sankalp Retail Value Stores Private Limited and Foot Mart Retail India Limited to Juhis Idea Mercantile Private Limited and Blessings Mercantile Private Limited, respectively. Company made investments in the equity shares of Capital Foods Exportts Private Limited, Future Consumer Enterprises Limited and Future Consumer Products Limited, and increased its shareholding in Indus-League Clothing Limited and Indus Tree Crafts Private Limited. Company issued Equity Shares increasing the paid-up equity share capital of the Company by 45,740 lakhs. Company subscribed to 9,200 equity shares issued by BIBA Apparels Private Limited. Company entered into a share purchase agreement with Sanjay Bindra for purchase of 11,750

2008

2009

2010

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Fiscal Year

Milestones equity shares of BIBA Apparels Private Limited. Company entered into a share transfer cum purchase agreement with Sanjay Bindra, Punita Bindra, Siddharth Bindra and Meena Bindra for purchase of up to 94,000 equity shares of BIBA Apparels Private Limited. Company acquired 2,50,000 equity shares of Indus-League Clothing Limited from Pantaloon Employees Welfare Trust. Company subscribed to 10,00,000 equity shares issued by Holii Accessories Private Limited. Company subscribed to 17,50,000 equity shares issued by Aadhaar Retailing Limited. Company entered into a share subscription agreement and a shareholders agreement with Idream Holdings Private Limited, Shripal Morakhia, Samir Patil and Amar Chitra Katha Private Limited for subscribing to 122,598 equity shares of Amar Chitra Katha Private Limited. Company transferred its entire shareholding in SSIPL Retail Private Limited to its subsidiary, Indus-League Clothing Limited.

2011

Subsidiaries The Company has six subsidiaries including a step-down subsidiary of the Company, Lee Cooper (India) Limited. For details regarding the Subsidiaries of the Company, please see the section entitled Subsidiaries beginning on page 179. Promoter For details, regarding the Promoters, please see the section entitled Promoters and Promoter Group beginning on page 194. Shareholders For details regarding the shareholders of the Company, see the section entitled Capital Structure beginning on page 71. Financial and Strategic Partners The Company does not have any financial or strategic partners. Material Agreements Capitalised terms not defined herein have the meaning ascribed to such terms in the relevant agreements. Service related agreements: A. Consulting and Advisory Services Agreement The Company and Future Capital Holdings Limited (the Consultant) (the Parties) have entered into a Consulting and Advisory Services Agreement dated February 20, 2008, amended through an agreement dated August 10, 2010 (collectively referred to as the Consulting Agreement), which is effective for a term of three years from August 10, 2010 and shall be automatically renewed on the same terms as the Consulting Agreement for further successive periods of three years each, unless terminated in accordance with the Consulting Agreement. The Consultant is a registered NBFC. The Company has engaged the services of the Consultant to provide certain consulting and advisory services, proposed to be undertaken by the Company in accordance with the terms of the Consulting Agreement. In terms of the Consulting Agreement, the Consultant shall provide services pertaining to research services and recommendations regarding Treasury Assets; support resource mobilization in any of its investee

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companies; advise on mergers and acquisitions; advice on suitable and efficient exits to be made by the Company from the investee companies and provide progress reports; conducting due diligence in relation to operational, commercial, financial, and tax matters based on specific request from the company; and updates in relation to all treasury assets. In terms of the Agreement, the services provided by the Consultant are recommendatory in nature. The Consultant shall be entitled to a service fee, decided by the Board, which shall not exceed a sum equivalent to 1% p.a. of the Adjusted Net Worth of the Company in aggregate together with the charges payable by the Company towards mentoring services to be availed from Pantaloon Retail (India) Limited. Further, the Consultants right to receive the service fee shall commence only from such date that the Adjusted Net Worth of the Company first exceeds ` 1,000 crores. The Consultant shall be entitled to receive the fees and other payments due to the Consultant up to and including the date on which the Consulting Agreement is terminated, irrespective of whether such termination is termination for cause or termination by mutual consent. The Consultant, its officers, directors and agents shall not be liable for any loss suffered by the Company in connection with or in relation to any service provided by it under the Consulting Agreement or any recommendation made by the Consultant unless the same is attributable to fraud or criminal misconduct by the Consultant. Additionally, the Consultant shall not be liable for the act or omissions of any person employed by it or by any agent, delegatee or sub-contractor that it appoints to provide any of the services on its behalf or in its place, provided the Consultant has exercised due diligence and care in finalising such employment. The Consultant has agreed to indemnify the Company in respect of any loss, cost, liability, expense or similar payments etc., arising from the engagement under, and work performed pursuant to the Consulting Agreement, up to a maximum limit of the Service Fee received or payable, as the case maybe, for the period during which the loss has been suffered by the Company. In the event of any dispute the Parties have agreed to resolve such dispute amicably between themselves within a period of 180 days from the date of the notice of dispute, failing which, the dispute shall referred for arbitration by a panel of three arbitrators and the arbitration shall be held in accordance with Arbitration and Conciliation Act, 1996 in Mumbai, India. B. Mentoring Services Agreement The Company and Pantaloon Retail India Limited (the Mentor) (the Parties) have entered into a Mentoring Services Agreement dated August 10, 2010 (the Mentoring Agreement) which is effective for a term of 10 years from August 10, 2010 and shall be automatically renewed at the same terms as the Mentoring Agreement for successive periods of 10 years each, unless terminated in accordance with the terms of the Mentoring Agreement. In terms of the Mentoring Agreement, the Mentor has agreed to provide certain mentoring services to the Company which include information on consumer behavior, advice on business strategy development of optimum business plans for the Business Ventures. Additionally, on request by the Company, the Mentor may also provide assistance in relation to the Companys exit strategies in relation to the investments in the Business Ventures, Companys strategy for investment in consumption-led sectors and undertaking business due diligence on business opportunities. In terms of the Mentoring Agreement, the services provided by the Mentor are recommendatory in nature and non-binding on the Company and the Business Ventures. For the aforesaid services, the Company has agreed to pay to the Mentor the amount as may be decided by the Board, which together with any other payments that may be made to the third party business consultants, will not exceed 1% p.a. of the Adjusted Net Worth of the Company and shall be payable quarterly in arrears. Further, the Mentors right to receive the Assistance Fee shall commence only from such date that the Adjusted Net Worth of the Company first exceeds ` 1,000 crores. The Mentor shall be entitled to receive Assistance Fees due to the Mentor up to and including the date on which the Mentoring Agreement is terminated, irrespective of whether the termination is voluntary termination or termination by

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mutual consent. In the event of any conflict which may result from both the Company and any other Future Group entity being interested in a business opportunity, such conflict shall be resolved through consultation with one independent director assigned for such consultation by each of the Mentor and the Company. As per the Mentoring Agreement, the Mentor, its officers, directors and agents shall not be liable for any loss suffered by the Company in connection with or in relation to any service provided by it under the Mentoring Agreement or any recommendation made by the Mentor unless the same is attributable to fraud or criminal misconduct by the Mentor. Additionally, the Mentor shall not be liable for the act or omissions of any person employed by it or by any agent, delegatee or sub-contractor that it appoints to provide any of the services on its behalf or in its place, provided the Mentor has exercised due diligence and care in finalising such employment. Each of the Company and the Mentor has agreed to indemnify the other in respect of cost, liability, loss, expense or similar payments arising from the engagement under, and work performed pursuant to the Mentoring Agreement, up to a maximum limit of the Assistance Fee received or payable, as the case maybe, for the period during which the loss has been suffered by the Company or the Mentor as the case maybe. In the event of any dispute the parties to the Mentoring Agreement have agreed to resolve such dispute amicably between themselves within a period of 180 days from the date of the notice of dispute, failing which, the dispute shall referred for arbitration. The arbitration shall be held in accordance with the Arbitration and Conciliation Act, 1996 and the place of arbitration shall be Mumbai. C. Master License Agreement between the Company and Future Ideas Company Limited The Company has entered into a master license agreement dated August 10, 2010 (Master License Agreement) with Future Ideas Company Limited (Future Ideas) whereby Future Ideas, proprietor of various trademarks in relation to the Future Group, has granted a non-exclusive, non-transferable license to the Company to use and reproduce the trademarks registered in the name of Future Group as provided in schedule I of the Master License Agreement subject to the brand usage guidelines prescribed under schedule II of the Master License Agreement. As per the Master License Agreement, the Company has agreed to pay an annual minimum royalty to Future Ideas for the period of five years staring from fiscal 2011 till fiscal 2015 on a yearly incremental basis varying from ` 100 lacs for the fiscal 2011 to ` 244 lacs for the fiscal 2015. The aforesaid royalty is required to be paid by the Company on a quarterly basis payable on 10th of succeeding month after end of each quarter. The Company has agreed to pay additional royalty of 0.10% of the annual turnover of the Company as reduced by the amount of minimum already paid. Additional royalty shall be payable within 10 days from the date on which annual accounts are approved by the Board of Directors. The Master License Agreement is valid from the date of the Master License Agreement till terminated by Future Ideas in accordance with the terms of the Master License Agreement. D. Master Service Agreement between our Company and Future Corporate Resources Limited (FCRL) The Company has entered into a master service agreement dated January 25, 2011 with FCRL (the MSA) whereby FCRL has agreed to provide support services to the Company in respect of certain business activities including inter alia designing and implementing good corporate governance, advising on fund raising avenues, evaluating business risk mitigation avenues and recommending measures thereof, guidance and framing procedure for corporate compliance with applicable laws. The MSA shall be in force and effect from April 1, 2010 (effective date) and continue for a term of one year from the effective date. The compensation payable by our Company to FCRL for the services rendered by FCRL under the MSA is ` 10 lakhs per month plus applicable taxes and levies.

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Investment related agreements E. Share Subscription Agreement between the Company, SSIPL Retail Private Limited and others Rishab Soni, Ashok Mathur, Sunil Taneja (SSIPL Promoters), SSIPL Retail Private Limited (SSIPL) and the Company (collectively, the Parties) have entered into a share subscription agreement dated December 17, 2007 (the SSA). In terms of the SSA, the Company has subscribed to 12,18,394 equity shares of SSIPL constituting 5.56% of the post-issue paid-up equity share capital of SSIPL on a fully diluted basis (6.57% on an undiluted basis), at a price of ` 82.08 per equity share aggregating to ` 1,000.06 lakhs. The SSA was entered into by the Parties to record their respective representations, warranties, undertakings and covenants in respect of the issue and allotment to, and subscription by, the Company of the equity shares of SSIPL. The SSA contains various customary clauses relating to representations, warranties, covenants and indemnification. Addendum to the Share Subscription Agreement On December 17, 2007 the SSIPL Promoters, SSIPL and the Company entered into an addendum to the SSA (the ASSA) to supplement the SSA. The Parties agreed that in lieu of the subscription price paid under the SSA by the Company, SSIPL shall also issue to the Company one fully paid-up investor performance warrant convertible into certain fully paid equity shares of SSIPL (IPW). The equity shares issued to the Company on conversion of the IPW shall be fully paid, free from all encumbrances and rank pari passu in all respects with outstanding equity shares of SSIPL. In terms of the ASSA, the issuance of the IPW was subject to the fulfillment of conditions precedent on or before December 31, 2007. The Company did not exercise their right to convert the IPWs and the same have lapsed. F. Securities Purchase cum Shareholders Agreement (SPA) between the Company and Aadhaar Retailing Limited The Company entered into a SPA with Aadhaar Retailing Limited (ARL) and Godrej Agrovet Limited (GAL) on March 27, 2008 to purchase 70% of the equity share capital of ARL from GAL for the total consideration of ` 3,010 lakhs. The Company has retained the control over the management by retaining the right to appoint four directors out of the maximum strength of six directors. The Company has also agreed that ARL is required to repay the total loan of ` 4,700 lakhs to GAL within 90 days of closing of the SPA. In the event, ARL fails to repay the sum within the stipulated period, the Company is required to infuse 70 % of the total debt outstanding failing which ARL is required to repay the loan with 15% interest per annum. As of December 31, 2010, the total loan amount outstanding (including interest) is ` 806 lakhs to be paid by ARL. During the term of the SPA, it is agreed that the parties are not allowed to transfer their shares to any third party without the prior approval of the other shareholders except to their affiliates. Both GAL and the Company have to offer shares to the other before selling the shares to a third party. The parties have also agreed that no encumbrances shall be created on the shares without the prior approval of the other shareholder. The Company has a right to incorporate its name in the brand name of ARL provided that Godrej is retained as a part of the brand name of ARL. In the event the shareholding of the Company in ARL falls below 26%, GAL may require ARL to remove the name of the Company from the brand name of ARL. In the event GAL or its associates proposes to transfer their shares to a third party, the Company has a right of first refusal on the sale of such shares. If the Company refuses to buy the shares on the exercise of the right of first refusal and at the same time finds a buyer for its shares who offers a higher price than the third party, GAL or its associates, as the case may be, will have a right to tag along their offered shares along with the shares of the shares of the Company.

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The parties have agreed that in case of any material change in control of the shareholder not resulting from an IPO or a purchase on exchange, the other shareholder will have a right to terminate the SPA. Further, such right would accrue when the purchase on exchange results in effective takeover of the shareholder. The SPA contains various customary clauses relating to representations, warranties, covenants and indemnification. G. Investment Agreement between the Company and Mukesh Sawlani, Anita P Dongre and Meena Y Sehra and AND Designs India Limited The Company entered into an agreement (Investment Agreement) with Mukesh Sawlani, Anita P Dongre and Meena Y Sehra (collectively referred as the Promoters) and AND Designs India Limited (ADIL) on November 30, 2008 for acquisition of 26,580 shares of ADIL constituting 15.15 % of the share capital of ADIL for the total consideration of ` 323.15 lakhs. Pursuant to the Investment Agreement, the Company also agreed to subscribe to fully convertible debentures (FCDs) issued by ADIL at ` 2.50 lakhs per FCD and which were to be allotted by ADIL on receipt of subscription price of ` 250.00 lakhs from the Company. The FCDs were to be converted into equity shares of ADIL by June 30, 2009 extendable up to September 30, 2009. Upon expiry of the term of FCDs, equity shares out of the conversion of FCDs together with the subscription shares shall not exceed 40% of the share capital of ADIL and the conversion is envisaged to result into issue of not more than 17,539 equity shares at a price of not less than ` 1,425 per share at minimum valuation conducted by an independent valuer and issue of not less than 9,739 equity shares at ` 2,567 per share at maximum valuation. Consequently, at minimum valuation which is agreed to be ` 250.00 lakhs, the Company is expected to hold 22.86% (44,119 equity shares) of the share capital of ADIL and at maximum valuation which is agreed to be ` 350 lakhs, the Company is expected to hold 36,319 equity shares constituting 19.61% of the share capital of ADIL. At no time, the shareholding of the Company in ADIL shall exceed 40% of the share capital of ADIL. Accordingly, the Company exercised the option on September 30, 2009 and converted the FCDs into 17,539 equity shares at a conversion price of ` 1,425 per equity share. Consequently, Companys shareholding increased from 15.15% to 22.86%. The control over the board of ADIL is to be maintained in proportion of the shareholding maintained in ADIL. If the Company maintains the shareholding of 10% in ADIL, it is entitled, at all times, to nominate at least one director on the board and committees of ADIL and its subsidiaries. The shares of the promoters of ADIL (ADIL Promoters) are locked in for a period of three years from the closing date in terms of the Investment Agreement. However, the ADIL Promoters may create encumbrances on their shares, in the ordinary course of business, only with the prior approval of the Company. Further, the ADIL Promoters are allowed to transfer, once in any financial year, the shares inter se provided that such transfer does not result in transfer of more than one half of their shareholding. At any time after the expiry of the lock-in period, if the ADIL Promoters, intend to sell part of their equity shares to reduce their shareholding in ADIL by more than 5% of the then share capital, in any financial year, the ADIL Promoters shall notify the Company in writing providing complete details relating to the proposed transfer and the detailed terms and conditions offered by the prospective bona fide transferee, the Company will have the right but not the obligation to require the promoters to procure the sale of part of or all the securities held by the Company, as may be offered by the Company, on the same terms and conditions as those agreed with the prospective bona fide transferee. ADIL is required to undertake an IPO within a period of five years from the closing date November 30, 2008 in terms of the Investment Agreement. If ADIL fails to undertake the same, ADIL shall at the option of the Company, arrange one or more third-party investor(s) to purchase the shares held by the Company at a price higher of the fair market value of the shares and the amount calculated at the rate of 19% internal

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annualised return on the total investment. In the event the Company is not provided an exit through any of the exit options as provided under the Investment Agreement, for any reason whatsoever, then at the option of the Company, the Company shall have a put option after the expiry of the sixth anniversary from the closing date of the Investment Agreement, the ADIL Promoters shall acquire (by way of purchase, buy back or otherwise) from the Company such securities as stated in the said put option notice. The Company shall, at all times, maintain at least 5% of the shareholding in ADIL, failing which the Investment Agreement shall stand terminated. ADIL, the Promoters of ADIL and the Company may by written agreement of all parties, terminate the Investment Agreement. In the event of termination of the Investment Agreement for certain specified reasons, the non-defaulting party has the right to i) call upon the defaulting party to purchase all the shares of the non-defaulting party; or ii) to call upon the defaulting party to purchase its shares. The Investment Agreement contains various customary clauses relating to representations, warranties, covenants and indemnification. H. Securities Purchase Agreements entered by the Company with PIL Industries Limited (formerly known as Pantaloon Industries Limited) and PFH Entertainment Limited for purchase of the shares of IndusLeague Clothing Limited We have entered into two securities purchase agreements both dated March 26, 2008 with PIL Industries Limited (formerly known as Pantaloon Industries Limited) and PFH Entertainment Limited respectively for purchase of certain shares of Indus-League Clothing Limited. In terms of the securities purchase agreements, the Company purchased 28,60,000 equity shares of Indus-League Clothing Limited for an aggregate consideration of ` 5,005.00 lakhs. Pursuant to the securities purchase agreements and other agreements the Company held 14.28% of the equity capital of Indus-League Clothing Limited. The securities purchase agreements contains various customary clauses relating to representations, warranties, covenants and indemnification. I. Share Subscription Agreement (SSA) and the Shareholders Agreement (SHA) between the Company and the other shareholders of Indus Tree Crafts Private Limited (ITCPL) The Company has entered into a SSA with Neelam Chhiber, Gita Ram (Management Shareholders) and ITCPL on December 1, 2008 for subscription of 38,000 equity shares for the total purchase consideration of ` 657.59 lakhs constituting 43.18 % of the share capital of ITCPL. The Company has also entered into a shareholders agreement dated December 1, 2008 (SHA) with the Management Shareholders, Indus Tree Mutually Beneficial Trust (Trust) and ITCPL providing inter alia the terms governing the relationship between the shareholders of ITCPL. The SHA inter alia provides that the Management Shareholders would gradually transfer a part of their shareholding over a period of four years in favour of Raminder Singh Rekhi, chief executive officer of ITCPL, by virtue of which the CEO shall then hold 8% of the equity capital of ITCPL. The CEO of ITCPL though not a party to the SHA, the rights of the CEO in relation to the shares acquired pursuant to the SHA shall be governed by the provisions of the SHA and the articles of association of ITCPL. If the employment of CEO ceases with ITCPL, the CEO shall, with a prior intimation to the Board of ITCPL, sell his shares to any third party within 60 days of ceasing to be an employee of ITCPL, failing which they said shares shall be offered to the Management Shareholders to be held by them in equal proportion. In terms of the SHA, the Board of ITCPL is to have minimum of two and maximum of five directors out of which the Company may nominate two directors who would not retire by rotation. However, the Company would not have such rights if its shareholding falls below two per cent of the share capital of ITCPL. The SHA mandates that the fifth director on the board of ITCPL should always be an independent director.

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The Management Shareholders, Trust and the CEO are not allowed to sell, encumber or transfer their shares without prior written consent of the Company. The Management Shareholders have agreed for a non-compete obligation until the Company and the Management Shareholders hold 5% or more of the share capital of ITCPL. The Management Shareholders and the Company are provided with the right of first refusal for any intended transfer of shares held by them in ITCPL. The Company also is provided with right to tag along with any proposed sale of shares by the Management Shareholders and/or the Trust. In the event that ITCPL issues fresh shares, the parties to the SSA have retained the pre-emptive rights over the fresh shares. However, the parties do not have the right of renunciation and hence, in case of renunciation by any of the parties, ITCPL can offer the shares to the other remaining shareholders in proportion to their existing shareholding. Further, the parties will not have the pre-emptive rights in case of fresh issue pursuant to the grant of stock option or issue of shares for the purposes of consideration for acquisition/merger of another business entity. In terms of the SHA, ITCPL is required to undertake an IPO within a period of 18 months from December 1, 2008. Both SSA and SHA would automatically terminate on the listing of shares of ITCPL. For the purposes of IPO, the Company will not be regarded as a promoter of ITCPL. The SSA contains various customary clauses relating to representations, warranties, covenants, indemnification and dispute resolution. J. Subscription cum Shareholders agreement has been executed between the Company and Hidesign India Private Limited and Holii Accessories Private Limited A subscription cum shareholders agreement (the SSA) was entered into on November 5, 2009 between Hidesign India Private Limited (Hidesign), Holii Accessories Private Limited (Holii) and the Company whereby the Company and Hidesign each, acquired 5,000 equity shares of ` 10 each of Holii constituting 50% of the paid up share capital of Holii. The parties to the SSA agreed to enter into the SSA to carry out the business which includes inter alia retailing fashion accessories including but not limited to leather handbags, wallets, accessories under the brand Holii. Subsequently, Holii issued 4,95,000 equity shares to the Company and Hidesign for the total consideration of ` 99 lakhs. Also, the Company and Hidesign each, have subsequently subscribed to 2,50,000 equity shares each of Holii for the total consideration of ` 50 lakhs. Thereafter in January 2011, the Company subscribed to 10,00,000 equity shares of Holii for an aggregate consideration of ` 100 lakhs. Right of first refusal: In the event that either shareholder subsequent to the expiry of the lock-in period proposes to transfer shares held by it (Offered Shares) to a person not being a permitted transferee (Prospective Shareholder), such shareholder (Selling Shareholder) shall first offer to sell the Offered Shares by sending a notice of the offer to the other shareholder (Non-Selling Shareholder), irrevocably offering to sell Offered Shares to the Non-selling Shareholder at the price at which the sale is proposed and any other terms and conditions of the sale. On receipt of the notice the Non-selling Shareholder shall have the option to purchase all of the offered shares within a period of 21 business days. In case of acceptance, the sale shall be completed within 15 business days from the date of such acceptance. In the event the NonSelling Shareholder rejects the offer or the Selling Shareholder does not receive a written acceptance in respect of the Offered Shares within 21 business days, the Selling Shareholder shall be entitled to transfer the Offered Shares to any third party within 60 business days from the date of the transfer notice. Any proposal for transfer of the equity shares after the expiry of 60 days from the date of transfer notice, shall be subject to the provisions of right of first refusal as provided in the SSA. The new shareholder shall execute a deed of adherence in accordance to the terms of the SSA. Tag along right: Subject to the provisions of the right of first refusal , the Non-selling Shareholder may instead of purchasing the Offered Shares, may cause by sending a tag along notice to the Selling Shareholder within 21 business days from the date of receipt of the transfer notice requiring the Selling Shareholder to ensure that the third party purchases shares on pro rata basis as provided under the tag along notice (Tag Along Shares) on terms not less favorable than those offered under the transfer notice.

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In the event that the third party is unwilling or unable to acquire all of the Offered Shares and all (but not less than all) of the Tag Along Shares upon such terms, then the Selling Shareholder shall cancel such proposed transfer and no equity shares shall be transferred to the third party. The Selling Shareholder shall not be entitled to sell or transfer any of the equity shares so offered to the third party unless the third party simultaneously purchases and pays for the Tag Along Shares. These transactions should be completed in 15 business days from the delivery of the tag along notice Capital requirements and financing: The Parties are not obliged to guarantee the obligations of Holii and shall neither be liable to the creditors of Holii for its debts or liabilities. Management: The board of directors of Holii (the BoD) shall comprise of four directors out of which two shall be appointed by the Company and two shall be appointed by Hidesign. The BoD shall meet at least once every three months one-third of its total strength shall be the quorum or two directors whichever is higher and no quorum shall be deemed to be present unless at least nominee director of each party is present. Transfer of Shares: In terms of the SSA, the shares shall be locked-in for a period of four years from the effective date of the agreement. However, either Shareholder could transfer its shares to a permitted transferee, subject to such permitted transferee undertaking to be bound by the terms and conditions of the SSA and executing the deed of adherence. The SSA has defined permitted transferee, in relation to any party, as any company, person, or other entity which directly or indirectly controls, is controlled by, or is under common control with such party. Matters reserved for affirmative vote: The BoD, the Company and Hidesign shall have affirmative voting rights regarding certain matters which include material change in the nature of business, fundamental corporate change such as merger, amalgamation, reorganization, dissolution, winding up, any changes in the BoD or capital structure, creation of a new equity stock options or additional equity options, any disinvestment of or sale of assets, investment lease, license or exchange or pledge in any other way proposing to dispose off any assets where the aggregate consideration is in excess of 5% of annual revenue of Holii in any financial year, any capital expenditures and strategies including providing security for guaranteeing debts) beyond that budgeted for in the business plan. Intellectual property rights: Holii shall have exclusive rights to its brand name and its intellectual property rights. Hidesign and FVIL shall assign all their rights under the brand Holii in favour of Holii and execute deeds and documents as may be required. Any use of Holiis intellectual property whether registered or not shall require Hidesign to obtain Holiis written consent. This consent shall be subject to the payment of a fee or charges as be mutually agreed upon by the BoD and pursuant to a definitive agreement. The SSA contains various customary clauses relating to representations, warranties, covenants, indemnification, and dispute resolution. K. Share purchase agreement dated February 18, 2010 between Indivision India Partners (Indivision) and the Company for purchase of shares of Capital Foods Exportts Private Limited A share subscription agreement (the SSA) and a shareholders agreement both dated October 27, 2006 (SHA) were executed between Indivision India Partners (Indivision), Ajay Gupta, Indivision Partners and Capital Foods Exportts Private Limited (Capital Foods) pursuant to which Indivision was allotted and issued 7,53,049 equity shares of ` 10 each representing 33% of the equity shares of Capital Foods. Subsequent to the execution of the SSA and the SHA, to meet the working capital requirements and for business expansion, Capital Foods made an offer to issue equity shares with a face value of ` 10 each at a premium of ` 166.41 per share to the existing shareholders of Capital Foods on right basis in the ratio of two equity shares for every five equity shares held by the existing shareholders on the record date i.e. February 20, 2009. All shareholders, except Indivision declined to accept their right shares. Indivision subscribed to 3,01,220 equity shares of ` 10 each issued at a premium of ` 166.41 per equity share by

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investing ` 5,313.82 lakhs through the Rights Share Subscription Agreement dated March 25, 2009. Consequently, a first deed of amendment dated March 25, 2009 was entered into among Ajay Gupta and Indivision Partners and Capital Foods to amend the SHA to reflect the shareholding of Indivision and Ajay Gupta pursuant to the the Rights Share Subscription Agreement which was as following: Sr. No. 1. 2. Ajay Gupta Indivision Name Percentage 59.19 40.81

Subsequently, Indivision entered into a share purchase agreement dated February 18, 2010 with the Company whereby Indivision agreed to sell its entire shareholding of 10,54,269 shares aggregating to 40.81 % of the share capital of Capital Foods to the Company for the total consideration of ` 4,511.25 lakhs. The Company also entered into a deed of adherence dated February 18, 2010 whereby the Company has agreed to abide by the terms of the SHA entered between Ajay Gupta, Indivision and Capital Foods as amended by the first deed of amendment dated March 25, 2009. L. Share Warrant Subscription Agreement dated March 25, 2009 among Ajay Gupta and Indivision India Partners and Capital Foods Exportts Private Limited A Share Warrant Subscription Agreement dated March 25, 2009 was executed between Ajay Gupta and Indivision and Capital Foods whereby Ajay Gupta was issued 559,296 warrants with a right to subscribe to equal number of equity shares at a price of `176.41 per equity share aggregating to ` 9,86,65,407.36. Ajay Gupta has the option to convert these warrants into equity shares of Capital Foods in one tranche at anytime within 24 months from March 25, 2009. Warrant shares shall mean a maximum of 5, 59,296 equity shares arising out of conversion of the warrants into shares. In the event the option is not exercised the same would have deemed to have lapsed and Ajay Gupta shall have no right to demand the allotment of the shares. Each warrant not exercised shall become void and all rights attached shall terminate. These warrants are non transferable and the right to exercise them can only be exercised by Ajay Gupta at a premium of ` 166.41 per share warrant. Any exception shall be allowed only by the written consent of Indivision subject to right of first refusal, tag along rights as provided under the SSA and SHA. The warrant share shall carry from the date of conversion, the right to receive proportionate dividends and other distributions declared to be declared and rank pari passu to the existing shares in all respects. M. Shareholders agreement relating to the Companys investment in Future Consumer Products Limited Pantaloon Retail (India) Limited (PRIL) entered into a shareholders agreement (FCPL SHA) with Sachin Ramesh Tendulkar (Sachin) on September 12, 2007 for issue and allotment of shares constituting 10% (ST Shares) of the total shareholding of Future Consumers Products Limited (FCPL) to Sachin. As per FCPL SHA, Pantaloon Retail (India) Limited is to create a range of products centred around Sachin more particularly described in Annexure I of the FCPL SHA (ST Brands). Further, for the purposes of marketing and selling such products, appointment of agents and/or forming of joint ventures, Pantaloon Retail (India) Limited is required to obtain prior approval of Sachin. Additionally, Sachin shall also be entitled to a royalty ranging from 1% to 5% on the revenue generated from sale of various products under ST Brand subject to a minimum guaranteed amount of ` 175 lakhs per year for a period of five years from January 1, 2008. Sachin shall also have affirmative veto in relation to certain management decisions in relation to FCPL which include acquisition of other businesses, mergers, demergers or amalgamations. During the period of five years from the date of execution of the FCPL SHA, the shares of the parties to the FCPL SHA is locked-in except that Pantaloon Retail (India) Limited may transfer its shares to any of its affiliates and Sachin may transfer his shares to any immediate relative. However, the ST Shares shall not be subject to any transfer restrictions and any transfer by other shareholders of FCPL shall, in no event, dilute the ST Shares below 7.5% of the entire shareholding of FCPL. In the event that FCPL fails to provide a

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market exit in five years from the date of completion, Sachin also has a right to require Pantaloon Retail (India) Limited to purchase all his shares held in FCPL within a period of 30 days from the date of issue of notice. Pantaloon Retail (India) Limited is also required to use reasonable endeavours to cause an IPO of FCPL within 5 years from the completion date. In the event of an IPO of FCPL, if Sachin sells his stake in FCPL, PRIL shall be allowed to use ST Brand for the next ten years from the date of such exercise. The FCPL SHA is liable to get automatically terminated if (i) Sachin sells his ST Shares; (ii) shareholding of PRIL falls below 26%; (iii) IPO of FCPL; or (iv) FCPL discontinues endorsement of ST Brands. On June 29, 2010, Pantaloon Retail (India) Limited transferred its entire shareholding in FCPL to the Company for the total consideration of ` 2,000.00 lakhs. For this purpose, the Company has entered into a deed of adherence on August 3, 2010 as per the requirement of FCPL SHA. N. Securities Purchase Agreement (SPA) between the Company and Future Capital Holdings Limited for the purchase of shares of BIBA Apparels Private Limited The Company entered into a SPA with Future Capital Holdings Limited (FCH) on October 26, 2007 to purchase 27,964 equity shares of ` 100 each and 7,000 fully convertible debentures of ` 10,000 each (FCDs), of BIBA Apparels Private Limited (BIBA) (Sale Securities) for a consideration aggregating to ` 1,310 lakhs. As required under the SPA, the Company has executed and delivered a deed of adherence to BIBA as prescribed in the investment agreement dated February 8, 2007 (Investment Agreement) entered amongst FCH, BIBA, BIBAs promoters and others and therefore, has all the rights provided under the Investment Agreement. On September 26, 2008, the Company converted the 7,000 FCDs held by it into 32,336 equity shares of BIBA for an aggregate consideration of ` 755.58 lakhs. O. Share Purchase Agreement (SPA) among our Company, Sanjay Bindra (Seller) and BIBA Apparels Private Limited (BIBA) The Company has entered into the SPA dated November 4, 2010 with the Seller and BIBA for purchase of 11,750 equity shares (Sale Shares) of face value of ` 100 each of BIBA from the Seller at the aggregate amount of ` 375 lakhs. Pursuant to the SPA, the Seller has provided warranties to the effect that it is the sole owner of the Sale Shares and holds full legal and beneficial interest them and has right to transfer and sell the same. Further, the Seller has provided covenants to the effect that the shares are fully paid-up and free from all encumbrances. The SPA also contains various other customary clauses relating to warranties, representations, covenants and indemnification P. Share Transfer cum Purchase Agreement (STPA) between the Company, Sanjay Bindra (Seller No. 1), Punita Bindra (Seller No. 2), Siddharth Bindra (Purchaser No. 1), Meena Bindra and BIBA Apparels Private Limited (BIBA) The Company has entered into the STPA dated December 20, 2010 with the Seller No. 1 and the Seller No. 2 (the Sellers), Purchaser No.1, Meena Bindra and BIBA. The STPA provides for purchase of 94,000 equity shares of BIBA of face value of ` 100 each (Sale Shares) for an aggregate consideration of ` 4,004.26 lakhs (Purchase Price) by the Company and Purchaser No.1 from the Sellers. In terms of the STPA the Company shall purchase an aggregate of 51,600 shares of face value of ` 100 each (Sale Shares B) of BIBA for an aggregate consideration of ` 2,198.08 lakhs (Purchase Price B). The Company shall purchase 36,600 shares of BIBA from Seller No. 1 for a consideration of ` 1,559.10 lakhs and 15,000 shares of BIBA from Seller No. 2 for a consideration of ` 638.98 lakhs. Further, the Company has paid an advance of ` 10 lakhs (Advance Amount B) to Seller No.1 upon execution of the STPA.

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The Purchaser No. 1 shall purchase an aggregate of 42,400 shares of face value of ` 100 each (Sale Shares A) of BIBA for an aggregate consideration of ` 1,806.17 lakhs (Purchase Price A) of which an advance of ` 200.00 Lakh (Advance Amount A) has been paid at the time of execution of the STPA. In terms of the STPA, the Company shall pay the balance consideration to the Sellers on or before February 28, 2011 failing which the date of payment of the balance amount shall stand extended to April 30, 2011 (Extended Date). Also, interest at the rate of 14% per annum shall become payable by the Company on the outstanding amount from February 28, 2011 until the date of payment or the extended date, whichever is earlier. In the event that the outstanding amount in not paid by the Company on or before the extended date, Advance Amount B shall be forfeited by the Sellers and the right and entitlement of the Company to acquire Sale Shares B shall be deemed to be relinquished. In the event of the entire consideration not being paid by the Company, Purchaser No. 1 shall have the option to acquire the Sale Shares B within 21 days from the extended date. If the Purchaser No. 1 fails to acquire Sale Shares A from Seller No.1 by paying the balance amount of Purchase Price A by the Extended Date, then the Company shall be bound to purchase the Sale Shares A within 21 days from the expiry of the Extended Date from Seller No.1. Further, in terms of the STPA, if the Company or the Purchaser No. 1, do not acquire the Sale Shares by paying the balance Purchase Price on or before 21 days from the extended date then the STPA shall stand terminated and the Company shall be liable to pay liquidated damages amounting to ` 500 lakhs to the Seller No. 1. Also, the parties have agreed that upon payment of the Purchase Price and transfer of Sale Shares, the rights and obligations of the Sellers as per the investment agreement dated February 8, 2007 shall stand terminated other than the non-compete obligations of the Sellers which shall terminated with effect from November 15, 2010. The STPA also contains various other customary clauses relating to warranties, representations, covenants and indemnification. Q. Share Subscription Agreement (ACKPL SSA) between the Company and Idream Holdings Private Limited, Shripal Morakhia, Samir Patil (collectively the ACKPL Promoter Group) and Amar Chitra Katha Private Limited (ACKPL) The Company has entered into the ACKPL SSA dated March 1, 2011 with the ACKPL Promoter Group and ACKPL for issue and allotment of 1,22,598 equity shares of ACKPL (Investor Shares) amounting to 26% of the total issued and paid up equity share capital of ACKPL on a fully diluted basis post allotment of the Investor Shares. In terms of the ACKPL SSA, subject to the fulfillment of conditions precedent specified in the ACKPL SSA by ACKPL and the ACKPL Promoter Group, the Company shall pay an initial subscription amount of ` 1502.06 Lakh towards subscription of 49,039 equity shares of ACKPL. On fulfillment of the conditions subsequent specified in the ACKPL SSA by ACKPL and the ACKPL Promoter Group, the Company shall subscribe to the remaining 73,559 equity shares of ACKPL for the total amount of ` 2,253.11 Lakh in the period between January 31, 2011 and June 30, 2011. The ACKPL SSA also contains various other customary clauses relating to warranties, representations, covenants and indemnification. R. Shareholders Agreement (ACKPL SHA) between the Company and the ACKPL Promoter Group and ACKPL The Company has entered into the ACKPL SHA dated March 1, 2011 with the ACKPL Promoter Group and ACKPL for the purpose of stipulating the rights and obligations of the parties to the ACKPL SHA in relation to the management and operations of ACKPL. As per the ACKPL SHA, each shareholder of ACKPL shall have the right to appoint directors on the board of ACKPL in proportion to their shareholding in ACKPL. The Company shall have the right to appoint at least two directors till it holds 10% of the total shareholding of ACKPL. Further, till the Company holds

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10% of the total shareholding of ACKPL, no quorum of the board meeting or shareholders meeting of ACKPL shall be validly constituted unless one authorized representative of the Company is present in such meetings. As per the ACKPL SHA, neither the ACKPL Promoter Group nor the Company shall transfer or create any encumbrance on any of their securities in ACKPL for a period of one year from the closing date. However, the ACKPL Promoter Group or the Company can transfer their securities within the group (in case of Promoter Group) and to one or more of their affiliates provided that affiliate enters into a deed of adherence. Further, each party shall have a right of first offer in the event that the other party desires to sell its shares exceeding 10% of the share capital of ACKPL. If the ACKPL Promoter Group desires to sell its shares in the aforesaid manner, the Company shall have the right but not the obligation to sell proportionate number of securities in relation to the securities offered by the ACKPL Promoter Group. However, as a result of sale of shares by the ACKPL Promoter Group, if the shareholding of the ACKPL Promoter Group falls below 35% of the share capital of ACKPL, the Company and its affiliates shall have the right to sell all its shares in ACKPL to the third party. The Company shall also have the same rights as aforesaid in the subsidiaries of ACKPL. Further, the ACKPL Promoter Group and ACKPL shall ensure that the Company is not classified as the promoter or manager of ACKPL. The ACKPL SHA also contains various other customary clauses relating to warranties, representations, covenants and indemnification. S. Wrap Agreement among the Company, Tusk Investment Fund I, Elephant India Finance Private Limited, Windy Investment Private Limited (collectively the Series 1 Investors), Idream Holdings Private Limited, Shripal Morakhia , Samir Patil (collectively the ACKPL Promoter Group) and Amar Chitra Katha Private Limited (ACKPL) A wrap agreement dated March 01, 2011 (Wrap Agreement) has been entered into between the Company, the Series 1 Investors (collectively the Financial Investors), the ACKPL Promoter Group and ACKPL to set forth and record the terms and conditions governing their relationship, rights and obligations pursuant to the shareholders agreements entered by the Financial Investors and in their mutual capacity as shareholders of ACKPL and in relation to the management and functioning of ACKPL. In terms of the Wrap Agreement, any further issues of equity shares or other securities of ACKPL in pursuance to a rights issue can be made only if it is affirmed by the Company and Series 1 Investors. The Wrap Agreement further acknowledges that the right of first offer of the Financial Investors on proportionate basis in respect of any shares proposed to be sold by the ACKPL Promoter Group to any person other than its affiliates. The Wrap Agreement also acknowledges the right of the Shareholders to tag along its proportionate number of securities in relation to the securities offered by the ACKPL Promoter Group to a third party. Further, ACKL shall not issue any securities to any person on terms more favourable than those available to the Shareholders as per their respective shareholders agreements without the prior consent of the Shareholders. Additionally, the Wrap Agreement recognizes certain other rights of the Financial Investors as conferred under their respective shareholders agreements. Competition For details the Companys competitors, please see section entitled Business - Competition on page 136.

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MANAGEMENT Board of Directors: As per the Articles of Association, the Company cannot have less than 3 and more than 12 Directors. Currently the Board has five Directors out which three Directors are independent directors in terms of Clause 49 of the Equity Listing Agreement. The following table sets forth details regarding the Board as of the date of filing the Prospectus with SEBI. Name, Fathers Name, Designation, Address, Occupation and Term G.N. Bajpai Fathers name: Bans Gopal Bajpai Designation: Chairman, Independent and Non-Executive Director Term: Liable to retire by rotation DIN: 00946138 Profession: Business Nationality: Indian Address: 131, Shaan Apartments Kashinath Dhuru Marg Opposite Kirti College Prabhadevi Mumbai 400 028 Age (Years) 68 Other Directorships

Apnapaisa Private Limited (formerly known as apnaloan.com Services Private Limited) Dalmia Cement (Bharat) Limited Emaar MGF Land Limited Future Capital Holdings Limited Future Generali India Insurance Company Limited Future Generali India Life Insurance Company Limited IDE India Infomerics Valuation & Rating Private Limited Intuit Consulting Private Limited Invent ARC Private Limited Invent Asset Securitisation and Reconstruction Company Private Limited Kingfisher Airlines Limited Mandhana Industries Limited Micromax Informatics Limited New Horizons India Limited Nitesh Estates Limited PNB Housing Finance Limited Dhanlaxmi Bank Limited Usha Martin Limited Walchandnagar Industries Limited Companies Brahmabrata Trading Private Limited Eclipse Infrastructure Private Limited Embassy Property Developments Limited (formerly known as Dynasty Developers Private Limited) ESES Commercials Private Limited Fame India Limited Future Capital Holdings Limited Future Corporate Resources Limited (formerly PFH Entertainment Limited) Future Generali India Insurance Company Limited Future Generali India Life Insurance Company Limited Future Media (India) Limited Galaxy Entertainment Corporation Limited

Kishore Biyani Fathers name: Laxminarayan Biyani Designation: Managing Director Term: Five years with effect from February 5, 2008 DIN: 00005740 Profession: Entrepreneur Nationality: Indian Address: 406, Jeevan Vihar Manav Mandir Road

50

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Name, Fathers Name, Designation, Address, Occupation and Term Mumbai 400 006

Age (Years)

Other Directorships

Gargi Developers Private Limited Home Solutions Retail (India) Limited Indian Merchant Chambers Jagran Prakashan Limited Kavi Sales Agency Private Limited Kumar Urban Development Limited (formerly Kumar Housing & Land Development Limited) Liquid Foot Infraprojects Private Limited Oviya Multitrading Private Limited Pantaloon Retail (India) Limited Raaka Multitrading Private Limited Radha Multitrading Private Limited Raja Infrastructure Private Limited Retailers Association of India Simpleton Investrade Private Limited Samreen Multitrading Private Limited Taraka Infrastructure Private Limited Sanavi Multitrading Private Limited Saachi Multitrading Private Limited Salarjung Multitrading Private Limited Silver Base Infrastructure Private Limited Softtouch Multitrading Private Limited Tanushri Infrastructure Private Limited U-Phase Infraprojects Private Limited Ucchal Infrastructure Private Limited White Circle Mercantile Private Limited White Knight Mercantile Private Limited Partnership Firms BLB Trading and Investment Consultants

Anil Harish Fathers name: D.M. Harish Designation: Independent and NonExecutive Director Term: Liable to retire by rotation DIN: 00001685 Profession: Lawyer Nationality: Indian Address: 13, CCI Chambers, 1st Floor Dinshaw Wacha Road Churchgate Mumbai 400 020

57

Companies Ador Welding Limited Advani Hotels and Resorts (India) Limited Ashok Leyland Limited Astoria Maritime Private Limited Bharti AXA Investment Managers Private Limited Cenmar Maritime Agencies (India) Private Limited Freight Connection (India) Private Limited Ges Seaco India Private Limited Helpyourngo.com (India) Private Limited Hinduja Global Solutions Limited (formerly HTMT Global Solutions Limited) Hinduja Ventures Limited (formerly Hinduja TMT Limited) Hotel Leelaventure Limited Mahindra Lifespace Developers Limited Mordril Properties (India) Private Limited

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Name, Fathers Name, Designation, Address, Occupation and Term

Age (Years)

Other Directorships

Mukta Arts Limited Oasis Preprint Services Private Limited Oberoi Realty Limited OMCI Ship Management Private Limited (formerly Loire Marine Services Private Limited) Pantaloon Retail (India) Limited Quantum Advisors Private Limited Sunil Mantri Realty Limited Trans Atlantic Consultants Private Limited Unitech Limited Valecha Engineering Limited Firms DM Harish & Co. Trusts CIG Realty Fund Create Foundation D.M. Harish Foundation Dayal K. Harjani Charitable Trust Freight Connection India Private Limited Employees Group Gratuity Assurance Scheme G.D.S Foundation Ge Seaco India Private Limited Employees Group Gratuity Assurance Scheme Hyderabad (Sind) National Collegiate Board Quantum Employees Stock Option Plan Rajni Patel Memorial Foundation Ram and Veena Buxani Foundation Sani Charitable Trust SNS Charitable Trust The IndusInd Foundation Anand Balasundaram Fathers name: Ramchandran Balasundaram 47 Staples Future Office Products Private Limited

Designation: Non-Independent Non-Executive Director Term: Liable to retire by rotation DIN: 02792009 Profession: Professional Nationality: Indian

and

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Name, Fathers Name, Designation, Address, Occupation and Term Address: D 814 Paradise Raheja Vihar, Powai Mumbai 400 072 Maharashtra Jagdish Shenoy Fathers name: Vasudev Shenoy Designation: Independent and NonExecutive Director Term: Liable to retire by rotation DIN: 01754643 Profession: Professional Nationality: Indian Address: Atmaram Bhuvan, Plot no 250, Room No.11 Station Road, Wadala (West), Mumbai 400 028

Age (Years)

Other Directorships

44

Companies Aadhaar Retailing Limited Arsha Advisory Services Private Limited BRX India Private Limited Indus-League Clothing Limited

None of the Directors are related to each other. Brief biographies of the Directors of the Company: G. N. Bajpai, aged 68, is the Chairman of the Company. He completed his masters degree in commerce from the University of Agra and bachelors degree in law from the University of Indore. He has previously been the Chairman of SEBI, Life Insurance Corporation of India, the Corporate Governance Task Force of International Organisation of Securities Commission and the Chairperson of the Insurance Institute of India. He has also been a member of the board of directors of General Insurance Corporation of India, ICICI Bank, Unit Trust of India, Axis Bank and Indian Railway Finance Corporation. He is on the board of advisors of the Indian Army Group Insurance Fund and the National Insurance Academy (University). Previously, he has served on the board of governors of the Indian Institute of Management (Lucknow). He has delivered lectures at the London School of Economics, Harvard University and the Massachusetts Institute of Technology. He has also addressed the seminar organized by the Organisation of Economics Co-operation and Development (OECD) and International Monetary (IMF). He has written three books and was recently awarded, Outstanding Contribution to the Development of Finance. He joined the Board of the Company on February 20, 2008. Kishore Biyani, aged 50, is the Managing Director of the Company. He is a commerce graduate with a postgraduate diploma in marketing management. He has over 25 years of experience in the field of manufacturing and marketing of ready-made garments. He has received several awards including the CEO of the Year - 2001, the most Admired Retailer of the Year 2004, the Retail Face of the Year - Images Retail Awards 2005 and the E&Y Entrepreneur of the Year Services 2006. He has been on the Board of the Company since October 8, 2007. Anil Harish, aged 57, is an Independent and Non-Executive Director of the Company. He holds a bachelors degree in arts (honours) and bachelors degree in law from University of Mumbai and a masters degree in law from University of Miami, USA. He is a partner of D.M. Harish & Co., Advocates and specialises in corporate laws,

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income tax and property matters. He has been on the Board of the Company since February 20, 2008. Anand Balasundaram, aged 47, is a Non-Executive Director of the Company. He is a qualified chartered accountant and holds a degree in commerce and with over 20 years of experience in corporate finance and banking across diversified business groups. Prior to joining the Company, he was the President-Corporate Finance, Vedanta Resources Group. He has been associated with Motorola India Limited, Credit Lyonnais Limited, HSBC Limited, IL&FS Limited and Citibank Limited. He has been on the Board of the Company since July 16, 2009. Jagdish Shenoy, aged 44, is an Independent and Non-Executive Director of the Company. He is a qualified chartered accountant and holds a bachelors degree in commerce from R.A. Podar College, University of Mumbai with over 20 year of experience in systems documentation, training, internal and operational audits and business advisory. He has been associated with RSM & Company, Chartered Accountants. He was also on the board of Aneja Associates. He has been on the Board of the Company since August 10, 2010. None of the Directors is or was a director of any listed company during the last five years preceding the date of filing of the Draft Red Herring Prospectus, whose shares have been or were suspended from being traded on the BSE or the NSE, during the term of their directorship in such company. Other than Kishore Biyani (the details of which are given below), none of the Directors is or was a director of any listed company which has been or was delisted from any recognised stock exchange in India during the term of their directorship in such company. Sr. No. 1. 2. 3. 4. 5. Particulars Name of the company Name of the stock exchanges on which the company was listed Date of delisting on stock exchanges Nature of delisting Reasons for delisting Information PIL Industries Limited BSE April 3, 2007 Voluntary delisting Public shareholding was less than 10% of share capital after consolidation of holding by promoters No Not applicable Not applicable January 4, 2005 to August 23, 2008

6. 7. 8. 9.

Relisting of the company Date of relisting, in the event the company is relisting Name of the stock exchanges on which the company was relisted Term (along with the relevant dates) in the above company

Service Agreement with the Managing Director, Kishore Biyani Under the terms of an agreement dated February 5, 2008, he has been appointed as the Managing Director of the Company for a period of five years with effect from February 5, 2008 to February 4, 2013. The Managing Director shall not be entitled to any remuneration. However, the Board of Directors, including a committee thereof may, subject to the shareholders and other requisite approvals, approve to pay remuneration to the Managing Director within the limits prescribed under the Companies Act. Further, the Managing Director shall not be paid any sitting fees. The Managing Director shall be entitled to terminate the agreement by resigning from the employment of the Company by giving a six months written notice to the Company. The Company shall also be entitled to terminate the agreement and the services of the Managing Director by giving him six months written notice or pay in lieu thereof. Payment or benefit to Directors/ officers of the Company The sitting fees/other remuneration paid to the Directors for the Fiscal 2011 are as follows:

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1.

Remuneration to Managing Directors: The aggregate value of salary and perquisites paid for the Fiscal 2011 to the Executive Directors of the Company are set forth in the table below:

S. No 1. 2.

Name of the Director Kishore Biyani Remuneration to Non- Executive Directors:

Salary (In ` lakhs) Nil

The details of the sitting fees and other payments paid to the Non-Executive Directors of the Company in Fiscal 2011 are set forth in the table below: S. No 1. 2. 3. 4. Name of the Director G. N. Bajpai Anil Harish Anand Balasundaram Jagdish Shenoy Sitting Fees (In ` lakhs) 2.60 1.40 2.80 1.00

Except for sitting fees, no other remuneration was paid to the non-executive directors. Except as stated in this section Management beginning on page 160 and options granted under the ESOP Scheme, no amount or benefit has been paid within the two preceding years or is intended to be paid or given to any of the Companys officers including the Directors and key management personnel. Except as disclosed in this Prospectus, none of the beneficiaries of loans, advances and sundry debtors are related to the Directors of the Company. Further, except statutory benefits upon termination of their employment in the Company or retirement, no officer of the Company, including the Directors and the key management personnel of the Company, are entitled to any benefits upon termination of employment. Interests of Promoters, Directors and Key Managerial Personnel Except as stated in the section entitled Financial Statements Annexure XXV - Related Party Transactions on page 340 and to the extent of shareholding in the Company and other than the ordinary course of business, the Promoters, Promoter Group, Directors and key managerial personnel do not have any other interest in the Companys business. Pantaloon Retail (India) Limited, which is one of the Promoters of the Company, has entered into a Mentoring Services Agreement dated August 10, 2010 with the Company and is entitled to fees for services rendered by it in accordance with the terms thereof. For further details of the Mentoring Services Agreement, please see the section entitled History and Certain Corporate Matters beginning on page 146. Pantaloon Retail (India) Limited, which is one of the Promoters of the Company, has through letter dated November 26, 2008 permitted the Company to use the a non-demarcated portion of the premises located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060 as its registered office. Future Capital Holdings Limited, which is a Group Company of the Company, has entered into a Consulting and Advisory Services Agreement dated February 20, 2008, as amended through agreement dated August 10, 2010 with the Company and is entitled to fees for services rendered by it in accordance with the terms thereof. For further details of the Consulting and Advisory Services Agreement, please see the section entitled History and Certain Corporate Matters beginning on page 146.

167

Future Corporate Resources Limited, which is one of the Promoters of the Company, has entered into the Master Service Agreement dated January 25, 2011 with the Company whereby Future Corporate Resources Limited has agreed to provide support services to the Company in respect of certain business activities including inter alia advising on fund raising avenues, evaluating business risk mitigation avenues and recommending measures thereof, designing and implementing good governance. For further details of the Master Service Agreement, please see the section entitled History and Certain Corporate Matters beginning on page 146. The Non-Executive Directors of the Company may be deemed to be interested to the extent of fees payable to them for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration and reimbursement of expenses payable to them under the Articles of Association of the Company. The Managing Director may be deemed to be interested to the extent of any remuneration that may be paid to him for services rendered by him as an officer of the Company pursuant to the agreement described in the section entitled Management Service Agreement with the Managing Director, Kishore Biyani beginning on page 166. The Directors may also be regarded as interested in the Equity Shares, if any, held by them or by the companies/ firms/ ventures promoted by them or that may be subscribed by or allotted to the companies, firms, trusts, in which they are interested as Directors, members, partners, trustees and Promoters, pursuant to this Issue. Except Meenakshi Maheshwari who holds 12,500 Equity Shares in her former name, Minakshi Sahay, the key managerial personnel of the Company do not have any interest in the Company other than to the extent of remuneration or benefits to which they are entitled to as per their terms of appointment and reimbursement of expenses incurred by them during the ordinary course of business. There are no arrangements or understanding with major shareholders, customers etc. pursuant to which any of the key managerial personnel have been appointed as director or member of the senior management. Shareholding of the Directors None of the Directors of the Company hold any equity shares in the Company as of the date of filing of this Prospectus. Borrowing Powers of the Board In terms of the Articles, the Board may, from time to time, at its discretion by a resolution passed at its meeting raise or borrow or secure the payment of any sum or sums of money for the purposes of the Company. However, if the moneys sought to be borrowed together with the moneys already borrowed (apart from temporary loans obtained from the Companys bankers in the ordinary course of business) should exceed the aggregate of the paid-up capital of the Company and its free reserves (not being reserves set apart for any specific purpose), the Board is required to obtain the consent of the Company in general meeting prior to undertaking such borrowing. In this regard, the Company, in the meeting of its shareholders dated February 5, 2008 had resolved that pursuant to the provisions of Section 293(1)(d) of the Companies Act, 1956, the Board is authorised to borrow moneys (apart from temporary loans obtained from the bankers of the Company in ordinary course of business) from banks, financial institutions, NBFCs etc., from time to time, for the purpose of Companys business in excess of the aggregate of the paid-up capital of the Company and its free reserves (not being reserves set apart for any specific purpose) provided that the total amount of such borrowings together with the amounts already borrowed and outstanding shall not exceed ` 4,00,000 lakhs over and above paid-up capital and free reserve of the Company. Corporate Governance The Company has complied with the requirements of the applicable regulations, including the listing agreement to be entered in to with the Stock Exchanges and the SEBI Regulations, in respect of corporate governance including constitution of the Board and Committees thereof. The corporate governance framework is based on an effective independent Board, separation of the Boards supervisory role from the executive management team and constitution of the Board Committees, as required under law.

168

The Company has a Board constituted in compliance with the Companies Act and listing agreement to be entered in to with the Stock Exchanges and in accordance with best practices in corporate governance. The Board functions either as a full Board or through various committees constituted to oversee specific operational areas. The Companys executive management provides the Board detailed reports on its performance periodically. Currently the Board has five Directors out which three Directors are independent directors in terms of Clause 49 of the Equity Listing Agreement. In compliance with Clause 49 of the Equity Listing Agreement, the Board comprises of one executive Director and four non-executive directors, including three independent Directors. Committees of the Board I. Audit Committee The members of the Audit Committee are: 1. 2. 3. G.N. Bajpai, Chairman of the Audit Committee, Independent and Non-Executive Director Anil Harish, Member of the Audit Committee, Independent and Non-Executive Director Anand Balasundaram, Member of the Audit Committee, -Non-Independent and Non-Executive Director

The Audit Committee was constituted by a meeting of the Board of Directors held on February 20, 2008. The scope and function of the Audit Committee is in accordance with Section 292A of the Companies Act and Clause 49 of the Listing Agreement. The terms of reference of the Audit Committee include the following: (i) (ii) Overseeing the Companys financial reporting process and disclosure of its financial information. Recommending to the Board the appointment, re-appointment, and replacement of the statutory auditor and the fixation of audit fee. Approval of payments to the statutory auditors for any other services rendered by them. Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to: (a) (b) matters required to be included in the Directors Responsibility Statement to be included in the Boards report in terms of clause (2AA) of section 217 of the Companies Act, 1956; changes, if any, in accounting policies and practices and reasons for the same; major accounting entries involving estimates based on the exercise of judgment by management; significant adjustments made in the financial statements arising out of audit findings; compliance with listing and other legal requirements relating to financial statements; disclosure of any related party transactions; and qualifications in the draft audit report.

(iii) (iv)

(c) (d)

(e) (f) (g) (h)

169

(v) (vi) (vii)

Reviewing, with the management, the quarterly, half-yearly and annual financial statements before submission to the Board for approval. Reviewing, with the management, the performance of statutory and internal auditors, and adequacy of the internal control systems. Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit. Discussion with internal auditors any significant findings and follow up thereon. Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board. Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern. To look into the reasons for substantial defaults in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors. Reviewing the functioning of the whistle blower mechanism, in case the same is existing. Review of management discussion and analysis of financial condition and results of operations, statements of significant related party transactions submitted by management, management letters/letters of internal control weaknesses issued by the statutory auditors, internal audit reports relating to internal control weaknesses, and the appointment, removal and terms of remuneration of the chief internal auditor. Review the uses and application of funds as specified in the prospectus, on a quarterly basis as a part of the quarterly declaration of financial results, make appropriate recommendations to the Board to take up steps till such time that the full money raised through the Issue has not been fully spent.

(viii) (ix)

(x) (xi) (xii) (xiii)

(xiv)

Details of the meetings of the Audit Committee: Sr. No. 1. Date of Meeting August 5, 2008 Attendees a) G.N. Bajpai b) Anil Harish c) Dhanpal Jhaveri a) G.N. Bajpai b) Anil Harish c) Dhanpal Jhaveri a) G.N.Bajpai b) Dhanpal Jhaveri a) G. N. Bajpai b) Anil Harish c) B. Anand Agenda To consider inter alia the audited financial results for March 31, 2008 and matters concerning audit and auditors re-appointment. To consider inter alia the financial results and approve appointment of the internal auditor and fix their remuneration. To consider inter alia the audited financial results for March 31, 2009 and matters concerning audit and auditors re-appointment. To inter alia take note of change in constitution of the audit committee, review and take on record internal audit report for the period beginning from April 1, 2009 till December 31, 2009, to consider the audited annual accounts for the financial year ended March 31, 2010 and to review operational performance of the Company. To consider and review inter alia the unaudited financial statements for the half year ended on September 30, 2010,

January 22, 2009

September 4, 2009 May 29, 2010

November 2, 2010

a) G. N. Bajpai b) Anil Harish

170

Sr. No.

Date of Meeting

Attendees c) B. Anand

Agenda internal audit carried out by the internal auditor M/s Nayak & Rane, Chartered Accountants, for the financial year 2010-11.

II.

Nomination and Remuneration/Compensation Committee The members of the Nomination and Remuneration/Compensation Committee are: 1. G. N. Bajpai, Chairman of the Nomination and Remuneration/Compensation Committee, Independent and Non-Executive Director; Anil Harish, Member of the Nomination and Remuneration/Compensation Committee, Independent and Non-Executive Director; Jagdish Shenoy, Member of the Nomination and Remuneration/Compensation Committee, Independent and Non-Executive Director Anand Balasundaram, Member of the Nomination and Remuneration/Compensation Committee, Non- Independent and Non-Executive Director

2.

3.

4.

This committee was originally constituted by the Board of Directors as Remuneration/ Compensation Committee on February 20, 2008. Subsequently, the Board of Directors had constituted a Nomination Committee on August 5, 2008. The Board of Directors, thereafter, merged both the aforestated committees as the Nomination and Remuneration/Compensation Committee on May 29, 2010. The Nomination and Remuneration/ Compensation Committee has been formed in accordance with the requirements prescribed by the Reserve Bank of India. The scope of reference of Nomination and Remuneration/ Compensation Committee includes the following: (i) (ii) (iii) (iv) To undertake a process of due diligence to determine the fit and proper status of existing Directors, if required. To undertake a process of due diligence to determine the fit and proper status of the person proposed to be elected as a Director of the Company. To finalise the format for obtaining the declarations from the existing/proposed Director(s). To obtain a declaration from existing Directors every year as on 31st March that the information already provided by them has not undergone any change and where there is any change, requisite details are furnished by the Directors forthwith. To obtain such further declarations from the existing Directors as may be required under the Companies Act, 1956, and/or other statutory provisions and update on the same to the Board of Directors from time to time. To recommend the suitable change(s), if required to the Board of Directors of the Company. Framing suitable policies and systems to ensure that there is no violation, by an employee of any applicable laws in India or overseas, including: a. b. The Securities and Exchange Board of India (Insider Trading) Regulations, 1992; or The Securities and Exchange Board of India (Prohibition of Fraudulent and Unfair Trade Practices relating to the Securities Market) Regulations, 1995.

(v)

(vi) (vii)

171

(viii)

Determine on behalf of the Board and the shareholders the Companys policy on specific remuneration packages for executive directors including pension rights and any compensation payment. Perform such functions as are required to be performed by the Compensation Committee under the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (ESOP Guidelines), in particular, those stated in Clause 5 of the ESOP Guidelines. Such other matters as may, from time to time, be required by any statutory, contractual or other regulatory requirements to be attended to by the Committee.

(ix)

(x)

Details of the meetings of the Nomination and Remuneration/ Compensation Committee: Sr. No. 1. Date of Meeting July 16, 2009 Attendees G.N. Bajpai Anil Harish Dhanpal Jhaveri G.N. Bajpai B. Anand G N Bajpai Jagdish Shenoy B Anand Anil Harish Agenda To inter alia consider the proposal for appointment of additional directors on the Board of the Company. To consider proposal for appointment of an additional director on the Board of the Company. Grant of options in terms of FVIL Employees Stock Option Plan 2011.

2.

August 2010

10,

3.

March 27, 2011

III.

Shareholders/Investors Grievance and Share Transfer Committee The members of the Shareholders/Investors Grievance and Share Transfer Committee are: 1. Anand Balasundaram, Chairman of the Shareholders/Investors Grievance and Share Transfer Committee, Non-Independent and Non-Executive Director Kishore Biyani, Member of the Shareholders/Investors Grievance and Share Transfer Committee, Non-Independent and Managing Director

2.

The Shareholders/ Investors Grievance and Share Transfer Committee was constituted by a meeting of the Board of Directors held on February 20, 2008. The terms of reference of Shareholders/ Investors Grievance and Share Transfer Committee encompasses the following: (i) (ii) (iii) To approve transfer / transmission / dematerialisation of Equity Shares of the Company. To approve issue of duplicate/ consolidated/ split share certificate(s). To do all necessary acts, deeds and things, as may be required, including authorizing any person(s) to endorse the share certificate(s), affixing common seal of the Company on share certificate(s) as per the Articles of Association of the Company, etc. To do all acts, deeds and things as may be required from admission of Equity Shares of the Company with National Securities Depository Limited and Central Depository Services (India) Limited.

(iv)

Details of the Shareholders/ Investors Grievance and Share Transfer Committee:

172

Sr. No. 1

Date of Meeting February 24, 2009

Attendees a) Kishore Biyani b) Dhanpal Jhaveri

Agenda To take note of resignation of Rakesh Jhunjhunwala as a member of the Shareholders/ Investors Grievance and Share Transfer Committee and to approve transfer of equity shares and take note of dematerialisation request(s) as approved. To approve transfer of equity shares and to take note of dematerialisation request(s) as approved. To inter alia take note of appointment of Registrar and Share Transfer Agent of the Company and to review and ratify the transfer of equity shares and dematerialisation request(s) as approved. To inter alia take note of resignation of Sameer Sain and Dhanpal Jhaveri as members of the committee, review and ratification of transfer of equity shares and dematerialization requests as approved.

March 20, 2009

July 16, 2009

a) Kishore Biyani b) Dhanpal Jhaveri a) Kishore Biyani b) Dhanpal Jhaveri a) Kishore Biyani b) B. Anand

4.

October 20, 2010

Other Committees of the Board I. Investment Committee The members of the Investment Committee are: 1. 2. 3. Kishore Biyani, Chairman of the Investment Committee, Non-Independent and Managing Director G. N. Bajpai, Member of the Investment Committee, Independent and Non-Executive Director Anand Balasundaram, Member of the Investment Committee, Non-Independent and Non-Executive Director

The Investment Committee was originally constituted as the Executive Committee by a meeting of the Board held on February 20, 2008. On May 29, 2010, the Board re-named the Executive Committee as the Investment Committee. The scope of reference of Investment Committee includes the following: (i) To invest, on such terms and conditions as it thinks fit, funds of the Company from time to time, up to a limit of ` 400,000,00,000 (Rupees Four Hundred Thousand lakhs) over and above the aggregate of the then existing paid-up capital and free reserve of the Company, outstanding at any point of time, in shares, debentures, bonds, units or such other securities including in the form loan(s), whether strategic, long-term or short-term or in any other form, to such entities /bodies corporate(s) as it may think fit, including acquisition of securities from the capital market(s), whether primary and/or secondary. To evaluate and approve investment proposals within the parameters as permissible within applicable rules, regulations, guidelines of the Reserve Bank of India. To maintain investment portfolio of the Company from time to time. To buy, sell, apply for purchase of, transfer, negotiate and/or otherwise deal with, on such terms and conditions, as it think fit, any securities up to the limits prescribed above. To give loan(s) in the form of inter-corporate deposit or other wise to the Bodies Corporate(s) or any other entities. To authorize officials of the Company to do all necessary acts, deeds, documents, and things as

(ii)

(iii)

(iv)

(v)

173

may be required to buy, sell, apply for purchase, transfer, etc., in relation to securities as may approved by the Committee. (vi) Such other matters as may from time to time be required by any statutory, contractual or other regulatory requirements, to be attended to by such Committee. To do all such acts, deeds, and things as may be required in relation to monitoring and implementation of the Business and Investment Policy of the Company, as modified/amended from time to time. To delegate to any Executive(s)/Official(s) of the Company, the powers for granting of loan(s) by the Company, in the form of inter-corporate deposit or otherwise to the Bodies Corporate(s) or any other entities as may be permissible under law. To decide on providing of guarantee or security of the Company in connection with any loan or other financial facilities/arrangements that may be availed by any of the investee entities (Business Ventures) of the Company to the extent not exceeding 5% of the owned funds of the Company in respect of any single Business Venture or 25% of the owned funds of the Company in aggregate for all Business Ventures and for the said purpose, to appoint one or representatives to do such acts, deeds, matters and things incidental and ancillary thereto.

(vii)

(viii)

(ix)

II.

IPO Committee The members of the IPO Committee are: 1. 2. 3. Kishore Biyani, Member of the IPO Committee, Non-Independent and Managing Director G. N. Bajpai, Member of the IPO Committee, Independent and Non-Executive Director Anand Balasundaram, Member of the IPO Committee, Non-Independent and Non-Executive Director

The IPO Committee of Directors was constituted by a meeting of the Board held on February 20, 2008. The scope of reference of IPO Committee includes the following: (i) To approve, adopt and file the Red Herring Prospectus and the Prospectus for the I.P.O. as required under Section 60 of the Companies Act, 1956, with the Ministry of Company Affairs and/or concerned Registrar Of Companies, and to make any corrections or alterations therein. To sign and execute such letters, deeds, documents, writings, etc. and to do all such acts, deeds, matters and things as might be required in connection with the issue of the Equity Shares under the I.P.O. and give such directions as may be necessary to settle any question or difficulty that may arise in regard to issue and allotment of equity shares including but not limited to: a) Approving the offer document and filing the same with the any other authority or persons as may be required; To decide on the timing, pricing and all the terms and conditions of the issue of the securities, including the price, and to accept any amendments, modifications, variations or alterations thereto; Arranging the delivery and execution of all contracts, agreements including Memorandum of Understanding with the lead managers/global coordinators, escrow agreements with selected banks, etc., and all other documents, deeds, and instruments as may be required or desirable in connection with the issue of securities by the Company;

(ii)

b)

c)

174

d)

Opening a separate special account with a scheduled bank to receive monies in respect of the issue of the equity shares of the Company; Making applications for listing of the equity shares of the Company on one or more stock exchange(s) and to execute and to deliver or arrange the delivery of the listing agreement(s) or equivalent documentation to the concerned stock exchange(s). Affixing the Common Seal of the Company on any of the document(s), deed(s), agreement(s), writings, MoU(s), etc. in accordance with the Articles of Association of the Company.

e)

f)

(iii)

To make applications to such authorities as may be required and accept on behalf of the Board such conditions and modifications as may be prescribed or imposed by any of them while granting such approvals, permissions and sanctions as may be required; To decide on the timing, pricing and all the terms and conditions of the issue of the shares for the I.P.O., including the price, and to accept any amendments, modifications, variations or alterations thereto; To appoint and enter into arrangements with the book running lead managers, underwriters to the I.P.O., Syndicate Members, Brokers, Escrow Collection Bankers, Registrars, Legal Advisors and any other agencies or persons or intermediaries to the I.P.O. and to negotiate and finalise the terms of their appointment, including but not limited to execution of the Book Running Lead Managers (BRLMs) mandate letter, negotiation, finalisation and execution of the memorandum of understanding with the BRLM etc.; To finalise and settle and to execute and deliver or arrange the delivery of the draft red herring prospectus, the red herring prospectus, the final prospectus, syndicate agreement, underwriting agreement, escrow agreement, stabilization agreement and all other documents, deeds, agreements and instruments as may be required or desirable in relation to the Public Issue; To open with the bankers to the I.P.O. such accounts as are required by the regulations issued by SEBI; To authorize and approve the incurring of expenditure and payment of fees in connection with the I.P.O.; To do all such acts, deeds, matters and things and execute all such other documents, etc. as it may, in its absolute discretion, deem necessary or desirable for such purpose, including without limitation, finalise the basis of allocation and to allot the shares to the successful allottees as permissible in law, issue of share certificates in accordance with the relevant rules; To do all such acts, deeds and things as may be required to dematerialise the equity shares of the Company and to sign agreements and/or such other documents as may be required with the National Securities Depository Limited, the Central Depository Services (India) Limited and such other agencies, authorities or bodies as may be required in this connection; To make applications for listing of the shares in one or more stock exchange(s) for listing of the equity shares of the Company and to execute and to deliver or arrange the delivery of necessary documentation to the concerned stock exchange(s); To settle all questions, difficulties or doubts that may arise in regard to such issues or allotment and matters incidental thereto as it may, in its absolute discretion deem fit; To delegate such powers to specified Executive(s)/ Official(s) of the Company and/or any other

(iv)

(v)

(vi)

(vii)

(viii)

(ix)

(x)

(xi)

(xii)

(xiii)

175

person, as may be required, to complete the above tasks, subject to their overall supervision and control; Management Organisation Structure

Board of Directors

Managing Director

Advisory Services

CEO

Mentoring Partner

President (Food Processing)

VP (Investment)

Head Legal & Compliance

Head Corporate Finance

Changes in the Board of Directors in the last three years The changes in the Board of Directors during the last three years are as follows: Name Pankaj Thapar Anand Balasundaram Jagdish Shenoy Date of Appointment July 16, 2009 July 16, 2009 August 10, 2010 Date of Cessation February 19, 2010. Reason Resigned Appointed Appointed

In addition to the above, Rakesh Jhunjhunwala, Sameer Sain and Dhanpal Jhaveri resigned as the directors of the Company on August 4, 2010, February 5, 2010 and February 19, 2010, respectively. Key Managerial Personnel of the Company and Subsidiaries In addition to Kishore Biyani, the Managing Director, provided below are the key managerial employees of the Company and its Subsidiaries. For details relating to the profile of Kishore Biyani, see the section entitled Management - Brief Biographies of the Directors of the Company on page 165. I. Company Name Designation Qualifications Previous Employment Total Years of Experience (including relevant experience) Date of joining Gross salary paid in Fiscal 2011 (In ` lakhs) 163. 50

Krishan Kant Rathi

Chief Executive Officer

Meenakshi Maheshwari

Vice President

Bachelors degree in commerce; qualified chartered accountant; qualified company secretary Bachelors degree in commerce; qualified

Motilal Oswal Private Equity Advisors Private Limited Ferrier Hodgson

25

March 1, 2010

19

April 5, 2010

38.20

176

Name

Designation

Qualifications

Previous Employment

Total Years of Experience (including relevant experience)

Date of joining

Gross salary paid in Fiscal 2011 (In ` lakhs) 27.96

Gopal Bihani Praveen Dwivedi

Investments Vice President Finance President Food Processing

Manoj Gagvani

Company Secretary and Head Legal

chartered accountant Bachelors degree in commerce; qualified chartered accountant Bachelors degree in commerce; Masters degree in commerce; Certificate programme on general management, supply chain management and strategic planning from Wharton Business School Bachelors degree in commerce and law; qualified company secretary

Limited Aadhaar Retailing Limited Namdhari Farm Fresh Private Limited

12

June 1, 2010 November 11, 2010

26

25.07

Pidilite Industries Limited

22

June 23, 2008

35.49

*Though on March 1, 2010, Krishan Kant Rathi was appointed as the Chief Investment Officer, on February 1, 2011, Krishan Kant Rathi has been designated as the Chief Executive Officer.

II. Name

Subsidiaries Designation Qualifications Previous Employment Total Years of Experience (including relevant experience) Date of joining Gross salary paid in Fiscal 2011 (In ` lakhs) 90.16

Devendra Chawala

CEO - Future Consumer Enterprises Limited

Rachna Agarwal

CEO - IndusLeague Clothing Limited CEO - Aadhaar Retailing Limited

Raminder Singh Rekhi

Bachelors degree in engineering (production); Masters degree in business administration (marketing management) Bachelors degree in science (economics); Post Graduate Diploma in Business Management Bachelors degree in arts; Post graduate diploma in rural management

Reliance Retail Limited

16

January 8, 2009

Madura Garments Limited

18

April, 1999

72.66

Indus Tree Crafts Private Limited

20

June 15, 2010*

50.78*

*Pursuant to the letter dated June 1, 2010 issued by Pantaloon Retail (India) Limited, Raminder Singh Rekhi has been deputed to Aadhaar Retailing Limited to work full time as the CEO for a period of one year commencing from June 15, 2010. During the term of deputation, the remuneration is to be paid by Pantaloon Retail (India) Limited.

177

None of the key managerial personnel of the Company and the Subsidiaries are related to each other. Further, all the key managerial personnel of the Company are permanent employees of the Company. Other than Raminder Singh Rekhi, all other key managerial personnel of the Subsidiaries are permanent employees of the respective Subsidiaries. Changes in key managerial personnel of the Company Name Gurmeet Singh Mission Manoj Gagvani Prashant Desai Krishan Kant Rathi Ashutosh Vidwans Date of Appointment October 1, 2007 June 30, 2008 October 1, 2007 March 1, 2010 October 1, 2007 Date of Cessation July 1, 2008 August 31, 2009 June 20, 2010 Reason Resigned Appointed Resigned Appointed Re-assignment within the Future Group Appointed Appointed Appointed

Meenakshi Maheshwari Gopal Bihani Praveen Dwivedi

April, 5 2010 June, 1, 2010 November 11, 2010

Shareholding of key managerial personnel of the Company Except Meenakshi Maheshwari who holds 12,500 Equity Shares in her former name, Minakshi Sahay, no other key managerial personnel of the Company hold any equity shares of the Company as of the date of filing this Prospectus. Bonus or profit sharing plan of the key management personnel of the Company Other than the ESOP Scheme, the Company does not have a performance linked bonus or a profit sharing plan for the key management personnel of the Company.

178

SUBSIDIARIES The Company has six Subsidiaries including a step down subsidiary of the Company, Lee Cooper (India) Limited. None of the Subsidiaries have made any public or rights issue in the last three years and have not become sick companies under the meaning of SICA and are not under winding up. Other than as disclosed in the sections entitled Promoter and Promoter Group and Group Companies beginning on pages 194 and 210, respectively, the Promoter has not disassociated from any of the companies during the preceding three years. The information provided in this section is as of the date of this Prospectus. Interest of the Subsidiaries in the Company None of the Subsidiaries hold any Equity Shares in the Company. Except as stated in the section titled Financial Statements Annexure XXV - Related Party Transactions on page 340, the Subsidiaries do not have any other interest in the Companys business. Common Pursuits Except as disclosed in this Prospectus, the Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by the Company. The Company will adopt the necessary procedures and practices as permitted by law to address any conflict situation as and when they arise. SUBSIDIARIES The Company has the following Subsidiaries as of the date of this Prospectus: 1. 2. 3. 4. 5. 6. 1. Aadhaar Retailing Limited Future Consumer Enterprises Limited Future Consumer Products Limited Indus-League Clothing Limited Indus Tree Crafts Private Limited Lee Cooper (India) Limited Aadhaar Retailing Limited Corporate Information: Aadhaar Retailing Limited (ARL) was incorporated on March 10, 2006. ARL is in the business of rural and semi-urban retail distribution of agricultural and consumer products for personal and household use, including apparel, seeds, fertilizers and FMCG products. ARL is proposing to establish franchisee outlets under hub and spoke model with existing centers to serve as hubs and the franchisees working as a spoke. Capital Structure: No. of equity shares of ` 10 each 3,00,00,000 2,60,00,000

Authorised capital Issued, subscribed and paid-up capital

179

Shareholding The shareholding pattern of ARL as on the date of the Prospectus is as follows: Sr. No. 1. 2. 3. 4. 5. Name of the Shareholder No. of equity shares held Shareholding Percentage (%) 1,82,00,000 49,39,994 21,29,750 7,30,250 1 1 1 1 1 1 2,60,00,000 70.00 19.00 8.19 2.81 100.00

Future Ventures India Limited Godrej Agrovet Limited Bahar Agrochem & Feeds Private Limited Mahendran Arumugham Godrej Agrovet Limited jointly with Mr. V.V. Chaubal 6. Godrej Agrovet Limited jointly with Mr. R.R. Govindan 7. Godrej Agrovet Limited jointly with Mr. B.S. Yadav 8. Godrej Agrovet Limited jointly with Mr. S. Varadaraj 9. Godrej Agrovet Limited jointly with Mr. P.N. Narkhede 10. Godrej Agrovet Limited jointly with Mr. Y.H. Mehta TOTAL 2. Future Consumer Enterprises Limited Corporate Information:

Future Consumer Enterprises Limited (FCEL) was originally incorporated as Future Specialty Retail Limited on March 10, 2008. Its name was changed to its present name on April 28, 2009. Future Consumer Enterprises Limited is involved in the business of product development, designing, branding and distribution of FMCG products under brands such as Tasty Treat, Clean Mate, Care Mate, Premium Harvest and Fresh and Pure. FCEL is currently being marketed through stores owned by the Future Group, such as Big Bazaar, Food Bazaar and KB Fairprice and Aadhaar. Capital Structure: No. of equity shares of ` 10 each 1,01,00,000 1,00,50,000

Authorised capital Issued, subscribed and paid-up capital Shareholding:

The shareholding pattern of FCEL as on the date of the Prospectus is as follows: Sr. No. 1. 2. 3. 4. 5. Name of the Shareholder Future Ventures India Limited Future Ventures India Limited jointly with Manoj Gagvani Future Ventures India Limited jointly with Ashutosh Vidwans Future Ventures India Limited jointly with Gopal Bihani Future Ventures India Limited jointly with Sanjay No. of equity shares held 1,00,49,994 1 1 1 1 Shareholding Percentage (%) 100.00 -

180

Sr. No. 6.

Name of the Shareholder

No. of equity shares held 1 1 1,00,50,000

Shareholding Percentage (%) 100.00

Rathi Future Ventures India Limited jointly with Neeta Singh 7. Future Ventures India Limited jointly with Vimal Dhruve TOTAL 3. Future Consumer Products Limited Corporate Information:

Future Consumer Products Limited (FCPL) was incorporated on September 11, 2007. FCPL is involved in the business of product development, designing, branding and distribution of FMCG products under the brand Sach. Capital Structure: No. of equity shares of ` 10 each 1,00,00,000 10,00,000

Authorised capital Issued, subscribed and paid-up capital Shareholding Pattern:

The shareholding pattern of FCPL as on the date of the Prospectus is as follows: Sr. No. 1. 2. 3. Name of the shareholder No. of equity shares held 8,99,994 1,00,000 1 1 1 1 1 1 10,00,000 Shareholding Percentage (%) 90.00 10.00 100.00

Future Ventures India Limited Sachin Tendulkar Future Ventures India Limited jointly with Manoj Gagvani 4. Future Ventures India Limited jointly with Gopal Bihani 5. Future Ventures India Limited jointly with Sanjay Rathi 6. Future Ventures India Limited jointly with Ashutosh Vidwans 7. Future Ventures India Limited jointly with Vimal Dhruve 8. Future Ventures India Limited jointly with Neeta Singh TOTAL 4. Indus-League Clothing Limited Corporate Information:

Indus-League Clothing Limited (Indus-League) was incorporated on November 25, 1998 and is involved in the business of designing, manufacturing, retailing ready-made garments and accessories. Capital Structure: No. of equity shares of ` 10 each 3,00,00,000 2,93,88,725

Authorised capital Issued, subscribed and paid-up capital

181

Shareholding: The shareholding pattern of Indus-League Clothing Limited as on the date of the Prospectus is as follows: Sr. No. Name of the Shareholder No. of equity shares held 2,51,87,383 13,70,126 14,21,364 12,63,600 1,40,252 2,000 4,000 2,93,88,725 Shareholding Percentage (%) 85.70 4.66 4.84 4.30 0.48 0.01 0.01 100.00

1. Future Ventures India Limited 2. Shree Nirman Limited 3. Bennett Coleman and Company Limited 4. Cradle Finance and Investment Company Private Limited 5. Sita Investment Co. Limited 6. Directors and Director's Relatives 7. Others TOTAL 5. Indus Tree Crafts Private Limited Corporate Information:

Indus Tree Crafts Private Limited (ICPL) was incorporated on December 23, 1994 and is involved in the business of designing, creating, exporting, domestic retailing and distribution of a wide range of environmentally and socially sustainable products. Capital Structure: No. of equity shares of ` 100 each Authorised capital Issued, subscribed and paid-up capital Shareholding: The shareholding pattern of ICPL as on the date of the Prospectus is as follows: Sr. No. 1. 2. 3. 4. Name of the Shareholder No. of equity shares held 55,336 17,250 17,250 14,000 1,500 105,336 Shareholding Percentage (%) 52.53 16.38 16.38 13.29 1.42 100.00 1,20,000 1,05,336

Future Ventures India Limited Neelam Chhiber Gita Ram Mutual Beneficial Trust (Represented by Neelam Chhiber & Gita Ram) 5. Raminder Singh Rekhi TOTAL 6. Lee Cooper (India) Limited Corporate Information:

Lee Cooper (India) Limited (LCIL) was originally incorporated as Apparel & Accessories Retail (India) Private Limited on April 21, 2006 and its name was subsequently changed to Lee Cooper (India) Private Limited on February 26, 2007. LCIL was converted from a private limited company to a public limited company and its name changed to Lee Cooper (India) Limited on November 20, 2008. LCIL is a manufacturer and retailer of lifestyle products, including denims, trousers, jackets, shirts and shoes under the Lee Cooper brand. LCIL is a step down subsidiary of the Company.

182

Capital Structure: No. of equity shares of ` 10 each 18,00,000 18,00,000 No. of preference shares of ` 10 each 1,62,00,000 82,00,000

Authorised capital Issued, subscribed and paid-up capital Shareholding:

The shareholding pattern of LCIL as on the date of the Prospectus is as follows: Equity shareholding: Sr. No. 1. 2. 3. 4. 5. 6. 7. TOTAL Preference shareholding: Sr. Name of the Shareholder No. 1. Indus- League Clothing Limited TOTAL No. of preference shares held 82,00,000 82,00,000 Shareholding Percentage (%) 100.00 100.00 Name of the Shareholder Indus League Clothing Limited Indus League Clothing Limited jointly with Ashutosh Vidwans Indus League Clothing Limited jointly with Neeta Singh Indus League Clothing Limited jointly with Manoj Gagvani Indus League Clothing Limited jointly with Abhishek Jalan Indus League Clothing Limited jointly with Subodh More Indus League Clothing Limited jointly with Vimal Dhruve No. of equity shares held 17,99,994 1 1 1 1 1 1 18,00,000 Shareholding Percentage (%) 100.00 100.00

183

BUSINESS VENTURES Other than the Subsidiaries, the Company has eight Business Ventures. The Company has indirect shareholding, through its subsidiary, Indus-League Clothing Limited, in three of the Business Ventures. Other than Capital Foods Exportts Private Limited which made a rights issue of 3,01,220 equity shares, none of the Business Ventures have made any public or rights issue in the last three years and have not become sick companies under the meaning of SICA and are not under winding up. The information provided in this section is as of the date of this Prospectus. I. 1. Directly held Business Ventures AND Designs India Limited Corporate Information: AND Designs India Limited (ADIL) was incorporated on March 14, 1995. ADIL caters to the womens apparel market, with focus on western and ethnic wear. Registered Office: The registered office of ADIL is located at Plot no.88, Marol Industrial Estate, M.V. Road, Andheri (East), Mumbai 400 059. Board of Directors: The directors of ADIL are: a) b) c) d) Ashni Biyani Anita Dongre Meena Sehra Mukesh Sawlani

Shareholding Pattern: The shareholding pattern of ADIL as on the date of the Prospectus is as follows: Sr. No. i. ii. iii. iv. v. vi. vii. Name of the equity shareholder Anita Dongre Meena Sehra Future Ventures India Limited Mukesh Sawlani Sangita Rohira Deepak Sawlani Hari Sawlani Total Financial Performance: Audited financial performance of ADIL for last three fiscal years and nine months ended December 31, 2010 is as follows: (In ` lakhs, except per share data) Particulars As at and for the As at and for the As at and for the As at and for the nine year ended March year ended March year ended March months ended 31, 2008 31, 2009 31, 2010 December 31, 2010 Sales 1,595.83 2,324.50 3,913.34 5,781.27 No. of equity shares 50,063 47,688 44,119 40,587 4,500 3,250 2,762 1,92,969 Shareholding (%) 25.95 24.72 22.86 21.03 2.33 1.68 1.43 100.00

184

Particulars

Other Income Total Income Net Profit/(Loss) after Tax Equity capital Reserves (excluding revaluation reserves) Earnings per share (Basic and diluted) Net asset value per share 2.

As at and for the year ended March 31, 2008 25.35 1,621.18 59.76 148.85 76.97 39.84 151.71

As at and for the year ended March 31, 2009 9.55 2,334.05 65.09 175.43 438.40 43.12 349.90

As at and for the year ended March 31, 2010 10.26 3,923.60 394.08 192.97 1,041.03 209.17 639.47

As at and for the nine months ended December 31, 2010 66.49 5,847.76 669.69 192.97 1,708.77 346.03 985.52

BIBA Apparels Private Limited Corporate Information: BIBA Apparels Private Limited (BAPL) was incorporated on July 10, 2002. BAPLs business focuses on womens apparel and has an established presence in the ethnic wear segment in India. Registered Office: The registered office of BAPL is located at 45-54, Whitehall Kemp Corner 143, A.K. Marg, Mumbai 400 036. Board of Directors: The directors of BAPL are: a) b) c) d) e) f) Meena Satish Bindra Sanjay Satish Bindra Siddharth Satish Bindra Anil Biyani Krishan Kant Rathi Manoj Gagvani

Shareholding Pattern: Shareholding Pattern of BAPL as on the date of the Prospectus is as follows: Sr. No. i. ii. iii. iv. v. vi. vii. viii. Name of the equity shareholder Siddharth Bindra Future Ventures India Limited Meena Bindra Dhanvan Impex Private Limited Kaveri Tradex Private Limited Sharadha Bindra Sparkle Dealers Private Limited Saurabh Modi Total Financial Performance: No. of equity shares held 1,38,810 1,32,850 1,13,600 40,000 17,740 15,000 7,000 4,500 4,69,500 Shareholding (%) 29.57 28.30 24.20 8.52 3.78 3.19 1.49 0.96 100.00

185

Audited Financial performance of BAPL for last three fiscals is as follows: (In ` lakhs, except per share data) As at and for the year As at and for the year ended March 31, 2009 ended March 31, 2010 8,079.57 9,887.85 5.54 2.24 8,085.11 9,890.09 28.05 810.64 460.30 2,125.10 6.32 6.32 561.68 460.30 2,864.71 176.11 176.11 722.36

Particulars Net Sales Other Income Total Income Net Profit/(Loss) after tax Equity capital Reserves Earnings per share (Basic) (Diluted) Net asset value per share 3.

As at and for the year ended March 31, 2008 6,639.09 47.63 6,686.72 514.67 427.96 1,373.80 122.26 126.29 421.01

Capital Foods Exportts Private Limited (Capital Foods) Corporate Information: Capital Foods was incorporated on September 9, 2003. Capital Foods is involved in the business of manufacturing various types of ambient and frozen processed food products. Capital Foods is also engaged in the process of exporting these products to various countries like USA, Australia, Singapore, New Zealand, UAE, Canada and Europe. Registered Office: The registered office of Capital Foods is located at Villa Capital, Sadhana Compound, Oshiwara Bridge, S.V.Road, Jogeshwari (W), Mumbai 400 102. Board of Directors: a) b) Ajay Gupta Omprakash Varma

Shareholding Pattern: The shareholding pattern of Capital Foods as on the date of the Prospectus is as follows: Sr. No. i. ii. iii. iv. v. Name of the equity shareholder Ajay Gupta Future Ventures India Limited Pagoda Advisors Private Limited Rakesh Patel Vijay Gupta Total Financial Performance: Audited Financial performance of Capital Foods for last three fiscals and nine months ended December 31, 2010 is as follows: No. of equity shares held 13,98,239 10,54,269 47,200 43,478 40,000 25,83,186 Shareholding (%) 54.13 40.81 1.83 1.68 1.55 100.00

186

Particulars

Sales Other Income Total Income Net Profit/ (Loss) after tax Equity capital Reserves Earnings per share (Basic and diluted) Net asset value per share 4.

As at and for the year ended March 31, 2008 2,117.03 11.23 2,128.26 178.33 228.20 1,877.75 7.81 91.77

As at and for the year ended March 31, 2009 1,824.23 80.49 1,904.73 53.23 258.32 2,432.24 2.06 104.16

(In ` lakhs, except per share data) As at and for the As at and for the nine year ended March months ended 31, 2010 December 31, 2010 1,847.15 1,224.82 10.02 1,857.17 67.01 258.32 2,499.25 2.59 106.75 4.08 1,228.90 5.65 258.32 2,504.90 0.22 106.97

Holii Accessories Private Limited Corporate Information: Holii Accessories Private Limited was originally incorporated as Purvi Mall Management Private Limited on February 22, 2007. Subsequently, on April 13, 2009, its name was changed to Holii Accessories Private Limited (Holii). Holii is involved in the business of retailing fashion accessories such as leather handbags, wallets and other accessories. Registered Office: The registered office of Holii is located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (East), Mumbai 400 060. Board of Directors: a. b. c. d. Ashni Biyani Krishan Kant Rathi Vikas Kapur Dilip Kapur

Shareholding Pattern: The shareholding pattern of Holii as on the date of the Prospectus is as follows:

Sr. No. i. ii.

Name of the equity shareholder Future Ventures India Limited Hidesign India Private Limited Total Financial Performance:

No. of equity shares held 17,50,000 17,50,000 35,00,000

Shareholding (%) 50.00 50.00 100.00

Audited financial performance of Holii for last three fiscal years and nine months ended December 31, 2010 is as follows: (In ` lakhs, except per share data)

187

Particulars

As at and for the period ended March 31, 2008*

As at and for the year ended March 31, 2009

As at and for the year ended March 31, 2010

Sales and Operating Income Other Income Total income Net Profit/(Loss) after Tax Equity Capital Reserves Earnings per share (Basic and diluted) Net asset value per share

0.00 0.00 0.00 (0.18) 1.00 0.00 (1.76)

0.00 0.00 0.00 (0.12) 1.00 0.00 (1.19)

167.69 0.21 167.90 (60.89) 150.00 (14.05)

As at and for the nine months ended December 31, 2010 302.67 0.00 302.67 (148.85) 150.00 (13.17) (4.00)#

8.24

7.04

5.92

* Profit and loss has been drawn from February 20, 2007 till March 31, 2008 # Share application money has not been considered as the equity shares pursuant to the same has been allotted subsequent to December 31, 2010.

5.

Amar Chitra Katha Private Limited Corporate Information: Amar Chitra Katha Private Limited (ACKPL) was originally incorporated as IBH Paperbacks Distributors Private Limited on November 5, 1980. The name was changed to IBH Publishers Private Limited on April 16, 1983 which was subsequently changed to Amar Chitra Katha Private Limited on February 12, 2007. ACKPL is engaged in the business of education and entertainment by way of publishing printed materials, production of animated films and to organize and conduct theatrical production and entertainment of all kinds. Registered Office: The registered office of ACKPL is situated at 3rd Floor, Forum Building, Raghuvanshi Mills Compound, Lower Parel, Mumbai.

Board of Directors: The present directors of ACKPL are: a. b. c. d. e. f. g. h. Shripal Morakhia Kalpana Morakhia Samir Patil Atul Doshi Gaurav Burman Amit Jain Ashni Biyani Santosh Desai

Shareholding Pattern: The shareholding pattern of ACKPL as on the date of the Prospectus is as follows:

188

Sr. No. 1. 2. 3. 4. 5. 6.

Name of the equity shareholder IDream Holdings Private Limited Tusk Investments Fund I Future Ventures India Limited Samir Patil Elephant India Finance Private Limited Windy Investments Private Limited Total

No. of equity shares 1,68,840 1,00,278 49,039 43,076 15,041 7,278 3,83,552

Shareholding (%) 44.02 26.14 12.79 11.23 3.92 1.90 100.00

Note: 14,420 options have been granted to the employees of ACKPL which have not been exercised yet.

Financial Performance: Audited Financial performance of ACKPL (Standalone) for last three fiscal years is as follows:
(In ` lakhs, except per share data)

Particulars

Net Sales Other Income Total Income Net Profit /(Loss) after Tax* Equity capital Reserves (excluding revaluation reserves) Earnings per share (Basic and diluted) Net asset value per share

As at and for the year ended March 31, 2008 660.71 42.14 702.85 14.29 1.78 1415.27 8.46 785.10

As at and for the year ended March 31, 2009 777.08 21.47 798.54 (85.76) 1.78 1400.22 (48.22) 712.07

As at and for the year ended March 31, 2010 1076.29 24.33 1100.62 (231.00) 1.78 1400.22 (129.89) 618.67

*After adjusting prior period items

II. 6.

Indirectly held Business Ventures SSIPL Retail Limited Corporate Information: SSIPL Retail Limited (SSIPL) was incorporated on October 5, 1994 and the status of the Company was changed from Private Limited to Public Limited on June 19, 2008. SSIPL is a retailer of Nike brand products. Registered Office: The registered office of SSIPL is located at B1 / F4 Mohan Co-operative Industrial Area, Main Mathura Road, Delhi 110 044. Board of Directors: The directors of SSIPL are: a. b. c. Rishab Soni Sunil Taneja Ashok Mathur

189

d. e. f. g. h. i.

Abhay Soi Carlton Pereira Lalit Kishore Rahul Sood Sanjeev Saraf Raj K. Vaisoha

Shareholding Pattern: The Company does not directly hold any shares in SSIPL and has indirect shareholding in SSIPL through its subsidiary, Indus-League Clothing Limited. The shareholding pattern of SSIPL as on the date of the Prospectus is as follows: Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. Name of the Shareholder(s) Tano Mauritius India FVCI Rishab Soni Ashok Mathur Rajesh Sahgal Sunil Taneja Indus-League Clothing Limited Trishul Tread Private Limited Dilip Mathur Infrastructure Development Finance Company Limited Kabir Taneja HBP Holding Limited Abhay Soi Narayan K Seshadri Ess Investments Private Limited Ashish Gupta Nandita Soni Ashish Jain Amit Mathur IDFC- SSKI Private Limited Himmaj Soni Siya Medicare Private Limited Siddharth Sareen Rohini Mathur Dhara Soni Ritu Kuckreja B M Khanna Anita Paul Pranav Kuckreja Rishab Soni (HUF) A & M Wearing Apparels & Accessories Private Limited Alka Taneja Sports Station Retail Private Limited Divya Mathur Applique Garments Private Limited Esha Mathur Anil Taneja Tejpavan Singh Gandhok No. of equity shares held 15,88,368 12,75,474 8,59,558 6,99,683 6,42,431 6,09,197 5,31,043 4,22,500 3,04,599 2,90,875 1,82,759 1,82,191 1,82,192 1,70,726 1,58,734 1,46,278 1,37,061 1,32,815 1,21,840 1,06,389 71,787 60,916 40,896 39,894 37,500 32,005 30,458 27,800 26,596 26,500 22,912 22,482 19,050 14,050 11,719 11,915 9,884 Shareholding Percentage (%) 17.13 13.76 9.27 7.55 6.93 6.57 5.73 4.56 3.29 3.14 1.97 1.96 1.96 1.84 1.71 1.58 1.48 1.43 1.31 1.15 0.77 0.66 0.44 0.43 0.40 0.35 0.33 0.30 0.29 0.29 0.25 0.24 0.21 0.15 0.13 0.13 0.11

190

Sr. No. 38. 39. 40. 41. 42. 43.

Name of the Shareholder(s) Cyrus E Cooper Vinayak V Kamath Vivek Chand Sahgal Sunil Taneja(HUF) Fields Spares Sales & Services Kiran Soni Total

No. of equity shares held 7,907 6,589 2,383 2,983 1,300 149 92,72,388

Shareholding Percentage (%) 0.09 0.07 0.03 0.03 0.01 0.00 100

Further, the Company held 5.56% of paid up capital of SSIPL on a fully diluted basis calculated as on the date of its investment in SSIPL. Financial Performance: Audited financial performance of SSIPL for the last three fiscal years is as follows: (In ` lakhs, except per share data) As at and for the year As at and for the year ended March 31, 2009 ended March 31, 2010 29,885.09 33,371.01 520.64 460.57 30,405.73 33,831.58 162.77 404.25 927.24 7,517.83 2.86 2.41 1.80 1.52 89.60 927.24 7408.05 4.36 3.69 4.36 3.69 89.89

Particulars

Revenues Other Income Total Income Net Profit/(Loss) after tax Equity capital 883.34 Reserves 7,645.18 Earnings per share (Before extraordinary item) (Basic) 4.13 (Diluted) 3.15 Earnings per share (After extraordinary item) (Basic) 4.13 (Diluted) 3.15 Net asset value per 46.58 share*
*Excluding preference shares.

As at and for the year ended March 31, 2008 22,085.05 506.17 22,591.22 301.00

7.

Celio Future Fashion Limited Corporate Information: Celio Future Fashion Limited (CFFL) was incorporated on May 5, 2008. CFFL is engaged in the business of retailing mens apparel and accessories in the Indian market. Registered Office: The registered office of CFFL is located at Knowledge House, Shyam Nagar, Off Jogeshwari Vikhroli Link Road, Jogeshwari (East), Mumbai 400 060. Board of Directors: The directors of CFFL are: a. b. Rakesh Biyani Kailash Bhatia

191

c. d. e. f.

Lalit Mathur Krishan Kant Rathi Laurent Potella Pierre Parlongue

Shareholding Pattern: The Company does not directly hold any shares in CFFL and has indirect shareholding in CFFL through its subsidiary, Indus-League Clothing Limited. The shareholding pattern of CFFL as on the date of the Prospectus is as follows: Sr. No. i. ii. Name of the equity shareholder Celio International Indus-League Clothing Limited Total
*

No. of equity shares held 7,48,056 7,48,055* 14,96,111

Shareholding (%) 50.01 49.99* 100

One share each is held by Indus-League Clothing Limited jointly with Sanjay Rathi, Ashutosh Vidwans, Manoj Gagvani, Neeta Singh and Vimal Dhruve, respectively.

Financial Performance: Audited financial performance of CFFL for the last three financials is as follows: (In ` lakhs, except per share data) As at and for the eleven months ended December 31, 2010 3018.30 25.32 3,043.62 (557.70) 116.28 2,283.72 (47.96) 56.81#

Particulars

Net sales Other Income Total Income Net Profit/(Loss) after Tax Equity Capital Reserves Earnings per share (Basic and diluted) Net asset value per share

As at and for the period ended January 31, 2009* 290.07 12.76 302.83 (188.52) 61.00 1,344.00 (146.63) 199.42

As at and for the year ended January 31, 2010 999.16 11.33 1,010.49 (993.15) 116.28 2,283.72 (143.24) 104.78

* Financials are for the period from May 5, 2008 to January 31, 2009. # Share application money has not been considered as the equity shares pursuant to the same has been allotted subsequent to December 31, 2010.

8.

Turtle Limited Corporate Information: Turtle Limited (Turtle) was incorporated on August 19, 1992. Turtles business focuses on manufacturing and retailing of readymade garments. Registered Office: The registered office of Turtle is located at 20 Round Tank Lane, Howrah, West Bengal 711 101. Board of Directors: The directors of Turtle are: a. b. Sanjay Jhunjhunwalla Krishan Kant Rathi

192

c. d. e. f. g. h. i. j.

Shitanshu Jhunjhunwalla Satyanarayan Jhunjhunwalla Hemlata Jhunjhunwalla Amit Ladsaria Anu Ladsaria Rakesh Biyani Saloni Jhunjhunwalla Manish Lohia

Shareholding Pattern: The Company does not directly hold any shares in Turtle and has indirect shareholding in Turtle through its subsidiary, Indus-League Clothing Limited. The shareholding pattern of Turtle as on the date of the Prospectus is as follows: Sr. No. i. ii. iii. iv. v. vi. vii. viii. ix. x. Name of the equity shareholder Sanjay Jhunjhunwalla Indus-League Clothing Limited Hemlata Jhunjhunwalla Amit Ladsaria Anu Ladsaria Amit Ladsaria(HUF) Sanjay Jhunjhunwalla (HUF) Manju Ladsaria Shitanshu Jhunjhunwalla Aman Ladsaria Total Financial Performance: Audited financial performance of Turtle for last three fiscal years and nine months ended December 31, 2010 is as follows:
(In ` lakhs, except per share data)

No. of equity shares held 19,00,900 15,60,000 7,87,850 5,86,700 3,55,100 3,35,100 2,03,850 2,00,100 47,400 23,000 60,00,000

Shareholding (%) 31.68 26.00 13.13 9.77 5.92 5.59 3.40 3.34 0.79 0.38 100.00

Particulars

Sales Other Income Total Income Net Profit /(Loss) after tax Equity capital Reserves Earnings per share (Basic and diluted) Net asset value per Share

As at and for the year ended March 31, 2008 4,638.20 30.84 4,669.04 186.24 600.00 396.55 3.10 16.61

As at and for the year ended March 31, 2009 6,179.68 49.01 6,228.69 122.03 600.00 518.57 2.03 18.64

As at and for the year ended March 31, 2010 6,409.63 37.72 6,447.35 291.15 600.00 739.54 4.85 22.33

As at and for the nine months ended December 31, 2010 5,910.25 15.92 5,926.16 266.34 600.00 1,005.87 4.44 26.76

193

PROMOTERS AND PROMOTER GROUP The Promoters of the Company are as follows: Individual Promoter: Kishore Biyani Corporate Promoters: 1. 2. 3. 4. 5. Future Capital Investment Private Limited; Future Corporate Resources Limited (erstwhile PFH Entertainment Limited); Future Knowledge Services Limited; PIL Industries Limited (formerly known as Pantaloon Industries Limited); and Pantaloon Retail (India) Limited.

The Individual Promoter Kishore Biyani is the Managing Director of the Company. He is a resident Indian national. For further details, please see the section entitled Management beginning on page 162. Kishore Biyanis driving license number is 78/C/21787. He does not have a voter identification card. His passport number is Z2084994.
The Company confirms that the PAN, bank account details and passport number of Kishore Biyani were submitted to the Stock Exchanges at the time of filing of the Draft Red Herring Prospectus with the Stock Exchanges.

Companies with which Kishore Biyani has disassociated in the last three years: The details of companies/firms with which Kishore Biyani has disassociated in the last three years is as follows: AB Investment & Securities as the proprietorship firm has been dissolved. For more details of Kishore Biyani, please see the section entitled Management beginning on page 162. The Corporate Promoters As of the date of this Prospectus, none of the Promoters have become sick companies under the meaning of SICA and are not under winding up.
The Company confirms that the PAN, bank account details and passport number of the corporate Promoter were submitted to the Stock Exchanges at the time of filing the Draft Red Herring Prospectus with the Stock Exchanges.

1.

Future Capital Investment Private Limited Corporate Information Future Capital Investment Private Limited (FCIPL) was originally incorporated on February 6, 2006 as Future Capital Holdings Private Limited. The company changed its name to Future Capital Investment Private Limited and was consequently, granted a fresh certificate of incorporation by the ROC on July 26, 2006. FCIPL is involved in the business of investment activities.

194

Board of Directors: The directors of FCIPL are as follows: (i). Ashni Biyani (ii). Rajesh Kalyani (iii). Dinesh Maheshwari Promoters of FCIPL Future Corporate Resources Limited is the promoter of FCIPL. Shareholding pattern: Name of the shareholders Future Corporate Resources Limited Future Corporate Resources Limited jointly with Dinesh Maheshwari Total Shareholding pattern of the shareholders of FCIPL The shareholding pattern of Future Corporate Resources Limited is as disclosed in this section Promoter and Promoter Group. FCIPL is ultimately controlled by Kishore Biyani and/or his relatives as defined under the Companies Act. Financial Performance: Audited financial performance of FCIPL for last three fiscal years is as follows: (` in lakh, except per share data) For the year ended For the year ended March 31, 2009 March 31, 2010 0.004 Nil (0.74) (0.64) 1.00 1.00 0.00 0.00 (7.43) (20.25) (6.38) (21.14) No. of equity shares held 9,999 1 10,000 Shareholding Percentage (%) 99.99 0.01 100.00

Particulars Income PAT/(Loss) Equity Capital Reserves and Surplus (excluding revaluation reserve) Earning per equity share (Basic and diluted) Net asset value per share Change in control of FCIPL

For the year ended March 31, 2008 Nil (0.64) 1.00 0.00 (6.35) (18.30)

The details of change in control of FCIPL during the last three years are as follows: Year 2010 - 2011 2008 - 2009 Name of the Shareholder Future Corporate Resources Limited Kishore Biyani No. of equity shares held 9,999 9,999 Shareholding (%) 99.99 99.99

Companies with which FCIPL has disassociated in the last three years:

195

FCIPL has not disassociated with any company in the last three years. 2. Future Corporate Resources Limited Corporate Information Future Corporate Resources Limited (FCRL) was incorporated as PFH Entertainment Limited on March 8, 1996. The company changed its name to Future Corporate Resources Limited and was consequently, granted a fresh certificate of incorporation by the ROC on February 3, 2010. FCRL is involved in the business of advertisement, space hiring, event management and feature films production and providing various corporate services directly or through acquired businesses mainly information technology, education development and commercial usage of intellectual property and other corporate services. Board of Directors: The directors of FCRL are as follows: (i). (ii). (iii). (iv). (v). (vi). Kishore Biyani Ashni Biyani Vivek Biyani Gopikishan Biyani Anil Biyani Laxminarayan Biyani

Promoters of FCRL The promoters of FCRL are: (a) (b) (c) (d) (e) Kishore Biyani Vijay Biyani Anil Biyani Sunil Biyani Rakesh Biyani

Shareholding pattern: The shareholding pattern of FCRL as on the date of the Prospectus is as follows: Name of the shareholders No. of equity shares held 2,49,99,994 1 1 1 1 1 1 2,50,00,000 Shareholding Percentage (%) 100.00 100.00

Simpleton Investrade Private Limited Simpleton Investrade Private Limited jointly with Sunil Biyani Simpleton Investrade Private Limited jointly with Sunil Biyani (HUF) Simpleton Investrade Private Limited jointly with Laxminarayan Biyani Simpleton Investrade Private Limited jointly with Laxminarayan Biyani (HUF) Simpleton Investrade Private Limited jointly with Vijay Biyani (HUF) Simpleton Investrade Private Limited jointly with Anil Biyani (HUF) Total

Shareholding pattern of Simpleton Investrade Private Limited (Simpleton):

196

As of the date of the Prospectus, the shareholding pattern of Simpleton was as follows: Name of the shareholders No. of equity shares held 3,200 1,700 1,500 1,500 1,500 400 200 10,000 Shareholding pattern of the shareholders of Simpleton: Shareholding pattern of the entities holding shares in Simpleton Investrade Private Limited as on the date of the Prospectus: (a) Samreen Multitrading Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100 Shareholding percentage

Samreen Multitrading Private Limited Tanushri Infrastucture Private Limited Kavi Sales Agency Private Limited Oviya Multitrading Private Limited Radha Multitrading Private Limited Raja Infrastucture Private Limited Salarjung Multitrading Private Limited Total

32.00 17.00 15.00 15.00 15.00 4.00 2.00 100.00

Name of the Shareholders Kishore Biyani Sangita Biyani Total (b)

Tanushri Infrastructure Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100

Name of the Shareholders Vijay Biyani Kishore Biyani Total (c)

Kavi Sales Agency Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100

Name of the Shareholders Anil Biyani Kishore Biyani Total (d)

Oviya Multitrading Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100

Name of the Shareholders Sunil Biyani Kishore Biyani Total

(e)

Radha Multitrading Private Limited

197

Name of the Shareholders Rakesh Biyani Kishore Biyani Total (f)

Number of shares held 9,900 100 10,000

Percentage of shares held 99 1 100

Raja Infrastructure Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100

Name of the Shareholders Gopikishan Biyani Kishore Biyani Total (g)

Salarjung Multitrading Private Limited Number of shares held 9,900 100 10,000 Percentage of shares held 99 1 100

Name of the Shareholders Laxminarayan Biyani Kishore Biyani Total

FCRL is ultimately controlled by Kishore Biyani and/or his relatives as defined under the Companies Act. Financial Performance of FCRL: Audited financial performance of FCRL for last three fiscal years is as follows: (` in lakh, except per share data) For the year ended For the year ended March 31, 2009 March 31, 2010 13,904.15 22,782.98 (202.99) (5,657.27) 300.00 2,500.00 444.77 494.36

Particulars Sales and other income PAT/(Loss) Equity Capital Reserves and Surplus (excluding revaluation reserve) Earning per equity share (Basic) (Diluted) Net asset value per share Change in control of FCRL:

For the year ended March 31, 2008 14,508.16 914.52 92.20 647.76

99.19 99.19 80.18

(21.88) (21.88) 24.81

(184.86) (1.28) (9.95)

The details of change in control of FCRL during the last three years are as follows: Year 2009-2010 Name of the Shareholder Simpleton Investrade Private Limited Manz Retail Private Limited Akar Estate & Finance Private Limited Kishore Biyani and his relatives Simpleton Investrade Private Limited Manz Retail Private Limited Akar Estate & Finance Private Limited Kishore Biyani and his relatives Varnish Trading Private Limited ESES Commercials Private Limited No. of equity shares held 2,44,68,802 79,193 3,70,000 82,005 23,48,802 79,193 3,70,000 82,005 60,000 60,000 Shareholding (%) 97.88 0.32 1.48 0.32 78.29 2.64 12.33 2.74 2.00 2.00

2008-2009

198

Year 2007-2008

Name of the Shareholder Akar Estate & Finance Private Limited Manz Retail Private Limited Kishore Biyani and his relatives Others- Public

No. of equity shares held 3,70,000 89,200 2,38,000 2,24,800

Shareholding (%) 40.13 9.67 25.82 24.38

Companies with which FCRL has disassociated in the last three years: FCRL has not disassociated with any company in the last three years. 3. Future Knowledge Services Limited Corporate Information Future Knowledge Services Limited (FKSL) was incorporated on January 18, 2007 and is involved in the business of IT enabled services and other corporate and management services. Board of Directors: The directors of FKSL are: (i) (ii) (iii) C P Toshniwal, Rakesh Biyani Vivek Biyani

Promoters of FKSL Pantaloon Retail (India) Limited is the promoter of FKSL. Shareholding pattern Name of the shareholder Pantaloon Retail (India) Limited Pantaloon Retail (India) Limited jointly with Pantaloon Retail (India) Limited jointly with Pantaloon Retail (India) Limited jointly with Pantaloon Retail (India) Limited jointly with Pantaloon Retail (India) Limited jointly with Pantaloon Retail (India) Limited jointly with Total No. of equity shares held 4,46,97,784 1 1 1 1 1 1 4,46,97,790 Shareholding Percentage 100.00 100.00

Sanjay Rathi Jitendra Gandhi Vimal Dhruve Arun Bhandari Milind Budhakar Subodh More

Shareholding of the shareholders of FKSL The shareholding pattern of Pantaloon Retail (India) Limited is as disclosed in this section Promoter and Promoter Group. FKSL is ultimately controlled by Kishore Biyani and/or his relatives as defined under the Companies Act.

Financial Performance: Audited financial performance of FKSL for last three fiscal years is as follows:

199

Particulars Sales and services and other income PAT/(Loss) Equity Capital Reserves and surplus (Excluding revaluation reserve) Earning per equity share (Basic) (Diluted) Net asset value per share

For nine months ended March 31, 2008 287.29 (166.53) 1,149.00 0.00

(` in lakh, except per share data) For the year ended For the year ended March 31, 2009 March 31, 2010 4,814.22 5,789.66 7.10 2,281.00 0.00 (547.07) 4,469.78 0.00

(181.80) (181.80) 7.74

0.04 0.02 8.89#

(1.32) (1.32) 8.21

# Share application money has not been considered as the equity shares pursuant to the same has been allotted subsequent to March 31, 2009.

Change in control of FKSL There has been no change in control or management of FKSL in the three years preceding the date of filing of this Prospectus. Companies with which FKSL has disassociated in the last three years: FKSL has not disassociated with any company during the last three years. 4. PIL Industries Limited (previously known as Pantaloon Industries Limited) (PIL) Corporate Information PIL was originally incorporated as Bansi Textile Industries Private Limited on July 15, 1987 and was converted to a public limited company on June 5, 1992 and its name was changed to Bansi Textile Industries Limited and subsequently, its name was changed to Pantaloon Textile Industries Limited. On November 4, 1999 the name was changed to Pantaloon Industries Limited. On December 6, 2010, the name of Pantaloon Industries Limited was changed to PIL Industries Limited. PIL is involved in the business of trading in textiles, apparels and general merchandise and it also makes strategic investment in allied activities. Promoters of PIL The promoters of PIL are: (i) (ii) (iii) (iv) Kishore Biyani Vijay Biyani Anil Biyani Sunil Biyani

Board of Directors: The directors of PIL are: (i) (ii) (iii). Anil Biyani Sunil Biyani Vijay Biyani

Shareholding pattern:

200

The shareholding pattern of PIL as on the date of the Prospectus is as follows: Name of the equity shareholder ESES Commercials Private Limited Manz Retail Private Limited Others Total Shareholding pattern of the shareholders of PIL As of the date of the Prospectus, the shareholding pattern of ESES Commercials Private Limited (ESES) is as follows: Name of the shareholders Future Corporate Resources Limited Future Ideas Realtors India Limited Total Number of shares held 7,625 7,625 15,250 Shareholding percentage 50.00 50.00 100.00 No. of equity shares held 44,35,974 19,21,385 2,47,882 66,05,241 Shareholding Percentage (%) 67.16 29.09 3.75 100.00

As of the date of the Prospectus, the shareholding pattern of Manz Retail Private Limited (Manz) is as follows: Name of the shareholders Future Corporate Resources Limited Future Ideas Realtors India Limited Total Number of shares held 95,000 95,000 1,90,000 Shareholding pattern of the common shareholders of ESES and Manz As of the date of the Prospectus, the shareholding pattern of Future Ideas Realtors India Limited is as follows: Name of the Shareholder Future Corporate Resources Limited (FCRL) FCRL with Sanjay Rathi FCRL with Rajesh Kalyani FCRL with Vimal Dhruve FCRL with Subodh More FCRL with Arun Bhandari FCRL with Milind Budhakar Total Number of shares held 49,994 1 1 1 1 1 1 50,000 Shareholding in percentage 100.00 100.00 Shareholding percentage 50.00 50.00 100.00

The shareholding pattern of FCRL is as disclosed in this section Promoter and Promoter Group PIL is ultimately controlled by Kishore Biyani and/or his relatives as defined under the Companies Act.

Financial Performance: Audited financial performance of PIL for last three fiscal years is as follows:

201

Particulars Sales and other income PAT/(Loss) Equity Capital Reserves and Surplus (excluding revaluation reserve) Earning per equity share (Basic and diluted) Net asset value per share
*Excluding preference shares.

For 15 months ended March 31, 2008 13,654.84 54.17 585.94 259.58 0.92 14.43*

(` in lakh, except per share data) For the year ended For the year ended March 31, 2009 March 31, 2010 13,763.10 17,362.49 (965.07) 143.30 660.52 660.52 2,808.15 2,808.15 (15.76) 40.53 2.17 42.70

Change in control of PIL The details of change in control of PIL during the last three years are as follows: Year 20092010 Name of the Shareholder Kishore Biyani and his relatives ESES Commercials Private Limited Manz Retail Private Limited Kishore Biyani and his relatives ESES Commercials Private Limited Future Corporate Resources Limited Manz Retail Private Limited Varnish Trading Private Limited Kishore Biyani and his relatives ESES Commercials Private Limited Varnish Trading Private Limited Future Corporate Resources Limited Manz Retail Private Limited No. of equity shares held 23,06,374 29,72,688 10,64,927 23,06,374 1,82,000 13,87,442 17,14,927 7,13,246 23,06,374 1,82,000 7,13,246 13,84,161 9,68,306 Shareholding (%) 34.92 45.00 16.12 34.92 2.76 21.01 25.96 10.80 39.36 3.11 12.17 23.06 16.53

20082009

20072008

Companies with which PIL has disassociated in the last three years: PIL has not disassociated with any company in the last three years. 5. Pantaloon Retail (India) Limited (PRIL) Corporate Information PRIL was originally incorporated as Manz Wear Private Limited on October 12, 1987. It was converted into a public limited company on September 20, 1991 and on September 25, 1991 the name was changed to Pantaloon Fashions (India) Limited. In the year 1992, PRIL made an initial public offering of its equity shares and changed its name to Pantaloon Retail (India) Limited on July 7, 1999. The main business of PRIL is organized retailing of a range of branded and private label apparel, footwear, perfumes, cosmetics, jewellery, leather products and accessories, home products, books, music and toys in stores or malls operated or managed by PRIL. Board of Directors: The directors of PRIL are:

202

(i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi)

Kishore Biyani Rakesh Biyani Gopikishan Biyani Vijay Biyani Shailesh Haribhakti Dr. Darlie O. Koshy S. Doreswamy Bala Deshpande Anil Harish V. K. Chopra Kailash Bhatia

Promoters of PRIL The promoter of PRIL is Kishore Biyani. Shareholding Pattern: As of March 31, 2011, the shareholding pattern of PRIL is as follows: (a)
Category code

Equity Shares:
Category of Shareholder No. of Share holders Total no. of shares No. of shares held in dematerialized form Total shareholding as a Shares pledged or percentage of total no. otherwise encumbered (See of shares Note 1 below) As a As a No. of As a percentag percentage shares percentage e of of (A+B)1 (A+B+C) (VI) (VII) (VIII) (IX) = (VIII)/(IV)*10 0

(I)

(II)

(III)

(IV)

(V)

(A) 1 (a) (b) (c) (d) (e) 2 a b c d

(B) 1 (a) (b) (c) (d) (e) (f) (g) (h) B2 (a) (b)

Shareholding of Promoter and Promoter Group2 Indian Individuals/ Hindu Undivided Family Central Government/ State Government(s) Bodies Corporate Financial Institutions/ Banks Any Others(Specify) Sub Total(A)(1) Foreign Individuals (Non-Residents Individuals/Foreign Individuals) Bodies Corporate Institutions Any Others(Specify) Sub Total(A)(2) Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+ (A)(2) Public shareholding Institutions Mutual Funds/ UTI Financial Institutions / Banks Central Government / State Government(s) Venture Capital Funds Insurance Companies Foreign Institutional Investors Foreign Venture Capital Investors Any Other (specify) Sub-Total (B)(1) Non-institutions Bodies Corporate Individuals:

2 2 2

90,362,248 90,362,248 90,362,248

90,362,248 90,362,248 90,362,248

44.92 44.92 44.92

29.65 29.65 29.65

44.92 26,788,845 44.92 26,788,845 -

44.92 26,788,845

75 12 2 10 85 184 819

14,997,430 4,884,863 5,117,151 8,574,284 48,488,158 82,061,886 14,626,582

14,997,430 4,884,863 5,117,151 8,574,284 48,488,158 82,061,886 14,623,577

7.46 2.43 2.54 4.26 24.11 40.80 7.27

7.46 2.43 2.54 4.26 24.11 40.80 7.27

NA NA NA -

NA NA NA -

203

Category code

Category of Shareholder

No. of Share holders

Total no. of shares

No. of shares held in dematerialized form

(c) (c-i) (c-ii) (c-iii) (c-iv) (B)

(C)

(1) (2)

i. Individual shareholders holding nominal share capital up to Rs 1 lakh ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. Any Other (specify) Clearing Member Non Resident Indians Directors & their Relatives (Independent Directors) Trust Sub-Total (B)(2) Total Public Shareholding (B)= (B)(1)+(B)(2) TOTAL (A)+(B) Shares held by Custodians and against which Depository Receipts have been issued Promoter and Promoter Group Public GRAND TOTAL (A)+(B)+(C)

29,602

7,160,688

Total shareholding as a Shares pledged or percentage of total no. otherwise encumbered (See of shares Note 1 below) As a As a No. of As a percentag percentage shares percentage e of of (A+B)1 (A+B+C) 5,925,637 3.56 3.56 -

23

5,617,869

5,617,869

2.79

2.79

223 332 3 1 31,003 31,187 31,189 -

1,158,285 117,145 37,600 236 28,718,405 110,780,291 201,142,539 -

1,158,285 115,145 37,600 236 27,478,349 109,540,235 199,902,483 -

0.58 0.06 0.02 0.00 14.28 55.08 100.00 -

0.58 0.06 0.02 0.00 14.28 55.08

13.32 -

100.00 26,788,845 -

31,189 201,142,539

199,902,483

100.00

13.32

100.00 26,788,845

Note 1: Future Corporate Resources Limited has pledged (i) 50,000 shares of PRIL on March 29, 2011, and (ii) 24,742 shares of PRIL on March 31, 2011.

(b)
Category code

Differential voting rights Shares:

Category of Shareholder No. of Share holders Total no. of shares No. of shares held in dematerialized form Total shareholding as a percentage of total no. of shares As a As a percentage of percentage of 1 (A+B) (A+B+C) (VI) (VII) Shares pledged or otherwise encumbered No. of shares (VIII) As a percentage

(I) (A)

(II) Shareholding of Promoter and Promoter Group2 Indian Individuals/ Hindu Undivided Family Central Government/ State Government(s) Bodies Corporate Financial Institutions/ Banks Any Others(Specify) Sub Total(A)(1) Foreign Individuals (NonResidents Individuals/ Foreign Individuals) Bodies Corporate Institutions Any Others(Specify) Sub Total(A)(2) Total Shareholding of Promoter and Promoter Group (A) = (A)(1)+ (A)(2)

(III)

(IV)

(V)

(IX) = (VIII)/(IV)*100

1 (a) (b)

9 -

10,836 -

10,836 -

0.07 -

0.07 -

(c) (d) (e)

3 12 -

7,396,857 7,407,693 -

7,396,857 7,407,693 -

46.43 46.50 -

46.43 46.50 -

200,000 200,000 -

2.70 2.70 -

2 a

b c d

12

7,407,693

7,407,693

46.50

46.50

200,000

2.70

204

Category code

Category of Shareholder

No. of Share holders

Total no. of shares

No. of shares held in dematerialized form

Total shareholding as a percentage of total no. of shares As a As a percentage of percentage of (A+B)1 (A+B+C)

Shares pledged or otherwise encumbered No. of shares NA NA As a percentage

(B) 1 (a) (b) (c)

(d) (e) (f)

(g) (h)

B2 (a) (b)

(c) (c-i) (c-ii) (c-iii)

(B)

Public shareholding Institutions Mutual Funds/ UTI Financial Institutions / Banks Central Government/ State Government(s) Venture Capital Funds Insurance Companies Foreign Institutional Investors Foreign Venture Capital Investors Any Other (specify) Sub-Total (B)(1) Non-institutions Bodies Corporate Individuals: i. Individual shareholders holding nominal share capital up to Rs 1 lakh ii. Individual shareholders holding nominal share capital in excess of Rs. 1 lakh. Any Other (specify) Clearing Member Directors & their Relatives Non Resident Indians Sub-Total (B)(2) Total Public Shareholding (B)= (B)(1)+(B)(2) TOTAL (A)+(B) Shares held by Custodians and against which Depository Receipts have been issued Promoter and Promoter Group Public GRAND TOTAL (A)+(B)+(C)

NA NA -

15 3 -

673,124 166,342 -

673,124 166,342 -

4.23 1.04 -

4.23 1.04 -

4 17

1,211,972 1,575,537

1,211,972 1,575,537

7.61 9.89

7.61 9.89

39 377 17,553

3,626,975 1,875,030 1,175,189

3,626,975 1,874,820 1,046,292

22.77 11.77 7.38

22.77 11.77 7.38

NA -

NA -

10

1,579,641

1,579,641

9.92

9.92

56 4 235 18,235 18,274

240,611 1,270 22,743 4,894,484 8,521,459

240,611 1,020 22,498 4,764,882 8,391,857

1.51 0.01 0.14 30.73 53.50

1.51 0.01 0.14 30.73 53.50

NA

NA

(C)

18,286 -

15,929,152 -

15,799,550 -

100.00 -

100.00 -

200,000 -

1.26 -

(1) (2)

18,286

15,929,152

15,799,550

100.00

100.00

200,000

1.26

PRIL is ultimately controlled by Kishore Biyani and/or his relatives as defined under the Companies Act.

Financial Performance: Audited financial performance of PRIL for last three fiscal years is as follows: (` in lakh, except per share data)

205

Particulars Sales and other income PAT/(Loss) Equity Capital and Class B Series 1 Share Capital Reserves and Surplus (excluding revaluation reserve) Earning per equity share (Equity) (Basic and diluted) (Class B Series 1) (Basic and diluted) Net asset value per share (including Class B Series 1 shares)

For the year ended June 30, 2008 5,05,267.00 12,597.00 3,186.00 1,75,150.00

For the year ended June 30, 2009 6,34,776.00 14,058.00 3,806.00 2,21,148.00

For the year ended June 30, 2010 6,01,900.00 17,956.00 4,123.00 2,52,748.00

8.34 111.96

7.94 8.04 118.20

8.46 8.56 124.61#

# Share application money has not been considered as the equity shares pursuant to the same has been allotted subsequent to June 30, 2010.

Change in control of PRIL There has been no change in control or management of PRIL during the three years preceding the date of filing of this Prospectus. Companies with which PRIL has disassociated in the last three years: PRIL has disassociated with the following entities in the last three years: i. ii. Alpha Future Airport Retail Private Limited due to termination of the joint venture; and CIG Infrastructure Private Limited due to sale of shares.

Changes in the Promoters in the Prospectus and the Draft Red Herring Prospectus dated February 21, 2008 Due to certain strategic realignment within the Future Group and restructuring of business of certain companies of the Future Group, the corporate Promoters of the Company have changed during the period between the draft red herring prospectus dated February 21, 2008 and the Draft Red Herring Prospectus. For instance, Future Capital Holdings Limited now focuses primarily on its lending and retail credit business. Pantaloon Future Ventures Limited (now known as Future Value Retail Limited) has transferred its shareholding in the Company to Future Knowledge Services Limited and therefore, Future Knowledge Services Limited has been included as the Promoter of the Company. Future Corporate Resources Limited and Pantaloon Industries Limited (now known as PIL Industries Limited) have been included as the Promoters of the Company due to the strategic realignment of businesses within the Future Group. As per the draft red herring prospectus dated February 21, 2008, the Equity Shares held by the erstwhile corporate promoters of the Company was as follows: Sr. No. 1. 2. 3. 4. Name of the shareholder Pantaloon Future Ventures Limited Future Capital Investment Private Limited Pantaloon Retail (India) Limited Future Capital Holdings Limited TOTAL No. of Equity Shares 2,27,93,700 18,00,000 2,45,93,700 Percentage 8.64 0.68 9.32

Transfer of Equity Share from the erstwhile promoters as disclosed in the draft red herring prospectus dated February 21, 2008 and the Promoters Other than 2,77,93,700 Equity Shares previously held by Pantaloon Future Ventures Limited (now known as Future

206

Value Retail Limited) which was transferred to Future Knowledge Services Limited, there have been no transfer of Equity Shares between the erstwhile promoters as disclosed in the draft red herring prospectus dated February 21, 2008 and the Promoters. Except Future Capital Investment Private Limited which holds 10,18,00,000 Equity Shares in the Company as of the Prospectus, no other erstwhile promoters of the Company as disclosed in the draft red herring prospectus dated February 21, 2008 presently hold any Equity Shares in the Company. Interests of Promoters and Common Pursuits The Promoters of the Company are interested to the extent of their shareholding in the Company. For details of the Promoters shareholding in the Company, please see the section entitled Capital Structure beginning on page 71. Further, the Kishore Biyani, who is also a Director of the Company may be deemed to be interested to the extent of fees, if any, payable to him for attending meetings of the Board or a Committee thereof as well as to the extent of other remuneration, reimbursement of expenses payable to him. For further details, please see the section entitled Management beginning on page 162. Further, Kishore Biyani is also a director on the boards of, or is a member of, certain Promoter Group entities and may be deemed to be interested to the extent of the payments made by the Company, if any, to such Promoter Group entities. For the payments that are made by the Company to certain Promoter Group entities, please refer to the section entitled Financial Statements Annexure XXV - Related Party Transactions on page 340. Except as stated otherwise in this Prospectus and in the ordinary course of business, we have not entered into any contract, agreements or arrangements during the preceding two years from the date of this Prospectus in which the Promoters are directly or indirectly interested and no payments have been made to them in respect of the contracts, agreements or arrangements which are proposed to be made with them including the properties purchased by the Company other than in the normal course of business. Further, other than the arrangements disclosed in the section entitled History and Certain Corporate Matters beginning on page 146, the Promoters do not have any interest in any venture that is involved in any activities similar to those conducted by the Company. Payment of benefits to the Promoters Except as stated in the section entitled Financial Statements Annexure XXV - Related Party Transactions on page 340 and in the ordinary course of business, there has been no payment of benefits to the Promoters during the two years prior to the filing of this Prospectus. Confirmations Further, none of the Promoters has been declared as a willful defaulter by the RBI or any other governmental authority and there are no violations of securities laws committed by the Promoters in the past or are pending against them except as disclosed in section titled Outstanding Litigation and Material Developments beginning on page 364. In addition to the Promoters and the Group Companies, the following entities constitute the Promoter Group of the Company:

1. Sr. No. 1.

Natural persons who are a part of the Promoter Group Name Anil Biyani Relationship with the Promoters Brother of Kishore Biyani

207

Sr. No. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 2.

Name Ashni Biyani Didwania Avani Biyani Godavari Biyani Kiran Seksaria Laxminarayan Biyani Madanlal Rathi Meena Bagree Nilima Saboo Rajesh Rathi Sangita Biyani Taradevi Rathi Vijay Biyani

Relationship with the Promoters Daughter of Kishore Biyani Daughter of Kishore Biyani Mother of Kishore Biyani Sister of Kishore Biyani Father of Kishore Biyani Father of Sangita Biyani Sister of Sangita Biyani Sister of Sangita Biyani Brother of Sangita Biyani Spouse of Kishore Biyani Mother of Sangita Biyani Brother of Kishore Biyani

Corporate entities forming a part of the Promoter Group Companies (i) (ii) (iii) (iv) (v) (vi) (vii) (viii) (ix) (x) (xi) (xii) (xiii) (xiv) (xv) (xvi) (xvii) (xviii) (xix) (xx) (xxi) (xxii) (xxiii) (xxiv) (xxv) (xxvi) (xxvii) (xxviii) (xxix) (xxx) (xxxi) (xxxii) (xxxiii) (xxxiv) (xxxv) Apollo Design Apparel Park Limited Avanee and Ashni Securities Private Limited Brahmabrata Trading Private Limited Cyber Nook Network Private Limited Dhanshree Fashions Private Limited Digital Infocom Systems Private Limited Eastern Petroleum Private Limited Future Brands Limited Future Generali India Insurance Company Limited Future Generali India Life Insurance Company Limited Future Ideas Company Limited Future Realtors (India) Private Limited Gargi Developers Private Limited Goldmohur Design and Apparel Parks Limited Idiom Design & Consulting Limited Integrated Food Park Private Limited Jaybharat Lubricants India Private Limited Kamadgiri Fashion Limited (earlier known as Kamadgiri Synthetics Limited) Kavi Sales Agency Private Limited L10n Infopreneur Private Limited Lalit Corporate Advisory Private Limited Liquid Foot Infraprojects Private Limited Pan India Food Solutions Private Limited Salarjung Multitrading Private Limited Second Life Projects Private Limited Shrishti Mall Management Company Private Limited Silver Base Infrastructure Private Limited Simpleton Investrade Private Limited Staples Future Office Products Private Limited Surplus Finvest Private Limited Tanushri Infrastructure Private Limited Unicorn Petroleum Industries Private Limited U-Phase Infraprojects Private Limited Utsav Mall Management Company Private Limited White Circle Mercantile Private Limited

Partnerships:

208

(i) (ii) (iii) (iv) (v) HUF: (i) (ii) (iii) (iv) (v)

Bandhan SMS Enterprises BLB Trading & Investment Consultants Jaybharat Udhyog Sita Ginneing Factory

Laxminarayan Biyani HUF Anil Biyani HUF Vijay Biyani HUF Ashish Saboo HUF Madan Lal Rathi HUF

Limited Liability Partnership (LLP): Anveshak Trade Enterprises LLP

209

GROUP COMPANIES Companies forming part of the Group Companies Unless otherwise stated none of the companies forming part of the Group Companies is a sick company under the meaning of SICA and none of them are under winding up. The Group Companies are as follows: Companies Sr. No. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. Name of the company Agre Developers Limited (formerly Future Mall Management Limited) Akar Estate Finance Private Limited Anchor Investment and Trading Private Limited Asian Retail Lighting Limited Bansi Mall Management Company Private Limited Axon Development Solutions Limited Clarks Future Footwear Limited ESES Commercials Private Limited Erudite Knowledge Services Limited FCH Securities & Advisors Limited (formerly Ambit Investment Advisory Company Limited) FLSL Distribution Services Limited Fashion Global Retail Limited Future Agrovet Limited (formerly Pantaloon Food Product (India) Limited) Future Axiom Telecom Limited Future Capital Financial Services Limited Future Capital Holdings Limited Future Capital Home Finance Private Limited Future Capital Investment Advisors Limited Future E-Commerce Infrastructure Limited Future Entertainment Private Limited Future Finance Limited Future Freshfoods Limited Future Hospitality Management Limited Future Human Development Limited Future Ideas Realtors India Limited Future Learning and Development Limited Future Media (India) Limited Future Mobile and Accessories Limited Future Outdoor Media Solutions Limited Future Supply Chain Solutions Limited (formerly Future Logistic Solutions Limited) Future Value Retail Limited (formerly Pantaloon Future Ventures Limited) Futurebazaar India Limited Galaxy Entertainment Corporation Limited Home Solutions Retail (India) Limited Kshitij Investment Advisory Company Limited Kshitij Property Solutions Private Limited Manz Retail Private Limited Myra Mall Management Company Limited Rural Fairprice Wholesale Limited Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited) Samreen Multitrading Private Limited Sanavi Multitrading Private Limited

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Sr. No. 43. 44. 45. 46. 47. 48. HUF:

Name of the company Shendra Advisory Services Private Limited Splendor Fitness Private Limited (formerly known as Talwalkar Pantaloon Fitness Private Limited) Taraka Infrastructure Private Limited Weavette Texstyles Limited Whole Wealth Limited Winner Sports Limited

Kishore Biyani HUF A. Details of the five largest Group Companies (based on turnover) The top five Group Companies on the basis of total turnover are as follows: 1. Future Capital Holdings Limited Corporate Information: Future Capital Holdings Limited was originally incorporated on October 18, 2005 as KB Infin Private Limited (KB Infin). Pantaloon Retail (India) Limited acquired the entire share capital of KB Infin and was subsequently converted to a public limited company on August 31, 2006. Subsequently, its name was changed to Future Capital Holdings Limited on December 21, 2006. Future Capital Holdings Limited is a non-banking finance company registered with the Reserve Bank of India. Future Capital Holdings Limited is involved in the business of providing retail financial services, corporate lending and wholesale credit, trade finance and asset management and advisory services. Interest of the Promoter Pantaloon Retail (India) Limited holds 34,779,999 equity shares, aggregating to 53.69% and Kishore Biyani holds 47,73,795 equity shares, aggregating to 7.37% of the issued and paid up equity share capital of Future Capital Holdings Limited. Financial Performance Financial summary of Future Capital Holdings Limited for the last three years: (` in lakhs except per share data) Fiscal 2009 Fiscal 2010 13,579.99 5,579.07 930.86 1,731.79 68,008.69 68,997.24 1.47 1.46 117.05 2.73 2.70 118.61

Particulars Income from operations and other income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic) (Diluted) Net asset value per share Share Price Information

Fiscal 2008 8,136.82 888.93 66,086.88 1.66 1.65 114.52

The equity shares of Future Capital Holdings Limited are listed on BSE and NSE. The monthly high and low of the market price of the equity shares of Future Capital Holdings Limited having a face value of ` 10 each on BSE for the last six months is as follows:

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Month April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 Source: www.bseindia.com

High (`) 179.25 150.40 165.25 199.00 230.95 256.85

Low (`) 141.00 132.30 131.00 148.00 174.80 194.40

The monthly high and low of the market price of the equity shares of Future Capital Holdings Limited having a face value of ` 10 each on NSE for the last six months is as follows: Month April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 Source: www.nseindia.com 2. High (`) 179.50 151.80 167.00 199.00 228.50 255.65 Low (`) 140.40 132.25 130.30 145.00 174.45 191.15

Agre Developers Limited (formerly known as Future Mall Management Limited) (ADL) Corporate Information: ADL was incorporated on March 10, 2008 as Future Mall Management Limited. On October 4, 2010, the name was changed to Agre Developers Limited. ADL is involved in the business of mall and project management. As per the scheme of arrangement sanctioned by the Bombay High Court on August 24, 2010 between Pantaloon Retail (India) Limited, ADL and Agre Properties and Services Limited (APSL) and their respective shareholders and creditors, with effect from the appointed date being April 1, 2010, mall management and project management undertaking were demerged from Pantaloon Retail (India) Limited and vested with ADL and the mall asset management and food services undertaking were demerged from Pantaloon Retail (India) Limited and vested with APSL. Interest of the Promoter Future Corporate Resources Limited holds 41,13,387 equity shares aggregating to 36.82 % of the issued and paid up equity share capital of ADL. Kishore Biyani holds 50 equity shares aggregating to 0.0004% of the issued and paid up equity share capital of ADL. PIL Industries Limited (formerly known as Pantaloon Industries Limited) holds 7,15,214 equity shares aggregating to 6.40% of the issued and paid up equity share capital of ADL. Financial summary of ADL for the last three years is provided as follows: (` in lakh, except per share data) Fiscal 2010 0.00 (0.20) 0.00 (0.40) 8.42

Particulars Income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per equity share

Fiscal 2008* 0.00 (0.29) 0.00 (0.58) 9.42

Fiscal 2009** 0.00 (0.59) 0.00 (1.17) 8.83

*The audited figures are for the period between March 10, 2008 and March 31, 2008 **The audited figures are for the period between March 10, 2008 and March 31, 2009

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Share Price Information The equity shares of ADL are listed on BSE and NSE. The monthly high and low of the market price of the equity shares of ADL having a face value of ` 10 each on BSE for the last six months is as follows: Month April 2011 March 2011 February 2011 January 2011 December 2010* High (`) 62.90 50.60 68.50 114.90 372.70 Low (`) 46.40 42.00 46.05 45.65 59.80

Source: www.bseindia.com *ADL was listed on BSE with effect from December 31, 2010.

The monthly high and low of the market price of the equity shares of ADL having a face value of ` 10 each on NSE for the last six months is as follows: Month April 2011 March 2011 February 2011 January 2011 December 2010* High (`) 63.30 50.70 68.95 109.35 190.00 Low (`) 46.35 42.50 45.30 43.40 57.40

Source: www.nseindia.com *ADL was listed on NSE with effect from December 31, 2010.

3.

Future Agrovet Limited (FAL) Corporate Information: FAL was originally incorporated as Pantaloon Food Product (India) Limited on April 13, 2005 and subsequently, changed its name to Future Agrovet Limited on November 19, 2008. FAL is involved in the business of dealing in all kinds of food products and staples. Interest of the Promoter Pantaloon Retail (India) Limited holds 3,51,00,000 equity shares, aggregating to 96.16% of the issued and paid up equity share capital of FAL. Financial Performance Financial summary of FAL for last three years is as follows: (` in lakhs except per share data) Fiscal 2009 Fiscal 2010 39,236.11 57,816.28 (305.98) (27.30) 0.00 0.00 (1.12) 8.42 (0.07) 8.34

Particulars Sales and other Income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per share

Fiscal 2008* 19,038.28 (313.51) 0.00 (5.12) 8.71

* Financials for nine month period ending March 31, 2008

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4.

Future Value Retail Limited Corporate Information: Future Value Retail Limited was originally incorporated as Pantaloon Future Ventures Limited on June 11, 2007. On November 16, 2009, the name of the company was changed to Future Value Retail Limited. It is engaged in the business of retailing consumer goods/fast moving goods through various organized retail formats. Interest of the Promoter Pantaloon Retail (India) Limited holds 6,64,99,912 equity shares, aggregating to 100% of the issued and paid up equity share capital of Future Value Retail Limited. Financial Summary of Future Value Retail Limited for last three years is as follows:
(` in lakhs except per share data)

Particulars Sales and other income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per equity share 5.

Fiscal 2008 0.05 (18.86) 2,160.00 (1.89) 122.69

Fiscal 2009 2.43 (0.42) 2,640.00 (0.02) 134.80

Fiscal 2010* 2,99,281.12 5,059.86 96,185.51 13.99 154.64

*Financial year for the period commencing from April 1, 2009 to June 30, 2010

Galaxy Entertainment Corporation Limited Corporate Information: Galaxy Entertainment Corporation Limited was incorporated on August 13, 1981. It is engaged in the business of providing entertainment and leisure related activities with family entertainment centers, sports bars, bowling and video games. Interest of the Promoter Pantaloon Retail (India) Limited holds 49,37,935 equity shares, aggregating to 31.55% of the issued and paid up equity share capital of Galaxy Entertainment Corporation Limited. Financial Performance The summary audited financial statements of Galaxy Entertainment Corporation Limited for the last three Fiscals: (` in lakhs, except per share data) Fiscal 2009 Fiscal 2010 3,718.22 3,435.58 (1,940.51) (1,999.92)

Particulars Revenue from services/sale of rights and other income PAT/(Loss)

Fiscal 2008 3,849.80 (364.53)

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Particulars Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per share Share Price Information

Fiscal 2008 3,514.42 (2.53) 32.46

Fiscal 2009 3,365.60 (12.40) 20.06

Fiscal 2010 3,365.60 (12.78) 7.28

The equity shares of Galaxy Entertainment Corporation Limited are listed on BSE. The monthly high and low of the market price of the equity shares of Galaxy Entertainment Corporation Limited having a face value of ` 10 each on BSE for the last six months is as follows: Month April 2011 March 2011 February 2011 January 2011 December 2010 November 2010 Source: www.bseindia.com B. 1. High (`) 20.45 24.80 30.70 28.05 30.06 42.60 Low (`) 15.35 14.60 20.00 20.10 23.15 26.07

Group Companies with negative net worth Axon Development Solutions Limited Corporate Information: Axon Development Solutions Limited was incorporated on April 25, 2008 and seeks to provide consulting services for all development and leasing related activities pertaining to the real estate industry. Interest of the Promoter The Promoters do not hold any equity shares in Axon Development Solutions Limited. Financial Performance The summary audited financial statements of Axon Development Solutions Limited for Fiscal 2009 and 2010: (In ` in lakhs, except per share data) Fiscal 2009* Fiscal 2010 0.00 0.00 (4.39) (0.76) (4.39) (5.15) (11.06) 1.21 (1.51) (0.30)

Particulars Income from operations PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per share
*

Fiscal 2008 N.A N.A N.A N.A N.A

Figures are for the period between April 25, 2008 and March 31, 2009

2.

ESES Commercials Private Limited Corporate Information: ESES Commercials Private Limited (ESES) was incorporated as Shree Shakti Synthetics Private Limited

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on May 11, 1987 and the name of the company was changed to ESES Commercials Private Limited on December 31, 2001. ESES is involved in the business of trading in textiles, yarns, apparels and general merchandise. Interest of the Promoter Future Corporate Resources Limited holds 7,625 equity shares, aggregating to 50% of the issued and paid up equity share capital of ESES. Financial Performance The summary audited financial statements of ESES for last three Fiscals: (Rs in lacs, except per share data) Fiscal 2009 Fiscal 2010 0.00 23.79 (43.38) (2.93) 0.00 0.00 (284.43) (299.93) (19.22) (319.14)

Particulars Sales and other income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per share 3. Fashion Global Retail Limited Corporate Information:

Fiscal 2008 0.00 (0.29) 0.00 (1.88) (15.50)

Fashion Global Retail Limited (FGRL) was incorporated on July 21, 2005 as A R Tradex Private Limited. The name was changed to Fashion Global Retail Private Limited with effect from February 27, 2007. The name was further changed to its present name with effect from October 22, 2008. FGRL is involved in the business of retailing of garments and other ancillary products. Interest of the Promoter Future Corporate Resources Limited holds 25,000 equity shares of ` 10/- each representing 50% of total paid up equity capital of FGRL. Financial Performance The summary audited financial statements of FGRL for last three Fiscals: (` in lakhs, except per share data) Fiscal 2009 Fiscal 2010 3780.65 3397.38 (319.40) (203.83) 0.00 0.00 (933.36) (1023.99) (407.66) (1431.65)

Particulars Sales and other income PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per equity share 4.

Fiscal 2008 1922.18 (99.68) 0.00 (996.84) (1965.99)

Anchor Investment and Trading Private Limited Corporate Information: Anchor Investment and Trading Private Limited was incorporated in Mauritius on August 16, 2007 and is involved in the business of investment, trading and investment advisory services.

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Interest of the Promoter: The Promoters do not hold any equity shares in Anchor Investment and Trading Private Limited. Financial Performance The summary audited financial statements of Anchor Investment and Trading Private Limited for last three Fiscals:
(Amount in USD except per share data)

Fiscal 2008* Particulars** Revenue PAT/(Loss) Reserves and Surplus (excluding revaluation reserves) Earning per equity share (Basic and diluted) Net asset value per equity share 0.00 (11,390) 0.00 (11,390) (11,389)

Fiscal 2009** 0.00 (9,197) 0.00 (9,197) (20,586)

Fiscal 2010** 0.00 (11,073) 0.00 (11,073) (31,659)

*For the period between August 16, 2007 and December 31, 2008 **Companys financial year is from January 1 to December 31.

5.

Bansi Mall Management Company Private Limited Corporate Information: Bansi Mall Management Company Private Limited was incorporated on October 19, 2005. It is involved in the business to acquire, develop, improve, build, sell, lease, manage, commercially exploit and otherwise deal in real estate, properties of all nature and description or any rights therein including land, buildings and other estate and realty including shopping malls, commercial and residential complexes. Interest of the Promoter: Future Corporate Resources Limited holds 5,000 equity shares, aggregating to 50% of the issued and paid up equity share capital of Bansi Mall Management Company Private Limited. Financial Performance

The summary audited financial statements of Bansi Mall Management Company Private Limited for last three Fiscals: (` in lakhs, except per share data) Particulars Fiscal 2008 Fiscal 2009 Fiscal 2010 Business centre service charges/consultancy fees, interest 25.40 195.37 2066.46 and other income PAT/(Loss) (1.28) (149.68) (4,241.48) Reserves and Surplus (excluding revaluation reserves) 0.00 0.00 0.00 Earning per equity share (Basic and diluted) (12.75) (1,496.77) (42,415.00) Net asset value per equity share (4.60) (1,501.37) (43,916.19) Details of other Group Companies 1. Akar Estate Finance Private Limited Corporate Information: Akar Estate Finance Private Limited was incorporated on September 29, 1992 and is involved in the

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business of investments and other NBFC activities. Interest of the Promoter Future Corporate Resources Limited holds 1,32,863 equity shares, aggregating to 50% of the issued and paid up equity share capital of Akar Estate Finance Private Limited. 2. Asian Retail Lighting Limited Corporate Information: Asian Retail Lighting Limited was incorporated on January 10, 2007 and is involved in the business of providing lighting solutions. Interest of the Promoter: Future Corporate Resources Limited holds 1,16,84,160 equity shares, aggregating to 88.95% of the total issued and paid up equity share capital of Asian Retail Lighting Limited. 3. Clarks Future Footwear Limited Corporate Information: Clarks Future Footwear Limited was incorporated on August 9, 2010 and is involved in the business of footwear and other ancillary products. Interest of the Promoter Pantaloon Retail (India) Limited holds 20,00,000 equity shares representing 50% of total paid up equity capital of Clarks Future Footwear Limited. 4. Erudite Knowledge Services Limited Corporate Information: Erudite Knowledge Services Limited was incorporated on October 8, 2007 and is involved in the business of IT enabled services and other corporate and management services. Interest of the Promoter Future Corporate Resources Limited holds 50,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Erudite Knowledge Services Limited. 5. FCH Securities & Advisors Limited (FSAL) (formerly known as Ambit Investment Advisory Company Limited) Corporate Information: FSAL was incorporated on August 3, 2005 as Ambit Investment Advisory Company Limited. On August 26, 2010, the name of Ambit Investment Advisory Company Limited was changed to FCH Securities & Advisors Limited. FSAL is involved in the business of providing financial, investment advisory services, management and facilitation services. Interest of the Promoter: The Promoters do not hold any equity shares in FSAL.

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6.

FLSL Distribution Services Limited Corporate Information: FLSL Distribution Services Limited was incorporated on December 19, 2008. The Company is engaged in the business of providing distribution and logistic services. Interest of the Promoter The Promoters do not hold any equity shares in FLSL Distribution Services Limited.

7.

Future Axiom Telecom Limited Corporate Information: Future Axiom Telecom Limited was originally incorporated on February 7, 2006 as Convergem Retail (India) Limited. Its name was subsequently changed to Convergem Communication (India) Limited with effect from August 27, 2007. With effect from July 21, 2008 its name was changed to its present name. Future Axiom Telecom Limited is involved in the business of dealing in telecom products. Interest of the Promoter: Pantaloon Retail (India) Limited holds 1,00,00,000 equity shares, aggregating to 50.00% of the issued and paid up equity share capital of Future Axiom Telecom Limited.

8.

Future Capital Financial Services Limited Corporate Information: Future Capital Financial Services Limited was originally incorporated as Future Finmart Limited on January 25, 2007 and subsequently, changed its name to Future Capital Financial Services Limited on April 16, 2008. The company is a non banking finance company registered with the Reserve Bank of India. Future Capital Financial Services Limited is involved in the business of providing retail financial services, wholesale credit and acting as direct selling agents, franchises, licenses, authorized sales agents for different types of financial and saving instruments. Interest of the Promoter The Promoters do not hold any equity shares in Future Capital Financial Services Limited.

9.

Future Capital Home Finance Private Limited Corporate Information: Future Capital Home Finance Private Limited was incorporated on December 23, 2010 and is involved in carrying on the business of providing long term finance to the persons enabling them to purchase a house, flat or plot for residential purpose, improvement in present property and to provide long term finance to persons engaged in the business of construction of houses or flats for residential purpose. Interest of the Promoter The Promoters do not hold any equity shares in Future Capital Home Finance Private Limited.

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10.

Future Capital Investment Advisors Limited Corporate Information: Future Capital Investment Advisors Limited was originally incorporated on November 21, 2005 as Indivision Investment Advisors Limited. Subsequently, on January 5, 2009 its name was changed to Future Capital Investment Advisors Limited. It is involved in the business of providing investment consultancy and financial advisory services. Interest of the Promoter The Promoters do not hold any equity shares in Future Capital Investment Advisors Limited.

11.

Future E-Commerce Infrastructure Limited Corporate Information: Future E-Commerce Infrastructure Limited was incorporated on May 25, 2007 and is involved in the business of providing infrastructure for dealing in all kinds of goods and products through electronic mode. Interest of the Promoter Pantaloon Retail (India) Limited holds 1,69,98,000 equity shares of Future E-Commerce Infrastructure Limited aggregating 72.00% of the equity share capital of Future E-Commerce Infrastructure Limited. Kishore Biyani holds 3,17,123 equity shares aggregating 1.34% of the equity share capital of Future ECommerce Infrastructure Limited and 66,493 compulsory convertible preference shares aggregating 0.25% of the issued and paid-up preference share capital of Future E-Commerce Infrastructure Limited.

12.

Future Entertainment Private Limited Corporate Information: Future Entertainment Private Limited was incorporated on December 19, 2006 and is involved in the business of providing entertainment and media solutions. Interest of the Promoter: Kishore Biyani holds 9,999 equity shares, aggregating to 99.99% of the issued and paid up equity share capital of Future Entertainment Private Limited.

13.

Future Finance Limited Corporate Information: Future Finance Limited was originally incorporated as Sivagami Finance and Investment Private Limited on October 14, 1991. Its name was changed to Sivagami Finance and Investment Limited with effect from June 27, 1995. Subsequently, the name was changed to Future Finance Limited with effect from October 18, 2007. Future Finance Limited is a non-banking finance company registered with the Reserve Bank of India. It is involved in the business of providing finance, factoring, investment, hire purchase and leasing and to finance industrial, trading and manufacturing. Interest of the Promoter The Promoters do not hold any equity shares in Future Finance Limited.

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14.

Future Freshfoods Limited Corporate Information: Future Freshfoods Limited was incorporated on April 6, 2010. Future Freshfoods Limited is engaged in the business of dealing in vegetables and dietary products. Interest of the Promoter The Promoters do not hold any equity shares in Future Freshfoods Limited.

15.

Future Hospitality Management Limited Corporate Information: Future Hospitality Management Limited was incorporated on March 31, 2007 and is involved in the business of managing and developing business of hotels, long stay apartments, service apartments, motels and restaurants. Interest of the Promoter The Promoters do not hold any equity shares in Future Hospitality Management Limited.

16.

Future Human Development Limited Corporate Information: Future Human Development Limited was originally incorporated on January 18, 2007 as Home Solutions Services (India) Limited and changed its name to its present name on March 11, 2010. Future Human Development Limited is involved in the business of training and developing human resources. Interest of the Promoter: Future Corporate Resources Limited holds 50,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Future Human Development Limited.

17.

Future Ideas Realtors India Limited Corporate Information: Future Ideas Realtors India Limited was originally incorporated on November 5, 2007 as Future Realtors India Limited. The name of the company was changed to its present name with effect from December 18, 2007. Future Ideas Realtors India Limited is involved in the business of realty. Interest of the Promoter Future Corporate Resources Limited holds 50,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Future Ideas Realtors India Limited.

18.

Future Learning and Development Limited Corporate Information: Future Learning and Development Limited was incorporated on April 10, 2008 and is involved in the education and learning sector.

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Interest of the Promoter Pantaloon Retail (India) Limited holds 2,82,65,550 equity shares, aggregating to 100 % of the issued and paid up equity share capital of Future Learning and Development Limited. 19. Future Media (India) Limited Corporate Information: Future Media (India) Limited was incorporated on March 8, 2006 and is involved in the business of media and advertising. Interest of the Promoter Pantaloon Retail (India) Limited holds 21,06,062 equity shares, aggregating to 84.24 % and Future Corporate Resources Limited holds 60,606 equity shares, aggregating to 2.42% of the issued and paid up equity share capital of Future Media (India) Limited. 20. Future Mobile and Accessories Limited Corporate Information: Future Mobile and Accessories Limited was incorporated on June 23, 2007 and is involved in the business of dealing in communication products. Interest of the Promoter Pantaloon Retail (India) Limited holds 1,00,00,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Future Mobile and Accessories Limited. 21. Future Outdoor Media Solutions Limited Corporate Information: Future Outdoor Media Solutions Limited was incorporated on April 10, 2008 and is involved in the business of providing media services. Interest of the Promoter Future Corporate Resources Limited holds 50,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Future Outdoor Media Solutions Limited. 22. Future Supply Chain Solutions Limited Corporate Information: Future Supply Chain Solutions Limited was originally incorporated as Future Logistic Solutions Limited on March 8, 2006 and changed to its present name on October 23, 2009. It is engaged in the business of providing logistics, warehousing and transportation services. Interest of the Promoter Pantaloon Retail (India) Limited holds 2,74,62,962 equity shares, aggregating to 94.82% of the issued and paid up equity share capital of Future Supply Chain Solutions Limited. Future Corporate Resources Limited holds 5,00,000 equity shares aggregating to 1.73% of the paid up and issued capital in Future

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Supply Chain Solutions Limited. 23. Futurebazaar India Limited Corporate Information: Futurebazaar India Limited was incorporated on January 23, 2006 and is involved in the business of retailing of all kinds of consumer goods and products through electronic mode. Interest of the Promoter Pantaloon Retail (India) Limited holds 1,91,60,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Futurebazaar India Limited. 24. Home Solutions Retail (India) Limited Corporate Information: Home Solutions Retail (India) Limited was incorporated on October 4, 2004 and is involved in the business of retailing various home appliances and providing professional expertise for home improvement and other services. Interest of the Promoter Pantaloon Retail (India) Limited holds 6,68,624 equity shares, aggregating to 66.86% of the issued and paid up equity share capital of Home Solutions Retail (India) Limited. 25. Kshitij Investment Advisory Company Limited Corporate Information: Kshitij Investment Advisory Company Limited was originally incorporated as PFH Investment Advisory Company Limited on December 31, 2004 and its name was changed to its present name on April 19, 2006. Kshitij Investment Advisory Company Limited is involved in the business of providing financial, investment advisory services, management and facilitation services. Interest of the Promoter Kishore Biyani holds one equity share jointly with Future Capital Holdings Limited, aggregating to 0.00003 % of the issued and paid up equity share capital of Kshitij Investment Advisory Company Limited. 26. Kshitij Property Solutions Private Limited Corporate Information: Kshitij Property Solutions Private Limited was originally incorporated as Satyam Mall Management Private Limited on April 25, 2006 and subsequently, its name was changed to Kshitij CapitaLand Mall Management Private Limited on April 26, 2007 and then to Kshitij Property Solutions Private Limited on May 7, 2008. It is involved in the business of mall management services. Interest of the Promoter The Promoters do not hold any equity shares in Kshitij Property Solutions Private Limited.

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27.

Manz Retail Private Limited Corporate Information: Manz Retail Private Limited was incorporated on October 7, 1994 and is involved in the business of buying, selling, and retailing in clothing, apparels, accessories and such other activities. Interest of the Promoter Future Corporate Resources Limited holds 95,000 equity shares, aggregating to 50% of the issued and paid up equity share capital of Manz Retail Private Limited.

28.

Myra Mall Management Company Limited (MMMCL) Corporate Information: MMMCL was incorporated on March 9, 2006 as Myra Mall Management Company Private Limited and the name of the company was changed to Myra Mall Management Company Limited on conversion from a private company to a public company on September 7, 2006. MMMCL is involved in the business of acquiring, improving, building, selling leasing, managing, commercially exploiting and dealing in real estate and properties of diverse natures. Interest of the Promoter The Promoters do not hold any equity shares in MMMCL.

29.

Rural Fairprice Wholesale Limited Corporate Information: Rural Fairprice Wholesale Limited was incorporated on September 1, 2009 and is involved in the business of wholesale of staples and food products. Interest of the Promoter Kishore Biyani holds 49,994 equity shares, aggregating to 99.99% of the issued and paid up equity share capital of Rural Fairprice Wholesale Limited.

30.

Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited) Corporate Information: Sprint Advisory Services Private Limited was originally incorporated as Sain Marketing Network Private Limited on March 10, 2005 which was changed to Sain Advisory Services Private Limited on July 19, 2007 and which was changed to the present name on April 21, 2011. It is involved in the business of providing consultancy and other ancilliary services. Interest of the Promoter Pantaloon Retail (India) Limited holds 12,95,24,931 equity shares, aggregating to 49.80% of the issued and paid up equity share capital of Sprint Advisory Services Private Limited. PIL Industries Limited (formerly known as Pantaloon Industries Limited) holds 12,95,24,931 equity shares aggregating to 49.80% of the issued and paid up equity share capital of Sprint Advisory Services Private

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Limited. 31. Samreen Multitrading Private Limited Corporate Information: Samreen Multitrading Private Limited was incorporated on August 28, 2010. It is engaged in the business as traders, distributors, wholesalers, retailers, exporters, importers, etc. in India & abroad. Interest of the Promoter Kishore Biyani holds 9,900 equity shares, aggregating to 99% of the issued and paid up equity share capital of Samreen Multitrading Private Limited. 32. Sanavi Multitrading Private Limited Corporate Information: Sanavi Multitrading Private Limited was incorporated on August 28, 2010. It is engaged in the business as traders, distributors, wholesalers, retailers, exporters, importers etc. in India and abroad. Interest of the Promoter Kishore Biyani holds 9,900 equity shares, aggregating to 99% of the issued and paid up equity share capital of Sanavi Multitrading Private Limited. 33. Shendra Advisory Services Private Limited Corporate Information: Shendra Advisory Services Private Limited was originally incorporated on November 11, 2005 as Shendra Infrastructure Development Limited. Subsequently, its name was changed to Shendra Infrastructure Development Private Limited on March 21, 2007 and changed to its present name on July 26, 2007. It is involved in the business of providing business and management consultancy services. Interest of the Promoter: Pantaloon Retail (India) Limited holds 585,32,500 equity shares, aggregating to 49.80% of the issued and paid up equity share capital of Shendra Advisory Services Private Limited. PIL Industries Limited (formerly known as Pantaloon Industries Limited) holds 585,32,500 equity shares aggregating to 49.80% of the issued and paid up equity share capital of Shendra Advisory Services Private Limited. 34. Splendor Fitness Private Limited (formerly known as Talwalkars Pantaloon Fitness Private Limited) Corporate Information: Splendor Fitness Private Limited (SFPL) was incorporated as Talwalkars Pantaloon Fitness Private Limited on December 19, 2006. Subsequently, the name of the company was changed to Splendor Fitness Private Limited on March 7, 2011. It is involved in the business of running and operating chain of health and fitness centres. Interest of the Promoter Pantaloon Retail (India) Limited holds 15,40,000 equity shares aggregating 91.67% of total paid up equity

225

capital of SFPL. 35. Taraka Infrastructure Private Limited Corporate Information: Taraka Infrastructure Private Limited was incorporated on August 28, 2010. It is engaged in the business as builders, contractors, erectors etc of buildings, houses, apartments, etc. Interest of the Promoter Kishore Biyani holds 9,900 equity shares, aggregating to 99% of the issued and paid up equity share capital of Taraka Infrastructure Private Limited. 36. Weavette Texstyles Limited Corporate Information: Weavette Texstyles Limited was incorporated on December 8, 1994 and is involved in the business of manufacturing of fabrics and textiles. Interest of the Promoter PIL Industries Limited (formerly known as Pantaloon Industries Limited) holds 15,30,000 equity shares, aggregating to 51 % of the issued and paid up equity share capital of Weavette Texstyles Limited. 37. Whole Wealth Limited Corporate Information: Whole Wealth Limited was incorporated on June 28, 2006 and is registered under the Hong Kong Ordinance (Chapter 32) and is involved in the business of exporting and importing consumer durable goods. Interest of the Promoter: PIL Industries Limited (formerly known as Pantaloon Industries Limited) holds 51,48,000 equity shares, aggregating to 60.00% of the issued and paid up equity share capital of Whole Wealth Limited. 38. Winner Sports Limited Corporate Information: Winner Sports Limited was originally incorporated as Winner Sports Private Limited on June 1, 2007. The name was changed to its present name with effect from January 20, 2010. It is engaged in the business of retailing of sports goods. Interest of the Promoter Pantaloon Retail (India) Limited holds 2,40,000 equity shares, aggregating to 100% of the issued and paid up equity share capital of Winner Sports Limited and 760,000 preference shares aggregating to 100% of the issued and paid up preference share capital of Winner Sports Limited.

226

RELATED PARTY TRANSACTIONS For details of related party transactions, please see the section entitled Financial Statements Annexure XXV Related Party Transactions and on page 340.

227

DIVIDEND POLICY The declaration and payment of dividends will be recommended by the Board of Directors and approved by the shareholders of the Company, in their discretion, and will depend on a number of factors, including but not limited to the earnings, capital requirements and overall financial position of the Company. The payment of dividends will not form a central part of investment objective of the Company, but the Company may choose to distribute dividends as and when it considers appropriate. The Company has not paid any dividend for the last three years.

228

SECTION V: FINANCIAL STATEMENTS UNCONSOLIDATED FINANCIAL INFORMATION OF FUTURE VENTURES INDIA LIMITED The Board of Directors, FUTURE VENTURES INDIA LIMITED Mumbai Dear Sirs, Re: Public issue of Equity Shares of Future Ventures India Limited 1. We have examined the Unconsolidated financial information of FUTURE VENTURES INDIA LIMITED (the Company or the Issuer) annexed to this report for the purpose of inclusion in the Offer document being issued by the company in connection with the initial public offering of Equity Shares of the Company and initialed by us for identification. The financial information has been prepared in accordance with the requirements of paragraph B of Part II of Schedule II to the Companies Act, 1956 (the Act), the Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements) Regulation, 2009 (the ICDR Regulations) notified on August 26, 2009, as amended from time to time, the Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India (ICAI) and terms of engagement agreed upon by us with the Company. The financial information has been prepared by the Company and approved by its Board of Directors. The financial information have been extracted by the Management from the financial statements for the years ended, March 31, 2006, March 31, 2007, March 31, 2008, March 31,2009 and March 31, 2010 and for the period ended December 31, 2010 adopted by the members/Board of Directors. Audit for the financial years ended March 31, 2006 and March 31, 2007 was conducted by the previous auditor, Mr. Jaya Jaya Raman, Chartered Accountant and accordingly, reliance has been placed on the financial information audited by him for the said years. In accordance with the requirements of Paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you, we further report that: a) The Statement of Assets and Liabilities, as Restated of the Company, including the Statement of Assets and Liabilities, as Restated as at March 31, 2006 and March 31, 2007 examined and reported upon by the previous auditor, Mr. Jaya Jaya Raman on which reliance has been placed by us, and as at March 31, 2008, March 31, 2009 and March 31, 2010 and December 31, 2010 examined by us, as set out in Annexure I to III respectively to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexures IV to XXIII). The Statement of Profit and Losses, as Restated and the Statement of Cash Flows, as Restated of the Company, including the Statement of Profit and Losses, as Restated and the Statement of Cash Flows, as Restated for the years ended March 31, 2006 and March 31, 2007 examined and reported upon by the previous auditor, Mr. Jaya Jaya Raman on which reliance has been placed by us, and for the years ended March 31, 2008, March 31, 2009 and March 31, 2010 and for the period ended December 31, 2010 examined by us, as set out in Annexure I to III respectively to this report are after making adjustments and regrouping as in our opinion were appropriate and more fully described in Significant Accounting Policies and Notes (Refer Annexures IV to XXIII). Based on the above and also as per the reliance placed on the reports submitted by the previous auditors, Mr. Jaya Jaya Raman, for the respective years, we are of the opinion that the restated financial information have been made after incorporating: i. Adjustment for material amounts relating to prior years in the restated financial information in the respective financial years to which they relate;

2.

3.

b)

c)

229

ii. d)

There are no extra-ordinary items that need to be disclosed separately in the accounts and no qualifications requiring adjustments.

We have also examined the following other financial information set out in Annexures prepared by the management and approved by the Board of Directors relating to the Company for the years ended March 31, 2008, March 31, 2009 and March 31, 2010 and for the period ended December 31, 2010. In respect of the years ended March 31, 2006 and March 31, 2007, this information has been included based upon the reports submitted by previous auditors Mr. Jaya Jaya Raman and relied upon by us. Annexure reference V V VI VII VIII IX X XI XII XIII XIV XV XVI XVII XVIII XIX XX XXI XXII XXIII

Details of Other Financial Information Share Capital Reserves and Surplus Fixed Assets Investments Cash and Bank Balances Statement of Other Current Assets Statement of Current Liabilities and Provisions Statement of Deferred Tax Income from Operations Statement of Other Income Employee Costs Administrative and Other Expenses Disclosure relating to Employee Benefits Segment Reporting Related Party Transactions Provisions, Contingent Liabilities and Contingent Assets Share Purchase Obligation Tax Shelter Statement Statement of Accounting and Other Ratios Capitalization Statement e)

Based on our examination of the financial information of the Company attached to this report, we state that in our opinion the financial information contained in Annexure I to III of this report read along with the Significant Accounting Policies and Notes (Refer Annexure IV to XXIII) prepared after making adjustments and regrouping as considered appropriate have been prepared in accordance with Part IIB of Schedule II of the Act and the ICDR Regulations.

4.

This report should not in any way be construed as a reissuance of any of our previous audit reports nor should this be construed as a new opinion on any of the financial statements referred to herein. We have no responsibility to update our report for events and circumstances occurring after the date of this report. Our report is intended solely for use of the management and for inclusion in the offer document in connection with the proposed issue of equity shares of the Company and is not be used, referred to or distributed for any other purpose except with our prior written consent. For Deloitte Haskins & Sells Chartered Accountants (Firm Registration No. 008072S) M.K. Ananthanarayanan Partner Membership No. 19521

5.

Place: Chennai Date: 26th March 2011

230

Future Ventures India Limited Statement of Assets and Liabilities, as Restated Annexure I (INR in Lakhs) Particulars Annexure 31-Dec10 31-Mar10 As At 31-Mar09 31-Mar08 31Mar07 7.23 (6.86) 0.37 0.37 0.00 31Mar06 7.27 (6.73) 0.54 0.54 0.00

A. Fixed Assets Gross Block Less: Depreciation Net Block Total Fixed Assets (A) B. Deferred Tax Asset (Net) (B) C. Investments (C) D. Current Assets, Loans & Advances Cash and Bank Balances Other Current Assets Total Current Assets, Loans and Advances (D) E. Liabilities and Provisions Current Liabilities Provisions Total Liabilities Provisions (E) and

VI 40.97 (23.47) 17.50 17.50 XI 3.74 56.50 (25.77) 30.73 30.73 1.22 58.67 (14.84) 43.83 43.83 2.53 35.12 (2.08) 33.04 33.04 (0.93)

VII

74,241.95

45,398.32

27,885.19

30,903.95

0.00

0.00

VIII IX

50.15 9,380.91 9,431.06

1134.96 11,900.84 13,035.80

715.37 6,994.60 7,709.97

128.39 12,406.05 12,534.44

34.95 17.56 52.51

27.21 22.84 50.05

X X

238.80 547.20 786.00

45.06 489.90 534.96

141.53 151.38 292.91

7473.03 29.83 7,502.86

0.65 8.11 8.76

0.65 6.97 7.62

F. Net Worth (A) + (B)+ (C) + (D) - (E) G. Represented By: Share Capital (including Share Application) Reserves and Surplus Statutory Reserve Fund Surplus in Profit and Loss Account Debit Balance in Profit & Loss Account Miscellaneous Expenditure (to V V V II II

82,908.25

57,931.11

35,348.61

35,967.64

44.12

42.97

82,624.37 5.79 372.24 36.53 0.00 (130.68)

57,624.37 5.79 338.59 0.00 (37.64) 0.00

36,884.37 5.79 3.48 0.00 (1545.03) 0.00

36,384.37 5.79 3.48 0.00 (426.00) 0.00

29.37 5.79 3.48 5.48 0.00 0.00

29.37 5.68 3.25 4.67 0.00 0.00

231

Particulars Annexure 31-Dec10 31-Mar10

As At 31-Mar09

31-Mar08

31Mar07

31Mar06

the extent not written off or adjusted) Net Worth

82,908.25

57,931.11

35,348.61

35,967.64

44.12

42.97

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

232

Future Ventures India Limited Statement of Profit and Loss, as Restated Annexure II (INR in Lakhs) For the Years Ended 31-Mar31-Mar313109 08 MarMar07 06 (389.52) 507.54 3.12 2.77 79.05 0.64 2.40 1.16 8.14 0.27 0.25 0.49 0.00 0.06 0.00 0.00 (302.33) 508.51 5.77 4.42 234.00 463.82 0.00 12.76 0.00 80.45 819.56 11.41 2.14 0.00 1.20 1.65 0.00 0.13 1.02 0.60 1.76 0.00 0.21 1.23

Particulars

Annexure

Income from Operations Interest on Deposits Other Income Profit on Sale of Assets Total Income Employee Costs Administrative and Other Expenses Interest and Financing Charges Depreciation Provision for Non-Performing Assets Total Expenditure Net Profit/(Loss) Taxation Before

XII XIII

Period Ended 31-Dec10 843.80 0.22 0.00 0.00 844.02 333.46 321.87 11.56 4.53 0.00

31-Mar10 2575.34 0.38 0.00 0.00 2575.72 300.77 161.55 0.00 11.56 0.00

XIV XV

VI XIX

671.42 172.60

473.88 2101.84

710.58 (1,012.91)

913.56 (405.05)

4.00 1.77

3.80 0.62

Provision for Taxation - Current Tax Less : Excess provision relating to earlier years no longer required written back - Deferred Tax - Fringe Benefit Tax Net Profit/(Loss) after Taxation as per Audited accounts Less : Adjustments on account of restatement Provision for Current tax Net Profit/(Loss) Taxation, as restated after

67.30 (60.45)

425.00

0.00

25.00

0.61

0.23

(2.52) 0.00 168.27

1.32 0.00 1675.52

(3.46) 3.05 (1,012.50)

0.93 0.50 (431.48)

0.00 0.00 1.16

0.00 0.00 0.39

60.45 107.82

(166.98) 1,842.50

106.53 (1,119.03)

0.00 (431.48)

0.00 1.16

0.00 0.39

Less: Transfer to Reserve Fund (As per 45-IC of RBI Act) Transfer to General Reserve

33.65 0.00

335.11 0.00

0.00 0.00

0.00 0.00

0.23 0.12

0.08 0.04

233

Particulars

Annexure

Period Ended 31-Dec10

31-Mar10

For the Years Ended 31-Mar31-Mar3109 08 Mar07

31Mar06

Fund Add: -Surplus/(Deficit) brought forward from previous year, as restated Balance transferred to Balance Sheet

(37.64)

(1545.03)

(426.00)

5.48

4.67 4.40

36.53

(37.64)

(1,545.03)

(426.00)

5.48

4.67

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

234

Annexure III Future Ventures India Limited Statement of Cash flows, as Restated As Per Accounting Standard 3 Cash Flow Statements (INR in Lakhs) For the Years Ended 31-Mar31-Mar313109 08 MarMar07 06 (1012.91) (405.05) 1.77 0.62

Particulars

Period Ended 31-Dec-10 172.60

31-Mar10 2101.84

Net Profit/ (Loss) Before Tax as per Audited Accounts

Adjustments for: Depreciation Interest Charges Provision for Non-Performing Assets (Net of write back) (Profit) /Loss on Sale of Assets (Net) Interest Income Dividend Income Loss/(Profit) on sale of Investments Provision for Standard Assets Miscellaneous Expenditure Written Off Operating Profit/(Loss) Before Working Capital Changes Adjustment for: (Increase)/Decrease in Receivables (Increase)/Decrease in Other Current Assets and Misc. expenditure (to the extent not written off or adjusted) Increase/(Decrease )in Current Liabilities and Provisions Cash Generated Operations from/(used in) 0.00 2598.30 0.00 (4425.50) 0.00 5613.79 0.00 (12230.37) 5.70 0.24 2.88 0.54 4.53 11.56 0.00 1.76 (810.43) (33.58) (0.01) 18.42 0.00 (635.15) 11.56 0.00 0.00 2.04 (828.20) (46.69) (1700.83) 0.00 0.00 (460.28) 12.76 0.00 0.00 0.00 (856.24) (241.67) 1408.38 0.00 0.00 (689.68) 2.14 11.41 (0.27) (0.06) (216.62) (271.68) (19.88) 0.00 0.00 (900.01) 0.13 0.00 0.77 0.00 (5.52) 0.00 0.00 0.00 0.00 (2.85) 0.21 0.00 0.74 0.06 (3.93) 0.00 0.00 0.00 0.04 (2.26)

198.72

(104.86)

(7319.30)

7474.97

1.54

0.83

2161.87

(4990.64)

(2395.19)

(5655.41)

4.63

1.99

(Direct Taxes Paid)/Refund received Add: Dividend Received Add; Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase of Fixed Assets Proceeds from Sale of Fixed Assets Investment in Fixed Deposits ( net of withdrawals)

(83.67) 33.58 651.64 2,763.42

(250.26) 46.69 686.62 (4507.59)

(5.14) 241.67 658.80 (1499.86)

(36.21) 271.68 88.62 (5331.32)

(0.57) 0.00 3.63 7.69

(0.01) 0.00 3.69 5.67

(2.36) 9.30 0.00

(1.38) 0.87 0.00

(23.55) 0.00 0.00

(35.12) 0.37 28.77

0.00 0.05 (2.38)

0.00 0.07 (0.26)

235

Particulars

Period Ended 31-Dec-10 (31,732.01) 2,888.40 (28,836.67)

31-Mar10 (41201.20) 25388.89 (15812.82)

Purchase of Investments Sale of Investment Net Cash (used in)/ from Investing Activities (B) Cash Flow from Financing Activities Interest Paid Proceeds from Issue of Equity Shares Increase/ (Decrease) in Bank Borrowings Net Cash (used in) / from Financing Activities (C ) Net (Decrease)/ Increase in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents At the Beginning of the Period/Year Cash and Cash Equivalents At the End of the Period/Year Net (Decrease)/ Increase in Cash & Cash Equivalents Note: Cash and Cash Equivalents at the Beginning of the Period/Year Less: Investment in Fixed Deposits (Long Term) Cash and Cash Equivalents at the Beginning of the Period/Year Cash and Cash Equivalents at the End of the Period/Year Less: Investment in Fixed Deposits (Long Term) Cash and Cash Equivalents at the End of the Period/Year

For the Years Ended 31-Mar31-Mar3109 08 Mar07 (28422.34) (74892.41) 0.00 30032.73 44008.33 0.00 1586.84 (30890.06) (2.33)

31Mar06 0.00 0.00 (0.19)

(11.56) 25000.00 0.00

0.00 20740.00 0.00

0.00 500.00 0.00

(11.41) 36355.00 0.00

0.00 0.00 0.00

0.00 0.00 (6.00)

24,988.44

20740.00

500.00

36343.59

0.00

(6.00)

(1,084.81)

419.59

586.98

122.21

5.36

(0.52)

1,134.96 50.15

715.37 1134.96

128.39 715.37

6.18 128.39

0.82 6.18

1.34 0.82

(1,084.81)

419.59

586.98

122.21

5.36

(0.52)

1,134.96 0.00 1,134.96

715.37 0.00 715.37

128.39 0.00 128.39

34.95 28.77 6.18

27.21 26.39 0.82

27.47 26.13 1.34

50.15 0.00 50.15

1134.96 0.00 1134.96

715.37 0.00 715.37

128.39 0.00 128.39

34.95 28.77 6.18

27.21 26.39 0.82

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

236

Future Ventures India Limited Annexure IV Significant Accounting Policies 1. Basis of Preparation of Financial Statements The Financial Statements have been prepared under the historical cost convention on accrual basis and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The said Financial Statements comply with the relevant provisions of the Companies Act, 1956 (the Act), the mandatory Accounting Standards notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006, as amended from time to time and guidelines issued by Reserve Bank of India for Non Banking Financial (Non Deposit Accepting or Holding) Companies from time to time. 2. Use of Estimates The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from estimates and assumptions used in preparing these financial statements. 3. Fixed Assets Fixed Assets are stated at cost less depreciation. Cost includes all direct expenses relating to the acquisition and installation of fixed assets. 4. Depreciation Depreciation is provided on Written Down Value Method at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956. Assets individually costing Rs.5,000/- or less are depreciated fully in the year of purchase. 5. Investments Investments maturing within twelve months from the date of investment and investments made with the specific intention to dispose of within twelve months from the date of investment are classified as trading investments. Other investments are classified as long-term investments. Investments which are long term in nature are stated at cost and provision for diminution is made if the decline in value is other than temporary in nature. If the balance sheet of the unlisted investee company is not available for two years, shares in such companies shall be valued at one Rupee only which is in accordance with the prudential norms prescribed by the Reserve Bank of India for Non- Banking Financial (Non Deposit Accepting) Companies. Trading investments are stated at lower of cost and fair value determined on the basis of each category of investments. For this purpose, the investments shall be categorized as equity, preference, debentures etc and considered scrip-wise and the cost and market value aggregated for all investments in each category. Unquoted investments in the units of mutual funds in the nature of trading investments shall be valued at the net asset value declared by the mutual fund in respect of each particular scheme as at the Balance Sheet date.

237

The reclassification of Investments from long term to trading investments would be effected with the approval of the board of directors in accordance with the guidelines issued by Reserve Bank of India. 6. Revenue Recognition. Transactions for purchase or sale of investments shall be recognized as of the trade date and not as of the settlement date, so that the effect of all investments traded during the financial year are recorded and reflected in the financial statements, for the year. Where investment transactions take place outside the stock market, for example, acquisitions through private placement or purchases or sales through private treaty, the transaction would be recorded, in the event of a purchase, as of the date on which the Company obtains an enforceable obligation to pay the price or, in the event of sale, when the Company obtains an enforceable right to collect the proceeds of sale or an enforceable obligation to deliver the instruments sold. The cost of investments acquired or purchased would include brokerage, stamp charges and any duties directly related to the acquisition of investment. Interest income is recognized on time proportion basis. Dividend income is recognized when the right to receive the same is established. Profit / Loss on sale of investments - Realized gain or loss on investments which is the difference between the sale consideration and the carrying cost is recognized in the profit and loss account on the date of recognition of sale. In determining the realized gain or loss on sale of a security, the cost of such security is arrived on First in First out basis. Interest income from financing activities is recognized at the rates implicit in the contract. Unrealized Interest income relating to Non-performing assets is derecognized. Fee for services rendered is recognized at the specific rates as per the terms of contract. Advisory fee payable for advisory services is recognized at the specific rates and as per terms agreed. 7. Foreign Currency Transactions Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. At the year-end, all monetary assets and liabilities denominated in foreign currency are restated at the year-end exchange rates. Exchange differences arising on actual payment / realisation and year end re-instatement referred to above are recognized in the Profit & Loss Account. 8. Retirement Benefits Defined Benefit Plan Gratuity liability determined on actuarial valuation performed in accordance with the projected unit credit method, as at the balance sheet date is provided for. Actuarial gains and losses arising from effects of changes in actuarial assumptions are immediately recognised in the profit & loss account as income or expense. Defined Contribution Plan Fixed contributions to Provident Fund are recognized in the accounts on actual cost to the Company.

238

Compensated Absences Liability for short term compensated absences is recognised as expense based on the estimated cost of eligible leave to the credit of the employees as at the balance sheet date on undiscounted basis. Liability for long term compensated absences is determined on the basis of actuarial valuation as on the balance sheet date. 9. Taxation Current tax is determined on the income for the year chargeable to tax in accordance with Income tax Act, 1961. Deferred tax is recognized for all timing differences. Deferred tax assets are recognized subject to consideration of prudence. 10. Provisions A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

239

Future Ventures India Limited Notes to Material adjustments made to Standalone Restated Financial statements of the company Based on the revised/original return of income filed by the Company for the financial years March 31, 2009 and March 31, 2010 respectively in October 2010, the net excess provision of Rs. 60.45 Lakhs has been written back in the financial statements for the nine months period ended December 31, 2010. Such adjustment to provision for tax has been duly adjusted in the respective years to which they relate. Notes Pertaining to 2007-08 1. The name of the company was changed from Subhikshith Finance and Investments Private Limited to Future Ventures India Private Limited effective from August 9, 2007. Subsequently, this name was also changed to Future Ventures India Limited effective from September 7, 2007, after obtaining necessary regulatory approvals. Share Capital During the year, the Company had issued 363,550,000 Equity shares at par value of Rs.10/- each on a private placement basis. 3. Investments In the opinion of the management, no provision is considered necessary for diminution in the value of Quoted Long Term Investments, as the diminution is not considered other than temporary in nature. Notes pertaining to 2008-09 1. Share Capital During the year, the Company had issued 5,000,000 Equity shares at par value of Rs.10/- each on a private placement basis. 2. Investments The Company has invested an aggregate amount of Rs. 6010.01 lakhs in Sankalp Retail Value Stores Private Ltd, Lee Cooper (India) Private Ltd (Associate Companies) and Footmart Retail (India) Ltd. (Joint Venture) in the year 2007-08 whose net worth has eroded as at March 31, 2009. These investments have been made in line with the investment policy of the Company which is to select companies which have business synergies and provide financial and technical support and grow them into profitable ventures. The above investee companies, being start- up companies in the retail space, have made substantial investments to develop their infrastructure and distribution network for growth and are expected to do well going forward. Once the critical mass is attained and sufficient number of stores is opened, the entities are expected to break-even and generate a reasonable return on investments thereby significantly improving their net worth. These entities are operating as per their business plan which is being consistently monitored. Also, these are strategic investments and the Company has plans of turning them around into profitable ventures by providing them the necessary financial and advisory support.. Therefore, in the opinion of the management, the diminution in the value of the said investments are temporary in nature and hence no provision is considered necessary.

2.

240

Notes pertaining to 2009-10 1. Share Capital During the year, the Company had issued 207,400,000 Equity shares at par value of Rs.10/- each on a private placement basis. Notes pertaining to April10-Dec10 1. Share Capital During the year, the Company had issued 250,000,000 Equity shares at par value of Rs.10/- each to promoter companies on preferential basis. 2. Miscellaneous expenditure (to the extent not written off or adjusted) Share Issue Expenses incurred in connection with the proposed initial public offering (IPO) of the Company is shown under Miscellaneous Expenditure (to the extent not written off or adjusted). Such expenditure would be adjusted against the Share Premium Account as and when shares are issued after completion of the IPO.

241

Future Ventures India Limited Annexure V Share Capital (INR in lakhs) March 31, March 31, 2007 2006

Particulars

Dec 31st, 2010

March 31st, 2010 500,000.00

March 31st, 2009

March 31st, 2008

Authorised 5,000,000,000 Equity Shares of Rs. 10/- each Issued, Subscribed and Paid up Capital Equity Shares of Rs. 10/each

500,000.00

500,000.00

500,000.00

100.00

100.00

82,624.37

57,624.37

36,884.37

36,384.37

29.37

29.37

Reserves and Surplus (INR in lakhs) March 31, 2006 5.20 0.48 5.68

Particulars

Capital Redemption Reserve General Reserve Reserves and Surplus Statutory Reserve Opening Balance Add : Transfer during the year Closing Balance

Dec 31st, 2010 5.20 0.59 5.79

March 31st, 2010 5.20 0.59 5.79

March 31st, 2009 5.20 0.59 5.79

March 31st, 2008 5.20 0.59 5.79

March 31, 2007 5.20 0.59 5.79

338.59 33.65 372.24

3.48 335.11 338.59

3.48 3.48

3.48 3.48

3.25 0.23 3.48

3.17 0.08 3.25

242

Future Ventures India Limited Annexure VI Fixed Assets 05-06 (INR in Lakhs)
Description of Assets As at 1st April 2005 0.46 2.27 0.17 4.50 7.40 Gross Block Additions Deletions As at 31st March 2006 0.46 2.27 0.17 4.37 7.27 As at 1st April 2005 0.29 1.97 0.03 4.23 6.52 Depreciation For Deletions the year 0.04 0.12 0.02 0.03 0.21 As at 31st March 2006 0.33 2.09 0.05 4.26 6.73 Net Block As at As at 31.03.06 31.03.05

Office Equipment Computers Furniture & Fixtures Vehicles Total

0.13 0.13

0.13 0.18 0.12 0.11 0.54

0.17 0.30 0.14 0.27 0.88

Fixed Assets 06-07 (INR in Lakhs)

Description of Assets As at 1st April 2006 0.46 Gross Block Additions Deletions As at 31st March 2007 0.46 As at 1st April 2006 0.33 Depreciation For Deletions the year 0.04 As at 31st March 2007 0.37 Net Block As at As at 31.03.07 31.03.06

Office Equipment Computers Furniture & Fixtures Vehicles Total

0.09

0.13

2.27 0.17

2.27 0.17

2.09 0.05

0.07 0.01

2.16 0.06

0.11 0.11

0.18 0.12

4.37 7.27

0.04 0.04

4.33 7.23

4.26 6.73

0.01 0.13

4.27 6.86

0.06 0.37

0.11 0.54

Fixed Assets 07-08 (INR in Lakhs) Net Block As at As at 31st 31st March March 2008 2007 12.23 0.09

Description of Assets

Office Equipments Computers Furniture & Fixtures Vehicles

As at 1st April 2007 0.46

Gross Block Additions Deletions

12.69

0.46

As at 31st March 2008 12.69

As at 1st April 2007 0.37

Depreciation For Deletions the year 0.46 0.37

As at 31st March 2008 0.46

2.27 0.17

20.18 2.25

2.27 0.17

20.18 2.25

2.16 0.06

1.57 0.05

2.16 0.06

1.57 0.05

18.61 2.20

0.11 0.11

4.33

4.33

4.27

0.06

4.33

0.06

243

Description of Assets

Total

As at 1st April 2007 7.23

Gross Block Additions Deletions

35.12

7.23

As at 31st March 2008 35.12

As at 1st April 2007 6.86

Depreciation For Deletions the year 2.14 6.92

As at 31st March 2008 2.08

Net Block As at As at 31st 31st March March 2008 2007 33.04 0.37

Fixed Assets 08-09 (INR in Lakhs) Net Block As at As at March March 31, 31, 2009 2008 15.99 12.23

Description of Assets

Office Equipments Computers Furniture & Fixtures Vehicles Total

As at April 1, 2008 12.69

Gross Block Additions Deletions

6.23

As at March 31, 2009 18.92

As at April 1, 2008 0.46

Depreciation For Deletions the year 2.47 -

As at March 31, 2009 2.93

20.18 2.25

4.44 -

24.62 2.25

1.57 0.05

8.81 0.40

10.38 0.45

14.24 1.80

18.61 2.20

35.12

12.88 23.55

12.88 58.67

2.08

1.08 12.76

1.08 14.84

11.80 43.83

33.04

Fixed Assets 09-10 (INR in Lakhs) Net Block As at As at March March 31, 31, 2010 2009 15.99 11.42

Description of Assets

Office Equipments Computers Furniture & Fixtures Vehicles Software Total

As at April 1, 2009 18.92

Gross Block Additions Deletions

0.35

3.55

As at March 31, 2010 15.72

As at April 1, 2009 2.93

Depreciation For Deletions the year 2.00 0.63

As at March 31, 2010 4.30

24.62 2.25

0.65

24.62 2.90

10.38 0.45

5.70 0.43

16.08 0.88

8.54 2.02

14.24 1.80

12.88 58.67

0.38 1.38

3.55

12.88 0.38 56.50

1.08 14.84

3.05 0.38 11.56

0.63

4.13 0.38 25.77

8.75 30.73

11.80 43.83

244

Fixed Assets Apr10-31st Dec10 (INR in Lakhs) Net Block As at As at Dec March 31, 31, 2010 2010 9.91 11.42

Description of Assets

Office Equipments Computers Furniture & Fixtures Vehicles Software Total

As at April 1, 2010 15.72

Gross Block Additions Deletions

0.54

1.20

As at Dec 31, 2010 15.06

As at April 1, 2010 4.30

Depreciation For Deletions the Period 1.18 0.33

As at Dec 31, 2010 5.15

24.62 2.90

1.82 -

1.56 2.25

24.88 0.65

16.08 0.88

2.74 0.14

1.06 0.84

17.76 0.18

7.12 0.47

8.54 2.02

12.88 0.38 56.50

2.36

12.88 17.89

0.38 40.97

4.13 0.38 25.77

0.47 4.53

4.60 6.83

0.38 23.47

17.50

8.75 30.73

245

Future Ventures India Limited Annexure VII INVESTMENTS (INR in Lakhs) March March 31st 2007 31st 2006

Particulars A. Long Term Investments (i) Investment in Subsidiaries(#) Unquoted (ii) Investment in Joint Ventures - Unquoted (iii)Investment in Associates - Unquoted (iv) Others (Unquoted Trade) Equity Shares - Others Fully Convertible Debentures (v) Others Non- Trade (i) Quoted Equity Shares - Others (ii) Unquoted Units of Mutual Funds

Dec 31st 2010

March 31st 2010

March 31st 2009

March 31st 2008

64,988.64

37,021.39

3,017.53

3,017.53

75.00 5,084.40

75.00 5,073.15

1307.51 7,196.03

605.00 5,405.00

3,045.72 -

2,370.79 -

7,698.94 250.00

6,620.22 700.00

4,787.32

6,315.27

3,000.00

B. Trading Investments (ii) Unquoted - NonTrade & others Units of Mutual Funds 1,048.19 857.99 3,627.86 5,240.93 Total 74,241.95 45,398.32 27,885.19 30,903.95 Value of Quoted Investments - Cost 4,787.32 6,315.27 - Market Value 845.46 3612.79 Value of Unquoted 74,241.95 45,398.32 23,097.87 24,588.68 Investments # 7,000,000 equity shares of Aadhaar Retailing Limited held by Future Ventures India Limited have been pledged to Future Capital Holdings Limited (FCH) to secure repayment of loan availed by Aadhaar Retailing Limited from FCH. Summary of addition and deletion to investments (INR in Lakhs) 31-Mar-08 74,892.40 43,988.45

Transactions Opening Balance Add: Addition Less : Redemption

31-Dec-10 45,398.32 31,732.01 2,888.38

31-Mar-10 27,885.19 41,451.20 23,938.07

31-Mar-09 30,903.95 28,422.34 31,441.10

246

Transactions Closing balance

31-Dec-10 74,241.95

31-Mar-10 45,398.32

31-Mar-09 27,885.19

31-Mar-08 30,903.95

247

Future Ventures India Limited

Particulars Add. during the period Rs. Adhunik Metals Limited Easun Reyrolle Limited. Gateway Distriparks Limited JM Financial Limited Mid-day Multimedia Limited Modison Metals Limited Mukta Arts Limited India Infoline Limited Reliance Communications Limited Aadhaar Retailing Limited Indus League Clothing Limited Star Shopping Centres Pvt. ltd. Industree Crafts Private Limited Future Consumer Products Limited Future Consumer Enterprises Limited Lee Cooper (India) Private December 2010 Red. As at 31st during December the 2010 period Rs. Rs. March 2010 Red. As at 31st during March the year 2010 Rs. 800.32 1,020.58 Rs. March 2009 Red. As at 31st during March the year 2009 Rs. 294.82 Rs. 800.32 1,020.58 March 2008 Red. As at 31st during March the year 2008 Rs. Rs. 800.32 1,020.58 294.82

Add. during the year Rs.

Add. during the year Rs.

Add. during the year Rs. 800.32 1,020.58 294.82

315.28 -

1,390.72 29.00

315.28 -

1,706.00 30.05

1.05

1,706.00 29.00

1,342.72 1,308.41 -

186.59 -

1,342.72 1,308.41 -

1,156.77 1,308.41 892.55 843.50

0.64 892.55 843.50

1,156.13 1,308.41 -

10,262.25 300.00

7,742.53 38,283.52 957.59

4,725.00 23,016.27 300.00 300.00 -

7,742.53 28,021.27 300.00 957.59 -

3,017.53 5,005.00

3,017.53 5,005.00

3,017.53 5,005.00

657.59 -

657.59 -

2,000.00 16,005.00

2,000.00 16,005.00

2,652.25

4,646.22

1,993.97

1,993.97

1,993.97

248

Particulars Add. during the period Rs. Limited Sankalp Retail Value Stores Private Limited Turtle Limited AND Design India limited Capital Foods Exportts Pvt. limited Lee Cooper (India) Private Limited - Pref. shares Sankalp Retail Value Stores Private Limited Pref. shares Footmart Retail (India) Ltd. Celio Future Fashion Ltd. Holii Accessories Pvt. Ltd. BIBA Apparels Private Limited SSIPL Retail Private Limited BIBA Apparels Private limited Debentures AND Design India limited Debentures Mutual Funds Bonds Total

December 2010 Red. As at 31st during December the 2010 period Rs. Rs. -

Add. during the year Rs. -

March 2010 Red. As at 31st during March the year 2010 Rs. 2,000.00 Rs. -

Add. during the year Rs. -

March 2009 Red. As at 31st during March the year 2009 Rs. Rs. 2,000.00

Add. during the year Rs. 2,000.00

March 2008 Red. As at 31st during March the year 2008 Rs. Rs. 2,000.00

573.15 11.25 4,511.25

250.00 4,500.00

1,133.44 -

573.15 4,500.00

1,133.44 323.15

1,133.44 323.15

410.00

821.03

411.03

411.03

411.03

1,000.00

1,000.00

1,000.00

1,000.00

497.50

605.01 1,200.00 -

75.00 1,370.74 1,000.06 -

702.50

605.01 702.50

605.01

605.01

75.00 674.92 2,045.66 1,000.06 -

75.00

755.58 -

700.00

1,370.74 1,000.06 -

615.16 1,000.06 700.00

615.16 1,000.06 700.00

250.00

250.00

250.00

2,778.59 31,732.01

2,588.38 2,888.38

1,048.19 74,241.95

4,725.18 41,451.20

7,495.06 23,938.07

857.98 45,398.32

24,413.49 28,422.34

29,026.56 31,441.10

3,627.86 27,885.19

44,489.72 6,001.92 74,892.40

36,248.79 6,001.92 43,988.45

8,240.93 30,903.95

249

Future Ventures India Limited Annexure VIII Cash and Bank Balances (INR in lakhs) March 31, 2006 0.79

Particulars

Dec 31st, 2010 0.05

March 31st, 2010 143.37

March 31st, 2009 16.25

March 31st, 2008 29.94

March 31, 2007 0.04

Cash and Cheque on Hand Balances with Scheduled Bank - In Current Account - In Fixed Deposit Accounts

50.10

991.59

699.12

98.45

6.14 28.77 34.95

0.03 26.39 27.21

50.15

1,134.96

715.37

128.39

250

Future Ventures India Limited Annexure IX Statement of Other Current Assets (INR in Lakhs) March March 31, 2007 31, 2006 3.91 3.37 1.06 1.06

Particulars Advance Tax Advance recoverable in Cash or in kind or for value to be received # Advance to subsidiary towards Share application money # Loans outstanding (including Inter corporate Deposits) # Interest Accrued on Deposits & Inter Corporate Deposits MAT Credit entitlement Service charges receivable Others Total #Include dues from Promoters @ Group Companies @

Dec 31, 2010 771.32 1.95

March 31, 2010 606.63 32.72

March 31, 2009 236.57 207.22

March 31, 2008 39.30 2,174.21

985.00 7,370.00 197.01 55.48 0.00 0.15 9,380.91 146.02 4,000.00

0.00 11,050.00 119.24 88.90 0.00 3.35 11,900.84 500.89 6,950.00

2400.00 4,050.00 97.46 0.00 0.00 3.35 6,994.60 441.73 3,000.00

0.00 10,100.00 92.39 0.00 0.00 0.15 12,406.05 2,140.00 5,000.00

0.00 11.61 0.74 0.00 0.24 0.00 17.56 -

0.00 17.63 0.62 0.00 0.16 0.00 22.84 -

@ As defined under ICDR Regulations and have been identified by the Company and relied upon by the auditors Amount due from companies under the same management: (INR in Lakhs)
Name of the Company As at Dec 31, 2010 Balance Maximum outstanding amount due at any time during the period 1,550.00 As at March 31, 2010 Balance Maximum outstanding amount due at any time during the year 1,550.00 1,550.00 As at March 31, 2009 Balance Maximum outstanding amount due at any time during the year 1,000.00 1,000.00 As at March 31, 2008 Balance Maximum outstanding amount due at any time during the year -

Home Solutions Retail (India) Limited Future Media (India) Limited Winner Sports Limited Pantaloon Retail India Limited Future Value Retail Limited Future Agrovet Limited

400.00

400.00

400.00

850.00

850.00

1,850.00

1,550.00

1,550.00

140.00

140.00

140.00

140.00

140.00

800.00

1,800.00

1,800.00

1,800.00

251

Name of the Company

Future Capital Holdings Limited Kshitij Investment Advisory Company Limited

As at Dec 31, 2010 Balance Maximum outstanding amount due at any time during the period -

As at March 31, 2010 Balance Maximum outstanding amount due at any time during the year -

As at March 31, 2009 Balance Maximum outstanding amount due at any time during the year 5,000.00

As at March 31, 2008 Balance Maximum outstanding amount due at any time during the year 5,000.00 5,000.00

63.00

There were no amounts due from the companies under the same management for the year ended March 31, 2006 and March 31, 2007.

252

Future Ventures India Limited Annexure X Statement of Current Liabilities and Provisions (INR in Lakhs) Particulars Dec 31, 2010 Current Liabilities: Sundry Creditors and Outstanding expenses TDS on salary, professional charges & others Total Current Liabilities Provisions: Provision for Non-Performing Assets Provision for Taxation Provision for Gratuity & Compensated absences Provision for Standard Assets Total Provisions 237.46 1.34 238.80 0.00 517.66 11.11 18.43 547.20 March 31, 2010 43.93 1.13 45.06 0.00 483.76 6.14 0.00 489.90 As At March 31, March 31, 2009 2008 140.65 0.88 141.53 0.00 136.86 14.52 0.00 151.38 7466.50 6.53 7473.03 0.00 27.51 2.32 0.00 29.83 March 31, 2007 0.65 0.00 0.65 5.27 2.84 0.00 0.00 8.11 March 31, 2006 0.65 0.00 0.65 4.75 2.22 0.00 0.00 6.97

253

Future Ventures India Limited Annexure XI Statement of Deferred Tax (Net) (INR in Lakhs) Particulars Dec 31, 2010 0.05 3.69 3.74 March 31, 2010 (0.82) 2.04 1.22 As At March 31, March 31, 2009 2008 (2.40) (1.72) 4.93 2.53 0.79 (0.93) March 31, 2007 0.00 0.00 0.00 March 31, 2006 0.00 0.00 0.00

Difference between Book WDV and Tax WDV Provision for compensated absences/Provision for Gratuity Net Deferred Tax Asset (Liability)

Deferred tax asset in respect of long term capital loss has not been recognized in the absence of virtual certainty on their realization.

254

Future Ventures India Limited Annexure XII Income from Operations (INR in Lakhs) For the For the Year Year ended ended March 31, March 31, 2007 2006 Rs. Rs.

Particulars

For the Period ended December 31, 2010 Rs.

For the Year ended March 31, 2010

For the Year ended March 31, 2009

Rs.

Rs.

For the Year ended March 31, 2008 Rs.

Profit/(Loss) on trading securities: Sales of Trading Securities Less : Cost of Sales Profit/(Loss) on trading securities: Interest Income: - On Investments - Trade - On Investments - Non Trade - Others Dividend Income Profit/(Loss) on Sale of Long Term securities Profit/(loss) on Sale of Current Investments

0.01 0.01

17,227.57 15,842.12 1,385.45

4,821.31 6,229.69 (1,408.38) -

810.21 33.58 -

12.53 815.29 46.69 315.38

8.36 768.83 241.67 -

70.00 56.55 89.43 271.68 3.12 2.77

19.88

843.80

2,575.34

(389.52)

507.54

3.12

2.77

255

Future Ventures India Limited Annexure XIII Statement of Other Income (INR in Lakhs) Particulars Period Ended Dec 31, 2010 0.00 0.00 0.00 March 31, 2010 For the Years Ended March 31, March 31, March 31, 2009 2008 2007 March 31, 2006

Non-Recurring Provision no longer required written back Miscellaneous Income Total other income

0.00 0.00 0.00

0.00 8.14 8.14

0.27 0.00 0.27

0.25 0.00 0.25

0.49 0.00 0.49

256

Annexure XIV Employee Costs (INR in Lakhs) For the year ended March 31, 2006 Rs. 0.60 0.60

Particulars

Salaries Wages & Bonus Remuneration to Director Contribution to Provident Fund Staff Welfare Expenses

For the Period ended Dec 31, 2010 Rs. 303.41 10.51 19.54 333.46

For the Year ended March 31, 2010 Rs. 255.35 6.25 39.17 300.77

For the year ended March 31, 2009 Rs. 209.31 7.57 17.12 234.00

For the year ended March 31, 2008 Rs. 73.55 1.59 5.31 80.45

For the year ended March 31, 2007 Rs. 1.20 1.20

257

Future Ventures India Limited Annexure XV Administrative and other expenses (INR in Lakhs) For the year ended March 31, 2006 Rs. 0.14 0.24 0.12 0.12 -

Particulars

Rent Legal and Professional Charges Rates & taxes Audit Fees : - Statutory Audit - Tax Audit - Other Services - Out of Pocket Expenses ( Including Taxes and Levies) Directors sitting fees Loss on Sale of Asset Travelling & Conveyance Expenses Advertisement & Publicity Provision for Standard Assets Miscellaneous expenses Total

For the Period ended Dec 31, 2010 Rs. 26.39 207.64 25.11 6.38 0.75 6.59 2.43

For the Year ended March 31, 2010 Rs. 17.72 66.72 20.91 8.50 1.00 9.68 3.97

For the year ended March 31, 2009 Rs. 38.19 203.01 1.17 4.50 0.50 4.20 1.72

For the year ended March 31, 2008 Rs. 7.22 186.33 609.60 4.50 0.50 0.62

For the year ended March 31, 2007 Rs. 0.29 0.10 0.10 0.01

5.00 1.76 10.20 18.43 11.19 321.87

4.40 2.04 13.58 13.03 161.55

9.60 52.61 131.77 16.55 463.82

1.40 2.16 7.23 819.56

0.82 0.33 1.65

0.06 0.92 -

0.16 1.76

258

Future Ventures India Limited Annexure XVI Disclosure as per Accounting Standard 15 Employee Benefits The company has a defined benefit gratuity plan and the details of actuarial valuation as on 31st March 2008, 2009, 2010 and as at 31st December 2010 are given below: (INR in Lakhs) Years Ended March March March 31,2010 31,2009 31,2008 Rs. Rs. Rs.

Particulars

Period Ended Dec 31,2010 Rs. 3.56 0.16 0.00 (0.52) 0.00

Expenses recognized in the Profit & Loss Account Current Service cost Interest cost on benefit obligations Expected return on plan assets Actuarial (gain)/loss Net benefit expense Amount recognized in the Balance Sheet Closing Projected Benefit Obligation Closing Fair value of plan assets Unfunded Net Asset/ (Liability) recognized in the balance sheet Changes in the present value of defined benefit obligations are as follows: Obligations at period beginning Service Cost Interest on Defined benefit obligation Benefits settled Actuarial (gain)/loss Obligations at period end Assumptions Interest rate Salary increase Attrition rate Retirement age

2.41 0.21 0.00 (2.46) 0.00

2.89 0.00 0.00 (0.32) 0.00

1.14 0.00 0.00 (1.14) 0.00

(5.93) 0 (5.93)

(2.73) 0 (2.73)

(2.57) 0 (2.57)

0.00 0.00 0.00

2.73 3.56 0.16 0.00 (0.52) 5.93

2.57 2.41 0.21 0.00 (2.46) 2.73

0.00 2.89 0 0 (0.32) 2.57

0.00 1.14 0.00 0.00 (1.14) 0.00

8.00% 5.00% 1.00% 58 years

8.00% 5.00% 1.00% 58 years

8.00% 5.00% 1.00% 58 years

8.00% 5.00% 1.00% 58 years

The above disclosure was not applicable for the year ended March 31, 2007 and March 31, 2006. The estimates of future salary increase take into account inflation, seniority, promotion and other relevant factors. The disclosure requirements with regard to composition of Investments in the Fair Value of Plan assets, has not been furnished, in the absence of relevant information.

259

Future Ventures India Limited Annexure XVII Segment Reporting The company is primarily engaged in the business of investing/financing. All the activities of the company revolves around the main business. Further, the company does not have any operations outside India. As such, there are no separate reportable segments as per Accounting Standard 17 Segment Reporting notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006.

260

Future Ventures India Limited Annexure XVIII Related Party Transactions Related parties referred to in this report represent related parties as defined in Accounting Standard 18, Related Party Disclosures notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006 and as identified by the management and relied upon by the Auditors. Details of related party transactions have been given below.

261

Future Ventures India Limited Annexure XVIII (Contd) Related Party Transactions As per Accounting Standard 18 Related Party Disclosures Related Party Transactions - April 2010 December 2010 (INR in Lakhs)
Related Parties Nature of Relationship ICDs Outstanding as at 31st December 2010 (Including int. receivables) 977.43 Payables Balance Outstanding as at 31st December 2010 Interest Income Loan/Advances Given during the period Amount Repaid during the period # 1,775.00 Advance towards Share Application Issue of Equity shares Trade advance given & settled during the period Fees for services Reimbursement of Expenses Rent Expenses Sale of Assets/Investment Purchase of Asset/investment Investment in Equity/Pref. shares

Aadhaar Retailing Ltd.(1) Indus League Clothing Ltd. Future Consumer Enterprise Ltd. Future Consumer Products Ltd. Star Shopping Centres Pvt. Ltd.(2) Indus Tree Crafts Pvt. Ltd. Lee Cooper (India) Ltd. Capital Foods Exportts Pvt. Ltd. Pantaloon Retail India Ltd. Celio Future Fashion Ltd.

Subsidiary

41.03

# 1,550.00

875.00

Subsidiary Subsidiary 1.50 50.00 50.00

# 10,262.25 # 16,005.00

Subsidiary

# 2,000.00

Subsidiary

300.00

Subsidiary

50.31

0.72

50.00

50.00

Subsidiary of Indus League Clothing Ltd. Associate

738.60

96.58

450.00

0.11

11.25

Associate*

# 15,000.00 10.94 350.00 350.00

# 2,000.00

Holii Accessories Pvt. Ltd. Talwalkars Pantaloon Fitness Pvt. Ltd. Future Ideas Realtors India Ltd. Future Corporate Resources Ltd. Capital Foods

Joint Venture of Indus League Clothing Ltd. Joint Venture

100.00

100.00

Associate*

450.55

49.87

# 1,800.00

# 1,800.00

Associate*

# 1,251.03

1.03

# 1,250.00

Associate*

88.24

37.47

500.00

# 1,000.00

# 1,350.00

99.27

2.11

2.79

# 3,932.85

Subsidiary of

100.14

4.98

700.00

600.00

262

Related Parties

Nature of Relationship

ICDs Outstanding as at 31st December 2010 (Including int. receivables)

Payables Balance Outstanding as at 31st December 2010

Interest Income

Loan/Advances Given during the period

Amount Repaid during the period

Advance towards Share Application

Issue of Equity shares

Trade advance given & settled during the period

Fees for services

Reimbursement of Expenses

Rent Expenses

Sale of Assets/Investment

Purchase of Asset/investment

Investment in Equity/Pref. shares

Ltd.

Future Ideas Company Ltd. Future Capital Holdings Ltd. Future Value Retail Ltd. Iskrupa Mall Management co. Pvt. Ltd.

Capital Foods Exportts Pvt. Ltd Associate* Associate* Associate* Associate* # 2,079.92

82.73

82.73 0.78 18.41 152.01 800.00 # 2,025.00 800.00 # 2,025.00 0.08

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the period. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

263

Related Party Transactions - April 2010 December 2010 (INR in Lakhs)

Related Parties Nature of Relationship ICDs Outstanding as at 31st December 2010 (Including int. receivables) Payables Balance Outstanding as at 31st December 2010 Interest Income Loan/Advances Given during the period Amount Repaid during the period Advance towards Share Application Issue of Equity shares Trade advance given & settled during the period Fees for services Reimbursement of Expenses Rent Expenses Sale of Assets/Investment Purchase of Asset/investment Investment in Equity/Pref. shares

Home solutions Retail (India) Ltd. Future Agrovet Ltd. Winner Sports Ltd. Future Capital Investment Pvt. Ltd. Future Capital Financial services Ltd. Future Finance Ltd. Kshitij Investment Advisory Company Ltd. Anchor Mall Pvt. Ltd. Future Realtors (India) Pvt. Ltd. Future Brands Limited PIL Industries Limited Total

Associate*

79.62

# 1,550.00

Associate*

79.40

# 1,800.00

Associate* Associate*

22.71

850.00 # 10,000.00

Associate*

0.11

Associate* Associate* 0.33

2.49 10.96

Associate

# 1,027.04

Associate*

# 2,753.00

Associate*

5.00

Associate*

# 2,287.11

5,747.98

171.30

596.27

9,075.00

13,100.00

975.00

25,000.00

1,350.00

182.00

3.19

13.45

302.79

12,005.00

28,278.50

(1) (2)

# *

Out of the ICD given. Rs.875 Lakhs has been converted into Advance against Share Application Money Investments amounting to Rs. 30,000,000 sold to Future Realtors (India) Private Limited Material related party transactions (which are over Rs. 1,000 Lakhs) during the period. Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

264

Related Party Transactions - 2009 2010 (INR in Lakhs)

Related Parties Nature of Relationship Receivable Balance Outstanding as at 31st March 2010 (Including int. receivables) 340.71 Payables Balance Outstanding as at 31st March 2010 Interest Income Loan/Advances Given during the year Amount Repaid during the year Issue of Equity shares Expenses & Reimbursement Sale of Investment Purchase of Asset/ Investment Investment in Equity/Pref. shares

Aadhaar Retailing Ltd. Indus League Clothing Limited Star Shopping Centres Pvt. Limited Industree Crafts Pvt. Ltd. Lee Cooper (India) Limited. Sankalp Retail Value Stores Pvt. Limited Turtle Limited AND Designs India Limited Capital

Subsidiary

110.32

# 4,560.00

# 4,235.00

# 4,725.00

Subsidiary # 23,016.27

Subsidiary

300.00

Subsidiary

54.64

12.04

550.00

500.00

300.00

Associates up to 30th Jan2010

# 1,128.48

28.48

# 1,100.00

0.51

# 5,467.25

# 3,062.25

Associates upto 28th Jan2010

# 3,000.00

Associates upto 30th Jan2010 Associates with Effect from 21st Oct 2009 Associates

# 1,133.44

3.98

50.00

100.00

250.00

265

Related Parties

Nature of Relationship

Receivable Balance Outstanding as at 31st March 2010 (Including int. receivables)

Payables Balance Outstanding as at 31st March 2010

Interest Income

Loan/Advances Given during the year

Amount Repaid during the year

Issue of Equity shares

Expenses & Reimbursement

Sale of Investment

Purchase of Asset/ Investment

Investment in Equity/Pref. shares

Foods Exportts Pvt. Limited

with Effect from 15th Feb 2010.

# 4,500.00

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year.

266

(INR in Lakhs)
Related Parties Nature of Relationship Receivable Balance Outstanding as at 31st March 2010 (Including int. receivables) Payables Balance Outstanding as at 31st March 2010 Interest Income Loan/Advances Given during the year Amount Repaid during the year Issue of Equity shares Expenses & Reimbursement Sale of Investment Purchase of Asset/ Investment Investment in Equity/Pref. shares

Future Capital Holdings Limited Pantaloon Retail India Limited Pantaloon Industries Limited Footmart Retail ( India ) Limited Celio Future Fashion Limited Holii Accessories Pvt. Ltd Total

Associates*

0.65

Associates*

5.47

Associates*

# 12,200.00 50.61 # 1,400.00 # 1,800.00 605.00

# 3,976.81

Joint Venture Upto 21st Jan 2010 Joint Venture Upto 30th Jan 2010 Joint Venture with Effect From 2nd Nov 2009 1,523.83 0.00

# 1,200.00

497.50

75.00

205.43

7,660.00

6,635.00

12,200.00

5.98

11405.69

3,977.46

36,726.02

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

267

Related Party Transactions - 2008-09 (INR in Lakhs)

Related Parties Nature of Relationship Receivable Balance Outstanding as at 31st March 2009 (Including int. receivables) # 2,400.00 Payables Balance Outstanding as at 31st March 2009 Interest Income Loan/Advances Given during the year Amount Repaid during the year Other Income, Rent Issue of Equity shares Expenses Reimbursed Purchase of Asset Investment in Equity/Pref. shares

Aadhaar Retailing Ltd. Indus Tree Crafts Pvt. Ltd. Turtle Ltd. Future Capital Holdings Ltd. Pantaloon Retail India Ltd. Pantaloon Industries ltd. Footmart Retail (India) Ltd. Celio Future Fashion Ltd. Total

Subsidiary

# 2,400.00

8.14

Associates

11.35

350.00

350.00

657.59

Asssociates Associates*

# 1,133.44 0.07 46.41 # 5,000.00 17.18

Associates*

140.00

5.60

Associates*

17.26

# 1,500.00

# 1,500.00

Joint Venture

427.61

400.00

Joint Venture

5.27

250.00

250.00

702.50

2,967.61

0.07

80.29

4,900.00

7,100.00

8.14

0.00

22.78

0.00

2,493.53

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

268

Related Party Transactions Related Party Transactions 2007 - 08 (INR in Lakhs) Investment in Equity/Pref. shares

Related Parties

Nature of Relationship

Receivable Balance Outstanding as at 31st March 2008 (including int. receivable)

Payables Balance Outstanding as at 31st March 2008

Interest Income

Loan/Advances Given during the year

Amount Repaid during the year

Other Income, Rent

Issue of Equity shares

Expenses Reimbursed

Purchase of investment

Aadhaar Retailing Ltd. Lee Cooper (India) Pvt. Ltd. Sankalp Retail Value Stores Pvt. Ltd. Future Capital Holdings Ltd. Pantaloon Retail India Ltd. Future Capital Investment Pvt. ltd. Pantaloon Industries

Subsidiary

# 3,017.53

Associates

# 2,405.00

Associates

# 3,000.00

Associates*

# 5,006.03

6.03

# 5,000.00

11.66

# 1,315.16

Associates*

140.00

140.00

6.67

605.01

Associates*

180.00

Associates*

# 3,605.00

# 3,605.00

269

Related Parties

Nature of Relationship

Receivable Balance Outstanding as at 31st March 2008 (including int. receivable)

Payables Balance Outstanding as at 31st March 2008

Interest Income

Loan/Advances Given during the year

Amount Repaid during the year

Other Income, Rent

Issue of Equity shares

Expenses Reimbursed

Purchase of investment

Investment in Equity/Pref. shares

ltd. Footmart Joint Venture Retail (India) Ltd. Total 5,146.03 3,605.00 6.03 5,140.00 0.00 # Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

605.01

0.00

180.00

18.33

5,525.17

9,027.54

270

Related Party Transactions Related Party Transactions - 2006 - 07 (INR in Lakhs) Expenses Reimbursed

Related Parties

Nature of Relationship

Receivable Balance Outstanding as at 31st March 2007 3.83

Interest Income

Loan Given during the year 3.00

Amount Repaid during the year 3.81

Other Income, Rent

Director's Remuneration

Growell Marketing Co SVT Associates ACE Enterprises Shankar Thirumalai Total

Firm in which Director is interested Firm in which the Directors are Partners Proprietorship Director Director Director of

0.69

0.00

1.59

16.50

16.50

0.24

0.21

2.80

3.40

0.96

0.00 0.00 4.07

0.00 0.00 2.49

0.00 0.00 22.30

0.00 0.00 23.71 0.96

0.60 0.60 1.20

0.07

0.07

Note: There is no material related party transaction (which is over Rs. 1,000 Lakhs) during the year.

271

Related Party Transactions Related Party Transactions 2005 - 06 (INR in Lakhs) Expenses Reimbursed

Related Parties Ace Credit Growell Marketing Co R Santhanam Srinivasan R SVT Associates Thirumalai Total

Nature of Relationship Proprietorship of Director Firm in which Director is interested Director Member Firm in which the Directors are Partners Director

Receivable Balance Outstanding as at 31st March 2006 0.60 4.08 3.20 0.20

Interest Income 0.11 0.45 0.58 0.64

Loan Given during the year 2.20 3.75

Amount Repaid during the year 1.60 1.11 0.58 29.05

Other Income, Rent

Director's Remuneration

23.70

0.60 8.08 1.78 29.65 32.34 0.60 -

Note: There is no material related party transaction (which is over Rs. 1,000 Lakhs) during the year.

272

Future Ventures India Limited Annexure XIX Accounting Standard 29 - Provisions, Contingent Liabilities and Contingent Assets (INR in Lakhs) For the Years Ended March 31, March 31, March 31, March 31, 2009 2008 2007 2006 0.00 0.00 0.00 0.00 0.00 0.00 5.27 0.00 5.27 0.00 (5.27) 0.00 4.75 1.02 5.77 (0.25) (0.25) 5.27 4.01 1.23 5.24 (0.49) 0.00 4.75

Movement in Provision for Non-Performing Assets

Opening Balance Additional Provision created during the year Provision written back Write-off out of provision Closing Balance

Period Ended Dec 31, 2010 0.00 0.00 0.00 0.00 0.00 0.00

March 31, 2010 0.00 0.00 0.00 0.00 0.00 0.00

273

Future Ventures India Limited Annexure XIX Contd. Contingent Liabilities: (INR in Lakhs) As at 31st March 2006 0.00

Particulars Corporate Guarantees

As at 31st Dec 2010 5,800.00

As at 31st March 2010 0.00

As at 31st March 2009 0.00

As at 31st March 2008 0.00

As at 31st March 2007 0.00

274

Future Ventures India Limited Annexure XX Share Purchase Obligation (INR in Lakhs) As at 31st March 2006 0.00

Particulars Share Purchase Obligation

As at 31st Dec 2010 2,188.08

As at 31st March 2010 0.00

As at 31st March 2009 13,860.00

As at 31st March 2008 13,860.00

As at 31st March 2007 0.00

275

Future Ventures India Limited Annexure XXI Tax Shelter Statement (INR in Lakhs) For the Years Ended 31-Mar31-Mar- 31-Mar- 31-Mar09 08 07 06 (1,012.91) 1,408.38 395.47 (405.05) 1.77 0.62 (405.05) 1.77 0.62 -

Particulars

Period Ended 31-Dec-10 172.60 (0.01) 172.59

31-Mar10 2,101.84 (315.38) (1,385.37) 401.09

Profit/(Loss) Before Taxes, as restated Add/(Less): Long Term Capital Loss/(Gain) with STT Add/(Less): Short Term Capital Loss/(Gain) with STT Adjusted/Restated Net Profit/(Loss) Before Tax Applicable Rates of Income Tax Notional Tax Liability (A) Adjustments: a) Permanent Differences IPO Expenses Expenditure towards increase in Authorized Capital Dividend Income Expenses inadmissible under section 14A Others Total Permanent Difference b) Timing Differences Difference between Tax and Book Depreciation Provision for Compensated Absences & Gratuity (Profit)/Loss on Sale of Asset

33.2175% 57.33

33.99% 136.33

33.99% 134.42

30.90% (125.16)

33.66% 0.60

33.66% 0.21

25.00 (33.58) 1.00 29.99 22.41

76.58

148.08 (241.67) 1.00 2.93 (89.66)

763.71

(0.12) (0.12)

(0.03) (0.03)

(46.69) 1.00 34.95 65.84

(271.68) 0.95 (1.29) 491.69

0.85 4.98 1.76

2.56 (8.54) 2.04

(2.01) 9.62 -

(4.96) 2.31 (0.06)

0.02 0.16

0.10 -

Total Timing Differences Total Adjustments Tax expense/Tax savings thereon Total Tax at normal rates

7.59 30.00 9.97 67.30

(3.94) 61.90 21.04 157.37

7.61 (82.05) (27.89) 106.53

(2.71) 488.98 151.09 25.93

0.18 0.06 0.02 0.62

0.10 0.07 0.02 0.23

276

Particulars

Period Ended 31-Dec-10 -

31-Mar10

Tax on Long Term Capital Gains @ 22.66% Tax on Short Term Capital Gains @16.995% Total Taxes Total Taxes as per Statement of Profit and Loss, as Restated Income Tax Deferred Tax Fringe Benefit Tax Total

For the Years Ended 31-Mar31-Mar- 31-Mar09 08 07 -

31-Mar06 -

100.65

67.30

258.02

106.53

25.93

0.62

0.23

67.30 (2.52) 64.78

258.02 1.32 259.34

106.53 (3.46) 3.05 106.12

25.00 0.93 0.50 26.43

0.61 0.61

0.23 0.23

277

Future Ventures India Limited Annexure XXII Statement of Accounting and Other Ratios Particulars Restated Net worth as at the end of the period/ year(Rs in Lakhs) Restated Net Profit/(Loss) after Tax (Rs. In Lakhs) No. of equity shares outstanding as at the end of period/year Weighted average no. of equity shares outstanding during the period/year Basic & Diluted Earnings per Share (Rs.) (As per AS-20- Earnings Per Share ) Return on Net Worth (%) Net Asset Value per Equity Share (Rs.) 31-Dec-10 82,908.25 107.82 826,243,700 31-Mar-10 57,931.11 1,842.50 576,243,700 31-Mar-09 35,348.61 (1,119.03) 368,843,700 31-Mar-08 35,967.64 (431.48) 363,843,700 31-Mar07 44.12 1.16 293,700 31-Mar06 42.97 0.39 293,700

735,880,064

399,436,577

367,295,755

86,427,177

293,700

293,700

0.01

0.46

(0.30)

(0.50)

0.39

0.13

0.13 10.03

3.18 10.05

(3.17) 9.58

(1.20) 9.89

2.63 15.02

0.91 14.63

The ratios have been computed as below:

Basic & Diluted Earnings per Share

Restated Net Profit/(Loss) after Tax Weighted average no. of equity shares outstanding during the period/year

= Return on Net Worth (%)

Restated Net Profit/(Loss) after Tax Restated Net Worth as at the end of period/year

the

X 100

Net Asset Value per Equity Share

Restated Net Worth as at the end of the period/ year No. of equity shares outstanding as at the end of the period/year

Net Worth = Equity Share Capital + Reserves Debit Balance in Profit & Loss Account Miscellaneous Expenditure (to the extent no written off or adjusted) The figures above are based on the restated financial statements of the Company

278

Future Ventures India Limited Annexure XXIII Capitalization Statement Particulars Borrowings Long Term Debt Short Term Debt Total Debt Shareholders Funds Share Capital (include Share Application Money) Reserves Less : Debit Balance in P&L Less: Miscellaneous Expenditure (to the extent no written off or adjusted) Total Shareholders Fund (Net Worth) Long Term Debt/ Equity Share Capital Long Term Debt/ Shareholders funds (Net Worth) 0.00 0.00 0.00 0.00 0.00 0.00 Pre- Issue as at Dec 31, 2010 (INR in Lakhs) Adjusted for Public Issue*

82,624.37 414.56 0.00 130.68

1,57,624.37 414.56 0.00 130.68

82,908.25 0.00 0.00

1,57,908.25 0.00 0.00

Note: The only adjustment is with respect to the equity share capital after considering the fresh public issue of 7,500 lakhs equity shares of Rs. 10 each at par value of Rs. 10 per equity share as fixed by IPO Committee in its meeting held on April 29, 2011. These shares are yet to be allotted.

279

CONSOLIDATED FINANCIAL INFORMATION OF FUTURE VENTURES INDIA LIMITED

The Board of Directors FUTURE VENTURES INDIA LIMITED Mumbai Dear Sirs Re: Public issue of Equity Shares of FUTURE VENTURES INDIA LIMITED 1. We have examined the consolidated financial information of FUTURE VENTURES INDIA LIMITED (the Company or the Issuer) and its subsidiaries, joint ventures and associates (the Company and its subsidiaries, joint ventures and associates constitute the Group) annexed to this report for the purpose of inclusion in the Offer Document being issued by the Company in connection with the initial public offering of Equity Shares of the Company and initialed by us for identification. The consolidated financial information has been prepared in accordance with the requirements of paragraph B of Part II of Schedule II to the Companies Act, 1956 (the Act), the Securities and Exchange Board of India (SEBI) Issue of Capital and Disclosure Requirements) Regulation, 2009 (the ICDR Regulations) notified on August 26, 2009, as amended from time to time, the Guidance Note on Reports in Company Prospectuses (Revised) issued by the Institute of Chartered Accountants of India (ICAI) and terms of engagement agreed upon by us with the Company. The consolidated financial information has been prepared by the Company and approved by its Board of Directors. For the purposes of consolidated financial information of the Company and its subsidiaries, joint ventures and associates, the consolidation has been drawn up from the date they became the subsidiaries, joint ventures or associates of the Company. This financial information have been prepared by the Management from the audited financial statements for the years ended March 31, 2008, March 31, 2009, March 31, 2010 and period ended December 31, 2010. We did not audit the financial statements of the subsidiaries and joint ventures for the financial years ended March 31 2008, March 31, 2009, March 31, 2010 and period ended December 31, 2010, whose Financial Statements reflect total assets of Rs. 11,285.18 Lakhs, Rs. 13,248.28 Lakhs, Rs. 48,322.75 Lakhs and Rs. 68,454.72 Lakhs and total revenues of Rs. 1,374.04 Lakhs, Rs. 13,356.58 Lakhs, Rs. 15,203.15 Lakhs and Rs. 39,074.47 Lakhs, respectively and of the associates which reflects the groups share of loss of Rs. 415.46 Lakhs, Rs. 947.37 Lakhs and groups share of profit of Rs. 36.87 Lakhs and Rs. 259.22 Lakhs respectively. These financial statements have been audited by other firms of Chartered Accountants, details of which are given in Annexure A whose reports have been furnished to us and our opinion is so far as it relates to the amounts included in these Consolidated Statement of Asset and Liabilities as restated and Consolidated Statement of Profit and Loss as restated are based solely on the report of other auditors. There are no extraordinary items that need to be disclosed separately in the accounts and qualification requiring adjustments. In accordance with the requirements of paragraph B of Part II of Schedule II of the Act, the SEBI Guidelines and terms of our engagement agreed with you, we further report that: (a) The Consolidated Statement of Profit and Losses, As Restated, for the years ended March 31, 2008, March 31, 2009, March 31, 2010 and period ended December 31, 2010, Consolidated Statement of Assets and Liabilities, As Restated as at March 31, 2008, March 31, 2009, March 31, 2010 and December 31, 2010 and the Consolidated Statement of Cash Flow, As Restated for the years ended March 31, 2008, March 31, 2009, March 31, 2010 and period ended December 31, 2010 of the Company and its subsidiaries, joint ventures and associates examined by us, as set out in Annexure I to III to this report are after making adjustments and regroupings as, in our opinion, were appropriate and more fully described in Annexure IV to XXIX.

2.

3.

4.

5.

280

(b)

Based on above and also as per the reliance placed on the reports submitted by the other auditors for subsidiaries, joint ventures and associates of the Company for the respective years, we confirm that the restated financial information has been made after incorporating: i. Adjustments for the material amounts relating to prior years in the respective financial years to which they relate; There are no extraordinary items, which need to be disclosed separately in the restated financial information in the respective financial years and no qualification requiring adjustments; and We have also examined the following other consolidated financial information set out in Annexures prepared by the management and approved by the Board of Directors relating to the Company and its subsidiaries, joint ventures and associates for the years ended March 31, 2008, March 31, 2009, March 31, 2010 and period ended December 31, 2010. Annexure Reference V V VI VII VIII IX X XI XII XIII A XIII B XIV XV XVI XVII XVIII XIX XX XXI XXII XXIII XXIV XXV XXVI XXVI XXVII XXVIII XXIX

ii.

iii.

Details of other consolidated financial information Share Capital Reserves and Surplus Fixed Assets Goodwill on Consolidation Investments Statement of Receivables Statement of Inventories Cash and Bank Balances Statement of Other Current Assets Statement of Secured and Unsecured Loans Brief Terms and Conditions of Secured and Unsecured Loans Statement of Current Liabilities and Provisions Statement of Deferred Tax Income from Investing Activity Statement of Other Income Cost of Goods Sold Employee Costs Administrative and Other Expenses Interest & Financing Charges Disclosure relating to Employee Benefits Segment Reporting Disclosure relating to Leases Related Party Transactions Provisions, Contingent Liabilities and Contingent Assets Capital Commitments Share Purchase Obligation Statement of Accounting and Other Ratios Capitalization Statement

Further, in respect of Brief terms and conditions of secured and unsecured loans including repayment schedule included in Annexure XIII B above, the details relating to loans taken by subsidiaries and joint ventures which were not audited by us, have been compiled based on the report issued by other auditors and in respect of Group Companies as defined in the ICDR Regulations and disclosed in Annexure IX, Annexure XII, Annexure XIII A and XIII B above are based on list of group companies identified by the Company and also as reported by other auditors, as applicable and we have relied on the same.

281

Based on our examination of the Restated Consolidated Financial Information of the Group attached to this report, we state that, in our opinion, the financial information contained in Annexure I to III of this report read along with the Significant Accounting Policies, Notes and Changes in Significant Accounting Policies (Refer Annexure IV to XXIX) prepared af ter making adjustments and regrouping as considered appropriate have been prepared in accordance with Paragraph B of Part II of Schedule II of the Act and the SEBI Guidelines. 6. This report should not in any way be construed as a reissuance of any of our pr evious audit reports nor should this be construed as a new opinion on any of the financial statements referred to herein. Our report is intended solely for use of the management and for inclusion in the offer document in connection the proposed issue of equity shares of the Company and is not be used, referred to or distributed for any other purpose except with our prior written consent. For Deloitte Haskins & Sells Chartered Accountants (Firm Registration No. 008072S)

7.

M.K. Ananthanaryanan Partner Membership No. 19521 Place: Chennai Date: 26th March 2011

282

Annexure A Year wise details of the entities which have been by other auditors (as referred to paragraph 4 of the report): Period ended December 31, 2010
Name of entity Relationship of the entity with the issuer company at period end Subsidiary Name of Auditor firm Whether Partnership firm / Proprietorship Partnership Firm Registration Number Name of Partner / Proprietor Partner / Proprietor membership number 35646

Aadhaar Retailing Limited Indus Tree Crafts Pvt. Limited Indus League Clothing Limited Star Shopping Centres Pvt Ltd Future Consumer Enterprises Ltd. Future Consumer Product Ltd. Holii Accessories Pvt Ltd And Designs India Limited Capital Food Exportts Pvt Ltd Lee Cooper (India) Limited Celio Future Fashion Limited Turtle Limited

Kalyaniwalla & Mistry K G Acharya & Co Singhvi, Dev & Unni

104607W

Ermin.K.Irani

Subsidiary

Partnership

8019S

H. Vinay Kumar

212816

Subsidiary

Partnership

003867S

Parthasarathy Sudarsanam

205179

Subsidiary

Yogi Associates

Propreitorship

002590N

Yograj Arora

81481

Subsidiary

NGS & Co

Partnership

119850W

Ganesh Toshniwal

46669

Subsidiary

NGS & Co

Partnership

119850W

Ganesh Toshniwal

46669

Joint Venture

Shambhu, Gupta & Co Rohira Mehta & Associates

Partnership

007234C

Sunil Kumar Soni

116375

Associate

Partnership

118777W

Nilesh Chheda

124810

Associate

V.R.Momaya & Associates

Partnership

106555W

Kishore.M.Rajeshirke

46182

Subsidiary of Indus League Joint Venture of Indus League Associate of Indus League

NGS & Co

Partnership

119850W

Navin.T.Gupta

40334

Deloitte, Haskins and Sells, Mumbai S K Singhania & Co

Partnership

117365W

Z. F Billimoria

42791

Partnership

302206E

Rajesh Singhania

52722

Year ended March 31, 2010

Name of entity Relationship of the entity with the issuer company at year end Subsidiary Name of Auditor firm Whether Partnership firm / Proprietorship Partnership Firm Registration Number Name of Partner / Proprietor Partner / Proprietor membership number 35646

Aadhaar

Kalyaniwalla

104607W

Ermin.K.Irani

283

Name of entity

Relationship of the entity with the issuer company at year end

Name of Auditor firm

Whether Partnership firm / Proprietorship

Firm Registration Number

Name of Partner / Proprietor

Partner / Proprietor membership number

Retailing Limited Indus Tree Crafts Pvt. Limited Indus League Clothing Limited Star Shopping Centres Pvt Ltd Holii Accessories Pvt Ltd And Designs India Limited Capital Food Exports Pvt Ltd Lee Cooper (India) Limited Celio Future Fashion Limited Turtle Limited

& Mistry Subsidiary K G Acharya & Co Singhvi, Dev & Unni Partnership 8019S H. Vinay Kumar 212816

Subsidiary

Partnership

003867S

Parthasarathy Sudarsanam

205179

Subsidiary

Yogi Associates

Propreitorship

002590N

Yograj Arora

81481

Joint Venture

Shambhu, Gupta & Co Rohira Mehta & Associates

Partnership

007234C

Sunil Kumar Soni

116375

Associate

Partnership

118777W

Nilesh Chheda

124810

Associate

V.R.Momaya & Associates

Partnership

106555W

Kishore.M.Rajeshirke

46182

Subsidiary of Indus League Joint Venture of Indus League Associate of Indus League

NGS & Co

Partnership

119850W

Navin.T.Gupta

40334

Deloitte, Haskins and Sells, Mumbai S K Singhania & Co

Partnership

117365W

Z. F Billimoria

42791

Partnership

302206E

Pawan Singhania

10639

Year ended March 31, 2009 Name of entity Relationship of the entity with the issuer company at year end Subsidiary Name of Auditor firm Whether Partnership firm / Proprietorship Firm Registration Number Name of Partner / Proprietor Partner / Proprietor membership number

Aadhaar Retailing Limited Footmart Retail India Limited Lee Cooper (India) Limited Turtle Limited

Kalyaniwalla & Mistry Lunawat Co. &

Partnership

104607W

Ermin.K.Irani

35646

Joint Venture

Partnership

000629N

Pramod Jain

90358

Associate

NGS & Co

Partnership

119850W

Navin.T.Gupta

40334

Associate

S K Singhania &

Partnership

302206E

Pawan Singhania

10639

284

Name of entity

Relationship of the entity with the issuer company at year end Associate

Name of Auditor firm

Whether Partnership firm / Proprietorship

Firm Registration Number

Name of Partner / Proprietor

Partner / Proprietor membership number

Sankalp Retail Value Store Private Limited Celio Future Fashion Limited Indus Tree Crafts Pvt. Limited

Co S.K.Kamdar & Co.

Partnership

104674W

S.K.Kamdar

032878

Joint Venture

NGS & Co

Partnership

119850W

Ganesh Toshniwal

46669

Associate

K G Acharya & Co

Partnership

8019S

H. Kumar

Vinay

212816

Year ended March 31, 2008 Name of entity Relationship of the entity with the issuer company Subsidiary Name of Auditor firm Whether Partnership firm / Proprietorship Partnership Firm Registration Number Name of Partner / Proprietor Partner / Proprietor membership number 35646

Aadhaar Retailing Limited Footmart Retail India Limited Lee Cooper (India) Limited Sankalp Retail Value Store Private Limited

Kalyaniwalla & Mistry S.R. Batliboi & Co. S.R. Batliboi & Co. BSR & Company

104607W

Ermin.K.Irani

Joint Venture Associate

Partnership

301003E

Raju Goyal

94549

Partnership

301003E

Hemal Shah

42650

Associate

Partnership

128032W

Bhavesh Dhupelia

042070

285

Future Ventures India Limited Consolidated Statement of Assets and Liabilities, as Restated Annexure I (INR in Lakhs) Particulars Annexure A. Fixed Assets Gross Block Less: Depreciation Net Block Capital Work in progress Total Fixed Assets (A) B. Deferred Tax Asset (Net) (B) C. Goodwill on consolidation (C) D. Investments (D) E. Current Assets, Loans & Advances Receivables Inventories Cash and Bank Balances Other Current Assets Total Current Advances (E) Assets, Loans and IX X XI XII 19,207.01 11,099.76 758.67 10,517.43 41,582.87 14,498.68 10,122.69 1,852.04 12,833.60 39,307.01 538.22 3,868.28 1,287.53 5,035.57 10,729.60 22.22 2,510.17 400.11 13,524.21 16,456.71 Dec 31, 2010 30,347.64 (5,209.03) 25,138.61 336.48 25,475.09 86.33 31,598.60 11,213.41 As at March 31, 2010 14,048.30 (3,421.57) 10,626.73 161.84 10,788.57 37.57 22,877.74 10,092.89 March 31, 2009 8,295.54 (833.98) 7,461.56 129.90 7,591.46 2.53 1,372.01 22,197.87 March 31, 2008 7,485.81 (154.26) 7,331.55 69.01 7,400.56 0.00 1,282.87 26,866.51

VI

XV VII VIII

F. Minority interest (F) G. Liabilities and Provisions Secured Loans Unsecured Loans Current Liabilities Provisions Deferred Tax Liability (net) Total Liabilities and Provisions (G ) H.Net Worth (A)+(B)+(C)+(D)+(E)-(F)(G) I. Represented By: Share Capital Reserves and Surplus Revaluation Reserve Statutory Reserve Fund V V V V XIII XIII XIV XIV XV

3,709.22

7,414.96

878.40

1,179.37

14,416.67 3,359.82 13,660.46 957.33 0.00 32,394.28 73,852.80

11,351.52 5,526.65 7,591.93 672.73 32.06 25,174.89 50,513.93

810.91 4,764.77 4,270.35 172.77 404.78 10,423.58 30,591.49

860.18 4,849.25 9,426.29 118.80 24.10 15,278.62 35,548.66

82,624.37 5.79 25.12 372.23

57,624.37 5.79 25.71 338.58

36,884.37 5.79 0.00 3.48

36,384.37 5.79 0.00 3.48

286

Particulars Annexure Debit Balance in Profit & Loss Account Less: Miscellaneous Expenditure (to the extent not written off or adjusted) Net Worth II Dec 31, 2010 (9,044.03) (130.68) 73,852.80

As at March 31, 2010 (7,480.52) 0.00 50,513.93

March 31, 2009 (6,302.15) 0.00 30,591.49

March 31, 2008 (844.98) 0.00 35,548.66

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

287

Future Ventures India Limited Consolidated Statement of Profit and Loss, as Restated Annexure II (INR in Lakhs) For the Years Ended March 31, 2010 12,389.36 733.36 (318.49) 0.00 256.81 8.69 2,297.73 0.00 2,423.82 17,791.28 12,417.64 2,408.57 3,028.14 1,042.29 862.33 (0.13) 19,758.84 (1,967.56) 0.00 March 31, 2009 12,017.91 1,004.72 (1,408.38) 0.00 263.59 92.43 4.39 0.63 1,089.18 13,064.47 12,523.05 2,037.88 2,698.85 220.06 700.35 0.00 18,180.19 (5,115.72) (31.55) March 31, 2008 5.50 507.54 0.00 0.00 0.00 0.64 1.73 0.06 0.00 515.47 6.41 81.85 820.79 12.84 3.27 0.00 925.16 (409.69) 0.00

Particulars

Annexure

Sale of Retail Merchandise Income from Investing Activity Profit/(Loss) on trading securities Royalty Other Operating Income Interest on Deposits Other Income Profit on Sale of Assets Proportionate Share in Joint Ventures Total Income Cost of Goods Sold (including Accretion/ Decretion to Inventory) Employee Costs Administrative and Other Expenses Interest & Financing Charges Depreciation Less : Transfer from Revaluation Reserve Total Expenditure Profit/ (Loss) before Prior Period items Add/(Less):Proportionate share of prior period items in a Joint Venture Expenses relating to earlier years Net Profit / (Loss) Before Taxation Less :Provision for Taxation - Income Tax - Excess provision relating to earlier years no longer required written back - Deferred Tax - Fringe Benefit Tax -Proportionate share in a Joint venture -Provision for income tax relating to earlier years Net Profit/ (Loss) before Adjustments [Add/(Less)] Adjustments: (Refer Note A (1) in Annexure IV) Expenses relating to earlier years Provision for Income Tax relating to earlier years Net Adjustments Restated Net Profit/ ( Loss) after Taxation -Add/(Less): Share in Associates

XVI XVI

XVII

XVIII XIX XX XXI VI

Period Ended Dec 31, 2010 37,134.86 716.51 0.01 87.50 101.45 10.21 246.55 0.00 1,673.15 39,970.24 28,301.45 3,535.41 6,753.97 1,747.09 1,808.52 (1.13) 42,145.31 (2,175.07) 0.00

(2,175.07) 248.30 (60.45) (74.05) 0.00 0.00 0.00 (2,288.87)

(1,967.56) 425.13

(5,147.27) 0.00

(409.69) 25.03

(265.79) 0.00 0.15 7.07 (2,134.12)

378.15 33.89 1.48 0.00 (5,560.79)

1.24 0.54 0.00 0.00 (436.50)

0.00 (60.45) (60.45) (2,349.32) 259.22

0.00 174.05 174.05 (1,960.07) 36.87

31.55 (106.53) (74.98) (5,635.77) (947.37)

0.00 0.00 0.00 (436.50) (415.46)

288

Particulars

Annexure

Add/(Less): Minority Interest Net Profit/ (Loss) after share of Associates & Minority interest -Surplus/(Deficit) brought forward from previous year Add: Adjustment on Acquisition of subsidiaries Add: Transfer to Reserve Fund (As per 45IC of RBI Act) Balance transferred to Balance Sheet

Period Ended Dec 31, 2010 622.43 (1,467.67) (7,480.52) (62.19) 33.65 (9,044.03)

For the Years Ended March 31, 2010 1022.17 (901.03) (6,302.14) 57.75 335.10 (7,480.52) March 31, 2009 1,125.97 (5,457.17) (844.98) 0.00 0.00 (6,302.15) March 31, 2008 1.50 (850.46) 5.48 0.00 0.00 (844.98)

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

289

Future Ventures India Limited Consolidated Statement of Cash flows as Restated Annexure III (INR in Lakhs) For the Years Ended March 31, 2010 (1,967.56) March 31, 2009 (5,115.72) March 31, 2008 (409.69)

Particulars

Restated Loss before Tax & before Prior period items Restatement Adjustments affecting Flow: Add/(Less): Expenses of earlier years written off Restated Loss before Tax Restatement Adjustments Adjustments for: Depreciation Interest & Financial Charges Provision for Non-Performing Assets (Net of write back) (Profit)/Loss on Sale of Assets (Net) Interest Income Proportionate Share in Interest Income of Joint Venture Dividend Income Gain on Disposal of Subsidiary Gain on Disposal of Associates Gain on Disposal of Joint Ventures Loss/(Profit) on sale of Investments Preliminary expenses written off Sundry Balances written off Provision for Doubtful Loans & Advances Bad Debts Written Off Provision for sales returns & discounts Provision for Standard Assets Provision No Longer Required Written Back Unrealised foreign exchange loss / (gain) Bad Debts Written Off Out of Provision Operating Profit Before Working Capital Changes Adjustment for: (Increase)/Decrease in Inventory (Increase)/Decrease in Trade Receivables and Cash

Period Ended Dec 31, 2010 (2,175.07)

0.00 After (2,175.07)

0.00 (1,967.56)

(31.55) (5,147.27)

0.00 (409.69)

1,808.52 1,598.12 0.00 63.56 (693.14) (0.69) (33.58) (51.75) 0.00 0.00 (0.01) 0.03 0.01 50.00 86.21 97.86 18.43 (13.43) 4.72 0.00 759.79

862.20 865.73 0.00 49.44 (692.14) 0.00 (46.69) 0.00 (1,321.18) (852.19) 318.49 0.00 0.00 53.45 0.00 0.00 0.00 0.00 0.00 7.00 (2,723.45)

700.35 220.06 (4.39) (0.63) (855.48) 0.00 (241.67) 0.00 0.00 0.00 1,408.38 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (3,920.65)

3.27 12.85 (0.27) (0.06) (216.62) 0.00 (271.68) 0.00 0.00 0.00 (19.88) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (902.08)

&

other

(158.30) 4,802.21

1,663.21 (4,742.06)

(1,358.11) 8,196.00

(2,510.17) (13,383.58)

290

Particulars

Increase/(Decrease )in Current Liabilities and Provisions Cash Generated from/(used in) Operations Direct Taxes Paid/Refund received Dividend Income Direct Tax Paid Interest Received Net Cash from/ (used in) Operating Activities (A) Cash Flow from Investing Activities Purchase/Acquisition of Fixed Assets Sale of Fixed Assets Purchase of Investment Investment in / (Refund of) Deposits Sale of Investments Interest Income Dividend received by a subsidiary from its associates Net Cash (used in)/ from Investing Activities (B) Cash Flow from Financing Activities Interest Paid Proceeds from Borrowings Proceeds from Share Application Money Proceeds from Issue of Equity Shares Repayment of Borrowings Financial Charges Net Cash from Financing Activities (C ) Net (Decrease)/Increase in Cash & Cash Equivalents (A+B+C) Cash and Cash Equivalents At the Beginning of the Year Add : Adjustment on acquisition and Disposal of Subsidiaries and Joint Ventures during the year (Net) Cash and Cash Equivalents At the End of the Year Net (Decrease)/ Increase in Cash & Cash Equivalents

Period Ended Dec 31, 2010 4,561.55

For the Years Ended March 31, 2010 (1,817.84) March 31, 2009 (5,174.58) March 31, 2008 9, 480.48

9,965.25 (264.67) 33.58 (5.19) 651.63 10,380.60

(7,620.14) (449.40) 46.69 0.00 597.49 (7,425.36)

(2,257.34) (23.49) 241.67 0.00 655.61 (1,383.55)

(7,315.35) (65.83) 271.68 0.00 88.59 (7,020.91)

(16,393.97) 12.90 (20,755.86) 12.01 2,888.40 15.09 15.60 (34,205.83)

(3,066.44) 1661.05 (23,172.81) (19.14) 15,568.88 0.00 0.00 (9,028.46)

(1,040.80) 2.00 (27,694.15) 0.00 30,032.72 0.00 0.00 1,299.77

(7,403.76) 0.36 (71,270.43) 0.00 44,008.32 0.00 0.00 (34,665.51)

(1,535.82) 5,927.12 0.00 25,000.00 (6,704.14) 0.00 22,687.16 (1,138.07)

0.00 0.00 0.00 20,740.00 (3,335.28) (865.73) 16,538.99 85.17

(220.06) 0.00 825.00 500.00 (133.74) 0.00 971.20 887.42

(12.85) 5709.43 0.00 36355.00 0.00 0.00 42051.58 365.16

1,832.90 56.72

1,287.53 460.20

400.11 0.00

34.95 0.00

751.55

1,832.90

1,287.53

400.11

(1,138.07)

85.17

887.42

365.16

291

Reconciliation of cash and cash Equivalents with amounts reflected in Balance Sheet: Particulars Period Ended Dec 31, 2010 751.55 7.12 758.67 For the Years Ended March 31, 2010 1,832.90 19.14 1,852.04 March 31, 2009 1,287.53 0.00 1,287.53 March 31, 2008 400.11 0.00 400.11

Cash and Cash Equivalents as above Add: Bank deposits not considered as Cash Equivalent Cash and Cash Equivalents as per Balance Sheet

The accompanying significant accounting policies as adopted by the company and notes, as restated (Annexure IV) and the statement of cash flows, as restated form an integral part of this statement.

292

Future Ventures India Limited Annexure IV A. 1. Note on Adjustments to the Restated Summary Statements Adjustments relating to prior years a. In the financial statements of certain subsidiaries and joint ventures for the years ended March 31, 2008 and 2009, expenses amounting to Rs. 31.55 lakhs and provision for taxation amounting to Rs. 7.07 lakhs have been identified as prior period items. For the purposes of this statement, such prior period items have been appropriately adjusted in the respective years. Where the entity was not a subsidiary or joint venture of Future Ventures India Limited in the respective previous years, the adjustment has been appropriately considered in the goodwill and minority interest relating to those subsidiaries and the goodwill relating to joint venture respectively. Based on the revised/original return of income filed by the Company for the financial years March 31, 2009 and March 31, 2010 respectively in October 2010, the net excess provision of Rs. 60.45 Lakhs has been written back in the financial statements for the period ended December 31, 2010. Such adjustment to provision for tax has been duly adjusted in the respective years to which they relate.

b.

B.

Basis of Consolidation: The consolidated financial statements relate to Future Ventures India Limited (the Company), its subsidiaries, joint ventures and associates. The Company, its subsidiaries, joint Ventures and associates constitute the Group. a) Basis of Accounting: I. The financial statements of the subsidiaries, joint ventures and associates used in the consolidation are drawn up to the same reporting date as of the Company i.e. period ended December 31, 2010. However, in respect of a Joint venture of a subsidiary, Celio Future Fashion Limited (Celio), whose financial year is from February 1st to January 31st every year, the Profit and Loss account has been drawn up for the period February 1, 2010 to December 31, 2010. The financial statements of the Group have been prepared under the historical cost convention on accrual basis and in accordance with Generally Accepted Accounting Principles in India (Indian GAAP). The said Financial Statements comply with the relevant provisions of the Companies Act, 1956 (the Act), the mandatory Accounting Standards notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006 as amended , and guidelines issued by Reserve Bank of India for Non Banking Financial (Non Deposit Accepting or Holding) Companies from time to time.

II.

b)

Principles of consolidation: The consolidated financial statements have been prepared on the following basis: I. The financial statements of the Company and its subsidiaries have been combined on a line-by-line basis by adding together like items of assets, liabilities, income and expenses. The intra-group balances and intra-group transactions and unrealised profits or losses have been fully eliminated.

293

II.

Interests in Joint Ventures have been accounted by using the proportionate consolidation method as per Accounting Standard 27 - Financial Reporting of Interests in Joint Ventures. Investments in associate companies has been accounted as per the Equity method, as laid down in Accounting Standard 23 Accounting for Investment in Associates in Consolidated Financial Statements and accordingly, the share of profit / loss of each of the associate companies has been added to / deducted from the cost of investments. The excess of cost to the Company, of its investment in the subsidiaries and joint ventures over the Companys portion of equity is recognised in the financial statement as Goodwill. The excess of the Companys portion of equity of the subsidiary and joint venture on the acquisition date over its cost of investment is treated as Capital Reserve. Minority interest in the net assets of consolidated subsidiaries consists of the amount of equity attributable to the minority shareholders at the dates on which investments are made by the Company in the subsidiaries and further movements in their share in the equity, subsequent to the dates of investments as stated above. Minority interests share of net profit for the year of consolidated subsidiaries are identified and adjusted against the profit after tax of the group.

III.

IV.

V.

VI.

294

VII.

The consolidated financial statements comprise the financial statements of Future Ventures India Limited and the following companies:Relationship Percentage held 31st December 2010 70% 52.53% 85.70% Percentage held 31st March 2010 70% 52.53% 66.20% 14.28% Subsidiary Subsidiary Subsidiary Joint Venture Joint Venture Joint Venture Associate Associate Associate Associate Associate Subsidiary of Indus League Joint Venture of 100% 90% 50.00 % 22.86% 40.81 % 100% 49.99% 60% 50.00 % 22.86% 40.81 % 100% 49.99% 49.99 % 50.00 % 50.00% 15.15% 21.67 % 26.00 % 29.40 % 21.67% 21.10.2009 15.02.2010 31.03.2008 01.12.2008 26.10.2007 30.01.2010 30.01.2010 NA NA 30.01.2010 30.01.2010 28.01.2010 NA NA 17.04.2009 02.08.2010 29.06.2010 02.11.2009 16.12.2008 31.03.2008 26.07.2010 NA NA NA 30.01.2010 21.01.2010 Percentage held 31st March 2009 70% 43.18% Percentage held 31st March 2008 70% Date on which relationship came into Existence Date on which relationship ceased

Name of the Company

Aadhaar Retailing Limited Indus Tree Crafts Pvt. Limited Indus League Clothing Limited Star Shopping Centres Pvt Ltd Future Consumer Enterprises Ltd. Future Consumer Product Ltd. Holii Accessories Pvt Ltd Celio Future Fashion Limited Footmart Retail India Limited And Designs India Limited Capital Food Exports Pvt Ltd Lee Cooper (India) Limited Turtle Limited Sankalp Retail Value Store Private Limited Lee Cooper (India) Limited Celio Future Fashion

Subsidiary Subsidiary Subsidiary

27.03.2008 01.03.2010 30.01.2010

NA NA NA

29.40%

295

Name of the Company

Relationship

Percentage held 31st December 2010 26.00%

Percentage held 31st March 2010

Percentage held 31st March 2009

Percentage held 31st March 2008

Date on which relationship came into Existence

Date on which relationship ceased

Limited Turtle Limited

Indus League Associate of Indus League

26.00%

30.01.2010

NA

296

C.

Significant Accounting Policies 1. Use of Estimates The preparation of financial statements in conformity with the generally accepted accounting principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenue and expenses and disclosure of contingent liabilities as of the date of the financial statements. The estimates and assumptions used in the accompanying financial statements are based upon the management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from estimates and assumptions used in preparing these financial statements 2. Fixed Assets Fixed Assets are stated at cost less depreciation. Cost includes all direct expenses relating to the acquisition and installation of fixed assets. Borrowing costs relating to acquisition of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready to be put to use. Intangible assets are stated at cost less accumulated amortization. Cost comprises of Purchase Price and all direct expenses incurred in connection therewith. Capital Work in Progress comprises of the cost of fixed assets that are not yet ready for their intended use at the reporting date. 3. Depreciation Depreciation is provided on Straight Line Method (SLM) at the rates and in the manner prescribed under Schedule XIV to the Companies Act, 1956 except the following: (i) In the case of the Parent Company, its subsidiary, Industree Craft Pvt Ltd and an Associate, And Design India Limited, fixed assets are depreciated on Written Down Value Method (WDV). However, the proportion of such assets which are depreciated on WDV method is insignificant. Computer software is depreciated over an estimated useful life of three to six years and Signage is depreciated over a useful period of three years. Leasehold improvements are amortized over the estimated useful life or the period of lease whichever is less. Intangibles in the nature of Goodwill, Trade Mark, and Other Intangibles are amortized over the estimated useful life of 9 years to 10 years. Trade Mark in the case of one of the subsidiaries is amortized over a period of fifteen years being period for which it has the right of use as per the relevant agreement. Hard Furnishing assets which include computers, office equipments, air-conditioners etc are depreciated over the estimated useful life of the assets which ranges between 3 to 10 years depending on the nature of the assets and its usage.

(ii)

(iii)

(iv)

(v)

Assets individually costing less than Rs.5000 are fully depreciated in the year of purchase.

297

4.

Investments Investments maturing within twelve months from the date of investment and investments made with the specific intention to dispose of within twelve months from the date of investment are classified as trading investments. Other investments are classified as long-term investments. Investments which are long term in nature are stated at cost and provision for diminution is made if the decline in value is other than temporary in nature. If the balance sheet of the unlisted investee company is not available for two years, shares in such companies are valued at one Rupee only which is in accordance with the prudential norms prescribed by the Reserve Bank of India for Non- Banking Financial (Non Deposit Accepting) Companies. Trading investments are stated at lower of cost and fair value determined on the basis of each category of investments. For this purpose, the investments shall be categorized as equity, preference, debentures etc and considered scrip-wise and the cost and market value aggregated for all investments in each category. In the case of the Company, which is governed by guidelines issued by Reserve Bank of India for Non Banking Financial (Non Deposit Accepting or Holding) Companies, the unquoted investments in the units of mutual funds in the nature of trading investments shall be valued at the net asset value declared by the mutual fund in respect of each particular scheme as at the Balance Sheet date. The reclassification of investments from long term to trading investments would be effected with the approval of the Board of Directors.

5.

Revenue Recognition Transactions for purchase or sale of investments shall be recognized as of the trade date and not as of the settlement date, so that the effect of all investments traded during the financial year are recorded and reflected in the financial statements, for the year. Where investment transactions take place outside the stock market, for example, acquisitions through private placement or purchases or sales through private treaty, the transaction would be recorded, in the event of a purchase, as of the date on which the Company obtains an enforceable obligation to pay the price or, in the event of sale, when the Company obtains an enforceable right to collect the proceeds of sale or an enforceable obligation to deliver the instruments sold. The cost of investments acquired or purchased would include brokerage, stamp charges and any duties directly related to the acquisition of investment. Interest/Dividend income on investments is recognized on accrual basis. Dividend Income is recognized when the right to receive the same is established. Profit / Loss on sale of investments - Realized gain or loss on investments which is the difference between the sale consideration and the carrying cost is recognized in the profit and loss account on the date of sale. In determining the realized gain or loss on sale of a security, the cost of such security is arrived on First in First out basis. Interest income from financing activities is recognized at the rates implicit in the contract. Unrealized Interest income relating to Non-performing assets is derecognized. Royalty is recognized on accrual basis in accordance with the terms of the relevant agreement. Fee for services rendered is recognized at the specific rates as per the terms of contract.

298

Advisory fee payable for advisory services is recognized at the specific rates and as per terms agreed. Sale of Goods Revenue is recognized when the significant risks and rewards of ownership of the goods have been passed to the buyer which normally coincides with delivery. Sales are net of returns, sales tax, rebates, discounts etc. Revenue by way of sale of shops-in-shop arrangements with other retailers is recognized on delivery of goods to such retailers which coincides with the transfer of significant risks and rewards of ownership in the goods as per the terms of the relevant contracts. Sales returns and provision for goods that are expected to be returned are made based on management estimation taking into account the past experience. 6. Inventories Inventories are valued at lower of cost and net realizable value. Cost includes all direct costs in the case of finished goods and work in progress, incurred in bringing such inventories to their present location and condition. Cost also includes all taxes and duties, but excludes duties and taxes that are subsequently recoverable from taxing authorities. Net realizable value is the estimated selling price in ordinary course of business, less estimated costs necessary to make the sales. Raw Materials are valued on First in First out basis. Cost of Trading stocks is determined on actual purchase price/ weighted average basis. 7. Foreign Currency Transactions Foreign currency transactions are recorded at the rate of exchange prevailing on the date of transaction. At the year-end, all monetary assets and liabilities denominated in foreign currency are restated at the year-end exchange rates. Exchange differences arising on actual payment / realization and year end re-instatement referred to above are recognized in the Profit & Loss Account. 8. Leases Operating leases payments are recognized as an expense in the Profit and Loss account on straight line bases over the lease term. Finance lease is capitalized at fair value of the asset or the present value of minimum lease payment at the inception of the lease, whichever is lower. 9. Retirement Benefits Defined Benefit Plan Gratuity determined on actuarial valuation performed in accordance with the projected unit credit method, as at the balance sheet date is provided for. Actuarial gains and losses arising from the effects of changes in actuarial assumptions are immediately recognized in the profit & loss account.

299

Defined Contribution Plan Fixed contributions to Provident Fund and Employees State Insurance are recognized in the accounts on actual cost to the Company. Compensated Absences Liability for short term compensated absences is recognized as expense based on the estimated cost of eligible leave to the credit of the employees as at the balance sheet date on undiscounted basis. Liability for long term compensated absences determined on the basis of actuarial valuation as on the balance sheet date. 10. Taxation Current Tax is determined based on the liability computed in accordance with the relevant tax rates and tax laws. Deferred tax is recognised for timing differences arising between the taxable income and accounting income computed using the tax rates and the laws that have been enacted or substantively enacted as of the balance sheet date. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses under tax laws, are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such Deferred tax assets. Other Deferred tax assets are recognized if there is a reasonable certainty that there will be sufficient future taxable income available to realise such Deferred tax assets. 11. Segment reporting The Accounting policies adopted for segment reporting are in line with the Accounting policies of the Company. a. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment. Revenue and expenses which relate to the enterprise as a whole and are not allocable to segments on a reasonable basis have been included under unallocated corporate expenses. Inter segment prices are normally negotiated amongst the segments with reference to cost, market prices and business risks, within an overall optimization objective for the enterprise.

b.

12.

Provisions A provision is recognized when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.

13.

Impairment of assets (i) The carrying amounts of assets are reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

300

(ii)

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

Notes pertaining to 2007-08 1. The name of the Company was changed from Subhikshith Finance and Investments Private Limited to Future Ventures India Private Limited effective from August 9, 2007. Subsequently, this name was changed to Future Ventures India Limited effective from September 7, 2007, after obtaining necessary regulatory approvals. The Company has acquired investments in Sankalp Retail Value Store Private Limited, an associate on 26 th October 2007. The goodwill arising on the date of investment aggregating to Rs. 2666.06 lakhs has been computed based on the unaudited financial statements of the associate as on the date of investment provided by the management for the purposes of our examination of Consolidated Financial Statement. Further, the share of loss in the above associate from the date of acquisition till 31 st March 2008 aggregating to Rs. 415.46 lakhs has been considered based on the unaudited financial statements for the period 27th October 2007 to 31st March 2008 provided by the management. Share Capital During the year, the Company had issued 363,550,000 Equity shares at par value of Rs.10/- each on a private placement basis. 4. Investments In the opinion of the management, no provision is considered necessary for diminution in the value of Quoted Long Term Investments, as the diminution is not considered other than temporary in nature. Notes pertaining to 2008-091. The Company has acquired investments in Celio Future Fashion Limited, a Joint Venture on 16th December 2008 and in Turtle Limited, an associate on 1st December 2008. The goodwill arising on the date of investment aggregating to Rs. 89.14 lakhs and Rs. 834.62 lakhs respectively has been computed based on the unaudited financial statements of the investee Companies as on the date of investment provided by the management for the purpose of our examination of consolidated financial statement. Share Capital During the year, the Company had issued 5,000,000 Equity shares at par value of Rs.10/- each on a private placement basis. 3. Investments The Company has invested an aggregate amount of Rs. 6,010.01 lakhs in Sankalp Retail Value Stores Private Ltd, Lee Cooper (India) Private Ltd (Associate Companies) and Footmart Retail (India) Ltd. (Joint Venture) in the year 2007-08 whose net worth has eroded as at March 31, 2009. The carrying value of investments in the said Associates includes Goodwill on acquisition aggregating to Rs. 5,044.80 lakhs The Goodwill on acquisition of the said Joint Venture recognised in the Financial Statements is Rs. 989.17 lakhs. These investments have been made in line with the investment policy of the Company which is to select companies which have business synergies and provide financial and technical support and grow them into profitable ventures.

2.

3.

2.

301

The above investee companies, being start- up companies in the retail space, have made substantial investments to develop their infrastructure and distribution network for growth and are expected to do well going forward. Once the critical mass is attained and sufficient number of stores is opened, the entities are expected to break-even and generate a reasonable return on investments thereby significantly improving their net worth. These entities are operating as per their business plan which is being consistently monitored. Also, these are strategic investments and the Company has plans of turning them around into profitable ventures by providing them the necessary financial and advisory support.. Therefore, in the opinion of the management, the diminution in the value of the said investments are temporary in nature and consequently, no adjustment is considered necessary to the carrying value of investment in associates and goodwill recognized on acquisition of the joint venture. In the opinion of the management, no provision is considered necessary for diminution in the value of Quoted Long Term Investments as the diminution is not considered other than temporary in nature. Notes pertaining to 2009-10 1. Share Capital During the year, the Company had issued 207,400,000 Equity shares at par value of Rs.10/- each on a private placement basis. Notes pertaining to Period ended December 31, 2010 1. Share Capital During the year, the Company had issued 250,000,000 Equity shares at par value of Rs.10/- each to promoter companies on preferential basis. 2. Miscellaneous expenditure (to the extent not written off or adjusted) Share Issue Expenses incurred in connection with the proposed initial public offering (IPO) of the Company is shown under Miscellaneous Expenditure (to the extent not written off or adjusted). Such expenditure would be adjusted against the Share Premium Account as and when shares are issued after completion of the IPO. D. Additional Information as required by Securities and Exchange Board of India

i.

Contribution of the Subsidiaries and Joint Ventures in percentage terms in the Sales of the Company. (In %) For the Years Ended 31-Mar-10 31-Mar-09 31-Mar-08 46.08 0.39 37.34 83.81 91.93 91.93 100.00 100.00

Particulars Sale of Retail Merchandise (Subsidiaries) Aadhaar Retailing Limited Indus Tree Crafts Private Limited Indus League Clothing Limited Future Consumer Enterprises Limited Total (A) Sale of Retail Merchandise (Joint Ventures) * Holii Accessories Private Limited Celio Future Fashion Limited Footmart Retail (India) Limited

For the Period Ended 31-Dec-10 12.22 1.87 69.82 11.81 95.72

0.39 3.89 -

0.57 3.38 12.24

0.53 7.54

302

Particulars Total (B) Grand Total (A + B)

For the Period Ended 31-Dec-10 4.28 100.00

For the Years Ended 31-Mar-10 31-Mar-09 31-Mar-08 16.19 8.07 100.00 100.00 100.00

* The sale of retail merchandise by the joint ventures represents the proportionate interest of the company in the respective joint ventures

ii.

Contribution of the Subsidiaries and Business Ventures in percentage terms in the Profit or Loss of the Company. (In %) For the Years Ended 31-Mar31-Mar31-Mar10 09 08 (221.35) (47.99) (0.41) (8.33) (11.99) (1.08) (4.96) 4.76 4.07 10.47 (16.04) 6.42 (55.11) (10.41) (3.38) 94.58 146.63 (2.19) (13.95) (0.15) (0.10) (13.63) (48.85) -

Particulars

Relationship

Aadhaar Retailing Limited Indus League Clothing Limited Indus Tree Crafts Private Limited Star Shopping Centres Private Limited Future Consumer Enterprises Limited Future Consumer Products Limited AND Design India Limited Capital Foods Exportts Private Limited Lee Cooper (India) Private Limited Sankalp Retail Value Stores Private Limited Turtle Limited Celio Future Fashion Limited Footmart Retail (India) Limited Holii Accessories Private Limited Gain on Disposal of Subsidiaries Gain on Disposal of Associates Gain on Disposal of Joint Ventures

Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Associate Associate Associate Associate Associate Joint Venture Joint Venture Joint Venture

For the Period Ended 31-Dec-10 (88.10) 39.83 (9.66) (0.48) (51.14) (0.16) 10.40 2.54 (5.07) 3.53 -

303

Future Ventures India Limited Annexure V (INR in lakhs) Share Capital

Particulars Authorised 5,000,000,000 Equity Shares of Rs. 10/- each Issued, Subscribed and Paid up Capital Equity Shares of Rs. 10/- each

Dec 31st, 2010 500,000.00

March 31st, 2010 500,000.00

March 31st, 2009 500,000.00

March 31st, 2008 500,000.00

82,624.37

57,624.37

36,884.37

36,384.37

Reserves and Surplus Particulars Capital Redemption Reserve General Reserve Reserves and Surplus Revaluation Reserve Opening Balance Add : Reserve in a subsidiary acquired during the year Add : Adjustment on consolidation Less : Transfer to Profit and Loss Account Closing Balance Statutory Reserve Opening Balance Add : Transfer during the year Less : Adjustments Closing Balance Dec 31st, 2010 5.20 0.59 5.79 March 31st, 2010 5.20 0.59 5.79 March 31st, 2009 5.20 0.59 5.79 March 31st, 2008 5.20 0.59 5.79

25.71 0.54 (1.13) 25.12

25.84 (0.13) 25.71

338.58 33.65 372.23

3.48 335.10 338.58

3.48 3.48

3.48 3.48

304

Future Ventures India Limited Fixed Assets 2007-2008 Annexure VI (INR in Lakhs)
Description of Assets As at 1st April 2007 Additions arising on acquisition of entities during the year 532.75 553.64 323.61 Gross Block Other additions during the year Deletions during the year As at 31st March 2008 As at 1st April 2007 Depreciation Additions arising on acquisition of entities during the year 0.00 29.82 4.00 For the year Deletions As at 31st March 2008 Net Block As at 31st March 2008

Land Building Office Equipments Computers Furniture & Fixtures Vehicles Plant & Machinery Leasehold improvement Signage Goodwill (Intangible Assets) Total Proportionate Share in Joint Venture Grand Total

0.00 0.00 0.46

0.00 0.00 12.69

0.00 0.00 0.46

532.75 553.64 336.30

0.00 0.00 0.37

0.00 0.32 0.50

0.00 0.00 0.37

0.00 30.14 4.50

532.75 523.50 331.80

2.27 0.17

391.50 579.77

20.19 2.25

2.27 0.17

411.69 582.02

2.16 0.06

8.06 11.23

1.68 0.20

2.16 0.06

9.74 11.43

401.95 570.59

4.33 0.00

0.00 5.21

0.00 0.00

4.33 0.00

0.00 5.21

4.27 0.00

0.00 0.02

0.06 0.00

4.33 0.00

0.00 0.02

0.00 5.19

0.00

625.98

0.00

0.00

625.98

0.00

5.65

0.08

0.00

5.73

620.26

0.00 0.00

79.86 3,662.03

0.00 0.00

0.00 0.00

79.86 3,662.03

0.00 0.00

0.42 30.10

0.01 0.42

0.00 0.00

0.42 30.52

79.43 3,631.51

7.23 0.00

6,754.35 696.33

35.13 0.00

7.23 0.00

6,789.48 696.33

6.86 0.00

89.30 61.76

3.27 0.00

6.92 0.00

92.50 61.76

6,696.98 634.57

7.23

7,450.68

35.13

7.23

7,485.81

6.86

151.06

3.27

6.92

154.26

7,331.55

305

Future Ventures India Limited Fixed Assets 2008-2009 Annexure VI (Cont) (INR in Lakhs)
Description of Assets As at 1st April 2008 532.75 553.64 336.30 Gross Block Other Deletions additions during during the year the year 0.00 40.14 108.90 0.00 0.00 0.00 As at 31st March 2009 532.75 593.78 445.20 As at 1st April 2008 0.00 30.14 4.50 Depreciation For Deletions the year As at 31st March 2009 39.24 29.35 Net Block As at As at 31st 31st March March 2009 2008 532.75 554.54 415.87 532.75 523.50 331.80

Land Building Office Equipments Computers Furniture & Fixtures Vehicles Plant & Machinery Leasehold improvement Signage Goodwill (Intangible Assets) Total Proportionate Share in Joint Ventures Grand Total

0.00 9.08 24.85

0.00 0.00 0.00

411.69 582.02

225.70 256.49

0.00 1.44

637.39 837.07

9.74 11.43

114.17 50.83

0.00 0.07

123.91 62.19

513.48 774.88

401.95 570.59

0.00 5.21

12.88 1.70

0.00 0.00

12.88 6.91

0.00 0.02

1.08 0.31

0.00 0.00

1.08 0.33

11.80 6.57

0.00 5.19

625.98

123.84

0.00

749.83

5.73

47.11

0.00

52.84

696.99

620.26

79.86 3,662.03

91.96 0.00

0.00 0.00

171.81 3,662.03

0.42 30.52

40.03 366.20

0.00 0.00

40.45 396.72

131.36 3,265.31

79.43 3,631.51

6,789.48 696.33

861.61 118.31

1.44 168.75

7,649.65 645.89

92.50 61.76

653.66 46.69

0.07 20.57

746.11 87.87

6,903.55 558.01

6,696.98 634.57

7,485.81

979.92

170.19

8,295.54

154.26

700.35

20.64

833.98

7,461.56

7,331.55

306

Future Ventures India Limited Fixed Assets 2009-2010 Annexure VI (Cont) (INR in Lakhs)
Description of Assets As at 1st April 2009 Gross Block Additions Other arising on additions acquisition of during the entities year during the year 42.04 49.77 227.26 0.00 0.00 28.34 Deletions during the year As at 31st March 2010 As at 1st April 2009 Depreciation Additions For arising on the acquisition of year entities during the year 0.00 4.93 57.93 0.00 9.87 25.86 Deletions As at 31st March 2010 Net Block As at 31st As at March 31st 2010 March 2009

Land Building Office Equipments Computers & Software Furniture Fixtures Vehicles Plant & Machinery Leasehold improvement Electrical Fittings Signage UPS Shop Interior TradeMark Goodwill (Intangible Assets) Total Proportionate Share in Joint Ventures Grand Total &

532.75 593.78 445.20

0.00 0.00 25.80

574.79 643.55 675.02

0.00 39.24 29.35

0.00 0.00 3.26

0.00 54.04 109.88

574.79 589.52 565.14

532.75 554.54 415.87

637.39

435.31

13.42

2.61

1,083.50

123.91

304.00

138.99

0.96

565.94

517.57

513.48

837.07

342.99

65.70

21.34

1,224.42

62.19

77.87

60.43

3.13

197.36

1,027.06

774.88

12.88 6.91

7.21 240.02

0.00 23.90

0.00 2.17

20.10 268.65

1.08 0.33

4.99 52.42

3.12 3.18

0.00 0.19

9.19 55.74

10.91 212.91

11.80 6.57

749.83

147.83

46.33

3.46

940.53

52.84

96.24

60.89

1.44

208.53

732.00

696.99

0.00

0.65

0.00

0.00

0.65

0.00

0.03

0.02

0.00

0.05

0.61

0.00

171.81 0.00 0.00 0.00 3,662.03

0.00 3.29 3404.64 1007.04 0.00

14.11 0.00 8.73 0.00 0.00

0.00 0.00 0.53 0.00 0.00

185.92 3.28 3,412.85 1,007.04 3,662.03

40.45 0.00 0.00 0.00 396.72

0.00 1.00 1011.00 241.57 0.00

58.67 0.03 61.20 12.79 366.20

0.00 0.00 0.00 0.00 0.00

99.12 1.03 1,072.20 254.36 762.92

86.79 2.26 2,340.65 752.65 2,899.11

131.36 0.00 0.00 0.00 3,265.31

7,649.65 645.89

5,908.05 310.65

200.53 1,000.81

55.91 1,611.38

13,702.33 345.97

746.11 87.87

1,851.98 30.20

801.25 61.08

8.98 147.93

3,390.36 31.21

10,311.97 314.76

6,903.55 558.01

8,295.54

6,218.70

1,201.34

1,667.29

14,048.30

833.98

1,882.18

862.33

156.91

3,421.57

10,626.73

7,461.56

307

Future Ventures India Limited Fixed Assets for the period ended December 31, 2010 Annexure VI (Cont) (INR in Lakhs)
Description of Assets As at 1st April 2010 Additions arising on acquisition of entities during the period Gross Block Other additions during the period Deletions during the period As at 31st Dec 2010 As at 1st April 2010 Depreciation Additions For the arising on Period acquisition of entities during the period Deletions As at 31st Dec 2010 Net Block As at 31st As at 31st Dec 2010 March 2010

Land Building Office Equipments Computers & Software Furniture Fixtures Vehicles Plant & Machinery Leasehold improvement Electrical Fittings Signage UPS Shop Interior TradeMark Goodwill (Intangible Assets) Total Proportionate Share in Joint Ventures Grand Total &

574.79 643.55 677.48 6.87

25.30

600.09 643.55

0.00 54.03 110.61 0.04 8.94 28.74 6.08 62.97 133.31

600.09 580.59 541.73

574.79 589.52 566.87

21.46

30.77

675.04

1,083.50

24.73

21.53

6.49

1123.27

565.94

0.40

132.55

4.01

694.88

428.39

517.57

1,224.42

195.97

75.66

13.47

1482.58

197.32

1.03

67.17

2.99

262.53

1220.02

1,027.10

20.10 266.19 20.14

12.88

7.22 286.33

9.19 55.05

0.88 11.19

4.60

5.47 66.24

1.75 220.10

10.91 211.14

940.53

2.75

48.12

895.16

208.53

62.51

4.83

266.21

628.95

732.00

0.65

0.09

0.56

0.05

0.06

0.02

0.09

0.48

0.61

185.92 3.28 3,412.85 1,007.04 3,662.03 0.50 611.74 15,131.66

185.92 3.78 4,024.59 16,138.70 3,662.03

99.12 1.03 1,072.20 254.37 762.92

46.29 0.28 283.53 814.47 274.65

145.41 1.31 1,355.73 1,068.84 1,037.57

40.51 2.47 2,668.86 15,069.86 2,624.46

86.79 2.26 2,340.65 752.65 2,899.11

13,702.33 345.97

227.57

15,910.74 272.85

111.82

29,728.82 618.82

3,390.36 31.21

1.47

1,731.26 77.26

22.53

5,100.56 108.47

24,628.26 510.35

10,311.97 314.76

14,048.30

227.57

16,183.59

111.82

30,347.64

3,421.57

1.47

1,808.52

22.53

5,209.03

25,138.61

10,626.73

* Previous years figures have been regrouped to confirm to current years classification.

308

Future Ventures India Limited

Goodwill on Consolidation Annexure VII (INR in lakhs) Goodwill recognized in the financial statements with regard to subsidiary and joint ventures is as follows: Name of the Company Subsidiary Aadhaar Retailing Limited Indus League Clothing Limited Indus Tree Crafts Private Limited Star Shopping Centres Private Limited Lee Cooper (India) Limited Future Consumer Enterprises Limited Future Consumer Product Limited Joint Venture Footmart Retail India Limited Celio Future Fashion Limited Holii Accessories Private Limited Total Dec 31st, 2010 262.51 23,213.90 517.92 5,436.83 22.17 2,055.98 March 31st, 2010 262.51 16,408.42 517.92 162.77 5,436.83 March 31st, 2009 262.15 March 31st, 2008 262.15

89.14 0.15 31,598.60

89.14 0.15 22,877.74

1,020.72 89.14 1,372.01

1020.72 1,282.87

Goodwill included in carrying amount of investments in Associates Name of the Company And Designs India Limited Capital Food Exports Private Limited Lee Coopers (India) Private Limited Sankalp Retail Value Store Private Limited Indus Tree Craft Private Limited Turtle Limited Total Dec 31st, 2010 371.45 3,386.23 834.62 4,592.30 March 31st, 2010 371.45 3,374.98 834.62 4,581.05 March 31st, 2009 2,378.74 2,666.06 694.35 834.62 6,573.77 March 31st, 2008 2,378.74 2,666.06 5,044.80

The goodwill relating to entities acquired during the years/period and the profit/loss on sale of entities sold during the years/period had been accounted based on the unaudited financial statements provided by the management of the respective entities as on the date of acquisition/disposal.

309

Future Ventures India Limited Annexure VIII Investments Dec 31st 2010 Rs. March 31st 2010 Rs. March 31st 2009 Rs. (INR in Lakhs) March 31st 2008 Rs.

Particulars

A. Long Term Investments a) Investment in Associates Cost of Investment Add: Share of Profit/(Loss) of Associate Add: Adjustment on Disposal of Associates Less: Dividend Received

6,267.69 362.73 (15.60) 6,614.82

6,256.44 (1,325.97) 1,429.49 6,359.96

7,196.03 (1,362.85) 5,833.18

5,405.00 (415.47) 4,989.53

b) Unquoted Trade Equity Shares Others Fully Convertible Debentures c) Quoted Non Trade Equity Shares - Others d) Unquoted Non- Trade Units of Mutual Funds B. Trading Investments (ii) Unquoted - Non- Trade & others (Lodged with Sales Tax Authorities) Units of Mutual Funds Proportionate Share in a Joint Venture (Long Term, Unquoted & Non- Trade) Total Value of Quoted Investments - Cost - Market Value Value of Unquoted Investments 0.06 0.06 4,787.32 6,315.27

3,549.22 0.00

2,874.30 0.00

7,698.94 250.00

6,620.22 700.00

3,000.00

1.11 1,048.20

0.58 857.99 3,627.86 0.57 5,240.92 0.57 26,866.51 6,315.27 3,612.79 20,551.24

11,213.41 0.06 0.35 11,213.35

10,092.89 0.06 0.29 10092.83

22,197.87 4,787.32 845.46 17,410.55

310

Future Ventures India Limited Annexure IX Statement of Receivables (INR in Lakhs) Particulars Dec 31, 2010 18,308.54 898.47 19,207.01 As at March 31, March 31, 2010 2009 14,103.14 43.83 395.54 494.39 14,498.68 538.22 March 31, 2008 0.00 22.22 22.22

Sundry Debtors Sundry Debtors -Proportionate share in Joint ventures Total

Ageing of Receivables: (INR in Lakhs) Particulars Dec 31, 2010 Outstanding for a period exceeding six months 5,683.57 Considered Good 69.07 Considered Doubtful Less: Provision for Doubtful Debts Others Considered Good Proportionate share of Joint Ventures Total (69.07) 12,624.97 898.47 19,207.01 19.07 (19.07) 7,890.08 395.54 14,498.68 0.00 (0.00) 43.83 494.39 538.22 0.00 (0.00) 0.00 22.22 22.22 6,213.06 0.00 0.00 March 31, 2010 As at March 31, 2009 March 31, 2008

Details of transactions with Promoters/Group Companies/Related Parties Particulars Promoters # Group Companies # Associates Companies Other Related Parties 31-Dec-10 13,643.47 3,281.32 0.00 0.00 As at 31-Mar-10 31-Mar-09 9,985.31 0.00 0.00 0.00 0.00 0.00 0.00 0.00

31-Mar-08 0.00 0.00 0.00 0.00

# As defined under ICDR Regulations and have been identified by the Company and relied upon by the auditors

311

Future Ventures India Limited Annexure X Statement of Inventories (INR in Lakhs) Particulars Retail Merchandise Proportionate share in Joint Ventures Total Dec 31, 2010 10,458.26 641.50 11,099.76 As at March 31, 2010 March 31, 2009 9,922.70 2,426.14 199.99 1,442.14 10,122.69 3,868.28 March 31, 2008 2,108.25 401.92 2,510.17

312

Annexure XI Cash and Bank Balances (INR in lakhs) March 31st, 2008 152.13

Particulars Cash and Cheques on Hand Balance with Scheduled Bank In Current Account In Fixed Deposit Accounts Proportionate Share in Joint Ventures Total

Dec 31st, 2010 77.64

March 31st, 2010 228.58

March 31st, 2009 43.60

300.65 327.10 53.28 758.67

1,333.90 202.81 86.75 1,852.04

831.09 74.00 338.84 1,287.53

239.43 8.55 400.11

313

Future Ventures India Limited Annexure XII Statement of Other Current Assets (INR in Lakhs) Particulars Dec 31, 2010 964.82 55.48 682.54 6,570.00 115.66 1,890.61 238.32 10,517.43 146.54 4,000.00 100.00 2,025.00 As at March 31, 2010 769.96 88.90 528.13 9,575.00 70.41 1,597.60 203.60 12,833.60 500.89 6,950.00 March 31, 2009 284.89 0.00 406.60 3,850.00 97.46 127.02 269.60 5,035.57 441.73 3,000.00 400.00 March 31, 2008 66.72 0.00 2,923.69 10,100.00 92.39 88.40 253.01 13,524.21 2,140.00 5,000.00 -

Advance Tax MAT Credit entitlement Advance recoverable in Cash or in kind or for value to be recd. Loans Outstanding (Including ICDs) Interest Accured on Deposits & ICD Other Deposits Proportionate share in Joint ventures Total Promoters# Group Companies# Associate Companies Other related Parties

# As defined under ICDR Regulations and have been identified by the Company and relied upon by the auditors

314

Future Ventures India Limited Statement of Secured & Unsecured Loans Annexure XIIIA (INR in Lakhs) Loans from Banks

Secured loans Loans from banks Cash credit facilities Working capital demand loan Finance Lease Term loans Proportionate Share in Joint Venture Total Secured loan Amounts repayable within one year

Dec 31, 2010 10,769.21 1,332.88 14.23 1,800.35 500.00 14,416.67 913.65

March 31, 2010 8,520.56 1,479.81 23.82 1,327.33 0.00 11,351.52 525.45

March 31, 2009

March 31, 2008

810.91 810.91 557.78

860.18 860.18 208.70

UnSecured loans Inter Corporate Deposits Other Loans Total Unsecured loans Amounts repayable within one year Promoters # Group Companies # Associate Companies Other related Parties

Dec 31, 2010 3,359.42 0.40 3,359.82 3,280.31 536.79 2,023.57 0.00 0.00

March 31, 2010 5,451.12 75.53 5,526.65 5,396.94 2,273.82 1,900.00 0.00 0.00

March 31, 2009 4,764.77 4,764.77 4,764.77 0.00 0.00 0.00 0.00

March 31, 2008 4,849.25 4,849.25 4,849.25 0.00 0.00 0.00 0.00

# As defined under ICDR Regulations and have been identified by the Company and relied upon by the auditors

315

Future Ventures India Limited Annexure - XIIIB (INR in Lakhs) Securities Offered

Particulars of Loan

Institution / Bank/ Party Societe Generale Bank

Sanctioned Amount

Working Capital Loan

600.00

Amount Outstanding as at Dec 31, 2010 600.00* * Includes Proportionate share of Joint Venture of Rs. 300.00 Lakhs

Rate of Interest

Repayment Terms

As mutually agreed between the parties; 9.75% p.a. as at December 31, 2010.

The facilities are valid till July 15, 2011 with each disbursement being repayable on due date as mutually agreed between the parties.

Working Capital Loan Working Capital Demand Loan

Central Bank India Axis

1,500.00 of 800.00

1,332.88

Base Rate + 4% 11.25%

NA

First and exclusive hypothecation charge over the present and future current assets and moveable fixed assets of the Company. Further, the loans are also secured by: (i) letter of credit / guarantee from Societe Generale, Paris for Rs. 70,000,000 for which counter guarantee is given by the Holding Company; and (ii) pledge of 348,832 equity shares held in the Company by a Joint Venturer, namely, Indus League Clothing Limited, and corporate guarantee from the said Joint Venturer covering Rs. 70,000,000. Stocks and Debtors

807.90

On Demand

Primary: Exclusive first charge on fixed assets of the Company created / proposed to be created out of the term loans from Axis. Collateral: Pari passu charge on fixed assets of the Company, except the Vehicles/Cars, which are financed by other lenders.

316

Particulars of Loan

Institution / Bank/ Party

Sanctioned Amount

Amount Outstanding as at Dec 31, 2010

Rate of Interest

Repayment Terms

Securities Offered

Cash Credit/ Working Capital Demand Loan

ING

500.00

101.88

11.50%

Not earlier than 7 days and not later than 180 days

Guarantee: Corporate Guarantee of Pantaloon Industries Ltd. and Personal Guarantee of Kishore Biyani. Primary: First Charge by hypothecation of entire raw materials, WIP, finished goods, receivables and other current assets, on pari passu basis with other lenders under multiple banking arrangements. Collateral: Second Charge on the fixed assets of company on pari passu basis with other working capital lenders. Guarantee: Personal Guarantee of Kishore Biyani. Primary: First Charge by hypothecation of entire raw materials, WIP, finished goods, receivables and other current assets, on pari passu basis with other lenders under multiple banking arrangements. Collateral: Second Charge on the fixed assets of company on pari passu basis with other lenders. Guarantee: Personal Guarantee of Kishore Biyani. Primary: Hypothecation of entire current assets

Cash Credit/Work ing Capital Demand Loan

ING

2,500.00

2,523.11

On 1,100 Lakhs at 11.25% and on 1,400 Lakhs at 11.00%

Roll Over: 1,100 Lakhs for 180 days and 1,400 Lakhs for 60 days

Cash Credit

SBI

6,000.00

5,004.55

12.50%

On demand

317

Particulars of Loan

Institution / Bank/ Party

Sanctioned Amount

Amount Outstanding as at Dec 31, 2010

Rate of Interest

Repayment Terms

Securities Offered

Cash Credit

Vijaya

2,500.00

1,842.95

11.00%

One Year

of Company, both present and future, on pari passu basis with other members Primary: Pari passu first charge on entire current assets, both present & future. Collateral: Pari passu second charge on existing fixed assets Guarantee: Corporate guarantee of Pantaloon Industries Ltd, Future Ventures India Limited & Personal Guarantee of Mr. Kishore Biyani. Primary: Pari passu first charge on entire current assets, both present & future. Collateral: Pari passu second charge on moveable fixed assets, except Vehicles/Cars/Equip ments Guarantee: Corporate guarantee of Pantaloon Industries Ltd. & Personal Guarantee of Mr. Kishore Biyani. Exclusive charges on Book Debts & receivables of the Borrowers. Unconditional & Irrevocable Corporate Guarantee from M/s. Future Ventures India Limited (Holding Company) Mortgage of the Machinery on Lease

Cash Credit

Axis

1,200.00

199.56

11.25%

On Demand

Cash Credit

Yes Bank

300.00

289.38

14.00%

On Demand

Finance Lease

Pantaloon Industries

64.29

14.23

12.00%

6 Years

318

Particulars of Loan

Institution / Bank/ Party Ltd. Yes Bank

Sanctioned Amount

Amount Outstanding as at Dec 31, 2010 219.15

Rate of Interest

Repayment Terms

Securities Offered

Term Loan

267.00

13.50%

Six Half Yearly Installments

Exclusive charge on Moveable Fixed Assets, Book Debts & Current Receivables of the Company. Unconditional & Irrecoverable Corporate Guarantee from M/s. Future Ventures India Limited. First and exclusive hypothecation charge over the present and future current assets and moveable fixed assets of the Company. Further, the loans are also secured by: (i) letter of credit / guarantee from Societe Generale, Paris for Rs. 70,000,000 for which counter guarantee is given by the Holding Company; and (ii) pledge of 348,832 equity shares held in the Company by a Joint Venturer, namely, Indus League Clothing Limited, and corporate guarantee from the said Joint Venturer covering Rs. 70,000,000. Fixed Assets

Term Loan

Societe Generale Bank

500.00

400.00 * * Includes Proportionate share of Joint Venture of Rs. 200.00 Lakhs

As mutually agreed between the parties; 11.50% p.a. as at December 31, 2010.

Sixteen quarterly installments commencing from February 2012.

Term Loan

Term Loan

Central Bank India Axis

124.00 of 2000.00

24.00

Base Rate + 3.5% 12.75%

Quarterly 48 EMIs

802.44

Primary: Exclusive first charge on fixed assets of the Company created / proposed to be created out of the term loans from Axis bank.

319

Particulars of Loan

Institution / Bank/ Party

Sanctioned Amount

Amount Outstanding as at Dec 31, 2010

Rate of Interest

Repayment Terms

Securities Offered

Collateral: Pari passu charge on fixed assets of the Company, except the Vehicles/Cars, which are financed by other lenders. Guarantee: Corporate Guarantee of Pantaloon Industries Ltd., Personal Guarantee of Kishore Biyani. Primary: Exclusive first charge on fixed assets of the Company created / proposed to be created out of the term loans from Vijaya bank. Collateral: Pari passu charge on fixed assets of the Company, except the Vehicles/Cars, which are financed by other lenders. Guarantee : Corporate Guarantee of Pantaloon Industries Ltd., Future Ventures India Limited and Personal Guarantee of Kishore Biyani. Hypothecation of asset under finance

Term Loan

Vijaya

800.00

749.07

11.00%

Repayment in 16 equal quarterly instalments after a moratorium period of 1 year from the date of first disbursement. Door to Door of 5 years . Interest to be paid at monthly intervals.

Machine Loan - Flat Lock Cylinder Machine Loan Vaccum Ironing

Sundaram Finance Ltd.

9.38

4.47

14.73%

Sundaram Finance Ltd.

1.12

0.53

15.05%

Machine Loan Cloth

Sundaram Finance

0.63

0.30

14.75%

47 Monthly Installment of Rs. 0.26 Lakhs each 17th of every month 47 Monthly Installment of Rs. 0.03 Lakhs each. 17th of every month 47 Monthly Installment of

Hypothecation of asset under finance

Hypothecation of asset under finance

320

Particulars of Loan

Institution / Bank/ Party Ltd.

Sanctioned Amount

Amount Outstanding as at Dec 31, 2010

Rate of Interest

Repayment Terms

Securities Offered

Cutting Machine Machine Loan Air Compressor

Sundaram Finance Ltd.

0.91

0.39

14.00%

Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit Inter Corporate Deposit Interest Accrued (Net of TDS) Inter Corporate Deposit Interest Accrued (Net of TDS) Interest Accrued (Net of TDS) Inter Corporate Deposit

Neelam Chhiber Pantaloon Retail (India) Ltd Pantaloon Industries Ltd. Godrej Agrovet Ltd Godrej Agrovet Ltd Future Capital Holding Future Capital Holding Pantaloon Retail (India) Ltd Future Ideas Company Limited

0.40

0.40

NIL

Rs. 0.02 Lakhs each. 17th of every month 41 Monthly Installment of Rs. 0.03 Lakhs each. 17th of every month None

Hypothecation of asset under finance

472.04

12.00%

1 Year

50.00

NIL

None

228.57

12.50%

Less than 1 Year

577.66

1,900.00

1,900.00

12.50%

365 Days

123.57

0.02

15.00%

Less than Year

0.50

NIL

Payable Demand

on

321

Future Ventures India Limited Annexure XIV Statement of Current Liabilities and Provisions (INR in Lakhs) Particulars Dec 31, 2010 Current Liabilities: Outstanding expenses (including Sundry creditors) Other Liabilities (Including TDS on salary, professional charges & others) Proportionate share in Joint ventures Total Current Liabilities Provisions: Other Provision Provision for Taxation Provision for Gratuity & Compensated absences Provision for Standard Assets Proportionate share in Joint ventures Total Provisions 11,183.70 1,374.75 1,102.01 13,660.46 As At March 31, March 31, 2010 2009 6,002.59 1,088.07 501.27 7,591.93 1,153.34 400.41 2,716.60 4,270.35 March 31, 2008 8,488.09 76.45 861.75 9,426.29

90.03 517.66 172.42 18.43 158.79 957.33

1.03 483.78 128.96 0.00 58.96 672.73

0.00 136.86 33.21 0.00 2.70 172.77

31.55 32.68 51.89 0.00 2.68 118.80

322

Future Ventures India Limited Annexure XV (INR in Lakhs) Statement of Deferred Tax Deferred Tax Liability (Net) Particulars Depreciation Provision for compensated absences & gratuity Others Disallowances under Income Tax Act Total As at 31st Dec'2010 (954.60) 245.52 60.63 648.45 As at 31st March'2010 (32.69) 0.63 As at 31st March'2009 (439.61) 6.36 28.47 As at 31st March'2008 (76.65) 17.64 34.91

(32.06)

(404.78)

(24.10)

Deferred Tax Asset (Net) Particulars Depreciation Provision for compensated absences & gratuity Business Loss and unabsorbed depreciation Disallowances under Income Tax Total As at 31st Dec'2010 (487.07) 44.42 494.56 34.42 86.33 As at 31st March'2010 (498.70) 41.16 495.11 0.00 37.57 As at 31st March'2009 (2.40) 4.93 0.00 2.53 As at 31st March'2008 0.00 0.00 0.00 0.00 0.00

Deferred tax asset in respect of long term capital loss has not been recognized in the absence of virtual certainty on its realization.

323

Future Ventures India Limited Annexure XVI (INR in Lakhs) Income from Investing Activity Particulars For the period ended 31st Dec 2010 Rs. For the year ended 31st March 2010 Rs. For the year ended 31st March 2009 Rs. For the year ended 31st March 2008 Rs.

Interest Income: - On Investments Trade - On Investments Non Trade - Others Dividend Income Profit on Sale Investments Total ( A ) of

682.93 33.58 716.51

12.53 674.14 46.69 733.36

8.36 754.69 241.67 1004.72

70.00 56.55 89.43 271.68 19.88 507.54

Profit/(Loss) on trading securities: Sales of trading Securities Less : Cost of Sales Total ( B )

0.01 0.00 0.01

11,963.88 12,282.37 (318.49)

4,821.30 6,229.68 (1,408.38)

324

Future Ventures India Limited Annexure XVII Statement of Other Income (INR in Lakhs) For the Years Ended March 31, 2010 0.00 51.66 0.00 1,321.18 852.19 4.82 67.88 2,297.73 March 31, 2009 4.39 0.00 0.00 0.00 0.00 0.00 0.00 4.39 March 31, 2008 0.27 0.00 0.00 0.00 0.00 1.41 0.05 1.73

Particulars

For the Period Ended Dec 31, 2010

Non-Recurring Provision no longer required written back Cash Discount Received Gain on Disposal of Subsidiary Gain on Disposal of Associates Gain on Disposal of Joint Venturers Rental Income Miscellaneous Income Total

13.43 78.47 51.76 0.00 0.00 28.90 73.99 246.55

325

Future Ventures India Limited Annexure XVIII Cost of Goods Sold (INR in Lakhs) For the year ended 31st March 2008 Rs. 298.96 31.50 330.46 0.05 0.01 0.06

Particulars

For the period ended 31st Dec 2010 Rs. 494.47 5,440.74 (574.70) 5,360.51 0.95 71.81 75.64 2.85 2,600.41 16.21 9.73 48.50 8,186.61

For the year ended 31st March 2010 Rs. 553.49 660.21 (494.47) 719.23 (21.69) 8.93 130.31 0.72 587.38 2.07 31.17 83.00 1,541.12

For the year ended 31st March 2009 Rs.

COST OF GOODS SOLD Opening Stock of Raw Materials Add: Purchases Closing Stock of Raw Materials

Packing Material Warehousing Charges Freight and Forwarding Charges Dyeing/Testing Charges Conversion Charges Labour charges Consumables Proportionate Share of Joint Ventures Total (A) ACCRETION/DECRETION IN INVENTORY Opening Stock of Work In Progress Add: Adjustment on acquisition of subsidiary Closing Stock of Work In Progress Opening Stock of Finished Goods / Traded Goods Add: Adjustment on acquisition of subsidiary Add: Purchases Closing Stock of Finished Goods / Traded Goods Proportionate Ventures Total (B) Total (A + B) Share of Joint

1,053.33 (1,805.51) (752.18) 8,374.91 644.75 18,965.42 (8,078.06) 19,907.02 960.00 20,114.84 28,301.45

1,889.68 (1,053.33) 836.35 9,130.39 7,227.83 (8,374.91) 7,983.31 2,056.86 10,876.52 12,417.64

2,108.25 11,551.95 (2,426.14) 11,234.06 958.53 12,192.59 12,523.05

30.48 4.67 (28.80) 6.35 6.35 6.41

326

Future Ventures India Limited Annexure XIX Employee Costs (INR in lakhs) For the year ended 31st March 2008 Rs. 74.84 1.64

Particulars

For the period ended 31st Dec 2010 Rs. 2,971.83 144.69

For the year ended 31st March 2010 Rs. 2,029.47 70.16

For the year ended 31st March 2009 Rs. 1,770.95 81.14

Salaries Wages & Bonus Contribution to Provident and Other Funds Staff Welfare Expenses Proportionate Share in Joint Ventures Total

124.34 294.55

88.12 220.82

62.29 123.50

5.37 -

3,535.41

2,408.57

2,037.88

81.85

327

Future Ventures India Limited Annexure XX Administrative and Other Expenses (INR in Lakhs) For the year ended 31st March 2008 Rs. 7.31 0.14 0.22

Particulars

For the period ended 31st Dec 2010 Rs. 1,573.16 4.86 265.75 169.54 1,831.63

For the year ended 31st March 2010 Rs. 797.78 1.14 146.50 34.91 484.86

For the year ended 31st March 2009 Rs. 554.45 192.14 291.80

Rent Electricity Power, Water & Fuel Freight & Octroi Advertisement, Publicity & Selling expenses (includes Free samples) Commission and Brokerage Cash Discount Repairs & Maintenance Travelling Expenses Postage, Telephone & Stationery Legal and Professional Charges Rates & Taxes Insurance Audit Fees : - Statutory Audit - Tax Audit - Other Services - Out of Pocket Expenses ( Including Taxes) Directors Sitting Fees Sundry balance written off Loss on Sale/Retirement of Fixed Assets Provision for Doubtful loans & Advances & Debts Security & Housekeeping Expenses Recruitment Expenses Royalty Bad Debts and advances Written Off Less: Adjusted against provisions Contingent Provision against Standard Assets Miscellaneous Expenses Proportionate Share in Joint Ventures

483.51 247.20 190.43 89.07 265.59 75.96 52.05 14.21 3.00 8.09 2.43 5.00 0.01 63.56 50.00 48.64 10.49 353.32 91.84 (5.63) 86.21 18.43 215.88 625.95

225.77 58.64 56.73 127.46 74.34 112.82 45.54 36.71 17.39 5.00 9.68 5.12 4.40 0.56 34.20 53.44 94.25 46.96 5.20 5.20 45.71 503.03

24.87 277.36 111.62 261.46 1.17 20.23 8.50 2.29 4.20 1.76 9.60 159.62 202.04 575.74

0.01 2.41 0.20 186.48 609.60 0.01 4.51 0.50 0.01 0.62 1.40 0.10 7.27 -

328

Particulars

Total

For the period ended 31st Dec 2010 Rs. 6,753.97

For the year ended 31st March 2010 Rs. 3,028.14

For the year ended 31st March 2009 Rs. 2,698.85

For the year ended 31st March 2008 Rs. 820.79

329

Future Ventures India Limited Annexure XXI Interest & Financing Charges (INR in Lakhs) For the year ended 31st March 2008 Rs.

Particulars

For the period ended 31st Dec 2010 Rs.

For the year ended 31st March 2010 Rs.

For the year ended 31st March 2009 Rs.

Interest on - Working Loans - Fixed Loans - Term Loans - Others

Capital

895.18 363.41 106.73 235.10 117.63 1.76 7.11 20.17

207.74 557.81 24.07 99.83 6.32 0.51 26.30 119.71

75.61 11.88 132.57

1.42 11.41 0.01 -

Bank Charges Lease Charges Finance Charges Proportionate Share in Joint Ventures Total

1,747.09

1,042.29

220.06

12.84

330

Future Ventures India Limited Annexure XXII Disclosure relating to Employee Benefits The Group has a defined benefit gratuity plan and the details of actuarial valuation as on 31st March 2008, 2009, 2010 and as at 31st December 2010 are given below: (INR in Lakhs) For the year ended March 31,2008 11.20 0.00 0.00 (1.14) 0.00 10.06

Particulars

Current Service Cost Interest cost on benefit obligation Benefits Settled Net actuarial (Gain)/Loss recognised in the period Past service cost Net benefit expenses Amounts recognised in balance sheet Defined benefit obligation

For the period ended Dec 31,2010 24.84 3.99 (8.62) 1.50 0.00 21.71

For the year ended March 31,2010 11.55 2.23 (0.61) (10.99) 0.00 2.18

For the year ended March 31,2009 13.39 0.80 0.00 (5.23) 0.00 8.96

91.73 0.00 Fair Value of Plan assets 91.73 Unrecognised( Asset )/ Liability * Change in the present value of the defined benefit obligation are as follows Obligation at period beginning Current service cost Interest on defined Obligation Benefits paid Actuarial (Gain)/ Losses on obligation Closing defined benefit obligation Obligation at period end * Discount Rate ( % ) Salary escalation rate 70.89 24.84 3.99 (9.49) 1.50 0.00 91.73 7%-8.25% 5%-6%

87.67 (10.50) 77.17

20.15 (10.06) 10.09

10.06 0.00 10.06

74.99 11.55 0.90 0.72 (10.99) 0.00 77.17 7%-8% 5%-6%

10.06 13.39 0.00 0.80 (4.10) 0.00 20.15 7%-8% 5%-6%

0.00 11.20 0.00 0.00 (1.14) 0.00 10.06 7%-8% 5%-6%

* Includes proportionate share of joint venture The estimates of future salary increase take into account inflation, seniority, promotion and other relevant factors. The disclosure requirements with regard to composition of Investments in the Fair Value of Plan assets, has not been furnished, in the absence of relevant information.

331

Future Ventures India Limited Annexure XXIII Segmental Reporting a) Business Segments The business segment has been considered as a primary segment for disclosure. The products included in each of the business segments are as follows: Retail Retailing of General Merchandise Investment Acquisition and holding of Investments The above segments have been identified taking into account the organization structure as well as the differing risks and returns of these segments.

332

Segment Reporting Annexure XXIII (INR in lakhs)

Particulars A 1 2 B 3 4 5 6 7 8 9 10 11 12 C SEGMENT REVENUE External Revenue Inter-segment Revenue TOTAL SEGMENT REVENUE RESULTS Segment Results Interest and finance charges Income Taxes Prior period item Net Profit/(Loss) after taxes Prior Period Adjustment Share of Profit/(Loss) of Associates Minority Interest in Net Income/(Loss) Net Profit/(Loss) after share of Associates and Minority Interest Adjustment on acquistion of subsidiaries SEGMENT ASSETS Unallocated Assets Proportionate Share in Joint Venture TOTAL ASSETS SEGMENT LIABILITIES Unallocated Liabilities Proportionate Share in Joint Venture TOTAL LIABILITIES CAPITAL EXPENDITURE Proportionate Share in Joint Venture DEPRECIATION Proportionate Share in Joint Venture NON CASH EXPENSES OTHER THAN DEPRECIATION Retail Apirl'10- Dec'10 39,038.43 132.20 39,170.63 (479.70) Investments Apirl'10- Dec'10 844.02 844.02 184.16 Others Apirl'10- Dec'10 87.79 87.79 (0.24) Eliminations Apirl'10- Dec'10 (132.20) (132.20) (132.20) Total Company Apirl'10- Dec'10 39,970.24 39,970.24 (427.98) (1,747.09) (113.80) (2,288.87) (60.45) 259.22 622.43 (1,467.67) (62.19) 107,508.87 86.33 2,361.10 109,956.30 30,633.47 3,709.22 1,760.81 36,103.50 15,910.74 272.85 1,731.26 77.26 -

21,363.50

83,690.51

2,454.86

29,383.79 15,908.38 1,726.71 786.00 2.36 4.53 463.68 0.02 -

E F G

333

(INR in lakhs)
Particulars A 1 2 SEGMENT REVENUE External Revenue Inter-segment Revenue TOTAL SEGMENT REVENUE RESULTS Segment Results Interest and finance charges Income Taxes Prior period item Net Profit/(Loss) after taxes before adjustment Prior period Adjustment Share of Profit/(Loss) of Associates Minority Interest in Net Loss Net Profit/(Loss) after share of Associates and Minority Interest Adjustment on acquistion of subsidiaries SEGMENT ASSETS Unallocated Assets Proportionate Share in Joint Venture TOTAL ASSETS SEGMENT LIABILITIES Unallocated Liabilities Proportionate Share in Joint Venture TOTAL LIABILITIES CAPITAL EXPENDITURE Proportionate Share in Joint Venture DEPRECIATION Proportionate Share in Joint Venture NON CASH EXPENSES OTHER THAN DEPRECIATION 20092010 15,215.56 2,160.96 17,376.52 Retail 20082009 13,374.94 14.15 13,389.09 20072008 6.96 6.96 20092010 2,575.72 2,575.72 Investments 20082009 (310.47) 8.14 (302.33) 20072008 508.51 508.51 Eliminations 2009-2010 (2,160.96) (2,160.96) Eliminations 2008-2009 Eliminations 2007-2008 TOTAL COMPANY 2009-2010 17,791.28 (22.29) (22.29) 17,791.28 TOTAL COMPANY 2008-2009 13,064.47 13,064.47 TOTAL COMPANY 2007-2008 515.47 515.47

B 3 4 5 6 7 8 9 10 11

(3027.11)

(3,882.75)

(3.21)

2,101.84

(1,012.91)

(393.64)

(925.27) (1,042.29) (159.49) (7.07) (2,134.12) 174.05 36.87 1,022.17 (901.03)

(4,895.66) (220.06) (413.52) (31.55) (5,560.79) (74.98) (947.37) 1,125.97 (5,457.17)

(396.85) (12.84) (26.81) 0.00 (436.50) 0.00 (415.46) 1.50 (850.46)

12 C

57.75 23,387.58 3,007.14 5,909.44 58,464.85 35,638.99 43,471.43 81,852.43 37.57 1,213.78 83,103.78 24,582.62 7,447.02 560.21 32,589.85 200.53 1,000.81 1.13 801.25 61.08 -

38,646.13 2.53 3,244.81 41,893.47 6,288.59 1,283.18 3,730.21 11,301.98 861.62 118.31 653.67 46.69 -

49,380.87 1,287.50 1,338.28 52,006.65 13,529.93 1,203.47 1,724.59 16,457.99 6,838.91 715.91 3.27 -

24,047.66 -

5,995.68 -

6,027.07

534.96 -

292.91 -

7,502.86 -

199.15 789.69 -

838.07 640.91 -

6,803.79

1.38 11.56 -

23.55 12.76 -

35.12

0.00 -

2.14 -

334

b)

Geographical Segment (In Lakhs)

Particulars

India As at 31st Dec'10 39,927.66 19,200.51 As at 31st March'10 17,785.08 14,377.08

Sales Debtors

Outside India As at 31st As at 31st Dec'10 March'10 42.58 6.20 6.50 121.60

Total As at 31st Dec'10 39,970.24 19,207.01 As at 31st March'10 17,791.28 14,498.68

The relationship with the above subsidiaries came into existence from 2009-10 and there was no geographical segment in the prior years.

335

Future Ventures India Limited Annexure XXIV Disclosure relating to Leases Operating and Finance Leases The Subsidiarys leasing arrangements are in respect of operating leases for premises occupied by the Company. These leasing arrangements are cancellable, and are renewable on a periodic basis by mutual consent on mutually acceptable terms. With respect to the Joint Venture, these are generally not non cancellable and are renewable either by mutual consent on mutually agreed terms or at the option of the lessee. Payments made under Operating Leases in a Subsidiary (INR in Lakhs) 31st March 2008 6.64

Particulars Lease payments for the year Minimum Lease Payments Not later than one year Later than one year but not later than five years Later than five years

31st Dec 2010 267.18

31st March 2010 540.00

31st March 2009 516.26

133.04 147.21 6.05

225.63 252.67 55.93

288.96 442.03 92.00

364.58 1,886.15 4,753.80

Payments made under Finance Lease in a Subsidiary (INR in Lakhs) 31st March 2008 0.00

Particulars Lease payments for the year Minimum Lease Payments Not later than one year Later than one year but not later than five years Later than five years

31st Dec 2010 11.35

31st March 2010 15.14

31st March 2009 0.00

15.14 0.00 0.00

15.14 11.35 0.00

0.00 0.00 0.00

0.00 0.00 0.00

Lease Expenses Proportionate Share in Joint venture (INR in Lakhs) 31st March 2008 284.05

Particulars Lease payments for the year Minimum Lease Payments Not later than one year Later than one year but not later than five years Later than five years

31st Dec 2010 0.00

31st March 2010 0.00

31st March 2009 224.71

0.00 0.00 0.00

0.00 0.00 0.00

18.47 68.43 73.39

252.74 974.11 671.69

336

Future Ventures India Limited Income from Operating Leases in a Subsidiary (INR in Lakhs) 31st March 2008 -

Particulars Lease rentals received during the year Minimum Lease Payments Not later than one year Later than one year but not later than five years

31st Dec 2010 29.05 38.95 19.32

31st March 2010 35.74 37.09 46.37

31st March 2009 -

Disclosure relating to Accounting Standard 29: Proportionate share of Joint Venture towards provision for goods that are expected to be returned by other retailers based on sales made on shop-in-shop arrangements and provision for expected discounts to other retailers based on sales made on shop-in-shop arrangements. (INR in Lakhs) 31st March 2010 Sales Return Discounts Total 32.50 23.50 56.00 32.50 23.50 56.00

Particulars Opening Balance Add : Provision for the period Less: Utilisation/Settlement Closing Balance

31st Dec 2010 Sales Return Discounts 32.50 23.50 78.87 75.00 32.50 23.50 78.87 75.00

Total 56.00 153.87 56.00 153.87

There was no disclosure relating to Accounting Standard 29 in the prior years.

337

Future Ventures India Limited Annexure - XXV Related Party Transactions Related parties referred to in this report represent related parties as defined in Accounting Standard 18, Related Party Disclosures notified by the Central Government of India under Companies (Accounting Standards) Rules, 2006 and as identified by the management and relied upon by the auditors. Details of related party transactions have been given below:

338

Disclosure in accordance with Accounting Standard 18 Related Party Transactions Related Party Transactions April 2010 - December 2010 (INR in Lakhs)
Related Parties Nature of Relationship Receivable Outstanding as st at 31 December 2010 (Including ICD and Interest) Payables Balance Outstanding as st at 31 December 2010 Loans Taken Outstanding as st at 31 December 2010 Dividend Income Interest Income Loan/Advances Given during the period Amount Repaid during the period Issue of Equity shares Trade advance given & settled during the period Fees for services Reimbursement of Expenses Rent Expenses Royalty Income Sales Purchases Sale of Assets/Investment Purchase of Asset/Investment Investment in Equity/Pref. shares

Capital Foods Exportts Pvt. Ltd. Turtle Ltd.

Pantaloon Retail India Ltd. Celio Future Fashion Ltd.

Associate with Effect from 15th Feb 2010. Associate of Indus League Clothing Ltd. With effect from 30th Jan 2010 Associate*

11.25

15.60

# 13,643.47

369.38

472.06

# 15,000.00 10.94 350.00 350.00 9.87

43.75

# 19,372.02 55.26 1.08

# 2,000.00

Future Capital Holdings Ltd. Future Ideas Company Limited PIL Industries Ltd. Talwalkars Pantaloon Fitness Pvt. Ltd. Future Ideas Realtors India Ltd. Future Corporate Resources Ltd. Capital Foods Ltd.

Joint Venture of Indus league clothing ltd. with effect from 30th Jan 2010 Associate* Associate* 82.73

# 2,023.57 0.50 82.73

0.78

Associate* Associate* 450.55

18.88

64.23 49.87 # 1,800.00 # 1,800.00

# 2,287.11

Associate*

# 1,251.03

1.03

# 1,250.00

Associate*

0.52

111.92

37.47

500.00

# 1,000.00

# 1,350.00

99.27

2.11

2.79

# 3,932.85

Future Realtors (India) Pvt. Ltd. Future Capital investment Pvt. Ltd. Future Value Retail Ltd. Iskrupa Mall Management co. pvt. Ltd. Home solutions Retail (India) Ltd. Future Agrovet Ltd. Winner Sports Ltd. Future Capital Financial services Ltd. Future Finance Ltd. Kshitij Investment Advisory Co. Ltd. Anchor Mall Pvt. Ltd. Future Brands Ltd. Total

Subsidiary of Capital Foods Exportts Pvt. Ltd. Associate*

100.14

4.98

700.00

600.00

300.00

# 2,753.00

Associate*

# 10,000.00 # 3,231.10 # 2,079.92 18.41 152.01 800.00 # 2,025.00 800.00 # 2,025.00 0.08 43.75 # 8,233.23

Associate* Associate*

Associate*

33.75

79.62

# 1,550.00

69.05

Associate* Associate* Associate*

4.76 11.71

79.40 22.71

# 1,800.00 850.00 0.11

4.31

Associate* Associate* 0.33

2.49 10.96

Associate* Associate* 20,806.95 343.24 926.48 2,560.36 15.60 456.44 7,425.00 10,775.00 25,000.00 1,350.00 182.00 3.08 23.32 87.50 27,733.87 1.08 302.79

# 1,027.04 5.00 12,005.00 11.25

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the period. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

339

Disclosure in accordance with Accounting Standard 18 Related Party Transactions Related Party Transactions 2009 2010 (INR in Lakhs)
Related Parties Nature of Relationship Receivable Outstanding as at 31st March 2010 (Including ICD and Interest) Payables Balance Outstanding as at 31st March 2010 Loans Taken Outstanding as at 31st March 2010 Interest Income Loan/Advances Given during the year Amount Repaid during the year Issue of Equity shares Expenses & Reimbursement Sales Sale of Investment Purchase of Asset/Investment Investment in Equity/Pref. shares

Indus Tree Crafts Private Limited Sankalp Retail Value Stores Pvt. Limited Lee Cooper (India) Limited Turtle Limited AND Designs India Limited Capital Foods Exportts Pvt. Limited

Associate upto 28th Feb 2010

7.40

550.00

200.00

300.00

Associate upto 28th Jan2010

# 3,000.00

Associate upto 30th Jan 2010 Associate upto 30th Jan 2010 Associate with Effect from 21st Oct 2009 Associate with Effect from 15th Feb 2010.

#1,100.00

0.51

# 5,467.25

# 3,062.25

# 1,133.44

3.98

50.00

100.00

250.00

# 4,500.00

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year.

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Related Party Transactions 2009 2010 (INR in Lakhs)

Related Parties Nature of Relationship Receivable Outstanding as at 31st March 2010 (Including ICD and Interest) Payables Balance Outstanding as at 31st March 2010 Loans Taken Outstanding as at 31st March 2010 Interest Income Loan/Advances Given during the year Amount Repaid during the year Issue of Equity shares Expenses & Reimbursement Sales Sale of Investment Purchase of Asset/ Investment Investment in Equity/Pref. shares

Future Capital Holdings Limited Pantaloon Retail India Limited Pantaloon Industries Limited Footmart Retail ( India ) Limited Celio Future Fashion Limited Holii Accessories Pvt. Ltd Total

Associate*

# 1,900.00

0.65

Associate*

# 9,985.31

200.00

5.47

# 4,924.04 # 3,976.81

Associate*

# 2,073.82

# 12,200.00 50.61 # 1,400.00 # 1,800.00 605.01

Joint Venture Upto 25th Jan 2010 Joint Venture Upto 30th Jan 2010 Joint Venture with Effect From 2nd Nov 2009 9,985.31 0.00 4,173.82

# 1,200.00

497.50

75.00

61.99

3,100.00

2,100.00

12,200.00

5.98

4,924.04

11,405.70

3,977.46

8,684.75

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

341

Related Party Transactions 2008-09 (INR in Lakhs)

Related Parties Nature of Relationship Receivable Outstanding as at 31st March 2009 (Including ICD and Interest) Payables Balance Outstanding as at 31st March 2009 Interest Income Loan/Advances Given during the year Amount Repaid during the year 350.00 Other Income, Rent Issue of Equity shares Expenses Reimbursed Purchase of investment Investment in Equity/Pref. shares

Indus Tree Crafts Pvt. Ltd. Turtle Ltd. Future Capital Holdings Ltd. Pantaloon Retail India Ltd. Pantaloon Industries ltd. And Designs India Ltd. Footmart Retail (India) Ltd. Celio Future Fashion Ltd. Total

Associate

11.35

350.00

657.59

Associate Associate*

#1,133.44 0.07 46.41 # 5,000.00 17.18

Associate*

140.00

5.60

Associate*

17.26

# 1,500.00

# 1,500.00

Associate

61.96

50.00

Joint Venture

427.61

400.00

Joint Venture

5.27

250.00

250.00

702.50

567.61

0.07

142.25

2,550.00

7,100.00

0.00

0.00

22.78

0.00

2,493.53

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

342

Related Party Transactions 2007-08 (INR in Lakhs)

Related Parties Nature of Relationship Receivable Outstanding as at 31st March 2008 (Including ICD and Interest) Payables Balance Outstanding as at 31st March 2008 Interest Income Loan/Advances Given during the year Amount Repaid during the year Other Income, Rent Issue of Equity shares Expenses Reimbursed Purchase of investment Investment in Equity/Pref. shares

Lee Cooper (India) Pvt. Ltd. Sankalp Retail Value Stores Pvt. Ltd. Future Capital Holdings Ltd. Pantaloon Retail India Ltd. Future Capital Investment Pvt. ltd. Pantaloon Industries ltd. Footmart Retail (India) Ltd. Total

Associate

# 2,405.00

Associate

# 3,000.00

Associate*

# 5,006.03

6.03

# 5,000.00

11.66

# 1,315.16

Associate*

140.00

140.00

6.67

605.01

Associate*

180.00

Associate*

# 3,605.00

# 3,605.00

Joint Venture

605.01

5,146.03

3,605.00

6.03

5,140.00

0.00

0.00

180.00

18.33

5,525.17

6,010.01

# Material related party transactions (which are over Rs. 1,000 Lakhs) during the year. * Significant Influence through Key Management Personnel (Mr. Kishore Biyani, Managing Director)

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Future Ventures India Limited Annexure XXVI Provisions, Contingent Liabilities and Contingent Assets Movement in Provision for Doubtful Debts and Advances (INR in Lakhs) Particulars Dec 31, 2010 75.75 0.00 50.00 125.75 0.00 5.63 120.12 0.00 For the Years Ended March 31, March 31, 2010 2009 0.00 0.00 22.31 0.00 53.44 75.75 0.00 0.00 75.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 March 31, 2008 5.27 0.00 0.00 5.27 0.00 5.27 0.00 0.00

Opening Balance Add : Provision relating to subsidiaries acquired during the year Add: Additional Provision created during the year Less: Provision written back Less: Write-off out of provision Closing Balance Proportionate Share of JV Contingent Liabilities

Particulars Outstanding guarantees given by the bank Proportionate Share of outstanding guarantees given by the bank on behalf of Joint Ventures Proportionate Share of Other Contingent liabilities in subsidiaries and joint venture Capital Commitments

As at 31st Dec 2010 3,907.40 0.00 1,894.04

As at 31st March 2010 5.90 0.00 733.86

As at 31st March 2009 9.00 1.90 5.71

(INR in Lakhs) As at 31st March 2008 0.00 10.54 0.00

The estimated value of contracts remaining to be executed on Capital Account to the extent not provided:(INR in Lakhs) As at 31st March 2008 86.68 2.61

Particulars Subsidiary Share in Venture

Joint

As at 31st Dec 2010 77.65 63.32

As at 31st March 2010 98.35 15.06

As at 31st March 2009 0.00 0.49

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Future Ventures India Limited Annexure XXVII Share Purchase Obligation (INR in Lakhs) As at 31st March 2008 13,860.00

Particulars Share Obligation Purchase

As at 31st Dec 2010 2,188.08

As at 31st March 2010 0.00

As at 31st March 2009 13,860.00

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Future Ventures India Limited Annexure XXVIII Statement of Accounting and Other Ratios Particulars Restated Net Worth as at the end of the period/year (Rs in Lakhs) Restated Net Worth (excluding revaluation reserve) as at the end of the period/year (Rs. In Lakhs) Restated Net Profit/(Loss) after Tax (Rs. in Lakhs) Restated Net Profit/(Loss) after Tax & Share of Associates and minority interest (Rs. In Lakhs) No. of Equity Shares Outstanding as at the End of Period/Year Weighted Average Number of Equity Shares Outstanding during the period/ year Basic & Diluted Earnings per Share (Rs.) (As per AS 20 Earnings Per Share) Return on Net Worth (%) Net Asset Value per Equity Share (Rs.) Dec 31, 2010 73,852.80 73,827.68 March 31, 2010 50,513.93 50,488.22 March 31, 2009 30,591.49 30,591.49 March 31, 2008 35,548.66 35,548.66

(2,349.32) (1,467.67)

(1,960.07) (901.03)

(5,635.77) (5,457.17)

(436.50) (850.46)

826,243,700 735,880,064 (0.20) (1.99) 8.94

576,243,700 399,436,577 (0.23) (1.78) 8.76

368,843,700 367,295,755 (1.49) (17.84) 8.29

363,843,700 86,427,177 (0.98) (2.39) 9.77

The ratios have been computed as below:

Basic & Diluted Earnings per Share

Restated Net Profit/(Loss) after tax & share of Associates and minority interest Weighted average no. of equity shares outstanding during the period /year Restated Net Profit/(Loss) after tax & share of Associates and minority interest Restated Net Worth (excluding revaluation reserve) as at the end of the period/ year

= Return on Net Worth (%)

X 100

Net Asset Value per Equity Share

Restated Net Worth (excluding revaluation reserve) as at the end of the period/year No. of equity shares outstanding as at the end of the period/year

Net Worth = Equity Share Capital + Reserves Debit Balance in Profit & Loss Account Miscellaneous Expenditure (to the extent no written off or adjusted) The figures above are based on the restated financial statements of the Company

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Future Ventures India Limited Annexure XXIX Capitalization Statement (INR in Lakhs) Adjusted for Public Issue

Particulars Borrowings Long Term Debt Short Term Debt Total Debt Shareholders Funds Share Capital Reserves Less : Debit Balance in P&L Less: Miscellaneous Expenditure (to the extent no written off or adjusted) Total Shareholders Fund (Net Worth) Long Term Debt/ Equity Share Capital Long Term Debt/ Shareholders funds (Net Worth)

Pre- Issue as at December 31, 2010

13,582.53 4,193.96 17,776.49

13,582.53 4,193.96 17,776.49

82,624.37 403.14 9,044.03 130.68

1,57,624.37 403.14 9,044.03 130.68

73,852.80 0.16 0.18

1,48,852.80 0.09 0.09

Note: The only adjustment is with respect to the equity share capital after considering the fresh public issue of 7,500 lakhs equity shares of Rs. 10 each at par value of Rs. 10 per equity share as fixed by IPO Committee in its meeting held on April 29, 2011. These shares are yet to be allotted.

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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION The following discussion of our financial condition and results of operations should be read in conjunction with our restated financial statements as of and for nine month period ended December 31, 2010 and as of and for the years ended March 31, 2010, 2009 and 2008 including the schedules and notes thereto and the reports thereon, which appear in the section titled Financial Statements in this Prospectus. The financial statements presented and discussed in this Prospectus are based on Indian GAAP, which differs in certain significant respects from IND AS. Our fiscal year ends on March 31 of each year. Accordingly, all references to a particular fiscal year are to the twelve-month period ended on March 31 of that year. The forward-looking statements contained in this discussion and analysis is subject to a variety of factors that could cause actual results to differ materially from those contemplated by such statements. Factors that may cause such a difference include, but are not limited to, those discussed in Forward-Looking Statements and Risk Factors, beginning on pages 11 and 12, respectively. Overview The Company was incorporated on July 10, 1996 with the name Subhikshith Finance & Investments Limited (Subhikshith). Following its acquisition in July 2007 by Pantaloon Future Ventures Limited, a subsidiary of Pantaloon Retail (India) Limited, the Company changed its name to Future Ventures India Private Limited. We are now a public limited company and are regulated by the RBI as a non-deposit taking Non-Banking Financial Company. Prior to the acquisition of the Company by PFVL, the Company was engaged in the business of granting loans and financing. We intend to exercise operational control or influence in the Business Ventures that we promote or in which we acquire interests. We intend to create, operationally manage and strategically manage diverse business activities, primarily in consumption-led sectors in the country, which we define as sectors whose growth and development will be determined primarily by the growing purchasing power of Indian consumers and their changing tastes, lifestyle and spending habits. We will seek to actively assist our Business Ventures in their growth and development strategies and provide them with access to a wide range of resources within the Future Group. In this regard, our Consultant, Future Capital Holdings Limited, provides us with consulting and advisory services, Pantaloon Retail (India) Limited provides us with mentoring capabilities and Future Corporate Resources Limited provides support and other services in relation to activities including governance, risk mitigation, human resources policies and information technology and guidance regarding corporate and legal compliance. Basis of Preparation of Financial Statements We prepare our consolidated financial statements in accordance with the requirements of Accounting Standard 21 Consolidated Financial Statements (AS21), Accounting Standard 23 Accounting for Investments in Associates in Consolidated Financial Statements (AS 23), and Accounting Standard 27 Financial Reporting of Interests in Joint Ventures (AS27) issued by the Institute of Chartered Accountants of India (ICAI). The financial statements of the Company and its subsidiary companies have been combined on a line by line basis by adding together book values of similar items such as assets, liabilities, income and expenses, after eliminating intra-group balances and transaction in accordance with AS 21. Investments in associate companies have been accounted in accordance with the equity method as per AS 23. Interests in joint ventures have been accounted for in accordance with the proportionate consolidation method as per AS 27. This standard is applied in accounting for interests in joint ventures and the reporting of joint venture assets, liabilities, income and expenses in the financial statements of the investing company. The investing company in its consolidated financial statements is required to report its interest in a joint venture using proportionate consolidation. The proportionate consolidation method under AS 27 requires the investing company to include its

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share of assets and liabilities as well as income and expenses in the joint venture in its financial statements. The excess or deficit cost to the Company of its investments over its portion of net worth in consolidated entities at respective dates on which such investments were made is recognized in the consolidated financial statements as goodwill or capital reserve. Any entity which has been acquired by the Company in a year is consolidated from the date of acquisition. See Annexure IV of our consolidated financial statements beginning on page 239 for a list of companies we consolidate in our consolidated financial statements for the nine month period ended December 31, 2010 and for Fiscal 2010, 2009, and 2008, as subsidiaries, associates or joint ventures. Factors Affecting Our Results of Operations and Financial Condition Economic Conditions in India Our results of operations and financial condition have been and will continue to be influenced by macro-economic, market and other conditions and developments in India that affect the growth and performance of the Business Ventures in which we acquire interests. These factors include levels of, and growth rates in, GDP and per capita GDP as well as the rate of inflation. Indias economy is expected to continue to grow during the next few years, contributing to higher disposable incomes, which we expect will fuel growth in the retail and consumption-led sectors. Indian economy may be adversely affected by changes in various macro-economic factors, including a general rise in interest rates, currency exchange rates, commodity and fuel prices and any adverse conditions which affect food and agricultural production and infrastructure. A slow down of the Indian economy may adversely affect its business, including its ability to implement its strategy. Developments in consumption-led sectors in India We will identify suitable business opportunities, including those in consumption-led sectors in India for which we intend to leverage the mentoring capabilities and expertise of the Future Group, especially our Promoter, Pantaloon Retail (India) Limited. Our results of operations and financial condition will be affected by developments in the consumption-led sectors. Consumption patterns in India have changed dramatically in recent periods, mainly as a result of rising disposable incomes. As disposable incomes have increased, household spending has shifted from spending on necessities to discretionary spending. Indians are spending an increasing proportion of their income on household products, apparel, communications and health care. Although growth in disposable incomes has been the main driver of higher consumption, population growth and a decline in the number of joint family households are also expected to contribute to growth in consumption. As the consumption-led sectors grow, we expect that the number of companies engaged in activities in these sectors will increase, leading to more potential business opportunities for us. However, the increasing attractiveness of these sectors may lead to greater competition for attractive assets. Regulation of consumption-led sectors in India Since our activities will be focused on consumption-led sectors in India, changes in regulation affecting these sectors will affect our results of operations and financial condition. Some industries within the Indian consumption-led sectors are regulated and the Foreign Investment Promotion Board (the FIPB) imposes restrictions on foreign direct investment in such sectors. As a result of restrictions on foreign investment, we believe that assets in the consumption-led sectors are potentially undervalued. The FIPB has, however, begun to ease certain restrictions on foreign direct investment in these sectors, and we expect the restrictions may be further relaxed over time. While this could result in greater demand and higher valuations for our Business Ventures, it could also increase competition for attractive business opportunities. In addition, competition in consumption-led sectors is likely to increase. On the other hand, the expansion of organized retailing in India could also lead to an increase in consumption, which would benefit us as our business opportunities increase and our existing Business Ventures increase in value. Market Conditions Our income from operations consists principally of dividend income. Our income from operations may also include interest income and gains on the sale of Business Ventures. These sources of income will be affected by market factors, including the strength and liquidity of Indian and global capital markets, market volatility, trends in investor

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asset allocation and movements in interest rates. We will pursue appropriate longer-term value creation strategies. We may seek to achieve this by unlocking value in our Business Ventures through public market or private sales after taking into account factors such as the stage of development of the relevant Business Venture and general market conditions. The strength of Indias capital markets generally, and the primary market specifically, will affect our ability to profitably unlock value in our Business Ventures. Movements in interest rates may also affect our results of operations. Our fixed-income instruments may be exposed to risks associated with changes in interest rates. General interest rate fluctuations may have a negative impact on our Business Ventures and the rate of return on invested capital. In particular, any decrease in interest rates could make fixed-income instruments less attractive to us. In addition, increasing interest rates will subject us to prepayment risk and may also result in reduced consumption and increased savings. Critical Accounting Policies The financial statements presented herein were prepared in accordance with the historical cost convention and applicable mandatory accounting standards issued by the Institute of Chartered Accountants of India, the relevant provisions of the Companies Act and guidelines issued by the RBI for NBFCs from time to time. The preparation of our financial statements in conformity with Indian GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate and re-evaluate our estimates, which are based on available information, industry standards, economic conditions and various other assumptions. The results of these evaluations and re-evaluations form the basis for our judgments about the carrying values of our assets and liabilities and the reported amounts of our revenues and expenses. Actual results may differ from these estimates and these estimates could differ under different assumptions. Certain critical accounting policies that are relevant to our business and operations are described below. For a description of our significant accounting policies, see Annexure IV of our audited consolidated financial statements beginning on page 239. Revenue Recognition Where transactions take place outside the public markets, the transactions are recorded as of the date on which the Company obtains an enforceable obligation to pay the price or an enforceable right to collect the proceeds of sale. The cost of investments acquired or purchased includes brokerage, stamp charges and any charges or duties directly related to the acquisition of investment. Advisory fees payable for advisory services is recognised at specific rates and in accordance with agreed terms. Dividend income is recognized when right to receive the same is established. Interest income from financing activities is recognised at the rates implicit in the contract. Unrealised interest income relating to non-performing assets is derecognised. Realized gain or loss on investments is recorded in the income statement on the date of sale. In determining the realized gain or loss on sale of a security, the cost of such security is arrived using the first in first out basis. The transactions for purchase or sale of publicly traded assets are recognized as of the trade date and not as of the settlement date in order to ensure that the effect of all assets traded during the financial year are recorded in the financial statements for that year. Investments Investments which are long term in nature are stated at cost and provision for diminution is made if the decline in value is other than temporary in nature. If the balance sheet of the unlisted investee company is not available for two years, shares in such companies are valued at one Rupee only which is in accordance with the prudential norms

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prescribed by the Reserve Bank of India for Non- Banking Financial (Non Deposit Accepting) Companies. Trading investments are stated at lower of cost and fair value determined on the basis of each category of investments. For this purpose, the investments shall be categorized as equity, preference, debentures etc and considered scrip-wise and the cost and market value aggregated for all investments in each category. Fixed Assets Fixed Assets are stated at cost less depreciation and cost includes all direct expenses relating to the acquisition and installation of fixed assets. Depreciation is provided on straight line basis at the rates prescribed under Schedule XIV to the Companies Act. Provisions A provision is recognized when our Company has a present obligation as a result of past event. It is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. We review and adjust these at each balance sheet date to reflect the current best estimates. These and other accounting policies are further described in the notes to the financial statements in this Prospectus. Additionally, as an NBFC we are and will continue to be subject to the RBIs prudential norms for NBFCs, which are discussed under RBI Norms applicable to NBFCs. Revised Accounting Standards for Financial Instruments Indian accounting standards relating to the recognition and measurement (and related disclosure) of financial instruments changed for accounting periods commencing on or after April 1, 2009 and will be mandatorily applicable for Indian companies from April 1, 2011. Under the revised standards, financial instruments are classified into financial assets and liabilities at fair value through profit or loss (to be recorded immediately in the profit and loss account), held to maturity investments (to be recorded at amortized cost), loans and receivables (to be recorded at discounted present values using effective interest rates) and available for sale financial assets (to be marked to market). As a result of these revised standards, we will be required to reclassify our investments, which we presently divide into current and long-term investments. The revised recognition standards are likely to have a significant impact on the methods by which we record our investments and the value of those investments. This could in turn have a significant impact on our financial results. However, we are not yet in a position to quantify any such potential impact. Results of Operations The following table sets forth select financial data from the Companys profit and loss account, for the nine month period ended December 31, 2010 and for Fiscal 2010, 2009 and 2008 the components of which are also expressed as a percentage of income for such periods: (In ` lakhs)
Particulars Nine month period ended December 31, 2010 37,134.86 716.51 0.01 87.50 101.45 10.21 246.55 % of Total Income Fiscal 2010 % of Total Income Fiscal 2009 % of Total Income Fiscal 2008 % of Total Income

Income: Sale of retail merchandise Income from investing activity Profit/(Loss) on trading securities Royalty Other operating income Interest on deposits Other income

92.91% 1.79% 0.00% 0.22% 0.25% 0.03% 0.62%

12,389.36 733.36 (318.49) 0.00 256.81 8.69 2,297.73

69.64% 4.12% (1.79)% 1.44% 0.05% 12.91%

12,017.91 1,004.72 (1,408.38) 0.00 263.59 92.43 4.39

91.99% 7.69% (10.78)% 2.02% 0.71% 0.03%

5.50 507.54 0.00 0.00 0.00 0.64 1.73

1.07% 98.46% 0.12% 0.34%

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Particulars

Nine month period ended December 31, 2010 0.00 1,673.15 39,970.24 28,301.45

% of Total Income 4.19% 100.00% 70.81%

Fiscal 2010

% of Total Income 13.62% 100.00% 69.80%

Fiscal 2009

% of Total Income 0.00% 8.34% 100.00% 95.86%

Fiscal 2008

% of Total Income 0.01% 100 1.24%

Profit on sale of assets Proportionate share in joint ventures Total Income Expenditure: Cost of goods sold (including increases/decreases in inventory) Employee costs Administrative and other expenses Interest and financing charges Depreciation Less: Transfer from revaluation reserve Total Expenditure Profit/ (Loss) Period items before Prior

0.00 2,423.82 17,791.28 12,417.64

0.63 1,089.18 13,064.47 12,523.05

0.06 0.00 515.47 6.41

3,535.41 6,753.97 1,747.09 1,808.52 (1.13) 42,145.31 (2,175.07) 0.00

8.85% 16.90% 4.37% 4.52% 105.44% (5.44)% -

2,408.57 3,028.14 1,042.29 862.33 (0.13) 19,758.84 (1,967.56) 0.00

13.54% 17.02% 5.86% 4.85% 111.06% (11.06)% -

2,037.88 2,698.85 220.06 700.35 0.00 18,180.19 (5,115.72) (31.55)

15.60% 20.66% 1.68% 5.36% 139.16% (39.16)% (0.24)%

81.85 820.79 12.84 3.27 0.00 925.16 (409.69) 0.00

15.88% 159.23% 2.49% 0.63% 179.48% (79.48)% -

Add/(Less):Proportionate share of prior period items in a Joint Venture Expenses relating to earlier years Net Profit/(Loss) before tax Taxation: Income tax Excess provision relating to years no longer required to be written back Deferred tax Fringe benefit tax Proportionate share in joint ventures Provision for income relating to earlier years Net Profit/ Adjustments (Loss) tax

(2,175.07) 248.30 (60.45)

(5.44)% 0.62% (0.15)%

(1,967.56) 425.13 0.00

(11.06)% 2.39% -

(5,147.27) 0.00 0.00

(39.40)% -

(409.69) 25.03 0.00

(79.48)% 4.86% -

(74.05) 0.00 0.00 0.00 (2,288.87)

(0.19)% (5.73)%

(265.79) 0.00 0.15 7.07 (2,134.12)

(1.49)% 0.04% (12.00)%

378.15 33.89 1.48 0.00 (5,560.79)

2.89% 0.26% 0.01% (42.56)%

1.24 0.54 0.00 0.00 (436.50)

0.24% 0.10% (84.68)%

before

Add/(Less) Adjustments: Expenses relating to earlier years Provision for Income Tax relating to earlier years Net Profit/(Loss) after Tax 0.00 (60.45) (2,349.32) (0.15)% (5.88)% 0.00 174.05 (1,960.07) 0.98% (11.02)% 31.55 (106.53) (5,635.77) 0.24% (0.82)% (43.14)% 0.00 0.00 (436.50) (84.68)%

Income Our total income primarily consists of income from sale of retail merchandise by our subsidiaries, income from investing activities, including gains or losses from trading of securities, interest on deposits, other operating income, other income and our proportionate share of income in our joint ventures. Income from sale of retail merchandise primarily consists of income from sales of retail products by our subsidiaries. Income from investing activity primarily consists of interest income and dividend income and gains or losses from trading securities. Our other operating income primarily consists of shop in shop rental income and display income from third party advertisers earned by our subsidiary Aadhaar Retailing Limited and also includes fees for consultancy services for mall

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development earned by our erstwhile subsidiary Star Shopping Centres Private Limited. We exited from our investment in Star Shopping Centres Private Limited on July 26, 2010. Our other income primarily consists of income which is typically non-recurring in nature. For example, in Fiscal 2010, our other income primarily consisted of gains from disposal of our interest in associates and joint ventures. Expenditure Our total expenditure consists of costs of goods sold by our subsidiaries, employee costs, operating and other expenses, interest and financing charges and depreciation and our proportionate share of costs in our joint venture. Cost of goods sold Our cost of goods sold primarily includes costs in relation to purchases of raw materials by our subsidiaries and other costs which include freight and forwarding charges and labour charges and our proportionate share of costs in our joint venture. Our cost of goods sold accounted for 70.81%, 69.80%, 95.86%, and 1.24% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008, respectively. Employee costs Our employee cost include salaries and bonuses to our employees, contributions to provident funds and other funds as well as staff welfare expenses and also includes our proportionate share of costs in our joint ventures. Our staff costs accounted for 8.85%, 13.54%, 15.60%, and 15.88% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008, respectively. Administrative and Other expenses Our administrative and other expenses primarily include expenses towards payment of rent, power, water and fuel, advertisement, publicity and selling expenses, travelling expenses, legal and professional charges and our proportionate share of such costs in our joint ventures. Our administrative and other expenses accounted for 16.90%, 17.02%, 20.66%, and 159.23% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008, respectively. Interest and financing charges Our interest and financing primarily consists of interest on working capital loans, fixed loans and term loans and our proportionate share of such expenses in our joint ventures. Our interest and financing charges accounted for 4.37%, 5.86%, 1.68%, and 2.49% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008, respectively. Depreciation Depreciation expenses primarily consists of depreciation our fixed assets. Depreciation also includes amortisation of intangible assets such as trademarks, brands and entry and licence fees. Depreciation accounted for 4.52%, 4.85%, 5.36%, and 0.63% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008, respectively. Provision for taxation We provide for income tax as well as deferred tax. We provided for fringe benefit taxes in Fiscal 2009 and Fiscal 2008. Provision for taxation accounted for 0.28%, 0.94%, 3.17% and 5.20% of our total income for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008 respectively. Nine month period ended December 31, 2010 Income. Our total income for the nine month period ended December 31, 2010 was ` 39,970.24 lakhs which primarily comprised of sale of retail of merchandise of ` 37,134.86 lakhs, income from investing activity of `

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716.51 lakhs, income from royalty of ` 87.50 lakhs, other operating income of ` 101.45 lakhs, other income of ` 246.55 lakhs and income from our proportionate share in joint ventures of ` 1,673.15 lakhs. Of ` 716.51 lakhs of income from investing activity, ` 682.93 lakhs was attributable to other interest income and ` 33.58 lakhs was attributable to dividend income. Of ` 246.55 lakhs of other income, ` 78.47 lakhs was attributable to cash discounts received, ` 51.76 lakhs was attributable to gains on account of sale of our stake in our subsidiary Star Shopping Centres Private Limited, ` 28.90 lakhs was attributable to rental income and ` 73.99 lakhs was attributable to miscellaneous income. Expenditure. Our total expenditure for the nine month period ended December 31, 2010 was ` 42,145.31 lakhs which primarily comprised of cost of goods sold of ` 28,301.45 lakhs, employee costs of ` 3,535.41 lakhs, administrative and other expenses of ` 6,753.97 lakhs, interest and financing charges of ` 1,747.09 lakhs and depreciation of ` 1,808.52 lakhs. Of ` 28,301.45 lakhs of cost of goods sold, ` 8,186.61 lakhs was attributable to cost of goods sold and ` 20,114.84 lakhs was attributable to accretion in inventory. Of ` 3,535.41 lakhs of employee costs, ` 2,971.83 lakhs was attributable to salaries, wages and bonus, ` 144.69 lakhs was attributable to contribution to provident fund and other funds, ` 124.34 lakhs was attributable to staff welfare expenses and ` 294.55 lakhs was attributable to our proportionate share in our joint ventures. Of ` 6,753.97 lakhs of administrative and other expenses, ` 1,573.16 lakhs was attributable to rent, ` 1,831.63 lakhs was attributable to advertisement, publicity and selling expenses, ` 483.51 lakhs was attributable to commission and brokerage, ` 247.20 lakhs was attributable to repairs and maintenance, ` 265.75 lakhs was attributable to power, water and fuel, ` 169.54 lakhs was attributable to freight and octroi, ` 190.43 lakhs was attributable to travelling expenses, ` 265.59 lakhs was attributable to legal and professional charges, ` 353.32 lakhs was attributable to royalty, ` 215.88 lakhs was attributable to miscellaneous expenses and ` 625.95 lakhs was attributable to our proportionate share in our joint ventures. Of ` 1,747.09 lakhs of interest and financing charges, ` 895.18 lakhs was attributable to interest on working capital loans, ` 363.41 lakhs was attributable to interest on fixed loans, ` 106.73 lakhs was attributable to interest on term loans, ` 235.10 lakhs was attributable to other interest and ` 117.63 lakhs was attributable to bank charges. Provision for taxation. Our provision for income tax for the nine month period ended December 31, 2010 was ` 248.30 lakhs. An excess provision (net) of ` 60.45 lakhs was written back for the period ended December 31, 2010 (which has been adjusted in the restated financial statements of the Company as disclosed in this Prospectus). A deferred tax credit of ` 74.05 lakhs has been accounted for the period ended December 31, 2010 due to timing differences related to depreciation and other disallowances. Net Profit/(Loss) after Tax. As a result of the foregoing, our net loss for the nine month period ended December 31, 2010 was ` (2,349.32) lakhs. Fiscal 2010 Compared to Fiscal 2009 Income. Our total income increased by 36.18% to ` 17,791.28 lakhs in Fiscal 2010 from ` 13,064.47 lakhs in Fiscal 2009 primarily due to an increase in other income, our proportionate share in our joint ventures, sale of retail merchandise by our subsidiaries, as well as a decrease in losses in trading securities. Our other income increased by 52,240% to ` 2,297.73 lakhs in Fiscal 2010 from ` 4.39 lakhs in Fiscal 2009 primarily due to a gain of ` 1,321.18 lakhs on exit from our investment in our associate Sankalp Retail Value Stores Private Limited and a gain of ` 852.19 lakhs on exit from our investment in our joint venture, Footmart Retail (India) Limited on January 21, 2010. Our income from proportionate share in joint ventures increased by 122.54% to ` 2,423.82 lakhs in Fiscal 2010 from ` 1,089.18 lakhs in Fiscal 2009 primarily due to an increase in revenues of our erstwhile joint venture, Footmart Retail (India) Limited and Celio Future Fashions Limited (we sold our stake in this joint venture to our subsidiary

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Indus-League Clothing Limited on January 30, 2010). Our income from sale of retail merchandise increased by 3.09% to ` 12,389.36 lakhs in Fiscal 2010 from ` 12,017.91 lakhs in Fiscal 2009 primarily due to an increase in retail sales by our subsidiaries. Our income from investing activity decreased by 27.01% to ` 733.36 lakhs in Fiscal 2010 from ` 1,004.72 lakhs in Fiscal 2009 primarily due to a decrease of dividend income to ` 46.69 lakhs in Fiscal 2010 from ` 241.67 lakhs in Fiscal 2009 due to disinvestments in shares and units of mutual funds and decrease in interest income from other investments to ` 674.14 lakhs in Fiscal 2010 from ` 754.69 lakhs in Fiscal 2009. Expenditure. Our total expenditure increased by 8.68% to ` 19,758.84 lakhs in Fiscal 2010 from ` 18,180.19 lakhs in Fiscal 2009 primarily due to an increase in interest and financing charges, depreciation, employee costs, and increases in administrative and other expenses. Our expenditure towards interest and financing charges increased by 373.64% to ` 1,042.29 lakhs in Fiscal 2010 from ` 220.06 lakhs in Fiscal 2009 primarily due to an increase in borrowings of working capital as well as term loans. Our depreciation expenses increased by 23.13% to ` 862.33 lakhs in Fiscal 2010 from ` 700.35 lakhs in Fiscal 2009 primarily due to our investments made during Fiscal 2010. Our employee costs increased by 18.19% to ` 2,408.57 lakhs in Fiscal 2010 from ` 2,037.88 lakhs in Fiscal 2009 primarily due to increase in salary increments and an increase in our proportionate share in our subsidiaries and joint ventures. Our administrative and other expenses increased by 12.20% to ` 3,028.14 lakhs in Fiscal 2010 from ` 2,698.85 lakhs in Fiscal 2009 primarily due to increases in rent payments and advertisement, publicity and selling expenses. Our rent payments increased to ` 797.78 lakhs in Fiscal 2010 from ` 554.45 lakhs in Fiscal 2009. Our advertisement, publicity and selling expenses increased to ` 484.86 lakhs in Fiscal 2010 from ` 291.80 lakhs in Fiscal 2009. Our administrative and other expenses also increased due to payments of commission and brokerage of ` 225.77 lakhs in Fiscal 2010. Provision for taxation. Provision for taxation after accounting for adjustments increased by 139% to ` 258.30 lakhs in Fiscal 2010 from ` 108.01 lakhs in Fiscal 2009 primarily due to increase in income from capital gains. Provision for income tax was ` 425.13 lakhs. The adjustments were made on account of the Companys decision to treat gains or loss from sale of investments as capital gains or losses. These adjustments were made by the Company at the time of filing its tax returns for Fiscal 2010 in October 2010. Provision for deferred tax decreased by 170.29% to ` (265.79) lakhs in Fiscal 2010 from ` 378.15 lakhs in Fiscal 2009 primarily due to recognition of deferred tax asset relating to losses and unabsorbed depreciation. Net Profit/(Loss) after Tax. As a result of the foregoing, our net losses decreased by 65.22% to ` (1,960.07) lakhs in Fiscal 2010 from ` (5,635.77) lakhs in Fiscal 2009. Fiscal 2009 Compared to Fiscal 2008 Income. Our total income increased to ` 13,064.47 lakhs in Fiscal 2009 from ` 515.47 lakhs in Fiscal 2008 primarily due to an increase in income from sale of retail merchandise, income from proportionate share in joint ventures and an increase in income from interest on deposits. Our income from sale of retail merchandise increased to ` 12,017.91 lakhs in Fiscal 2009 from ` 5.50 lakhs in Fiscal 2008 primarily due to our investments in various Business Ventures, namely Aadhaar Retailing Limited, Lee Cooper (India) Private Limited, Industree Craft Private Limited and Turtle Limited. Our income from proportionate share in joint ventures was ` 1,089.18 lakhs in Fiscal 2009 on account of our investment in Footmart Retail India Limited and Celio Future Fashion Limited. We did not have any joint ventures

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in Fiscal 2008. Our income from interest on deposits increased to ` 92.43 lakhs in Fiscal 2009 from ` 0.64 lakhs in Fiscal 2009 primarily due to interest income on our fixed deposits. Our income from investing activity increased by 97.96% to ` 1,004.72 lakhs in Fiscal 2009 from ` 507.54 lakhs in Fiscal 2009 primarily due to increase in interest income from other investments. Our interest income from other investments increased to ` 754.69 lakhs in Fiscal 2009 from 89.43 lakhs in Fiscal 2008. Expenditure. Our total expenditure increased to ` 18,180.19 lakhs in Fiscal 2009 from ` 925.16 lakhs in Fiscal 2008 primarily due to our investments in the following Business Ventures, namely, Aadhaar Retailing Limited, Footmart Retail India Limited and Celio Future Fashion Limited. Our total expenditure increased on account of an increase in cost of goods sold, employee costs, operating and other expenses, interest and financing charges and depreciation as set forth below: Our expenditure towards cost of goods sold increased to ` 12,523.05 lakhs in Fiscal 2009 from ` 6.41 lakhs in Fiscal 2008. Our employee costs increased to ` 2,037.88 lakhs in Fiscal 2009 from ` 81.85 lakhs in Fiscal 2008. Our administrative and other expenses increased to ` 2,698.85 lakhs in Fiscal 2009 from ` 820.79 lakhs in Fiscal 2008. Our expenditure towards interest and financing charges increased to ` 220.06 lakhs in Fiscal 2009 from ` 12.84 lakhs in Fiscal 2008. Our depreciation expenses increased to ` 700.35 lakhs in Fiscal 2009 from ` 3.27 lakhs in Fiscal 2008. Provision for taxation. Provision for taxation increased to ` 413.52 lakhs in Fiscal 2009 from ` 26.81 lakhs in Fiscal 2008 primarily due to an increase in deferred tax liability. We did not have any provision for income tax in Fiscal 2009 as compared to an income tax provision of ` 25.03 lakhs in Fiscal 2008. Provision for deferred tax increased to ` 378.15 lakhs in Fiscal 2009 from ` 1.24 lakhs in Fiscal 2008 primarily due to depreciation of Business Ventures invested in Fiscal 2008. Net Profit/(Loss) after Tax. As a result of the foregoing, our net losses increased to ` (5,635.77) lakhs in Fiscal 2009 from ` (436.50) lakhs in Fiscal 2008. Liquidity and Capital Resources Our liquidity primarily depends on cash distributions that are made to us by Business Ventures. We receive cash from time to time from our Business Ventures. This cash is usually in the form of dividend payments. We may also expect to receive interest payments on securities or cash consideration received in connection with unlocking of value in our Business Ventures. Other than amounts that are used to pay expenses or that are distributed to shareholders, any returns generated by our Business Ventures will be reinvested in accordance with our business policies and procedures, which we believe will assist us in growing our asset base. We do not intend paying dividends on our Equity Shares. Cash Flow Data The following table presents the Companys cash flows for Fiscal 2010, 2009 and 2008: (In ` lakhs) Fiscal 2008 (7,020.91)

Particulars Net cash from/(used in) operating

Nine month period ended December 31, 2010 10,380.60

Fiscal 2010 (7,425.36)

Fiscal 2009 (1,383.55)

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Particulars activities Net cash from/(used in) investing activities Net cash from/(used in) financing activities Net increase/(decrease) in cash and cash equivalents Operating Activities

Nine month period ended December 31, 2010 (34,205.83) 22,687.16 (1,138.07)

Fiscal 2010 (9,028.46) 16,538.99 85.17

Fiscal 2009 1,299.77 971.20 887.42

Fiscal 2008 (34,665.51) 42,051.58 365.16

Net cash from operating activities was ` 10,380.60 lakhs in for the nine month period ended December 31, 2010. Net cash from operating activities consisted of net profit/(loss) before tax of ` (2,175.07) lakhs, as adjusted for interest and financial charges of ` 1,598.12 lakhs, interest income of ` 693.14 lakhs, dividend income of ` 33.58 lakhs, and a number of non-cash items including depreciation of ` 1,808.52 lakhs, gain on disposal of subsidiary of ` 51.75 lakhs and provision for doubtful loans and advances of ` 50.00 lakhs, bad debts written off for ` 86.21 lakhs and provision for sales return and discounts of ` 97.86 lakhs. Changes in working capital primarily consists of increase in inventory of ` 158.30 lakhs, decrease in trade and other receivables of ` 4,802.21 lakhs and increase in current liabilities and provisions of ` 4,561.55 lakhs. Net cash used in operating activities was ` 7,425.36 lakhs in Fiscal 2010. Net cash used in operating activities consisted of net profit/(loss) before tax of ` (1,967.56) lakhs, as adjusted for interest and financial charges of ` 865.73 lakhs, interest income of ` 692.14 lakhs, dividend income of ` 46.69 lakhs and a number of non-cash items including depreciation of ` 862.20 lakhs, gain on disposal of associates of ` 1,321.18 lakhs, gain on disposal of joint ventures of ` 852.19 lakhs, loss on sale of investments of ` 318.49 lakhs, loss on sale of assets (net) of ` 49.44 lakhs and provision for doubtful loans and advances of ` 53.45 lakhs. Changes in working capital primarily consists of decrease in inventory of ` 1,663.21 lakhs, increase in trade and other receivables of ` 4,742.06 lakhs and decrease in current liabilities and provisions of ` 1,817.84 lakhs. Net cash used in operating activities was ` 1,383.55 lakhs in Fiscal 2009. Net cash used in operating activities consisted of net profit/(loss) before tax of ` (5,147.27) lakhs, as adjusted for interest and financial charges of ` 220.06 lakhs, interest income of ` 855.48 lakhs, dividend income of ` 241.67 lakhs and a number of non-cash items including depreciation of ` 700.35 lakhs, loss on sale of investments of ` 1,408.38 lakhs and profit on sale of assets (net) of ` 0.63 lakhs. Changes in working capital primarily consist of increase in inventory of ` 1,358.11 lakhs, decrease in trade and other receivables of ` 8,196.00 lakhs and decrease in current liabilities and provisions of ` 5,174.58 lakhs. Net cash used in operating activities was ` 7,020.91 lakhs in Fiscal 2008. Net cash used in operating activities consisted of net profit/(loss) before tax of ` (409.69) lakhs, as adjusted for interest and financial charges of ` 12.85 lakhs, interest income of ` 216.62 lakhs, dividend income of ` 271.68 lakhs, and certain non-cash items including depreciation of ` 3.27 lakhs, profit on sale of assets of ` 0.06 lakhs and profit on sale of investments of ` 19.88 lakhs. Changes in working capital primarily consists of increase in inventory of ` 2,510.17 lakhs, increase in trade and other receivables of ` 13,383.58 lakhs and increase in current liabilities and provisions of ` 9,480.48 lakhs. Investing Activities Our net cash (used in)/from investment activities in the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008 was ` (34,205.83) lakhs, ` (9,028.46) lakhs, ` 1,299.77 lakhs and ` (34,665.51) lakhs respectively. For the nine month period ended December 31, 2010, our net cash used in investing activities primarily included purchase of fixed assets of ` 16,393.97 lakhs and purchase of investments of ` 20,755.86 lakhs. In Fiscal 2010, our net cash used in investing activities primarily included purchase of fixed assets of ` 3,066.44 lakhs and purchase of investment of ` 23,172.81 lakhs.

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In Fiscal 2009, our net cash generated from investing activities primarily included purchase of fixed assets of `1,040.80 lakhs and purchase of investment of ` 27,694.15 lakhs and redemption of investment of ` 30,032.72 lakhs. In Fiscal 2008, our net cash used in investing activities primarily included purchase of fixed assets of ` 7,403.76 lakhs and purchase of investment of ` 71,270.43 lakhs. Financing Activities Our net cash generated from financing activities for the nine month period ended December 31, 2010, Fiscal 2010, 2009 and 2008 was ` 22,687.16 lakhs, ` 16,538.99 lakhs, ` 971.20 lakhs and ` 42,051.58 lakhs respectively. For the nine month period ended December 31, 2010, our net cash generated from financing activities primarily included ` 25,000 lakhs as proceeds from issue of equity shares and ` 5,927.12 lakhs as proceeds from borrowings which was offset by repayment of borrowings of ` 6,704.14 lakhs and interest paid of ` 1,535.82 lakhs. In Fiscal 2010, our net cash generated from financing activities primarily included ` 20,740.00 lakhs as proceeds from issue of equity shares, which was offset by repayment of borrowings of ` 3,335.28 lakhs and financial charges of ` 865.73 lakhs. In Fiscal 2009, our net cash generated from financing activities primarily included ` 825.00 lakhs as proceeds from share application money and ` 500.00 lakhs as proceeds from issue of equity shares, which was offset by interest paid of ` 220.06 lakhs and repayment of borrowings of ` 133.74 lakhs. In Fiscal 2008, our net cash generated from financing activities primarily included proceeds from borrowings of ` 5,709.43 lakhs and ` 36,355.00 lakhs as proceeds from issue of equity shares, which was offset by interest paid of ` 12.85 lakhs. Indebtedness The Company does not have any indebtedness on an unconsolidated basis. The following table sets forth the Companys secured and unsecured debt position as at December 31, 2010 on a consolidated basis. (In ` lakhs) Amount outstanding as at December 31, 2010 10,769.21 1,332.88 14.23 1,800.35 500.00 14,416.67 3,359.42 0.40 3,359.82 17,776.49

Particulars Secured loans: Cash credit facilities Working capital demand loan Finance lease Term loans Proportionate share in joint venture Total (A) Unsecured loans: Inter-corporate deposits Other loans Total (B) Total (A +B) Contingent Liabilities

The following table sets forth our contingent liabilities on a consolidated basis as at December 31, 2010: Particulars Outstanding guarantees given by the bank in subsidiary

(In ` lakhs) Amount 3,907.40

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Particulars Proportionate share of other contingent liabilities in subsidiaries and joint venture Off-Balance Sheet Arrangements

Amount 1,894.04

We do not participate in transactions that generate relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purposes of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Related Party Transactions We have entered and may in the future continue to enter into transactions of a material nature with certain of our promoters, and Directors and entities controlled by such persons that may have a potential conflict of interest with our interests. Such related party transactions include and will continue to include will include asset purchases from Future Group entities, payment of service and incentive fees to our consultant and mentor, administrative payments, etc. We intend that all our related party transactions will be in the normal course of business and conducted on an arms length commercial basis, in compliance with applicable laws. Quantitative and Qualitative Disclosures about Market Risk We are exposed to securities market risks and interest rate risks in the normal course of our business. Securities Market Risks We may participate in companies whose securities are publicly traded. The market prices and values of publicly traded securities of companies in which we have participated may be volatile and are likely to fluctuate due to a number of factors beyond our control, including the illiquidity of some such securities compared to other publicly traded securities, actual or anticipated fluctuations in the quarterly and annual results of our and other companies in the industries in which they operate, market perceptions concerning the availability of additional securities for sale, general economic, social or political developments, changes in industry conditions, changes in government regulation, shortfalls in operating results from levels forecast by securities analysts, the general state of the securities markets and other material events, such as significant management changes, refinancings, acquisitions and dispositions. Changes in the values of these assets could lead to significant changes in our operating results. Interest Rate Risks We and the companies in which we acquire interests may incur indebtedness which will result in exposure to risks associated with movements in prevailing interest rates. An increase in interest rates could make it more difficult or expensive to obtain debt financing, could negatively impact the value of our Business Ventures and could decrease the returns that Business Venture generates. We believe that we will be subject to risks associated with changes in prevailing interest rates due to the fact that we may deploy our capital in companies whose capital structures may have a significant degree of indebtedness. Participation in highly leveraged companies are inherently more sensitive to declines in revenues, increases in expenses and interest rates and adverse economic, market and industry developments. A leveraged companys income and net assets also tend to increase or decrease at a greater rate than would be the case if money had not been borrowed. As a result, the risk of loss associated with participation in a leveraged company is generally greater than for companies with comparatively less debt. Unusual or Infrequent Events or Transactions Except as discussed above, there have been no events or transactions to our knowledge which may be described as unusual or infrequent.

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Significant Economic Changes Except as discussed above, to our knowledge there are no known factors which will have a material adverse impact on our operations and profitability. Known Trends or Uncertainties Our business has been affected and we expect will continue to be affected by the trends identified above in Factors Affecting our Results of Operations and Financial Condition and the uncertainties described in the section titled Risk Factors beginning on page 12. To our knowledge, except as described or anticipated in this Prospectus, there are no known factors which we expect will have a material adverse impact on our revenues or income from continuing operations Future Relationship between Costs and Income Except as described above and in the section titled Risk Factors beginning on page 12, there are to our knowledge no known factors which would have a material adverse impact on the relationship between costs and income of our Company. Competitive Conditions For details of competitive conditions we face, see sections titled Risk Factors and Business beginning on pages 12 and 116, respectively. Seasonality Our business is not seasonal. However, there could be variations in our quarterly income and profit after tax because of various factors, including those set forth above under Factors Affecting our Results of Operations and Financial Condition and those described in the section titled Risk Factors beginning on page 12. Material Developments after December 31, 2010 We have submitted an expression of intent to the Ministry of Food Processing Industries, Government of India in February 2011 for setting up of a mega food park at Bakrol Village, Ahmedabad District, Gujarat. For further details, please refer to the section Business-Food Processing-Mega Food Parks. We have submitted an expression of intent to the Ministry of Food Processing Industries, Government of India in February 2011 for setting up of a mega food park at Khelgaon, Bhagalpur District, Bihar. For further details, please refer to the section Business-Food Processing-Mega Food Parks. We have entered into a share subscription agreement and a shareholders agreement on March 1, 2011 (SSSHA) with Amar Chitra Katha Private Limited (ACKPL), Idream Holdings Private Limited and certain individuals (collectively referred to as the ACKPL Shareholders) to subscribe up to 1,22,598 equity shares of ACKPL for an amount aggregating ` 3,755.18 lakhs which would constitute 26% of the total issued and paid up equity share capital of the company. We currently hold 49,039 shares of ACKPL constituting 12.79% of the total issued and paid up equity share capital of the company. We have also entered into a wrap agreement on March 1, 2011 with the ACKPL Shareholders whereby we, along with certain other financial investors of ACKPL, have been conferred with certain rights including inter alia tag along rights, right of first offer, affirmative voting rights. For further details, see the section entitled History and Certain Corporate Matters beginning on page 146. We have entered into a Master Service Agreement on January 25, 2011 with Future Corporate Resources Limited (FCRL). In accordance with the terms of this agreement, FCRL shall provide certain support services and other services to us in relation to activities including governance, risk mitigation, human resources policies, information technology and guidance regarding corporate and legal compliance. We are required to pay FCRL an amount aggregating ` 10.00 lakhs for these services. For further details, see the section entitled History and Certain Corporate Matters beginning on page 146.

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On March 14, 2011, we have transferred our entire shareholding of 6,09,197 constituting 6.57% of the share capital of SSIPL to our subsidiary, Indus-League Clothing Limited for the total consideration of ` 1,250.00 lakhs. Our Board has approved the FVIL Employees Stock Option Plan 2011 on February 28, 2011 for issue of employees stock options exercisable into not more than 500 lakhs Equity Shares. Pursuant to the same, we have granted 1,32,80,000 stock option to the employees and directors of the Company and the Subsidiaries. We have acquired 51,600 equity shares of BAPL from Sanjay Bindra and Punita Bindra resulting in increase of our shareholding in Biba Apparels Private Limited from 17.31% to 28.30%. for further details, please see Business Fashion - Biba Apparels Private Limited on page 128.

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SECTION VI: LEGAL AND OTHER INFORMATION OUTSTANDING LITIGATION AND MATERIAL DEVELOPMENTS Except as stated below there are no outstanding litigations, suits, criminal or civil prosecutions, proceedings or tax liabilities against the Company, Directors, Promoters and the Promoter Group Companies and there are no defaults, non-payment of statutory dues, over-dues to banks/ financial institutions/ small scale undertaking(s), defaults against banks/ financial institutions/ small scale undertaking(s), defaults in dues payable to holders of any debenture, bonds and fixed deposits and arrears of preference shares issued by the Company, defaults in creation of full security as per terms of issue/ other liabilities, proceedings initiated for economic/ civil/ any other offences (including past cases where penalties may or may not have been awarded and irrespective of whether they are specified under paragraph (I) of Part 1 of Schedule XIII of the Companies Act) other than unclaimed liabilities of the Company and no disciplinary action has been taken by SEBI or any stock exchanges against the Company, the Promoters or the Directors. Cases filed against the Company Nil Cases filed by the Company Nil Cases involving the Subsidiaries A. Aadhaar Retailing Limited Criminal Cases Cases filed against Aadhaar Retailing Limited 1. A case has been filed in 2008 by the Chief Health Officer before the Chief Judicial Magistrate, Karnal, against Pawan Kumar and Mohinder Singh (in their capacity of being the in-charges of a store in Jundla) on grounds arising from failure to print the green colour symbol on the samples of certain products, rajma white, chana dal and kashmiri chill and upon the failure of these samples to meet the prescribed standard. The court granted bail to Pawan Kumar and Mohinder Singh. The matter is currently pending. A criminal complaint has been filed in 2009 by the Local Health Authority, Haryana before Chief Judicial Magistrate, Hisar, against Sanjay Khanna, (center in charge) and Aadhaar Retailing Limited for violation of the Prevention of Food Adulteration Rules, 1955. On December 17, 2008 the inspectors took a sample of President Dhania and Lal Mirch from a shop in Hansi and after analysis of the samples found them not to meet the prescribed standard under Prevention of Food Adulteration Rules, 1955. The manufacturer of the sample is Shri Banke Bihari Spices Private Limited. The samples were tested again in Central Laboratory and yet again failed to meet the prescribed standards. The Department has to produce evidence. The matter is currently pending. A case has been filed in 2009 by the State of Punjab before the Judicial Magistrate, (1 st class), Amritsar against Vivek Rathi (store manager) for violation of Section 16 of the Prevention of Food Adulteration Rules, 1955. On January 10, 2009 the inspectors took a sample of ghee supplied by Big Bazar from a shop in Ajnala and after analysis of the sample failed to meet the prescribed standard. Vivek Rathi left the organization in August, 2009. It has been prayed that the ghee sold is misbranded as it does not have the complete address of manufacturer. The matter is currently pending.

2.

3.

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4.

A case has been filed in 2008 by the Health Authority before the Chief Judicial Magistrate, Sirsa against Manikchand (store manager) for violation of the Prevention of Food Adulteration Rules, 1955. On May 27, 2008 the inspectors took a sample of parimal basmati rice from a shop in Raina and after analysis of the sample failed to meet the standard prescribed under Prevention of Food Adulteration Act. Manikchand appeared before the forum and bail was granted. Manikchand has left the organization in December, 2009 and the said store has been closed in the area. The matter is currently pending. A criminal complaint has been filed in 2010 by the Local Health Authority, Haryana before Chief Judicial Magistrate, Hisar, against Neeraj Chhabra and Aadhaar Shopping Mall for violation of Rule 32 of Prevention of Food Adulteration Rules 1955. On March 2, 2010 the inspectors took a sample of Godrej Aadhaar Haldi powder from a shop in Yamuna Nagar and allegedly found the product to be misbranded as it did not bear the batch number. The matter is currently pending. A criminal complaint has been filed in 2010 by the Local Health Authority, Haryana before Chief Judicial Magistrate, Punjab against Arvind Chaudhary and Aadhaar Retailing Limited for violation of Rule 32 of Prevention of Food Adulteration Rules 1955. On July 10, 2009 the inspectors took a sample of Rasoi Brand Masala bearing Kalonji from a shop in Ajnala, Punjab and allegedly found the product to be misbranded as it did not bear the batch number or the name of the manufacturer. The matter is currently pending. A criminal complaint has been filed by Food Inspector, Tarantaran, Punjab in 2010 before Chief Judicial Magistrate, Amritsar against Amit Arora, Center in Charge, Tarantaran, Punjab and the director of ARL and others in relation to the sample of Ankur Salt taken from the store in Tarantaran, Punjab supplied by Ankur Chem Food which failed to meet the standard prescribed under the Prevention of Food Adulteration Act, 1954 and the rules made there under. The matter is currently pending. A criminal complaint has been filed by Food Inspector, Ludhiana in 2010 before the Chief Judicial Magistrate, Ludhiana against Ashutosh Pandey, Manager in Store, Samrala and the managing director of Ankur Chem Food Limited in relation to the sample of Ankur Salt taken from the store in Samrala, Punjab supplied by Ankur Chem Food which failed to meet the standard prescribed under the Prevention of Food Adulteration Act, 1954 and the rules made there under. The matter is currently pending. A criminal complaint has been filed by Food Inspector, Ludhiana in 2010 before Chief Judicial Magistrate, Ludhiana against Ashutosh Pandey, Manager in Store, Samrala and the managing director of Good Day Food Limited in relation to the sample of Fresh and Pure Cow Ghee manufactured by Good Day Food Limited taken from the store in Samrala, Punjab which failed to meet the standard prescribed under the Prevention of Food Adulteration Act, 1954 and the rules made there under. The matter is currently pending.

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Civil Proceedings Cases filed against Aadhaar Retailing Limited 1. A civil suit has been filed in 2009 by Jaycee Fertilisers before the Court of Civil Judge (Senior Division), Amritsar against Aadhaar Retailing Limited (in Mumbai and Ajnala respectively) and Godrej Agrovet Limited (the Defendants) alleging that the Defendants have not paid for the fertilisers delivered to them. The amount involved in the matter is ` 8.00 lakhs. The matter is currently pending. A civil suit has been filed in 2009 at Sirsa by Laxmi Narayan, Atam Prakash and Manoj Kumar (the Plaintiffs) before the Court of Civil Judge (Senior Division), against Godrej Agrovet Limited and Aadhaar Retailing Limited (the Defendants). The Plaintiffs are claiming outstanding rental dues from Godrej Agrovet Limited. The amount involved in the matter is ` 2.00

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lakhs towards rental dues from the Defendants. The matter is currently pending. 3. A case under section 11 of the Arbitration and Conciliation Act has been filed by Tejpal, Naresh Pawan Kumar and Laj Rani (the Petitioners) before the Punjab and Haryana High Court against Godrej Agrovet Limited and Aadhaar Retailing Limited (the Respondents) seeking the appointment of arbitrator on grounds arising from the Respondents decision to shut their retail outlet managed by the Petitioners. The Petitioners contend that the notice of Respondent for the termination of the Agreement amount to breach of contract. The amount involved in this matter is ` 77.00 lakhs.The matter is currently pending. A complaint has been filed in 2010 by Nathuram Raheja (the Complainant) before the Additional Civil Judge Senior Division, Hisar against Aadhaar Retailing Limited and Godrej Agrovet Limited on grounds arising from termination of tenancy during the lock-in period. The Complainant seeks rent and compensation till the lock-in period. The Complainant has sought leave of the court to determine compensation. The matter is currently pending. A case has been filed by Deputy Director of Agriculture, Haryana before Chief Judicial Magistrate, Karnal against Ritesh Singh, employee, Aadhaar Retailing Limited and V. K. Sharma Employee, Agrimass Chemicals Limited on the basis that quality of agri mass chemical are bad in quality resulting into destroying the crops of some farmer. The complainant has sought the leave of court to determine the compensation. The matter is currently pending.

4.

5.

Consumer Cases Cases filed against Aadhaar Retailing Limited 1. A complaint has been filed by Jaswinder Singh in November, 2010 before the Consumer Dispute Redressal Forum, Mehta Chowk, Punjab against Aadhaar Retailing Limited and Godrej Company Services through authorised service provider on the basis that the fully automatic machine does not work properly. The machine was purchased from store of Aadhaar Retailing Limited located at Mehta Chowk. The amount claimed in this matter is ` 0.70 lakhs. The matter is currently pending. A complaint has been filed by Shalender in September, 2010 before the District Consumer Dispute Redressal Forum, Jind, Haryana against Aadhaar Retailing Limited on the basis that the fresh & pure ghee sold was under weight. The amount claimed in this matter is ` 0.60 lakhs. The matter is currently pending. A complaint has been filed by Rajesh Kumar in December, 2010 before the District Consumer Dispute Redressal Forum, Yamunanagar, Haryana against Aadhaar Retailing Limited on the basis that the billing amount of some of the products was more than maximum retail price of the products. The amount involved in this matter is ` 0.80 lakhs. The matter is currently pending.

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3.

Cases filed by Aadhaar Retailing Limited A complaint has been filed in 2009 by Aadhaar Retailing Limited before the State Commission, Chandigarh, against Jaswinder Singh on grounds of being aggrieved by an order dated December 29, 2008. The District Commission passed an ex-parte order directing Aadhaar Retailing Limited to pay ` 0.80 lakhs. Pursuant to the order an amount was paid under protest. The amount involved is ` 0.80 lakhs. The matter is currently pending. Labour Cases Cases filed against Aadhaar Retailing Limited 1. A complaint has been filed in 2009 by the Labour Inspector, before the Labour Court, Sonepat against Aadhaar Retailing Limited alleging that the payment of salaries is less than the prescribed

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minimum wages and the working hours are more than hours prescribed. The amount involved in the matter is ` 21.52 lakhs. The matter is currently pending. 2. A complaint has been filed in May 2010 by Gurpreet Singh, field officer at the store of Aadhaar Retailing Limited, Batala, before the Presiding Officer, Labour Court, Gurdaspur, Punjab against Aadhaar Retailing Limited on the basis that his employment was wrongfully terminated on the ground of shrinkage found at the store at Batala. The matter is currently pending.

B.

Indus-League Clothing Limited Cases filed against Indus-League Clothing Limited Civil Proceedings 1. A civil suit has been filed by Kalanjali Arts and Crafts in 2007 before the Court of 1st Senior Civil Judge, City Civil Court, Hyderabad against Indus-League Clothing Limited. The plaintiff has made a claim of ` 0.70 lakhs and interest of ` 0.50 lakhs against return of goods/promotional items of Indus-League Clothing Limited, for which the Indus-League Clothing Limited denies having received such return of goods / promotional items. The matter is currently pending. A civil suit has been filed in 2006 by Indus Clothing Limited (the Plaintiff) against IndusLeague Clothing Limited and Lee Cooper International Limited, (the Defendants) before the Delhi High Court seeking grant of permanent injunction restraining Indus-League Clothing Limited from using the mark Indus Clothing Limited. The Plaintiff prays that (i) Lee Cooper International Limited be restrained from entering into a joint venture arrangement with IndusLeague Clothing Limited; and (ii) a decree in favour of the Plaintiff declaring them to be the prior user/owner of the mark Indus Clothing Private Limited be passed. An application for interim injunction has been dismissed in favour of the Defendants and the suit for passing off is still pending. The suit is currently pending. Cases filed by Indus-League Clothing Limited A civil suit has been filed by Indus-League Clothing Limited before the Court of Civil Judge (Senior Division), Chandigarh, against Meters & Instruments Private Limited and Realtech Construction Private Limited for recovery of refundable security deposit amounting to ` 15.97 lakhs paid under two separate agreements to lease entered into during March 2008. The matter is pending. Tax related proceedings Cases filed by Indus-League Clothing Limited 1. An appeal has been filed before the Commissioner (Appeals-I) by Indus-League Clothing Limited on grounds of being aggrieved by the order passed by the Additional Commissioner, Central Excise (the Commissioner) . The Commissioner has, through a demand order issued in 2009, directed Indus-League Clothing Limited to pay ` 5.88 lakhs towards the recovery of CENVAT credit and imposed an equivalent amount of penalty. Indus-League Clothing Limited has preferred an appeal before CESTAT, Bangalore. The CESTAT, Bangalore has stayed the proceedings and the matter is currently pending. Appeal has been filed in 2009 before the Commissioner Income Tax Appeals by Indus-League Clothing Limited against the Assistant Commissioner Income Tax (Appeals) - I, Bangalore on grounds of being aggrieved by the disallowance of expenses for the assessment year 2006-2007. The amount involved is ` 43.82 lakhs. The matter is currently pending.

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3.

An appeal has been filed by Indus-League Clothing Limited in November, 2010 before the Deputy Commissioner of Sales Tax (Appeals) P-1, Mumbai, against the orders of the Assessing Officer under the Central Sales Tax Act, 1956 claiming ` 790.00 lakhs towards sales tax plus interest thereon and penalty amounting to ` 494.00 lakhs pertaining to the periods 2005-06 and 2006-07. The appellate authority has stayed the recovery proceedings till the final disposal of the matter. The matter is currently pending.

Arbitration proceedings Cases filed against Indus-League Clothing Limited Arbitration proceedings have been initiated in 2009 before the Punjab and Haryana High Court by Dynamic Continental Private Limited against Indus-League Clothing Limited for recovery of dues. The amount involved in the matter is ` 36.41 lakhs. The Punjab and Haryana High Court has ordered for the appointment of sole arbitrator. The matter is currently pending. C. Future Consumer Products Limited Nil D. Future Consumer Enterprises Limited Nil E. Lee Cooper (India) Limited Civil Proceedings Cases filed against Lee Cooper (India) Limited 1. A civil petition has been filed in 2009 before the Rent Controller Court, Ludhiana by M/s Curo India Private Limited (formerly known as Dynamic Continental Private Limited) (the Petitioner) against Lee Cooper (India) Limited (the Respondent) for eviction arising on the ground of alleged non-payment of rent for the period commencing from September, 2008 to May, 2009. The premises have been closed by the Respondent and their stock was removed on January 15, 2009. The Petitioner claims that the possession of the premises has not been handed over to the Petitioner. The matter is currently pending. A money suit has been filed in 2010 before the Civil Judge No. 3 Kamrup, at Guwahati by M/s N.E.Sales Corporation (the Plaintiff) against Lee Cooper (India) Private Limited and others (Defendants) for recovery of ` 3.90 lakhs along with interest, towards financial loss suffered by the Plaintiff due to the alleged breach of understanding by the Defendants. The matter is currently pending. Notices issued against Lee Cooper (India) Limited 1. M/s Curo India Private Limited (formerly known as Dynamic Continental Private Limited) has issued a notice to Lee Cooper (India) Limited under section 434 of the Companies Act for winding up on ground of non-payment of dues of up to ` 139.70 lakhs arisen on account of lease rent, service tax and maintenance charges. The matter is pending. The Registrar of Companies, Karnataka, Bangalore, has issued a notice to Lee Cooper (India) Limited and its directors, C.P. Toshwani and Kailash Bhatia for violation of the provisions of section 159, 166, 210, 217 and 220 of the Companies Act. Lee Cooper (India) Limited has made an application for compounding of offences under section 621A of the Companies Act. The matter is currently pending. Indus Tee Crafts Private Limited

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Nil Litigation involving Directors A. Kishore Biyani Criminal proceedings Cases filed against Kishore Biyani 1. A case has been filed in 2006 before the Magistrates Court, Belapur by the Food and Drugs Administration Department, Thane against Pantaloon Retail (India) Limited and Kishore Biyani, under the Prevention of Food Adulteration Act, 1954 for alleged adulteration in Pure Mustard Oil, the product sold by the Pantaloon Retail (India) Limited. The matter is currently pending. Four criminal cases have been filed in 2008 before the Chief Judicial Magistrate, Ranchi by the Local Health Authority, Municipal Corporation, Ranchi against Kishore Biyani and another, for adulteration and misbranding of food items Toordal, Chana Dal, Chana Besan and Chana Sattu (the Food Items). The samples of the Food Items collected by the Municipal Corporation from Big Bazaar at Ranchi were found to be adulterated and misbranded and did not meet the prescribed standards under the Prevention of Food Adulteration Rules, 1955. It has been alleged that an offence under section 16 of the Prevention of Food Adulteration Act, 1954 has been committed. The matter is currently pending. A criminal case has been filed in 2008 before the First Class Judicial Magistrate, Indore by the Local Health Authority, Municipal Corporation, Indore against Kishore Biyani and other directors of Pantaloon Retail (India) Limited. The sample of the product N-Joi seized by the Municipal Corporation of Indore, from the Pantaloon Retail (India) Limiteds store was found to contain a synthetic food colour ponceau 4R, on a test conducted by the public analyst. There was no declaration on the label of the sample pack to this effect and hence it has been alleged that there has been a violation of Rule 24 and proviso (b) of Rule 32 of the Prevention of Food Adulteration Rules, 1955. It is also alleged that the said product and one another product Fresh & Pure Toast biscuits were adulterated and misbranded. Pantaloon Retail (India) Limited has filed a criminal miscellaneous petition before the Madhya Pradesh High Court, Indore Bench under section 482 of Code of Criminal Procedure, 1973 for quashing the complaint and the Madhya Pradesh High Court has granted exemption to all the directors of Pantaloon Retail (India) Limited till the final disposal of the case in the lower court, by an order dated March 29, 2009. The matter is currently pending in the lower court. A criminal case has been filed in 2007 before the Metropolitan Magistrate, Karkardooma, New Delhi, by the Municipal Authority, Delhi against Pantaloon Retail (India) Limited and its directors in relation to carry on business at the Food Bazaar at Rohini, Delhi without the health trade license. Pantaloon Retail (India) Limited has stated that the application for grant of the said license was made to Municipal Corporation of Delhi and business was commenced pending issuance of the same. Pantaloon Retail (India) Limited has challenged the proceeding before the Sessions Court, Delhi. The matter is currently pending. Two criminal cases have been filed in 2008 by the Local Health Authority, Municipal Corporation of Kamrup, Guwahati before the Chief Judicial Magistrate, Kamrup, Guwahati against the directors of Pantaloon Retail (India) Limited and Pantaloon Retail (India) Limited, in relation to alleged adulteration of food products including (i) a sample of Kalazira which was found to be polished with hydrocarbon oil and contained excessive living insects thereby violating provisions of Prevention of Food Adulteration Rules, 1955 (the Rules); (ii) a sample of Pure Cow Ghee was found to be artificially coloured by using Beta Carotene and also contained excessive living insects thereby violating provisions of the Rules. The matter is currently pending.

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A criminal case has been filed in 2009 by the Local Health Authority, Ahmedabad Municipal Corporation before the Sixth Court of the Metropolitan Magistrate, Ahmedabad against Anil S Kaltari, Pantaloon Retail (India) Limited, Kishore Biyani, Ghanshyam Biyani and Sandip Modi in the capacity of directors of the Pantaloon Retail (India) Limited, in respect of a product supplied at the Pantaloon Retail (India) Limiteds retail outlet at Ahmedabad. The public analyst allegedly found the product to be misbranded as it did not conform to the standards and provisions of the rules 32 (b) and (e) of the Rules and as per section 2 (ix) (k) of the Prevention of Food Adulteration Act, 1954. The matter is currently pending. A criminal case has been filed in 2009 by the Local Health Authority, Government of Delhi before the Additional Chief Metropolitan Magistrate, New Delhi against all the Directors of Pantaloon Retail (India) Limited and Pantaloon Retail (India) Limited. The sample of the product Malatni Madras Mixture seized by the Municipal Corporation of Delhi, from Pantaloon Retail (India) Limiteds store was found to be misbranded as best before date did not appear on the product as required per Rule 32 and 36(2)(a) of the MPSG Act read with the Prevention of Food Adulteration Act, 1954. A writ petition (no. Crl. M.C. No. 3837/2009 in Criminal miscellaneous application (no. 13068/2009) under section 482 of Cr. P.C. before the Delhi High Court against the summons order dated August 10, 2009, wherein the Court granted a stay by an order dated November 11, 2009 against the directors. The matter is currently pending. A criminal case has been filed in 2008 by the Local Health Authority, Municipal Corporation of Indore before the First Class Judicial Magistrate, Indore against all the Directors of Pantaloon Retail (India) Limited. The sample of the products viz. Fresh & Pure Toast Biscuits seized by the Municipal Corporation of Indore, from a store of Pantaloon Retail (India) Limited was found to contain a synthetic food colour on a test conducted by the public analyst that was not declared on the label of the sample pack. It is alleged that there was violation of provisions of the Prevention of Food Adulteration Act, 1954. Pantaloon Retail (India) Limited has filed a criminal miscellaneous petition before the High Court of Madhya Pradesh for quashing the complaint and the High Court of Madhya Pradesh has granted exemption to all the directors of Pantaloon Retail (India) Limited until the final disposal of the case in the lower court. The matter is currently pending. The Local Health Authority, Udaipur has filed a criminal case before the Assistant Chief Judicial Magistrate No. 1, Udaipur against Chetan Dave, Gopikishan Biyani, Kishore Biyani, Rakesh Biyani, Vedprakash Arya, Future Value Retail Limited, Rajesh Kamani, Milind Bhai Sitwala and M/s Bhagwati Floors and Foods Private Limited alleging that the sample of Maida collected from the Big Bazaar was found to be misbranded as per the report of the public analyst and hence an offence under section 2 (ix) (k) of Prevention of Food Adulteration Act, 1954 & Rule 32 (c) of PFA Rules, 1955 has been committed. The matter is pending.

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Civil Cases Cases filed against Kishore Biyani A civil suit has been filed in 2009 before the Bombay High Court by Sports and Leisure Apparels Limited against PRIL, Kishore Biyani and others in respect of shops no. 6A and 6B situated at ground floor, Cross Road Mall, 28 Pandit M. M. Malviya Road, Haji Ali, Mumbai. The plaintiffs have sought an injunction against the defendants from creating any third party right, interest and parting with possession or inducting third party in possession of the demised property until the final disposal of the suit and has claimed compensation of ` 191 lakhs towards the loss of business and ` 791 lakhs as damages. The notice of motion for an ad-interim relief was duly dismissed by an order dated July 3, 2009. An appeal was filed against the said order, which was also dismissed. The matter is currently pending. Consumer Cases Cases filed against Kishore Biyani

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A consumer complaint has been filed in 2010 before the Consumer Forum South Mumbai by Rakesh K. Agrawal (the Complainant) against Pantaloon Retail (India) Limited, Kishore Biyani and Big Bazaar, Mumbai for being allegedly over charged by ` 35 for the three products purchased by him from the store. The case is currently pending. Notices 1. Eight separate notices have been issued by the Registrar of Companies, Mumbai against Kishore Biyani, Rakesh Biyani and Gopikishan Biyani in their capacity as directors of Pantaloon Retail (India) Limited and Pantaloon Retail (India) Limited on grounds including inter alia (i) not furnishing the particulars of employees to the Registrar of Companies or to the inspecting officer, (ii) non-disclosure of the complete registered office address in the balance sheet, (iii) not furnishing the particulars of export activities, (iv) irregularities in approving accounts, (v) irregularities in accounts related disclosures, (vi) finalization of the balance sheets and profit and loss accounts without obtaining confirmation of unsecured loans, current assets, loans and advances and current liabilities, (vii) not furnishing/annexing the statement in pursuance of section 212 of the Companies Act for the four subsidiaries. Pantaloon Retail (India) Limited has responded to the notice and has not received any further correspondence in the matter. Equinox Business Parks Private Limited (Equinox) has issued a legal notice dated April 5, 2011 to Agre Developers Limited (Agre), Kishore Biyani and the directors of Agre. Agre had entered into a leave and license agreement dated October 11, 2010 (Agreement) with Equinox for the use and occupation of certain commercial premises from January 1, 2011 to November 30, 2015. Equinox has alleged that Agre has failed to take possession of the premises as per the Agreement and has demanded a sum of ` 820.24 lakhs towards payment of license fee, amenities charges, common area maintenance charges and brokerage.

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Anil Harish Cases filed against Anil Harish Criminal proceedings 1. The Local Health Authority, Municipal Corporation of Indore has filed a criminal case in 2008 before the First Class Judicial Magistrate, Indore against all the directors of Pantaloon Retail (India) Limited, including Anil Harish. The sample of a product namely N-Joi, seized by the Municipal Corporation of Indore, from a store of Pantaloon Retail (India) Limited was found to contain a synthetic food colour on a test conducted by the public analyst that was not declared on the label of the sample pack. It is alleged that there was violation of provisions of the Prevention of Food Adulteration Act, 1954. Pantaloon Retail (India) Limited has filed a criminal miscellaneous petition before the High Court of Madhya Pradesh for quashing the complaint and the High Court of Madhya Pradesh has granted exemption to all the directors of Pantaloon Retail (India) Limited until the final disposal of the case in the lower court. The matter is currently pending. The Local Health Authority, Municipal Corporation of Indore has filed a criminal case in 2008 before the First Class Judicial Magistrate, Indore against all the directors of Pantaloon Retail (India) Limited, including Anil Harish. The samples seized by the Municipal Corporation of Indore, from a store of Pantaloon Retail (India) Limited were found to be misbranded on a test conducted by the public analyst and a criminal complaint has been lodged. PRIL has filed a criminal miscellaneous petition before the High Court of Madhya Pradesh for quashing this complaint and the High Court of Madhya Pradesh has granted exemption to all the directors of PRIL until the final disposal of the case in the lower court. The matter is currently pending. The Municipal Authority of Delhi filed a case (no. 220 of 2007) before the Metropolitan

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Magistrate, Karkardooma, New Delhi, against Pantaloon Retail (India) Limited and all its directors, including Anil Harish in relation to carrying on business at a Food Bazaar store in New Delhi without a health trade license. Pantaloon Retail (India) Limited has submitted that the business was commenced after an application was made but pending issuance of the license. The matter is currently pending. 4. The Local Health Authority, Municipal Corporation of Kamrup, Guwahati has filed a criminal case (no. 4557 of 2008) before the Chief Judicial Magistrate, Kamrup, Guwahati against all the directors of the Pantaloon Retail (India) Limited including Anil Harish and Pantaloon Retail (India) Limited in relation to adulteration of food products. The sample of a product seized by the Municipal Corporation of Kamrup, Guwahati from a Big Bazaar store was found to be polished with hydrocarbon oil. It is alleged that there is violation of the provisions of the Prevention of Food Adulteration Act, 1948. The matter is currently pending. The Local Health Authority, Municipal Corporation of Kamrup, Guwahati has filed a criminal case (no. 4556 of 2008) before the Chief Judicial Magistrate, Kamrup, Guwahati against all the directors of Pantaloon Retail (India) Limited including Anil Harish and Pantaloon Retail (India) Limited, in relation to adulteration of food products. The sample of a product collected by the Municipal Corporation of Kamrup, Guwahati from Pantaloons was found to be artificially coloured and contained live insects. It has been alleged that there has been a violation of the Prevention of Food Adulteration Act, 1954 and rules there under. The matter is currently pending. The Local Health Authority, Government of NCT of Delhi has filed a criminal case (no. 94/PFA/DA/09) before the Additional Chief Metropolitan Magistrate, Patiala House, New Delhi against all the directors of Pantaloon Retail (India) Limited including Anil Harish and Pantaloon Retail (India) Limited. The sample of a product seized by the Municipal Corporation of Delhi, from a store of PRIL was found to be misbranded as the best before date was not mentioned. A report of the public analyst states that the mixture is not adulterated. Summons was issued against all the directors in the said matter on August 10, 2009. PRIL has filed a writ petition before the High Court of Delhi. The High Court of Delhi has stayed the summoning order. The matter is currently pending. The Haryana State Pollution Control Board, Panchkula has filed a complaint before the Special Environment Court, Faridabad against Unitech Developers and Projects Private Limited, a wholly owned subsidiary of Unitech Limited, and all the directors of Unitech Limited alleging that Unitech Developers and Projects Private Limited has not procured necessary clearance certificate from the Ministry of Environment and Forest. Unitech Developers and Projects Private Limited has obtained a stay order against the said complaint from the High Court of Punjab and Haryana. Unitech Limited has filed objection before the High Court of Punjab and Haryana (no. 34688 of 2009) in relation to the directors of Unitech Limited being included as parties to the proceedings. The matter is currently pending.

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Civil Proceedings Cases filed against Anil Harish 1. A suit has been filed in 2003 before the Civil Judge, Senior Division at Alibaug by Shivnath Ganpat Patil and others (the Plaintiffs), in their capacity of representing certain villagers at Akshi against Anil Harish and others (Defendants) for challenging a deed of right of way executed between Abdul Hamid Kasam Mujawar, and the Defendants. The Plaintiffs challenged the right of way granted to the Defendants over a piece of land situated at village Akshi, taluka Alibag, district Raigad, which is adjacent to the land of the Defendants. The matter is currently pending. The Company Law Board (the CLB) had passed an order directing the Central Government to initiate an investigation under section 237 of the Companies Act against Mukta Arts Limited

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(MAL), Anil Harish, in his capacity as director of MAL and others. MAL filed an appeal against the order of CLB in the Bombay High Court. The Bombay High Court has granted a stay in favour of MAL and the matter is currently pending. Cases filed by Anil Harish

1.

A civil suit has been filed before the Civil Judge, Senior Division at Alibaug by Anil Harish and others against Abdul Hamid Kasam Mujawar and others seeking specific performance for an agreement for sale dated January 17, 2009. The consent terms have been arrived, however the court has not passed an order disposing off the same.

Anil Harish is also aware of certain other cases filed against Unitech Limited, in the capacity of being a director of Unitech Limited and not in his individual capacity. C. Anand Balasundaram Nil D. Jagdish Shenoy Nil E. G.N.Bajpai Nil Cases involving Promoters A. Kishore Biyani For details of outstanding litigation involving Kishore Biyani, please see the section entitled Litigation involving Directors - Kishore Biyani on page 369. B. PIL Industries Limited (formerly known as Pantaloon Industries Limited) Arbitration proceedings Cases filed by PIL Industries Limited (formerly known as Pantaloon Industries Limited) Arbitration proceedings have been initiated in 2006 before the Bombay High Court by PIL Industries Limited (the Plaintiff) against Manroopji Bhagchand & Co. (the Defendants) on grounds arising from non-payment of the arbitration award dated October 4, 2007. The arbitration bench ordered the Defendants to inter alia (i) pay the original amount of ` 2.65 lakhs along with an interest amount of ` 0.91 lakhs, as on October 4, 2007; and (ii) pay committee expenses of ` 1,900 within 30 days of the decision. The Defendants failed to make the necessary payments within 30 days. The court has initiated execution proceedings under Order XXI Rules 43 and 54 of the Code of Civil Procedure, 1908 directing joint warrant of attachment of movable and immoveable properties in possession of the Defendants. The parties failed to settle the matter amicably and the matter is currently pending. Notices issued against PIL Industries Limited (formerly known as Pantaloon Industries Limited)(PIL) Nine separate notices have been issued by the Registrar of Companies, Mumbai against Vijay Biyani, Anil Biyani and Sunil Biyani in their capacity as directors of PIL and three separate notices have been issued against PIL on grounds including inter alia (i) not furnishing the particulars of employees to the Registrar of Companies or to the inspecting officer, (ii) inadequate furnishing of the particulars of the employees in

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the annual report, (iii) not furnishing the particulars of export activities, (iv) irregularities in approving accounts, (v) inadequate furnishing of disclosure in notes to accounts, (vi) finalization of the balance sheets and profit and loss accounts without obtaining confirmation of unsecured loans, current assets, loans and advances and current liabilities, (vii) non disclosure of the complete registered office address in the balance sheet and (ix) irregularities in appointment of a director. PIL has responded to the notice and has not received any further correspondence in the matter. C. Pantaloon Retail (India) Limited (PRIL) Criminal Cases Cases filed against PRIL 1. A criminal case has been filed in 2003 before the 6 th Court of the Metropolitan Magistrate, Ahmedabad by the Local Health Authority, Ahmedabad Municipal Corporation against Pantaloon Retail (India) Limited (PRIL) in respect of a product supplied at the PRILs retail outlet at Ahmedabad. The public analyst allegedly found the product to be adulterated as it did not conform to the standards and provisions of the Prevention of Food Adulteration Rules, 1955 and it was found to be misbranded in terms of section 2(ix)(k) of the Prevention of Food Adulteration Act, 1954. PRIL has filed a criminal miscellaneous petition before the Gujarat High Court under section 482 of Criminal Procedure Code, 1973, seeking that the complaint against it be quashed. The Gujarat High Court has stayed the proceedings pending before the Metropolitan Magistrate, Ahmedabad and has quashed the entire proceedings pending against Kishore Biyani. Thus, currently the matter is pending in relation to PRIL and an employee Alok Dave. A criminal complaint has been filed in 2007 by the Mobile Vigilance Squad, Kozhikode before the Chief Judicial Magistrate, Palakkad against PRIL, Big Bazaar (Palakkad Kerala) and others, alleging that the sample of Urad Gota collected from the said Big Bazaar was adulterated. The matter is currently pending. Two criminal cases have been filed by the Local Health Authority, Hubli before the First Class Judicial Magistrate, Hubli against the officials of Big Bazaar, Hubli, alleging that the samples of Turadal and Moong Dal collected from the said Big Bazaar were found to be adulterated as per the report of the public analyst and hence an offence under section 7 (1) read with section 16 (a) of the Prevention of Food Adulteration Act, 1954 has been committed. These matters are currently pending. A criminal case has been filed in 2010 before the First Class Judicial Magistrate, Municipal Court, Baroda by the Local Health Authority, Baroda against Big Bazaar, Seven Seas Mall, Vinay Garg Manager Seven Seas Mall, Baroda, and owner of SIS Hariharan Motilal Agarwal. The public analyst allegedly found the sample of Gulkand Mukhwas collected from the Big Bazaar to be adulterated as it did not conform to the standards and provisions of the Prevention of Food Adulteration Rules, 1955 and it was found to be misbranded in terms of section 2(ix)(k) of the Prevention of Food Adulteration Act, 1954. The report of Central Laboratory is awaited. The matter is currently pending. A criminal case has been filed in 2010 before the First Class Judicial Magistrate, Municipal Court, Baroda by the Local Health Authority, Baroda against Big Bazaar, Seven Seas Mall, Vinay Garg Manager Seven Seas Mall, Baroda, and owner of SIS Hariharan Motilal Agarwal. The public analyst allegedly found the sample of Mava Mukhwas collected from the Big Bazaar to be adulterated as it did not conform to the standards and provisions of the Prevention of Food Adulteration Rules, 1955 and it was found to be misbranded in terms of section 2(ix)(k) of the Prevention of Food Adulteration Act, 1954. The report of Central Laboratory is awaited. The matter is currently pending. Criminal complaint has been filed in 2009 under section 15 of the Environment Protection Act,

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1986 before the Additional Chief Metropolitan Magistrates Patiala House Court by the Delhi Pollution Control Committee against Big Bazaar Vasant Kunj and others on grounds arising from violating the notification dated November 7, 2009. The notification forbids the use of polyethylene bags, which were allegedly used at the store. The matter is currently pending. 7. A criminal case has been filed in 2008 against one of the employees of PRIL by a customer under sections 406 and 407 of the Indian Penal Code, 1860 and 3(x) of the Scheduled Castes and the Scheduled Tribes (Prevention of Atrocities) Act, 1989. The matter is currently pending. A criminal case has been filed in 2008 by the Local Health Authority, Bangalore before the Special Court for Economic Offences, Bangalore against the Manager, Food Bazaar, Hosur Road and another, alleging that the sample of Carbonated water (Kinley Club Soda) collected from the said Food Bazaar was expired on the date of taking the sample and hence an offence under the Prevention of Food Adulteration Act, 1954 had been committed. The matter is currently pending. A criminal case has been filed in 2009 by the State of Karnataka represented by Hebbal Police Station before Additional Chief Metropolitan Magistrates Court at Bangalore against Aleem, Manjunathgowda and others, who were the employees of PRIL, for hurting a person. All the accused have been released on bail and the charge sheet has been filed before the court. The matter is currently pending.

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For further details in relation to criminal cases which have been filed against Kishore Biyani, Anil Harish and Pantaloon Retail (India) Limited, please see section entitled Outstanding Litigation and Material Developments - Criminal Cases - Cases filed against Kishore Biyani and Outstanding Litigation and Material Developments - Criminal Cases - Cases filed against Anil Harish on pages 369 and 371, respectively. Cases filed by PRIL 1. PRIL has filed a criminal complaint before the Economic Offences Wing, against Prakash Khanduri, Mithun Sahal, Futermal Jain, Gopal Jain, Praveen, A.P. Mahesh Co-operative Bank Limited and its officials, Sahebrao Deshmukh Co-operative Bank Limited and its officials and Apna Sahakari Bank Limited and its officials against certain banks, officers and others. PRIL has alleged that the accused persons got cheques issued by it in the name of its vendors by making false entries in the system and creating fake accounts in the name of the vendors, with the above said banks, in collusion with the officials of the banks. The amount involved in this case is ` 52.88 lakhs . All the accused have been duly arrested by the Economic Offences Wing. Mithun Sahal, Futermal Jain and Praveen have been released on bail and bail application filed by Prakash Khanduri was rejected by the lower Court. Prakash Khanduri had filed an appeal against the order which has been dismissed by the Sessions Court of Mumbai. The High Court has granted bail to Prakash Khanduri. A charge sheet has been before the Metropolitan Magistrates Court at Esplanade Court, Mumbai The matter is currently pending. A criminal case has been filed in 2007 by PRIL before the Second Additional Chief Metropolitan Magistrate, Nampally, Hyderabad by PRIL against the accused in relation to dishonour of three cheques issued by him for an aggregate amount of ` 1.00 lakhs. The said cheques were issued by the accused towards the payment of various mobile phones purchased by him from Big Bazaar located in Hyderabad on credit. The complaint has been filed under section 138 of the Negotiable Instruments Act, 1881. PRIL has claimed a compensation aggregating to twice the total amount mentioned in the said cheques, in addition to the punishment to be imposed on the accused. The matter is currently pending. PRIL and Big Bazaar, City Centre, Kerala have filed a criminal miscellaneous petition in 2008 before the Kerala High Court against State of Kerala to stay all further proceedings against them in case (ST. no. 3/ 2008) which was filed before the First Class Judicial MagistrateIII Palakkad, till the disposal of the instant petition. The said case was filed before the Magistrate alleging violation

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of the provisions of Weights and Measures (Enforcement) Act, 1985 and Packaged Commodities Rules, 1977. The High Court has passed directions dated July 8, 2008 that until further orders, personal presence of the petitioners shall not be insisted by the learned magistrate and that the petitioners shall be permitted to appear through their counsels. The matter is currently pending. 4. A criminal case has been filed by PRIL before the Metropolitan Magistrate, 48 th Court, Andheri at Mumbai against M/s Nandos Indage Restaurant Private Limited and others under section 138 of the Negotiable Instruments Act, 1881 in relation to the post dated cheques issued by the accused towards payment of their outstanding rent for the space provided by PRIL at Unit no. 6 on the Ground Floor at Orchid City Centre Mall which caused a loss of approximately ` 3.00 Lakhs. The matter is pending.

Civil Cases Cases filed against PRIL 1. A civil suit has been filed in 2003 by Raymond Limited before the Bombay High Court against PRIL and others, for restraining PRIL from selling goods under the trademark RAYMEN. The claimant has claimed that PRIL aided and abetted the infringement of the said trademark by selling goods manufactured by the supplier in their stores and has sought damages for an amount aggregating ` 5.00 lakhs. The parties are negotiating settlement and the matter is currently pending. An original suit has been filed in 2008 before the Delhi High Court by Central Retail Corporation Limited, Central Department Store Limited and Harng Central Department Store Limited against Future Brands Limited and PRIL, seeking permanent injunction against the defendants to restrain them from using the trademark Central. Further, the plaintiffs have sought damages amounting to ` 1,000 lakhs. Future Brands and PRIL have filed the written statement on November 3, 2008. The matter is currently pending. Two original suits have been filed in 2007 by Sanman Residency and Shree Kesar Trading Company respectively before the City Civil Court, Bangalore and Senior Civil Judge, Hyderabad against PRIL and Food Bazaar, for recovery of money. The main issue in the one of the case pertains to certain discrepancies in the bill amount raised by the plaintiff for stay of PRILs employees in their hotel. The plaintiff has claimed an amount of ` 3.00 lakhs and interest at the rate of 18 %per annum, towards the alleged balance amount to be paid by PRIL. The matter is currently pending. In the other case the plaintiff has claimed an aggregate amount of ` 2.00 lakhs and interest at the rate of 18 %per annum for the delayed payment on account of the goods supplied by the plaintiff to the defendant. PRIL has filed its written statement. These matters are currently pending. A civil suit has been filed in 2008 by Damji Bhai Hansraj Bhai Vekaria before the Principal Senior Civil Judge, Rajkot against Big Bazaar and Pantaloon, Rajkot, alleging that the building wherein Big Bazaar and Pantaloon are located is illegal. The plaintiff has stated that the land was acquired from the plaintiff for town planning and therefore, cannot be allotted for commercial purpose. The matter is currently pending. A civil suit has been filed in 2006 by Rohit Chandra before the Court of Civil Judge South (Junior Division), Lucknow against PRIL and another, alleging that PRIL is liable for the offence of carrying on unfair trade practices, by selling the goods at lesser prices and thereby trying to create monopoly. The plaintiff has stated that PRIL has been selling foreign imported goods without the required details, such as name of the manufacturer, maximum retail price and date of manufacture and that the staff of PRIL has hurt his religious sentiments. The plaintiff has sought permanent injunction against PRIL to restrain it from carrying on its business activities in the demised premises. PRIL has filed the written statement. The matter is currently pending.

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A civil suit has been filed in 2007 by Sanjay Goel before the Court of Senior Civil Judge, Delhi against Jaipur Golden Transport Limited and PRIL, for non receipt of payment for goods delivered to PRIL and Jaipur Golden Transport Limited. The plaintiff has claimed an amount of ` 1.00 lakhs and interest at the rate of 18% per annum. The plaintiff has also requested for permanent injunction against Jaipur Golden Transport Limited for restraining it from selling, transferring and disposing off the goods by auction or otherwise, till full and final payment of the said suit amount. The matter is currently pending. A recovery suit has been filed in 2008 before the Court of District Judge, Delhi by AVS Trading Company Limited against PRIL to recover possession of the property at 14-A, 8th Floor, Dr. Gopal Das Bhavan, 28, Barakhamba Road, New Delhi, which was transferred by the plaintiff to PRIL through a lease deed of three years. The lease deed was terminated by the plaintiff after giving a notice dated October 26, 2007. The plaintiff has claimed damages amounting to ` 1.00 lakhs and interest at the rate of 18 % per annum from the defendant, for delay in returning the possession of the property. The matter is currently pending. A complaint has been filed before the Monopolies and Restrictive Trade Practices Commission, New Delhi by J.K. Dhingra against the Branch Manager, Big Bazaar, Inderlok, Delhi and others, for use of monopolistic, restrictive and unfair trade practices by the respondent in respect of the Great Exchange Offer scheme launched from February 16, 2007 to March 16, 2007. The complainant has claimed that he had collected exchange coupons worth ` 0.09 lakhs, but he was not given items of standard quality by the respondents and was forced to purchase goods worth ` 0.36 lakhs to get the exchange coupons reimbursed. The amount involved in the matter is ` 1.24 lakhs. The matter is currently pending. Two cases have been filed before the City Civil Court, Kolkata against PRIL and others, for nontransfer of 100 shares and 200 shares respectively of PRIL, which the plaintiffs had bought from other defendants. PRILs registrars Intime Spectrum Registry Limited, did not transfer the shares as the signatures on the share transfer deed did not match the specimen signature recorded with it. The plaintiff has sought a direction from the court to direct other defendants to take necessary steps for completion of the transfer in their name and an injunction to restrain PRIL from granting any right in respect of the said shares to other defendants/persons. PRIL has filed written statements. The matters are currently pending. A civil suit has been filed in 2009 before the Bombay High Court by Sports and Leisure Apparels Limited against PRIL, Kishore Biyani and others in respect of shops no. 6A and 6B situated at ground floor, Cross Road Mall, 28 Pandit M. M. Malviya Road, Haji Ali, Mumbai. The plaintiffs have sought an injunction against the defendants from creating any third party right, interest and parting with possession or inducting third party in possession of the demised property until the final disposal of the suit and has claimed compensation of ` 191 lakhs towards the loss of business and ` 791 lakhs as damages. The notice of motion for an ad-interim relief was duly dismissed by an order dated July 3, 2009. An appeal was filed against the said order, which was also dismissed. The matter is currently pending. A civil suit has been filed in 2009 before the Small Causes Court, Bangalore, by Tunes, Bangalore against PRIL alleging non receipt of payment of ` 0.69 lakhs towards the delivery of audio and video CDs and VCDs. The matter is currently pending. A civil suit has been filed in 2009 before the Delhi High Court by filed by Koninklijke Phillips Electronics N.V. against Bhagirathi Electronics and Big Bazaar and HSRIL alleging infringement of patent and selling of DVD player of PASSION respectively and has claimed certain data from Big Bazaar and HSRIL. The matter is currently pending. Fabindia Overseas Private Limited and others have filed a writ petition in 2010 before the Bombay High Court, against the Union of India, Secretary-Ministry of Finance, Director General of Service Tax and Central Board of Excise and Customs, PRIL and others seeking a stay of service tax

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levied on renting of immovable property. The matter is currently pending. 14. M. G. Dattathreya and others have filed a writ petition in 2010 before the High Court of Karnataka at Bangalore, against the Assistant Commissioner of Service Tax Bangalore, Commissioner of Service Tax Bangalore, Director General of Service Tax, Union of India, and against PRIL seeking a stay of service tax levied on renting of immovable property. In the said matter, interim order has been passed whereby no recovery of the service tax shall be made in respect of renting of an immovable property. The matter is currently pending. Hardcastle Restaurants Private Limited and others have filed a writ petition in 2010 before the High Court of Bombay against Union of India, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. M/s. Nova Plast has filed a summary civil suit against PRIL in 2010 before the Small Causes Court, Ahmedabad for the recovery of outstanding dues towards the goods supplied by him to PRIL during the year 2007-08. Accordingly, PRIL has made a payment towards the settlement of the outstanding dues in question. The matter is currently pending. Welspun Retail Limited and others have filed a writ petition in 2010 before the Bombay High Court, against the Union of India, Ministry of Finance, Director General of Service Tax and Central Board of Excise and Customs, Commissioner of Service Tax, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. M/s. Brand Calculus Franchising India Private Limted has filed a writ petition in 2010 before the High Court of Karnataka at Bangalore, against Union of India, Director General of Service Tax, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. A civil suit has been filed in 2009 by Indian Performing Right Society Limited against PRIL and two of its officer for restraining PRIL from publicly performing or authorizing the public performance or communication to the public of the plaintiffs repertoire of musical and literary works or any part of the same in their Pantaloons stores located at Unitech, Rohini, Delhi and crossriver Mall Shahdara, Delhi. By way of interim arrangement. PRIL has paid license Fees for one year to play music in all group stores. The matter is currently pending. Quest Retail Private Limted has filed a writ petition in 2010 before the Bombay High Court, against Union of India, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. Samsonite South Asia Private Limted has filed a writ petition in 2010 before the Bombay High Court, against the Union of India, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. Paramount Surgimed Limited and others have filed a writ petition in 2010 before the Bombay High Court, against the Union of India, PRIL and others seeking a stay of service tax levied on renting of immovable property. The matter is currently pending. Two separate writ petitions have been filed by INOX Leisure Limited (Inox Petition) and A & W Promoters & Developers Private Limited (A&W Petition) both against the Union of India seeking a stay of service tax levied on renting of immovable property. Pantaloon Retail (India) Limited and Future Value Retail Limited have been made pro forma parties in relation to Inox Petition and A&W Petition, respectively. The matters are currently pending. The Union Bank of India has filed an application before the Debt Recovery Tribunal III, Kolkata, against PRIL and others seeking recovery of ` 295 lakhs and interest from PRIL. PRIL has filed an application for removal of its name, the hearing whereof has been completed and the

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order is awaited. The matter is pending. Cases filed by PRIL 1. PRIL has filed an original suit in 2006 before the City Civil Court, Bangalore seeking a perpetual injunction to restrain the defendants from interfering in the peaceful possession of the immovable property situated at Marathahallli Village, Varthur Hubli, Bangalore. PRIL had taken the said property on lease from defendants by way of a lease agreement dated September 4, 2006 for a period of five years, further renewable for a period of seven years. The defendants were trying to create a third party interest in the said suit property despite of having entered into the lease agreement with PRIL and are trying to dispossess PRIL from the property. The Court has granted temporary injunction restraining the defendants from interfering in PRILs peaceful possession of the property. The matter is currently pending. A case has been in 2008 filed before the District Judge, Jaipur by PRIL against Rebecca Expo Investment Private Limited for cancellation of a memorandum of understanding dated October 7, 2005 entered into between PRIL and the certain persons for transfer of a property situated in Jaipur. The said memorandum of understanding has been cancelled by the defendants stating that they are unable to transfer the property due to force majeure reasons. The court did not allow the interim injunction sought by PRIL and did not restrain the defendants from transferring the property to third parties, against which an appeal (no. 3647 of 2008) has been filed before High Court of Rajasthan for the requisite relief. The High Court of Rajasthan has passed an order dated September 16, 2008, for maintaining the status quo in respect of the suit property. The matter is currently pending. A case has been filed in 2010 before the District Judge, Hyderabad by PRIL against Chalasani Purnchandra Rao and others (the Defendants) for non-adherence to the terms of the memorandum of understanding dated November 23, 2009 executed by and between PRIL and the Defendants for a property situated in Kukatpally. The terms of the MoU were breached by the Defendants and the lease was not granted to PRIL. PRIL seeks interim relief in order to restrain the Defendants from creating any third party rights in respect of property. The damages claimed aggregate to ` 200 lakhs. The court through its order dated June 2, 2010 allowed the interim injunction sought by the Company to restrain the Defendants from transferring the property to third parties. The matter is currently pending. A case has been filed in 2010 before the Additional Civil Judge, Ludhiana by PRIL against FMI Limited for cancellation of a memorandum of understanding entered into between PRIL and FMI Limited in relation to letting out to us space in the upcoming mall FMI centre at Ludhiana. PRIL is seeking permanent and mandatory injunction against the termination of the memorandum of understanding. The matter is currently pending. The Upper Collector, Ghaziabad has initiated a case in 2008 against PRIL for deficiency in payment of stamp duty for certain property related transactions. PRIL had filed a reply to the notice. The Upper Collector passed an order dated November 4, 2008 that a notice is required to be sent to the lessor in relation to the said insufficiency in payment of stamp duty. The Lessor filed its reply dated December 10, 2008 in the Court of Assistant Commissioner of Stamps, Gaziabad. Subsequently, the Assistant Collector, Ghaziabad in this case passed an order dated April 24, 2009 directing PRIL to pay ` 259 lakhs towards stamp duty and ` 25.00 lakhs towards penalty aggregating to ` 285 lakhs. PRIL had filed an appeal against the said order before the Chief Controlling Revisional Authority, Allahabad to stay that order and has also deposited ` 130 lakhs. The Chief Controlling Revisional Authority, Allahabad didnt grant the stay and therefore PRIL has filed a writ petition with the Allahabad High Court for a stay. The Allahabad High Court has, vide its order dated July 10, 2009, granted a stay in the said matter stating that till the appellate authority reaches the final decision no recovery shall be made against the PRIL for the balance amount. The matter is currently pending.

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The District Collector of Stamps, Gautambudhnagar, Uttar Pradesh has issued a notice in 2009 to PRIL for deficiency in payment of stamp duty amounting to ` 303 lakhs, in relation to a property related transaction. The matter is currently pending for hearing. Furthermore, earlier also a case (no. 45 of 2007) was filed in respect of the same property, wherein an order was passed by the Collector, Gautambudhnagar on March 30, 2009, imposing a stamp duty of ` 242.00 lakhs along with penalty and interest of ` 24.00 lakhs total aggregating to ` 266 lakhs on PRIL, as per section 33 of the Indian Stamp Act, 1899. PRIL had filed an appeal against the order before the Chief Controlling Revenue Authority (CCRA), Allahabad, which was dismissed by an order dated November 3, 2009. PRIL thereafter had filed a writ petition against the order before the High Court of Allahabad. By an order dated November 24, 2009 the High Court of Allahabad granted a stay and directed PRIL to pay 50% deposit of the impugned demand. PRIL has deposited ` 121 lakhs payable to Tehsildar, Dadri, G.B. Nagar in December, 2009. The matter is currently pending. The Collector of Stamps, Kanpur has filed a case in 2007, against PRIL, for alleged deficiency in payment of stamp duty in respect of a property transaction, seeking to recover an amount of ` 56.00 lakhs as stamp duty along with penalty. The Collector of Stamps through an order dated May 28, 2007 directed PRIL to pay the aforesaid amount along with penalty. PRIL has filed a writ petition before the Allahabad High Court against the order of the Collector of Stamps. The Allahabad High Court referred the matter to Chief Controlling Revisional Authority, Allahabad and the case was remanded back to Kanpur Stamp Office by Chief Controlling Revisional Authority. PRIL has already paid a stamp duty of ` 51.00 lakhs and the instrument is partly executed. The Collector of Stamps, Kanpur has passed another order dated September 29, 2008, wherein PRIL has been directed to pay ` 51.00 lakhs towards the stamp duty and an equivalent amount towards the penalty aggregating to ` 102 lakhs. The PRIL has filed an appeal before the Chief Controlling Revisional Authority against the said order. The Chief Controlling Revisional Authority has granted stay on the order of the Collector of Stamps, Kanpur. PRIL has filed another writ petition (no. 51538 of 2009) before the Allahabad High Court, wherein, further stay was granted by an order dated October 10, 2009. The matter is currently pending.

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Tax Related Cases Cases filed against PRIL 1. The Deputy Commissioner of Income Tax has passed an order against PRIL directing them to pay an amount aggregating approximately ` 18.00 lakhs for the assessment year 2001-2002. PRIL filed an appeal against the order before the Commissioner of Income Tax (Appeals), Mumbai. The Commissioner of Income Tax (Appeals) through an order dated November 19, 2004 disposed the matter partly in favour of PRIL. The Deputy Commissioner of Income Tax and PRIL have filed an appeal against the aforesaid order on March 11, 2005 and January 20, 2005, respectively before the Income Tax Appellate Tribunal, Mumbai (ITAT). The ITAT has decided the appeal and remanded the matter back to the Commissioner of Income Tax (Appeals) for fresh adjudication. The matter is currently pending. The Deputy Commissioner of Income Tax passed an order against PRIL and reduced the addition in capital work in progress to the extent of ` 75.97 lakhs for the assessment year 2001-02. PRIL filed appeal against the order before Commissioner of Income Tax (Appeals), Mumbai (CIT) disputing reduction in capital work in progress. The CIT (Appeal) through order dated June 29, 2009 allowed the reduction of the capital work in progress claimed by PRIL. Subsequently, the Deputy Commissioner of Income Tax passed orders against PRIL in the assessment years 20022003, 2003-2004, 2005-2006 and 2006-2007 disallowing depreciation on account of reduction of capital work in progress in the assessment year 2001-2002. PRIL has filed appeal against the above orders in CIT (appeal) and CIT appeal has passed order in favour of PRIL for the assessment year 2006-2007. The appeal for the assessment years 2002-2003, 2003-2004 and 20052006 filed and the CIT (Appeal) has allowed appeal in favour of PRIL. The Income Tax Department has filed appeal in Income Tax Tribunal Mumbai (IAT) against order of CIT (Appeal)

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for the assessment year 2001-2002, the matter is in the Tribunal. The matter is pending. Cases filed by PRIL 1. PRIL has received the demand notice for the assessment year 2006-2007 for not submitting the Fforms. PRIL has filed a writ petition before the High Court of Karnataka and paid the entire amount under protest. The amount involved is `73.93 lakhs. The matter is currently pending. The Deputy Commissioner of Income Tax reopened the assessment for the year 2004-2005. The order disallowed (i) ` 6.32 lakhs for depreciation on CWIP during the assessment year 2001-2002, (ii) Rs 40.06 lakhs under section 14A of the Finance Act, (iii) Rs 202.00 lakhs as interest on capital work in progress under section 36(1)(ii) of the Finance Act, (iv) Rs 53.16 lakhs on reversal on the insurance claim; and (v) Rs 138.19 lakhs on account of valuation of closing stock. PRIL has filed appeal with CIT (Appeal) against the order for AY 2004-05.The disputed amount of demand for A.Y 2004-05 is Rs 208.32 lakhs. The appeal is currently pending. The Deputy Commissioner of Income Tax during the scrutiny assessment for 2007-08 has (i) disallowed capital receipt from Future Media aggregating to Rs 2,500 lakhs, (ii) Rs 92.90 lakhs under Section 14A and Rule 8D of the Finance Act, (iii) Rs 243.83 lakhs disallowed against transportation and handling charges; and (iv) Rs 317.23 lakhs disallowed against interest on loans and advances under section36(1)(ii) of the Finance Act. The disputed amount of demand for assessment year 2007-2008 is Rs 1,116.98 lakhs. The appeal is currently pending. PRIL filed an appeal before the Joint Commission of Commercial Taxes, Karnataka VAT against the order of CST Assistant for the assessment year 2007-2008 of `54.89 lakhs. PRIL has paid 50% of the demand, and issued a bank guarantee of `27.44 lakhs. The matter is currently pending. PRIL received a demand notice for `1.73 lakhs for the assessment year 2006- 2007, out of which PRIL has paid Rs 23,890. In respect of the remaining amount of Rs 1.50 lakhs, PRIL filed an appeal before the Additional Commissioner- Grade 2, UP Trade Tax. The amount has been deposited under protest. The matter is currently pending. PRIL received a demand notice for `9.01 lakhs for the assessments year 2007-2008 out of which PRIL adjusted Rs 2.03 lakhs with adjustment voucher received against finalization of appeal cases of year 2007-2008. In respect of the remaining amount of Rs 6.97 lakhs, PRIL filed an appeal with the Additional Commissioner Grade 2, UP Trade Tax. The amount has been deposited under protest. The matter is currently pending. PRIL and others have filed writ petitions before the High Court of Gujarat, two writ petitions before the Calcutta High Court and three writ petitions before the Andhra Pradesh High Court, against Union of India, Secretary-Ministry of Finance, Director General of Service Tax and Central Board of Excise and Customs seeking a stay on levy of service tax on renting of immovable property. PRIL has claimed that the service tax has to be levied on services rendered in renting of immovable property and not on renting of immovable property and has challenged the notification and circulars relating to levy of service tax on renting of immovable property. Interim stay has been granted by the High Courts, restraining the respondents from recovering service tax until further orders. A transfer petition in 2009 had been filed, whereby the Supreme Court of India has tagged writ petitions filed before the Gujarat High Court with SLP (9(C) no. 13850 of 2009). The matters are currently pending. PRIL and others have filed a writ petition in 2008 before the High Court of Gujarat, against the Union of India, Secretary-Ministry of Finance, Director General of Service Tax and Central Board of Excise and Customs seeking a stay of service tax levied on renting of immovable property. PRIL has claimed that service tax has to be levied on services rendered in renting of immovable property and not on renting of immovable property and have challenged the notification and circulars relating to levy of service tax on renting of immovable property. Interim stay has been

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granted by the High Court, restraining the respondents from recovering service tax until further orders. A transfer petition (Civil) (Nos. 738 -796 of 2009) had been filed, whereby the Supreme Court of India has tagged the said case with Transfer Petition (C) Nos. 807-821 of 2008. 9. Two writ petitions have been filed before the High Court of Andhra Pradesh by PRIL and one writ petition has been filed before the High Court of Andhra Pradesh by PRIL and Future Value Retail Limited (the Petitioners) against the Union of India, and others seeking a stay of service tax levied on renting of immovable property. PRIL has claimed that service tax has to be levied on services rendered in renting of immovable property and not on renting of immovable property and have challenged the notification and circulars relating to levy of service tax on renting of immovable property. The matter is currently pending. PRIL has filed a two writ petitions before the Guwahati High Court, against the State of Assam, Commissioner of Guwahati Municipal Corporation and Collector, Government of Assam, requesting for quashing the advertisement tax bills, which has demanded advertisement tax over the signages on the leased property. PRIL has challenged the notification and the circulars relating to the same. The Guwahati High Court has granted a stay in favour of PRIL on March 5, 2009. The petitions are currently pending. The Assistant District Magistrate (Finance and Revenue), Allahabad has issued a notice in 2008 against PRIL, with respect to the registration and payment of stamp duty in relation to transaction of a property at Atlantic Mall, Allahabad. An order dated January 12, 2009 was passed by Upper Collector (Finance and Revenue) demanding ` 90.00 lakhs towards stamp duty and ` 1.00 lakhs towards penalty. PRIL filed a writ petition before the Allahabad High Court, which set aside the impugned order and directed the Additional District Magistrate (Finance and Revenue) Allahabad to proceed afresh in accordance with law. In the fresh case (No. 332 / 2008-09) the Upper Collector (Finance and Revenue) directed PRIL to deposit ` 80.00 lakhs towards stamp duty and ` 80.00 lakhs towards penalty with 1.5 % interest by an order dated September 25, 2009. PRIL had filed an appeal against the order with the CCRA Allahabad after depositing ` 67.00 lakhs (being the 1/3rd amount of Stamp Duty, Penalty and Interest). CCRA admitted the appeal by an order dated October 28, 2009. The matter is currently pending. PRIL has filed an appeal on April 8, 2011 before Commissioner of Income Tax (Appeals), Mumbai against the order dated March 26, 2011 of the Additional Commissioner of Income Tax disallowing the following expenditure during the income tax scrutiny u/s 143(3) for the assessment year 2008-09: (a) Rs 102.00 lakhs under Section 14A and Rule 8D of the Finance Act, and (b) Rs 270.90 lakhs against interest on loans and advances under section 36(1)(iii) of the Finance Act. The disputed demand for assessment year 2008-2009 is Rs 150.00 lakhs. The rectification of order u/s 154 had been filed by PRIL where the short credit of ` 58.50 lakhs has been sought. The company has further filed the rectification letter dated April 15, 2011, where the short TDS credit of Rs. 174.82 lakhs (including the 58.50 lakhs) has been sought. The appeal is currently pending.

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Labour Cases Cases filed against PRIL 1. The Assistant Commissioner of Labour II, Hyderabad, Assistant Commissioner of Labour, Vijayawada and Senior Labour Inspector 18th Circle, Bangalore have filed five separate cases before the Court of Authority under the Minimum Wages Act, 1948 against Big Bazaar, for not paying the wages to the employees of Big Bazaar in accordance with the Minimum Wages Act, 1948. It has been held that PRIL has to make the payment to the employees as per the Minimum Wages Act, 1948. The aggregate amount involved in the cases is ` 21.00 lakhs. These matters are currently pending. A labour complaint has been filed in 2009 before P.O.I.T., KKD, by Rakesh Rathi, alleging that

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illegal termination of his service and has claimed reinstatement along with full back wages and consequential benefits. The matter is currently pending. 3. Complaint has been filed in 2009 before Labour Court, Surat by Raju Ganesh Prasad Gupta against PRIL seeking reinstatement of services. The matter is currently pending. A case has been filed in 2007 before the Ahmedabad Labour Court by Ajay Dadu bhai Jebaliya against PRIL on grounds of termination. PRIL contends that he was absent without giving any notice for a long period of time and though, show cause notices to him several times, he did not reply to the same and did not resume services. The matter is currently pending. A reinstatement application has been filed in 2009 under Industrial Dispute Act has been filed before the Labour Court, Ahmedabad, by one of the contract labourer, namely Bipendra Singh Balwan, against Delta Guards Private Limited and Big Bazaar Satellite claiming reinstatement in service along with full back wages. The matter is currently pending. A reinstatement application under Industrial Dispute Act has been filed before the Labour Court, Ahmedabad, by one of the contract labourer, namely Goutam Singh Virendra Singh, against Delta Guards Private Limited and Big Bazaar Satellite claiming reinstatement in service along with full back wages. The matter is currently pending. Two separate recovery petitions have been filed in 2008 by one of the employees of a company, which has a contract with Big Bazaar. Big Bazaar is not concerned with the matter as the plaintiff is neither their employee nor is there in the pay rolls. Two similar applications (nos. 51/09 and 52/09) have been filed against PRIL and another company, which has a contract with PRIL, for payment of wages aggregating to ` 0.88 lakhs. These matters are currently pending before the Labour Court, Ahmedabad.

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Cases filed by PRIL 1. Three complaints have been filed by PRIL before the Industrial Court at Mumbai and Industrial Court at Thane, against the certain unions, for the disturbances caused to the business activities of PRIL as a result of the violent agitations carried out before different stores and premises of PRIL. The Courts have passed orders restraining the defendants from obstructing PRILs employees and the managerial staff, in any manner from performing their regular work or from indulging in any act of violence, force coercion. These matters are currently pending.

Consumer Cases Cases filed against PRIL 1. A complaint has been filed in 2004 before the District Consumer Disputes Redressal Forum, Bandra, Mumbai against PRIL and Tops Detective and Security Services. The complainant claimed compensation for an amount aggregating to ` 5.00 lakhs with interest at the rate of 18% per annum for the loss of his laptop on September 6, 2003 from Big Bazaar outlet operated by PRIL in Mumbai. The complainant alleged deficiency in the services of safe custody provided by PRIL and Tops Detective and Security Services which led to the loss. The matter is currently pending. 25 complaints have been filed before different Consumer Disputes Redressal Forums against Big Bazaar and others for selling defective goods such as refrigerators, air conditioners, football, shoes, sofa set and mobile phones and non replacement of such defective goods and deficient services. These matters are currently pending. The amounts involve in the said cases is approximately 8.58 lakhs. A complaint has been filed in 2008 before the District Consumer Disputes Redressal Forum

2.

3.

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against Big Bazaar and others. The complainant claims that the jacket in question was purchased by him, from another store i.e. Salassar and not from Big Bazaar. However, the magnetic detector installed at the exit gate of Big Bazaar beeped while the complainant was carrying the said jacket outside the gate and was consequently stopped by the security staff and thus faced humiliation. The matter is currently pending. 4. Eight complaints have been filed before various Consumer Disputes Redressal Forums against Big Bazaar for selling contaminated, adulterated, expired, wrongly described, or old products. The complaints are currently pending. The amounts involve in the said cases is approximately ` 5.00 lakhs. The matters are pending at various stages of adjudication. 27 complaints have been filed against Big Bazaar for various reasons including over billing, charging more than the printed maximum retail price of the product, deficiency of services, unfair trade practices and restrictive trade practices. The amounts involve in the said cases is approximately ` 2.60 lakhs. The matter is currently pending. A complaint has been filed in 2006 before the District Consumer Disputes Redressal Forum, Gurgaon against Big Bazaar. The said matter case was heard ex parte and now the complainant has filed execution petition to recover the compensation awarded by the forum, by an order dated October 25, 2007. PRIL had filed an appeal before the State Consumer Disputes Redressal Commission, which was dismissed by an order dated August 21, 2008. PRIL has filed an appeal in the National Consumer Disputes Redressal Commission, which is currently pending. A consumer complaint has been filed on April 13, 2009 before the District Consumer Dispute Redressal Forum, Thane, by Avinash More against the Manager, Big Bazaar Society alleging that he was misguided/cheated by a great exchange offer Advertisement in Daily news paper regarding an offer extended by Big Bazaar whereby new goods could be purchased at lesser price in exchange of old goods. The District forum directed Big Bazaar to pay ` 0.05 lakhs to the complainant. PRIL has filed an appeal before the State Consumer Dispute Redressal Forum on December 15, 2009. The matter is currently pending. Consumer Complaint has been filed in 2009 before Consumer Dispute Redressal Forum, Pune by Babulal P. Solanki against the Chairman/Secretary Pune Central Mall, PRIL and others for the alleged defects in goods and services due to an accident related to the lift occurred and the complainant and his wife suffered serious injuries. The matter is currently pending.

5.

6.

7.

8.

9.

Consumer Complaint has been filed in 2009 before District Consumer Dispute Redressal Forum Jaipur by Niraj Bhamu against Big Bazaar on grounds of being aggrieved by a scheme of Big Bazaar, where a Reliance hand set on purchases exceeding ` 600 was provided by Big Bazaar. The complainant alleges that he purchased in excess of ` 600 from Big Bazaar but did not receive any handset and two pending outstanding bills from reliance served to him. The matter is currently pending. Consumer Complaint has been filed in 2009 before District Consumer Dispute Redressal Forum, Lucknow by Lily Tandon against Reliance Communications and Big Bazaar on grounds arising from deficiency in service arising out of incorrect information provided in relation to a mobile handset. The complainant purchased a mobile with life time validity, which was deactivated after 8 months for not having the minimum recharge amount. The matter is currently pending.

10.

11.

Consumer Complaint has been filed in 2009 before the Consumer Dispute Redressal Forum, Mumbai by Manju Om Salecha against Navras, PRIL and National Insurance Company Limited for the alleged loss of a bracelet in transit. The insurance company informed the complainant that the loss is not covered under the parameters of the said policy conditions. The complainant has demanded of ` 0.51 lakhs towards the amount, ` 0.45 lakhs towards medical expenses, ` 0.05

382

lakhs towards costs and ` 1.00 lakhs towards mental agony and harassment.

12.

Consumer Complaint has been filed in 2009 before the District Consumer Forum, Jaipur by Prakash Kumar Sharma against Big Bazaar, Jaipur and others for grievances pertaining to the service centre dealing with his mobile handset. The amount involved is ` 0.99 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Forum, Gurgaon by Girish Mudgil against Big Bazar and others for grievances pertaining to technical problem in the handset which the customer service center failed to repair. The amount involved is ` 1.00 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Forum, Agra by Shailendra Kumar Srivastava against Big Bazar, Agra and others for grievances pertaining to the voice in headset, which was found to be a manufacturing defect by the service center The amount involved is ` 0.75 lakhs with 9% interest p.a. on the cost of the handset. The matter is currently pending.

13.

14.

15.

Consumer Complaint has been filed in 2010 before the District Consumer Forum, Lucknow by Sudesh Kumar against Big Bazar, PRIL, Lucknow and others for grievances pertaining to the screen of his mobile handset, which was found to be a manufacturing defect by the service center The amount involved is ` 0.99 lakhs. The matter is currently pending. Two separate consumer complaints have been filed in 2009 before the District Consumer Forum, Agra and Gurgaon by two separate individuals against Big Bazar, PRIL, and others on grounds of grievances pertaining to the mobile handset .The amount involved is ` 0.30 lakhs. The matters are currently pending. A consumer complaint has been filed in 2010 by Kapil Sudhir Bhatnagar before the Consumer Court, Lal Darwaja, Ahmedabad, against Home Town Ahmedabad, alleging that the complainant ordered for renovation and refurnishing of his bathroom to Home Town and alleged for shortcoming, mishandling and mismanagement from the beginning resulting into delay, failure and incompletion of project work. The matter is currently pending. A consumer complaint has been filed in 2010 by S.M.H. Abidi before the District Consumer Dispute Redressal Forum, Lucknow against Home Town, Saharaganj Mall, Lucknow alleging that that he was not provided the refrigerator in the colour he opted for and hence this complaint. The matter is currently pending.

16.

17.

18.

Cases filed by PRIL 1. An appeal/revision application has been filed before the National Consumer Disputes Redressal Commission by Big Bazaar against order dated April 10, 2007 passed by the State Consumer Disputes Redressal Commission, Gujarat for alleged selling of currency coupons on big saving days by unfair means and resulting in restrictive trade practices. The matter is currently pending.

Arbitration Cases filed against PRIL 1. Two separate original miscellaneous petitions have been filed in 2010 before the Delhi High Court by Galleria Property Management Services Private Limited against PRIL on grounds of breach of the lease agreement Galleria Property Management Services Private Limited seeks interim relief during the pendency of the arbitration proceedings and prays that the court directs

383

PRIL to furnish security in relation to the arrears of rentals, maintenance, mesne profits, and other charges until the termination of the lease in respect of shop nos. 27 and 308 situated at DLF City Centre, AP-Block, Shalimar Bagh, Delhi aggregating to ` 514 lakhs. Galleria Property Management Services Private Limited is also claiming mesne profits and interest at the rate of 24 % .p.a. The matters are currently pending. 2. An application under section 11 of the Arbitration and Conciliation Act, 1996 has been filed in 2009 before the High Court of Delhi, by Ariba India Private Limited against PRIL has been filed for appointment of an arbitrator. The defendant is alleged to have breached the software service contract entered into by the parties. In the legal notice dated January 14, 2009 sent to PRIL by the claimant, a total amount of ` 785 lakhs has been claimed. The matter is currently pending.

Stamp duty cases Cases filed against PRIL 1. The Collector of Stamps, Lucknow has initiated two cases in 2008 against PRIL for deficiency in payment of stamp duty in relation to transactions of property which belonged to Sahara India Commercial Corporation Limited. The matters are currently pending. The notice issued by the Collector of Stamps, Lucknow does not provide for the amount involved. The Collector of Stamps, Agra has initiated a case in 2009 against PRIL for deficiency in payment of stamp duty in relation to a transaction of property which belonged to MRG Developers Private Limited. The notice issued by the Collector of Stamps, Lucknow does not provide for the amount involved. The Assistant Collector of Stamp, Meerut has initiated a case in 2008 against PRIL for deficiency in payment of stamp duty in relation to a property transaction. No amount has been mentioned in the said notice. However, in case (no 960 of 2007) relating to the same property an amount of ` 65.00 lakhs has been deposited by the Licensor of the property towards stamp duty, penalty, registration fees and interest. The matter is currently pending. The Assistant Collector, Lucknow, has initiated a case in 2009 against PRIL for insufficient payment of stamp duty for transaction related to property. The notice issued does not provide for the amount involved. The case is currently pending.

2.

3.

4.

Notices issued against PRIL 1. The Assistant Inspector General of Registration, Kanpur Nagar, issued a notice against PRIL on November 28, 2008 for non-payment of stamp duty for a property of Big Bazaar situated at Rave Moti, Kanpur Nagar. The notice issued does not provide for the amount involved. The case is currently pending. The Assistant Inspector General of Registration, Kanpur Nagar, issued a notice on December 6, 2007, against DEPOT, Kanpur, relating to alleged non-payment of stamp duty for a property of DEPOT situated at Rave Moti, Kanpur Nagar. The aforesaid notice does not mention the amount involved. The case is pending. For further details in relation to notices issued by the Registrar of Companies, Mumbai against PRIL please see section entitled Outstanding Litigation and Material Developments Litigation Involving Directors - Kishore Biyani - Notices at page 371.

2.

3.

D.

Future Capital Investment Private Limited Nil

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E.

Future Corporate Resources Limited Nil

F.

Future Knowledge Services Limited Nil

Litigation involving the Group Companies

A.

Bansi Mall Management Company Limited Civil Cases Cases filed against Bansi Mall Management Company Limited A civil suit has been filed in 2009 before the Bombay High Court by Sports and Leisure Apparels Limited against PRIL, Kishore Biyani, Bansi Mall Management Company Limited and others in respect of shops no. 6A and 6B situated at ground floor, Cross Road Mall, 28 Pandit M. M. Malviya Road, Haji Ali, Mumbai. The plaintiffs have sought an injunction against the defendants from creating any third party right, interest and parting with possession or inducting third party in possession of the demised property until the final disposal of the suit and has claimed compensation of ` 191 lakhs towards the loss of business and ` 791 lakhs as damages. The notice of motion for an ad-interim relief was duly dismissed by an order dated July 3, 2009. An appeal was filed against the said order, which was also dismissed. The matter is currently pending.

B.

Future Bazaar India Limited (FBIL) Criminal Cases Cases filed by FBIL Seven separate criminal cases under section 138 of the Negotiable Instruments Act, 1881have been filed before Second Additional Chief Metropolitan Magistrate, Mumbai by FBIL against the proprietor of Quantum Concepts (the Accused) in relation to dishonour of seven different cheques issued by Quantum Concepts for an aggregate amount of ` 39.26 lakhs. The said cheques were issued by the Accused towards the payment for purchase of various items like DVD players, digital cameras, CF cards, mens watches, camcorder and other allied items from FBIL located in Knowledge House, Shyam Nagar on credit. FBIL has claimed a compensation aggregating to ` 78.00 lakhs. The matter is currently pending.

C.

Future Capital Financial Services Limited Criminal Case Cases filed against Future Capital Financial Services Limited An enquiry proceeding under Section 144 (2) of Criminal Procedure Code has been filed by Vishal Garg seeking to stop any kind of harassment or nuisance to him by Future Money employees in connection with the recovery of amounts due under a personal loan availed by him. The total amount outstanding is ` 1.78 lakhs. The matter is currently pending. Cases filed by Future Capital Financial Services Limited 5,578 cases have been filed against customers for recovery of loan amounts under Sections 138 and 142 of

385

Negotiable Instruments Act. The amount involved is ` 5,766.14 lakhs. These matters are pending at various stages of adjudication. Civil Cases Cases filed against Future Capital Financial Services Limited 1. A case has been filed in 2008 before the Delhi High Court against Future Capital Financial Services Limited (the Defendant) by Satish Kumar Satija (the Plaintiff) on grounds of being aggrieved by the order of the arbitrator. The Plaintiff availed a home equity loan and disputes arose between the parties on the rate of interest charged. The Plaintiff therefore did not pay his EMI dues to the Defendant. The Defendant invoked arbitration proceedings. The amount involved is ` 165 lakhs. The matter is currently pending. A case has been filed in 2010 before the Delhi High Court against Future Capital Financial Services Limited (the Defendant) by Suman Joshi (the Plaintiff) on grounds of being aggrieved by the order of the arbitrator. The Plaintiff availed a home equity loan and disputes arose between the parties on the rate of interest charged. The Plaintiff therefore did not pay his EMI dues to the Defendant. The Defendant invoked arbitration proceedings. The amount involved is ` 41 lakhs. The matter is currently pending. 11 separate civil cases have been filed before various forums by individuals, who availed personal loans from Future Capital Financial Services Limited on grounds including inter alia (i) restricting collection calls, (ii) loan sanction letter not provided at the time of disbursement, (iii) dispute in relation to the rate of interest charged, (iv) coercive collection tactics employed for recovery of amount, (v) sending coercive collection agents and (vi) demanding fresh repayment schedules. The amount involved in these matter aggregates to is ` 4.10 lakhs. These matters are pending at various stages of adjudication. 13 separate insolvency petitions have been filed before various forums by customers, who have availed personal loans from Future Capital Financial Services Limited seeking to be declared insolvent as they are unable to pay amounts due to Future Capital Financial Services Limited. The amount involved in these matter aggregates to ` 16.31 lakhs. These matters are currently pending at various stages of adjudication. Three separate cases have been filed before the Kolkata City Civil Court by customers who have availed personal loans from Future Capital Financial Services Limited for seeking a declaration that Future Capital Financial Services Limited is not entitled to any repayment. The plaintiffs pray that Future Capital Financial Services Limited be restrained from disposing them from their residences and threatening them for recovery of dues. The amount involved in the matters is ` 4.58 lakhs. The matters are currently pending at various stages of adjudication.

2.

3.

4.

5.

Consumer Cases Case filed against Future Capital Financial Services Limited (FCFSL) 1. Five separate cases have been filed before the Consumer Forum, Bangalore by customers who have availed personal loans from FCFSL for seeking an injunction against the recovery agents of FCFSL in relation to the recovery of dues not entitled to any repayment. The amount involved in the matters is ` 21.82 lakhs. The matters are currently pending at various stages of adjudication. A case has been filed in 2007 before the Consumer District Forum, Bangalore by Rajesh V against Future Capital Financial Services Limited on grounds of deficiency of service. The amount involved is ` 0.08 lakh. The matter is currently pending.

2.

386

3.

Three separate cases have been filed before the Consumer Forum, Bangalore by customers who have filed for insolvency. The amount involved in the matters is ` 4.28 lakhs. The matters are currently pending at various stages of adjudication. A case has been filed in the Consumer Forum, Ambala by Mukesh Kumar Jain alleging that he had paid ` 0.77 lakhs to the recovery collector in March, 2009 to close the loan but the collector had deposited only ` 0.04 lakhs in the bank. Mukesh Kumar Jain has asked for a compensation of ` 0.53 lakhs. The matter is pending. A case has been filed in the Consumer forum, Chandigarh by Surender Singh in relation to the foreclosure and bouncing charges of ` 0.42 lakhs paid at the time of foreclosure of his loan. The matter is pending. A case has been filed in the Consumer Forum, Jaipur by Raj Kumar Raj in relation to improper disbursement of loan and repayment schedule regarding the personal loan obtained by him. The total amount involved is ` 0.55 Lakh. The matter is pending. A case has been filed in the Consumer forum, Ludhiana by Santosh Kaur in relation to a loan which was not disbursed as the petitioner failed to provide few papers in respect of property. The petitioner has claimed a compensation of ` 0.10 Lakh and a processing fee of ` 0.01. The matter is pending.

4.

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6.

7.

Arbitration proceedings Cases filed by Future Capital Financial Services Limited Eight separate arbitration matters have been initiated by Future Capital Financial Services Limited against various individuals on grounds including defaults in payment interest amounts of home equity loans availed by these persons. The amount involved in these matters is ` 436.95 lakhs. These matters are pending at various stages of adjudication. D. Future Media (India) Limited (FMIL) Criminal Cases Case filed by Future Media (India) Limited 1. A complaint has been filed by FMIL in 2008 before the Court of Metropolitan Magistrate, 13th Court, Bhoiwada u/s 138 of the Negotiable Instruments Act, 1881 in relation to bouncing of cheque of ` 1.18 lakhs issued by Prem, proprietor of Steeping Stone, an event management firm based in Hyderabad, in settlement of legal dues of FMIL. The matter is pending. A complaint has been filed by FMIL in 2010 before the 33rd Court at Ballard Pier u/s 138 of the Negotiable Instruments Act, 1881 in relation to bouncing of cheque of ` 6.29 lakhs issued by The Links Private Limited who had obtained space from FMIL for advertising purpose. The complaint has been filed against The Links Private Limited and its 5 directors. The matter is pending.

2.

Tax related matters:

Case filed by Future Media (India) Limited FMIL has filed an appeal before Commissioner of Income Tax (Appeals), Mumbai, as the Income Tax Department had disallowed capital assets and related depreciation allowance and certain amounts u/s 40 (a)

387

(ia) of the Income Tax Act, 1961 for the assessment year 2007-08 & 2008-09. The matter is pending. E. Future Capital Holdings Limited Civil Cases Cases filed against Future Capital Holdings Limited 1. A civil case has been filed in 2010 before Additional Civil Judge, Nellore by V. Govinda Rao (the Plaintiff) against Future Capital Holdings Limited (the Defendant). The Plaintiff had previously filed a consumer complaint against the Defendant for non-receipt of application money, which was dismissed. The matter is currently pending. A civil suit has been filed before Civil Judge (Junior Division), Hisar by Jyana Ram (the Plaintiff) against Future Capital Holdings Limited seeking a mandatory injunction and a direction that ` 97,920 along with interest be paid to the Plaintiff. The Plaintiff had applied for shares of Future Capital Holdings Limited. The matter is currently pending. A case has been filed in July, 2010 before the Delhi High Court against Future Capital Holdings Limited and others (the Defendant) by Ashish Khanna under section 151 of the Civil Procedure Code, 1908 in relation to illegality of termination order and compensation of ` 25 lakhs towards the same and the cost of suit. The matter is currently pending.

2.

3.

Consumer Cases Cases filed against Future Capital Holdings Limited 1. A complaint has been filed in 2009 before Consumer Dispute Redressal Forum, Delhi against Future Capital Holdings Limited by Aditi Bansal seeking refund of application money paid by her. The amount involved in the matter is ` 6.24 lakhs. The matter is currently pending. A complaint has been filed in 2009 by Mukesh Prajapat in the Consumer Disputes Redressal Forum, Rajasthan where the complainant has claimed that he was wrongfully denied allotment of shares. The amount involved in the matter is ` 86,200.The matter is pending. A complaint has been filed in 2008 before the Consumer Dispute Redressal Forum, Farukhabad against Future Capital Holdings Limited by Ashish Awasthi seeking refund of application money paid by him. The amount involved in the matter is ` 0.61 lakhs. The matter is currently pending. A complaint has been filed in 2009 before the Consumer Dispute Redressal Forum, Ahmedabad against Future Capital Holdings Limited by Hardikbhai Patel seeking refund of application money paid by him. The amount involved in the matter is ` 0.43 lakhs. The matter is currently pending. A complaint has been filed in 2008 before the Consumer Dispute Redressal Forum, Jaipur against Future Capital Holdings Limited by Sudha Boolia seeking refund of application money paid by her. The amount involved in the matter is `1.31 lakhs. The matter is currently pending. A complaint has been filed in 2009 before the Consumer Dispute Redressal Forum, Jodhpur against Future Capital Holdings Limited by Ashok Bhati seeking refund of application money paid by her on account of non receipt of application money or allotment of shares. The amount involved in the matter is ` 0.24 lakhs. The matter is currently pending.

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Tax related matters Cases filed by Future Capital Holdings Limited

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1.

An appeal has been filed before the Commissioner of Income-tax (Appeals) by Future Capital Holdings Limited for the assessment year 2007-2008. The amount involved is ` 1559.83 lakhs. The matter is currently pending. An appeal has been filed before the Commissioner of Income-tax (Appeals) by Future Capital Holdings Limited for the assessment year 2008-2009. The amount involved is ` 45.35 lakhs. The matter is currently pending.

2.

F.

Future Supply Chain Solutions Limited (erstwhile Future Logistic Solutions Limited)

Criminal Cases

Cases filed against Future Supply Chain Solutions Limited

A criminal case has been filed by SMS Transport against V V Rao and Anshuman Singh, the employees of Future Supply Chain Solutions Limited before the VIth Additional Chief Metropolitan Magistrate, Bangalore in relation to default in payment towards transportation of goods. Future Supply Chain Solutions Limited has filed an application before the Karnataka High Court for quashing the first information report. The Karnataka High Court has granted an interim stay against the criminal proceedings. The matter is pending before the High Court with the above order being in force. Cases filed by Future Supply Chain Solutions Limited

Complaint has been filed under section 138 and 141 of Negotiable Instruments Act, 1881 in 2010 before the Court of the Chief Judicial Magistrate, Alipore by Future Supply Chain Solutions Limited (the Complainant) against Deep Services Private Limited and its directors (the Respondents). Certain cheques issued by the Respondent towards the refund of security deposit bounced. The amount involved in the matter is ` 23.50 lakhs. The Respondents have filed a revision application in Calcutta High Court. Future Supply Chain Solutions Limited is now proceeding to file winding up petition for Deep Services Private Limited in the High Court, Calcutta. The matter is currently pending. Civil Cases Cases filed by Future Supply Chain Solutions Limited

A case has been filed by Future Supply Chain Solutions Limited, PRIL and others before the City Civil Court, Bangalore against SMS Transport, Alert Commandos Private Limited among others for recovery of amount of theft of food items and packing material. A theft had occurred at N S Palya warehouse of Future Supply Chain Solutions Limited. The matter is pending.

Cases filed against Future Supply Chain Solutions Limited

A case has been filed against Future Supply Chain Solutions Limited among others in the Metropolitan Magistrate Court, Dadar under sections 394 and 471 of the Mumbai Municipal Corporation Act, 1988 alleging that Future Supply Chain Solutions Limited does not possess adequate license as required by the Act. The matter is pending.

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Labour Cases

Cases filed by Future Supply Chain Solutions Limited A complaint has been filed on June 13, 2009 before the Industrial Court, Thane by Future Supply Chain Solutions Limited (the Complainant) against Bhartiya Kamgar Sena (the Respondent) seeking to restrain the Respondents from functioning in and around the premises of the Complainant situated at G-6, MIDC, Boisar. The Industrial Court through their order granted the interim relief and restrained the Respondents from engaging in any union related activities in the above premises of the Complainant. The matter is currently pending. Cases filed against Future Supply Chain Solutions Limited 1. A case has been filed against Future Supply Chain Solutions Limited in January 2011 in the Labour Court Thane alleging that the company is engaged in unfair labour practice under Maharashtra Recognition of Trade Unions and Prevention of Unfair Labour Practices Act, 1971. Future Supply Chain Solutions Limited had terminated some workmen from G-6 Tarapur warehouse on the grounds of loss of confidence. The case has been filed by one of the workmen. The matter is pending. 29 labour cases have been filed against Future Supply Chain Solutions Limited by various individuals before the Labour Court, Ahmedabad under the provisions of the Industrial Disputes Act, 1947 for reinstatement. The matters are pending.

2.

G.

Future Value Retail Limited Criminal Cases Cases filed against Future Value Retail Limited 1. A criminal case has been filed by the Local Health Authority, Udaipur before the Assistant Chief Judicial Magistrate No. 1, Udaipur against Chetan Dave, Gopikishan Biyani, Kishore Biyani, Rakesh Biyani, Vedprakash Arya, Future Value Retail Limited, Rajesh Kamani, Milind Bhai Sitwala and M/s Bhagwati Floors and Foods Private Limited alleging that the sample of Maida collected from Big Bazaar was found to be misbranded as per the report of the public analyst and hence an offence under section 2 (ix)(k) of Prevention of Food Adulteration Act, 1954 and Rule 32 (c) of PFA Rules, 1955 has been committed. The matter is currently pending. Four criminal cases have filed by the State Of Gujarat before the Chief Judicial Magistrate Court, Anand against Big Bazaar and Bhupendra Singh Rawat for violations under the Minimum Wages Act, 1948. The matter is currently pending.

2.

Labour cases

Cases filed against Future Value Retail Limited

A labour complaint has been filed in 2010 by Sejal Bapubhai Tamboli before the Labour Commisioner, Vadodara under the Industrial Dispute Act, 1947 against Future Value Retail Limited and Star Sitara Baroda in relation to reinstatement of her service as Saloon in-charge at Star Sitara, Baroda. Future Value Retail Limited had transferred her services to Star Sitara at Ahmedabad during her pregnancy period. The matter is currently pending.

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Cases filed by Future Value Retail Limited A complaint has been filed under section 28 and 29 read with item 5 of Schedule III of Maharashtra Recognition of Trade Unions & Prevention of Unfair Labour Practices Act, 1999 in 2010 before the Bandra Industrial Court by Future Value Retail Limited against Bhartiya Kamgar Sena (the Defendants), on grounds arising from for indulging in unfair labour practices by disrupting the smooth functioning of day to day activities at the premises situated at Knowledge House situated at Shyam Nagar, Off JVLR, Jogeshwari (E) Mumbai. The court has passed an interim order dated May 24, 2010, restraining the Defendants from obstructing the smooth functioning of the premises and its staff, customers from coming and outgoing into the premises. The matter is currently pending. Consumer Cases Cases filed against Future Value Retail Limited

1.

A consumer complaint has been filed in 2010 before the Consumer Forum, Bharuch by Bhupendra Gohil against Big Bazaar Anand alleging that there is mismatch of pricing of products purchased from Big Bazaar. The matter is currently pending. A consumer complaint has been filed in 2010 before the Consumer Forum, Bharuch by Payal Mudliyar against Big Bazaar Anand with allegations that there is mismatch of pricing of products purchased by her from Big Bazaar. The matter is currently pending. A consumer complaint has been filed in 2010 before the Consumer Forum, South Mumbai by Rakesh K. Agrawal against PRIL, Kishore Biyani and Big Bazaar, Orchid City Centre, Mumbai alleging that he has been over charged by ` 35 for the three products purchased by him from the store. The matter is currently pending. A consumer complaint has been filed in 2010 by Sarjeet before Gurgaon District Consumer Disputes Redressal Forum against Big Bazaar, Sahara mall alleging that that at the time of purchasing a TV from the store the complainant was told that he will get a Reliance BIG TV connection free with any CTV. However, BIG TV was not been installed despite his requests and persuasions. The case is currently pending. A consumer complaint has been filed in 2010 by Nirankar Nath Pandey before District Consumer Disputes Redressal Forum, Lucknow against Big Bazaar, Saharaganj, Lucknow alleging that he was given a discount of 33% on a hypothetical amount and not on the marked rate price as reflected on the carton of the TV. The case is currently pending. A consumer complaint has been filed in 2010 by Prem Swaroop Maheshwari before District Consumer Disputes Redressal Forum, Kanpur against the managing director, Big Bazaar, Kidwai Nagar, Kanpur, alleging that he was over charged on the purchase of Saffola oil. The case is currently pending. A consumer complaint has been filed in 2010 by Gurpreit Singh Chawla before State Consumer Disputes Redressal Commission, Delhi against Big Bazaar, West Gate Mall, Rajouri Garden. The matter is pending. A consumer complaint has been filed in 2010 by Kamal Gupta before the District Consumer Court, Kota against Big Bazaar alleging that the rice sold was common rice instead of Basmati Rice. The case is currently pending. A consumer complaint has been filed in 2010 by Rajendra Prasad Sharma before the Consumer Court Second, Jaipur against Big Bazaar alleging that purchased Huggies Care Medium 20 Diaper

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Pad purchased from BB Jaipur for the total amount of ` 265 instead of the marked rate price of ` 175 as shown on the product. The case is currently pending. 10. A consumer complaint has been filed in 2010 by Rajesh Tank before the Consumer Court Second, Jaipur against Big Bazaar, MGF and ITC Limited alleging that he had bought a Vivel soap pack of five, however when he checked the product at his home he found there were only four pieces in the pack. The case is currently pending. A consumer complaint has been filed in 2010 by Trilok Chand Agarwal before the Consumer Court Second, Jaipur against Big Bazaar alleging that the 20% discount which was supposed to offered on purchase of ` 750 and above was not actually offered. The case is currently pending. A consumer complaint has been filed in 2010 by Shradha Sharma before the Consumer Court Second, Jaipur against Big Bazaar alleging that the four packets of Knorr Classic Mixed Vegetable Soup and Knorr Oriental Hot n Sour Vegetable Soup purchased from Big Bazaar was not provided with the discount of 10% as was shown on the product and was charged excess of ` 38. The case is currently pending. A consumer complaint has been filed in 2010 by Parvej Khan before the Consumer Court Second, Jaipur against Big Bazaar alleging that the set of tooth brush from Big Bazaar, Jaipur was charged at ` 37.62 for the product instead of MRP ` 30/- as shown on the product. The case is pending. A consumer complaint has been filed in 2010 by Praveen Kumar before the Consumer Court Second, Jaipur against Big Bazaar alleging that Fanta Soft Drink purchased from Big Bazaar, Jaipur was charged at excess of ` 1.78 than the marked rate price shown on the product. The case is pending. A consumer complaint has been filed in 2010 by Mounik Jain before the Consumer Court Second, Jaipur against ICICI Bank and Big Bazaar alleging that instead of timely payment by credit card used in Big Bazaar, the petitioner was served notice for pending dues. The case is currently pending. A consumer complaint has been filed in 2010 by Himanshu Verma before the Consumer Court Second, Jaipur against Big Bazaar alleging that Big Bazaar charged ` 60 (50 paise extra) instead of actual invoice amount of ` 59.50. The case is currently pending. A consumer complaint has been filed in 2010 by Nand Kishore before the District Consumer Dispute Redressal Forum, Lucknow against Big Bazaar, Saharaganj, Sahara Mall alleging that the F & D home theatre purchased was defective. The case is currently pending. A consumer complaint has been filed in 2010 by K.S. Singh before District Consumer Dispute Redressal Forum, Janakpuri against Big Bazaar, West Gate Mall alleging that the air conditioner purchased was defective. The case is currently pending. A consumer complaint has been filed in 2010 by K.K. Singh before District Consumer Dispute Redressal Forum, Merut against Big Bazaar, PVS Mall, Merut alleging that the washing machine purchased was defective. The case is currently pending. A consumer complaint has been filed in 2010 by Gurpreet Singh before District Consumer Dispute Redressal Forum, Ludhiana against Big Bazaar, Jallandhar alleging that the Samsung air conditioner purchased was defective. The case is currently pending. A consumer complaint has been filed by Sunil Chopra before District Consumer Dispute Redressal Forum, Shalimar Bagh against Big Bazaar, West Gate Mall, Rajouri Garden alleging that the packets of dry fruits sold were infested with insects. The matter is currently pending.

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392

22.

A consumer complaint has been filed in 2010 by Satyam Singh before the Consumer Court, Bharuch against Big Bazaar, Bharuch alleging that jeera purchased from Big Bazaar was charged at ` 30 (` 3 extra) instead of actual marked rate price of ` 27.00 only. The matter is pending. A consumer complaint has been filed in 2010 by Chhagan Lal Salvi before the Consumer Court, Udaipur against Big Bazaar, Udaipur and United India Insurance Company Limited alleging that he was not compensated for mobile theft though the mobile was under insurance. The subject mobile was not insured by the company as the premium had not been paid by the customer and the reliance was placed on the extended warranty for one year. The matter is currently pending. Eight consumer complaints have been filed before various District Consumer Disputes Redressal Forums against Future Value Retail Limited stores located at various places. The complaints relate to inter alia defects in relation to the purchased furniture, electronic appliances and consumable products.

23.

24.

Civil Cases

Cases filed against Future Value Retail Limited For further details in relation to civil cases filed against Future Value Retail Limited, please see section entitled Outstanding Litigation and Material Developments - Civil Cases Cases filed against PRIL on page 376.

Cases filed by Future Value Retail Limited

1.

Writ petition has been filed in 2010 before the High Court of Andhra Pradesh by Pantaloon Retail India Limited and Future Value Retail Limited (the Petitioners) against the Union of India, and others seeking a stay of service tax levied on renting of immovable property. The Petitioners state that Section 65(90a) read with Section 65(105)(ZZZZ) of the Finance Act, 2007and Finance Act 2008 and Finance Act, 2010 are null, void and ultra vires and violate Articles 14, 246 and 265 of the Constitution of India and Section 66 of the Finance Act. The Petitioners pray that they be declared illegal and arbitrary. The court through an order dated June 21, 2010 grated interim stay and directed the Respondents not to initiate any coercive steps for recovery of service tax on the renting of immovable properties by the Petitioners for the period of June 1, 2007 to April 1, 2010. The matter is currently pending. Pantaloon Retail India Limited and Future Value Retail Limited have filed a writ petition in 2010 before the High Court of Calcutta against the Union of India and others seeking a stay of service tax levied on renting of immovable property. The Petitioners has claimed that Section 65(90a) read with Section 65(105)(ZZZZ) and Section 66 of the Finance Act, 2007 and the Finance Act, 2008 and the Finance Act, 2010 shall be declared null and void and ultra vires the Constitution of India. The matter is currently pending.

2.

For further details in relation to civil cases filed by Future Value Retail Limited, please see section entitled Outstanding Litigation and Material Developments - Civil Cases Cases filed by PRIL on page 379. H. Future Agrovet Limited (erstwhile Pantaloon Food Product (India) Limited) Criminal Cases

393

Cases filed against Future Agrovet Limited 1. A complaint has been filed in 2008 before the 39th Court, Vile-Parle by the Health License Department of Bombay Municipal Corporation against K.BS Fair Price (Charkop, Kandivali), a division of Future Agrovet Limited in relation to carrying of trade without obtaining requisite license under section 394 (1)(e)(i) of the Bombay Municipal Corporation Act, 1888. The matter is currently pending.

2.

The PFA Department has filed a complaint in 2009 before the Metropolitian Magistrate, at the Patiala House Court against Future Agrovet Limited, Varinder Kaur and Satvinder Singh alleging that the sample of Dal Arhar collected from a store in Vikas Puri was adulterated. The matter is currently pending.

3.

A complaint has been filed by the Weight and Measurement Department has before the Controller Weight and Measurement, against Future Agrovet Limited, and Praveen Kumar, alleging that the sample of one weighing machine, in the store situated at Chander Lok did not meet the required specifications.

Cases filed by Future Agrovet Limited 1. A case has been filed in 2009 before the Karkardooma Court, Delhi by K.BS Fair Price against property/store owners of Braham Puri Delhi party seeking a fund of the security deposit amounting to ` 1.67 lakhs in relation to an agreement dated February 19, 2008. The matter is currently pending.

Civil Cases Cases filed against Future Agrovet Limited A case has been filed in 2009 before the Tis Hazari Court, Delhi by Mukul Aggarwal Properties against Future Agrovet Limited relation to a store operated by Future Agrovet, seeking commission aggregating to ` 3.37 lakhs. The matter is currently pending. Cases filed by Future Agrovet Limited 1. A case has been filed in 2009 before the City Civil Court by K.BS Fair Price (Plaintiff) against Madan Mohan Reddy and Subramanya seeking the refund of the security deposit. The Plaintiff was operating a store on the premises taken on lease from Madan Mohan Reddy. Madan Mohan Reddy sold the property to Subramanya in December 2008 and the intimated the sale to the Plaintiff through a letter. Consequently, the Plaintiff terminated the lease deed and sought the refund of their security deposit of Rs 4.50 lakhs. The case is currently pending.

Labour Cases Cases filed against Future Agrovet Limited A complaint under sections 31 and 200 of the Karnataka Shops and Commercial Establishment Act, 1961 has been filed in 2009 before the Metropolitan Magistrate Traffic Court by the Labour Office of Bangalore against K.BS Fair Price, for non compliance with the requirement of display of registration certificate at the store, maintenance of visitor book at the store, maintenance of attendance register in form T. The matter is currently pending. Notices

394

1.

A final notice under the Karnataka Shops and Commercial Establishment Act, 1961, the Minimum Wages Act 1948 has issued by the Labour Department in 2010 to K.BS Fair Price, the Wilson garden store, Bangalore to show the cause under for not maintaining records as required at the store premises and not furnishing the same during inspection. The matter is currently pending. Two notices have been issued by the Legal metrology against K.BS Fair Price stores for altering the maximum retail price on the barcode. The matters are currently pending.

2.

I.

Future Mobile and Accessories Limited Criminal Cases Cases filed by Future Mobile and Accessories Limited 1. Criminal Complaint has been filed in 2010 before the Metropolitan Magistrate, Delhi by Future Mobile and Accessories Limited against Seema Ashpanani under Section 138 of the Negotiable Instruments Act, 1881. The amount involved in the matter is ` 0.28 lakhs. The matter is currently pending. A criminal case has been filed in 2009 against the employee for theft and embezzlement of mobile stocks before the District Court, Gurgaon under section 380 and 457 of the Indian Penal Code, 1860. The matter is pending.

2.

Civil Cases Cases filed against Future Mobile and Accessories Limited 1. A money suit has been filed in civil miscellaneous case in 2009 by Sanjeevani Health and Lifestyle Private Limited before the Courts of the Civil Judge, Kolkata against Future Mobile and Accessories Limited on grounds arising from alleged nonpayment of rent for the entire lock-in period. The amount involved is ` 57.00 lakhs along with interest accruing at 18%. The money suit and the civil case are pending at various stages of adjudication. A civil suit has been filed in 2009 by Kamini A. Prthyani before the Courts of the Civil Judge (Senior Division), Mumbai against Future Mobile and Accessories Limited on grounds arising from termination of the lease agreement and alleged nonpayment of rent for the entire lock-in period along with other expenses. The amount involved is ` 4.00 lakhs. The matter is currently pending. A civil suit has been filed in 2009 by Meghraj Leelaram Rochani before the Court of the Joint Civil Judge (Senior Division), Mumbai against Future Mobile and Accessories Limited on grounds arising from termination of the lease agreement and alleged nonpayment of rent for the entire lock-in period along with other expenses. The amount involved is ` 4.00 lakhs. The matter is currently pending.

2.

3.

Consumer Cases Cases filed against Future Mobile and Accessories Limited (FMAL) 1. A consumer case has been filed in 2010 before the District Consumer Forum, Delhi by Pradeep Kumar Mangal against HDFC Bank, FMAL and others for the alleged misuse of his credit card, which was swiped in the store. The amount involved is ` 0.30 lakhs. The matter is currently pending. A consumer case has been filed in 2010 before the Consumer Disputes Redressal Forum, Delhi by

2.

395

Desh Raj against FMAL and Fly Care for the alleged malfunction in a mobile phone model, FLY V-100 which the customer service center failed to repair. The amount involved is ` 0.25 lakhs. The matter is currently pending 3. A consumer case has been filed in 2010 before the District Consumer Disputes Redressal ForumII, Lucknow by Mudit Awasthi against FMAL and Samsung India Limited for the alleged function in a mobile phone model, Samsung 3310 Metro Silver. The amount involved is ` 0.95 Lakh. The matter is currently pending. A consumer compliant has been filed in 2010 before the Consumer Disputes Redressal Forum, West Bengal by Shouvik Kumar Banerjee against Big bazaar and others for the alleged technical problem in phone model no. FLY 2040L. The amount involved is ` 0.08 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2009 before the District Consumer Forum, New Delhi by Duggar Securities Limited, against Axiom Telecom and others for grievances pertaining to the battery back-up of a handset, which the customer service center failed to repair. The amount involved in the matter is ` 0.32 lakhs with 18% interest per annum. The matter is currently pending.

4.

5.

6.

A consumer complaint has been filed in July, 2010 by Sunil Chopra before the District Forum, New Delhi against FMAL and others for grievances pertaining to the defect in handset. The amount involved in the matter is ` 0.30 lakhs as compensation. The matter is pending before adjudication. A consumer complaint has been filed in August, 2010 before the District Forum, Belgam and Karnataka by Kiran against FMAL and others for grievances pertaining to the defect in handset. The amount involved in the matter is ` 0.45 lakhs as compensation. The matter is pending before adjudication. A consumer complaint has been filed in January, 2011 before the District Forum, New Delhi by Ritesh Kumar against FMAL and others for grievances pertaining to the defect in handset. The amount involved in the matter is ` 0.80 lakhs as compensation. The matter is pending before adjudication.

7.

8.

J.

Home Solutions Retail (India) Limited (HSRIL) Criminal Cases Cases filed by HSRIL HSRIL has filed a criminal case before Additional Chief Metropolitan Magistrate, Bangalore, on May 6, 2009 against Chandani, proprietor of Sri Sai Ganesh Concrete Blocks, in relation to dishonour of two cheques (Cheque no. 558576 dated February 3, 2009 amounting to ` 0.61 lakhs and Cheque no. 558577 dated February 6, 2009 amounting to Rs, 0.61 lakhs) issued by Chandani, drawn on State Bank of Mysore. The said cheques were issued by Chandani towards the payment of LG Dish Washer, Sony Home Theatre and LG LCD TV purchased by the brother of Chandani on part payment from Home Town, located in Bangalore. The Complaint has been filed under section 138 of the Negotiable Instruments Act, 1881. The matter is currently pending. Civil Cases Cases filed against HSRIL

396

1.

Suit has been filed in 2007 against HSRIL by Asian Paints Limited (APL) in the Bombay High Court. APL had, inter alia, prayed for grant of an ad-interim injunction restraining HSRIL from using the trademark "Home Solutions" or deceptively similar trademark till the final disposal of the present suit. The Bombay High Court through an order dated September 18, 2007 rejected the plea and did not grant an ad-interim injunction. The suit is currently pending for disposal. A. Anusuya has filed a civil case against Bangalore Development Authority and others on April 3, 2002 before the City Civil Judge, Bangalore, claiming to be the owner of the land on which the building was constructed and where HSRIL had taken a part of premises on lease basis for running its retail store. HSRIL was included as a respondent and it was also proposed that the rents be deposited in the court pending the suit. The application to seek HSRIL to deposit the arrears of rents during the pendency of the suit was rejected by the Court and the plaintiff has been directed to file evidence in this matter. The matter is currently pending. Asian Paints has filed a civil suit (no. 2178 /07) on July 13, 2007 before the Bombay High Court against HSRIL for claiming compensation Rs 50.00 lakhs along with 21% interest as compensation for use of trade mark Home Solutions by HSRIL. Separately, Asian Paints had also filed a notice of Motion (no. 2961 of 2007) and the same is pending for final hearing. The matters are currently pending. A civil suit has been filed in 2009 before the Delhi High Court by Koninklijke Philips Electronics N.V. against HSRIL, alleging that the HSRIL is selling unlicensed DVD video players from its various outlets under the brand name KORYO and PASSION. HSRIL has filed a written statement. No monetary claim has been made against HSRIL. The matter is currently pending.

2.

3.

4.

Cases filed by HSRIL 1. HSRIL has in February 2008 filed an objection before the Registrar of Trademark, Kolkata opposing the registration of the mark Neozone being applied for registration by Neozone Tubes Private Limited vide application no. 1469368 and 1469370 in Class 35 and 37, as it is deceptively similar to the mark E Zone applied for by HSRIL. The matter is currently pending. HSRIL has in July 2009 filed an objection before the Registrar of Trade Marks, Delhi opposing the registration of the mark SURBHI being applied for registration by Surbhi Broadband Private Limited vide application no. 1596094, as it is deceptively similar to the mark SURABHI applied for by HSRIL. The matter is currently pending. HSRIL has in November 2009 filed its objection before the Registrar of Trade Marks, Chennai opposing the registration of the mark SEN-SEI being applied for registration by Sen-Sei Technologies Private Limited, through an application no. 1617916, as it is deceptively similar to the registered mark SENSEI of HSRIL. The matter is currently pending. HSRIL has in February 2010 filed its objection before the Registrar of Trade Marks, Delhi opposing the registration of the mark Home Solutions being applied for registration by Reckitt Benckiser, company situated at Luxembourg, vide application no. 1426153, as it is deceptively similar to the mark Home Solutions. The matter is currently pending. HSRIL in April 2010 has filed its objection before the Registrar of Trade Marks, Delhi opposing the registration of the mark era e zone being applied for registration by Era E-Zone (India) Limited, company situated at Okla Industrial Estate Phase III, New Delhi -20, vide application no 1669607, as it is deceptively similar to the mark E Zone. The matter is currently pending.

2.

3.

4.

5.

Consumer Cases Cases filed against HSRIL

397

1.

Consumer complaint has been filed in 2008 before the District Consumer Dispute Redressal Forum, Indore by Dr N.K. Neema against HSRIL alleging that the modular kitchen fittings were of inferior quality and they were not fitted properly and has claimed compensation of ` 1.22 lakhs towards the cost of the products, ` 0.50 lakhs for mental torture and monetary loss and ` 0.03 lakhs for legal expense and 18% interest on the total amount claimed. The matter is currently pending. Consumer complaint has been filed in 2008 before the President, District Consumer Redressal Forum, Shalimar Bagh, Delhi, by Ram Niwas against HSRIL and others, alleging that the colour television set delivered was faulty and has claimed compensation of ` 0.15 lakhs for the cost of product purchased. The matter is currently pending. Consumer complaint has been filed in 2008 before the District Consumer Dispute Redressal Forum, Agra by Dr. Ramesh Chandra Saraswat against HSRIL and others alleging that the Nokia mobile handset was not functioning properly and has claimed compensation of ` 0.04 lakhs towards the cost of the product, ` 0.20 lakhs for mental torture, ` 0.05 lakhs for travelling expenses and ` 0.05 lakhs for miscellaneous expenses. The matter is currently pending. Consumer complaint has been filed in 2008 before the District Consumer Disputes Redressal Forum, Pune, by Mahantesh Rudrappa Rachnnavar against HSRIL, alleging that the DT4S Kennedy Town Dining Table and chairs delivered were defective and has claimed compensation of ` 0.22 lakhs for refund of the cost of product and ` 0.10 lakhs for mental agony. The matter is currently pending. Consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Aurangabad, by Varsha Deelip Pawar against HSRIL, alleging that the Palacio Bedroom set was delivered with a defective bed and has claimed replacement of the product or ` 0.34 lakhs being the cost of the product along with 18% interest, ` 0.10 lakhs for mental agony, ` 0.02 lakhs as legal expenses and ` 800 as miscellaneous cost. The matter is currently pending. Consumer complaint has been filed in 2009 before the District Consumer Dispute Redressal Forum, Delhi, by O.P. Verma, against HSRIL and others alleging that the washing Machine was not functioning properly and has claimed replacement or repair of the product along with ` 0.08 lakhs as cost of litigation and ` 0.50 lakhs as compensation. The matter is currently pending. Consumer complaint has been filed in 2009 before the District Consumer Redressal Forum, Lucknow, by Chandra Prakash Gupta against HSRIL and others, alleging that the Eva bedroom set was not delivered and has claimed compensation of ` 0.48 lakhs towards refund with 18% interest along with `4.00 lakhs for mental agony and ` 0.20 lakhs towards legal expenses. The matter is currently pending. A consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Indore, by Surendra Pagaria against HSRIL, alleging that the second set of sofa purchased was not as comfortable compared to the first set of sofa and has claimed compensation of ` 0.50 lakhs towards refund or replacement of the product. The matter is currently pending. Consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Indore, by Bulbul Sharma against HSRIL, alleging that the I-Pod and charger purchased were defective and has claimed compensation of ` 0.15 lakhs as the cost of product and ` 0.03 lakhs towards refund. The matter currently pending. Consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Ranchi, by Gopal Sharan Singh against HSRIL, alleging that the Whirlpool White Magic Washing Machine delivered was defective and has claimed compensation of ` 0.22 lakhs towards refund with 18% interest along with ` 0.5 lakhs for physical and mental agony and ` 0.10 lakhs towards legal expenses. The matter is currently pending.

2.

3.

4.

5.

6.

7.

8.

9.

10.

398

11.

Consumer complaint has been filed in 2009 before the Consumer Disputes Redressal forum, Indore, by Subhendra Vyas against HSRIL alleging that the laptop purchased by him was not functioning properly and has claimed compensation of ` 0.45 lakhs towards refund along with Rs 0.50 lakhs for mental agony and Rs 0.10 lakhs towards other expenses. The matter is currently pending. Consumer complaint has been filed in 2009 before the Consumer Disputes Redressal Forum, Indore, by Praveen Saxena against HSRIL, alleging that the sofa set purchased by him was defective and claimed compensation of ` 0.26 lakhs towards refund with 9 % interest, from the date of payment till the date of realization, along with ` 0.20 lakhs for mental agony and ` 0.05 lakhs towards legal expenses. The matter is currently pending. Consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Lucknow (the Forum), by I. R. Siddiqui against HSRIL, alleging that the Modular Kitchen was not installed properly and within stipulated time period and the products delivered were of sub-standard quality. The complaint was filed before the Forum for claiming ` 1.00 Lakh towards mental agony, ` 0.25 Lakh per month towards loss of accomodation from August 1, 2009, interest at the rate of 24% on ` 1.10 Lakh, ` 2.00 lakhs towards loss of health, ` 2.00 lakhs towards diabetic expenses for whole life, ` 1.00 Lakh as security agency work loss, ` 1.00 Lakh towards damages for not attending to relations, ` 1.00 Lakh for loss of son-in-law, ` 0.50 Lakh for cost of petrol and conveyance, ` 0.02 Lakh towards mobile calls, ` 0.15 Lakh towards cost of proceedings along with interest at the rate of 24% per annum. The matter is currently pending. Consumer complaint has been filed on in 2009 before the District Consumer Disputes Redressal Forum, Indore, by Sarla Sajotia against HSRIL, alleging that the Modular Kitchen was not installed in time and it was unnecessarily delayed and has demanded installation of Modular Kitchen within three working days. The amount involved in the matter is ` 1.06 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Indore, by G. C. Jain against HSRIL, alleging that the product purchased by him was defective. The complaint was filed to claim refund and costs in relation to mental agony and postal charges aggregating to Rs 0.24 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Indore, by Vinay Prakash Pandey, against HSRIL, alleging that the refrigerator purchased by him was defective. The complaint was filed to claim refund and compensation aggregating to Rs 0.19 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Aurangabad by Dr. Dharmapal Patil, alleging that the furniture booked by him was not delivered within stipulated period. The Complaint was filed to compensation in relation to transport charges, litigation cost and loss of business aggregating to Rs 0.65 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Hyderabad by Dr. Kesava Bhogaraju alleging that the modular kitchen fitting has not been installed as on date. The complaint was filed to claim refund of Rs 0.69 lakhs towards the cost of the products with 18% interest per annum from January 2009 until realization. The amount involved is ` 1.50 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Delhi by Sumit Paul, against HSRIL, alleging that the refrigerator purchased by him was defective. The complaint was filed to claim refund and compensation and miscellaneous

12.

13.

14.

15.

16.

17.

18.

19.

399

aggregating to Rs 0.13 lakhs from HSRIL. The matter is currently pending. 20. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Aurangabad by Akash Chopra, alleging that the air conditioner booked by him was not delivered within stipulated period and has claiming Rs 0.25 lakhs as compensation. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Kolkata, by Surendra Gupta, alleging that the refrigerator along with the stabilizer purchased by him appears to be defective. The complaint was filed seeking the replacement or refund amount of Rs 0.34 lakhs as the cost of the product and ` 0.25 lakhs as compensation for mental harassment and other cost. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Ahmedabad, by Arihant Corporation, a partnership firm, through its partner, Dhaneshbhai Patel, alleging that the water dispenser purchased by him appears to be defective. The Complaint was filed seeking a refund of Rs 0.05 lakhs and compensation for mental harassment and other costs aggregating to ` 0.05 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Delhi by Dr Manish Sharma, alleging that the air conditioner purchased by him is defective. The amount involved is ` 1.00 lakhs. The matter is currently pending. Consumer Complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Kolkata by Deepak Gaur alleging that the LCD TV purchased by him has not been installed. The amount involved in the matter is Rs 0.76 lakhs. The matter is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Jaipur by Anjum Praveen (the Complainant) against Home Solutions Retail (India) Limited and PRIL. The Complainant has alleged that the sofa set bought by him was defective and has sought for replacement of the same or refund of money along with ` 0.80 Lakh for mental harassment and ` 0.05 Lakh as advocate fees. The case is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Dispute Redressal Forum, Saini Enclave, Karkardooma, Delhi by A. C. Agarwal (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that the air conditioner purchased by him has not been functioning properly as has sought for replacement of the defective unit, refund of cost of unit being ` 0.21 Lakh with a compensation of ` 0. 30 Lakh for injury caused in the hot season and cost of proceedings. The case is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Mumbai Suburban District by Vijayasarathi Nerellapalli (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that the modular kitchen purchased by him is pending for installation and has claimed ` 5.00 Lakh towards the money paid by the complainant for purchase and interest on the same, penalty for non performance of contract and inconvenience and distress caused. The case is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Mumbai Suburban District by Lakshmi Narayana Ghanti (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that the modular kitchen purchased by him is pending for installation and has claimed ` 6.00 Lakh towards the money paid by the complainant for purchase and interest on the same, penalty for non performance of contract and inconvenience and distress caused. The case is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Gurgaon by Chandresh Sona (the Complainant) against Home Solutions Retail (India)

21.

22.

23.

24.

25.

26.

27.

28.

29.

400

Limited. The Complainant has alleged that the washing machine purchased by him has not been functioning properly and has claimed ` 0.15 Lakh towards cost of the product and ` 0.50 Lakh for harassment and inconvenience caused. The case is currently pending. 30. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Aurangabad by A. K. Chopra (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that he had purchased a table and chair which were not delivered and has claimed a compensation of ` 0.25 Lakh and air cooler rent charges at ` 120 per day, from April 2, 2010 till the date of realization along with interest of 18% p.a, transportation charges of the air cooler of ` 250. The case is currently pending. An appeal has been filed in 2010 before the Karnataka State Consumer Disputes Redressal Commission against the order of the Consumer Forum, Bangalore dated September 30, 2010 by Pradeep Raman (the appellant) against Home Solutions Retail (India) Limited. The appellant has alleged that furniture bought by him was not delivered within the time frame and has prayed that the order dated September 30, 2010 be set aside and call for the lower court records. The case is currently pending. A consumer complaint has been filed in 2009 before the District Consumer Disputes Redressal Forum, Thane by Sandeep Somaji Pednekar (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that the modular kitchen purchased by him was not properly installed and another sofa bought by him was defective. The Complaint has sought for ` 2.00 Lakh as compensation. The case is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Indore by Surjit Lal Deshraj (the Complainant) against Home Solutions Retail (India) Limited. The Complainant has alleged that a laptop computer bought by him was defective and has claimed ` 0.20 Lakh towards cost of the product, interest at the rate of 18 % per annum amounting to ` 0.02 Lakh and ` 0.15 Lakh as compensation. The case is currently pending. A consumer complaint has been filed in 2010 before the Consumer Court, Lal Darwaja, Ahmedabad by Kapil Sudhir Bhatnagar against Home Town, Ahmedabad, alleging that the complainant ordered for renovation and refurnishing of his bathroom to Home Town and has alleged shortcoming, mishandling and mismanagement from the beginning resulting in delay and failure in completion of project work. The matter is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Lucknow by S.M.H. Abidi against Home Town, Saharaganj Mall, Lucknow alleging that he was not provided with the refrigerator in the colour he had initially selected. The matter is currently pending. A consumer complaint has been filed in 2010 before the District Consumer Disputes Redressal Forum, Shalimar Bagh by Tilak Raj against E - zone Mangalam Place, Rohini and others alleging that the Samsung LCD television that he purchased from the store was not performing satisfactorily. On approaching Samsung and despite repeated requests to get the same rectified, it was not carried out by Samsung. The matter is currently pending.

31.

32.

33.

34.

35.

36.

Tax cases Cases filed by HSRIL 1. A writ petition has been filed in 2008 before the Delhi High Court by HSRIL to quash notification no. 24/2007 and circular no. 98/1/2008 (Service Tax) pertaining to levy of service tax on renting of immovable property. The Delhi High Court has granted a stay in the matter vide order dated March 3, 2008 and subsequently, through a final order dated April 18, 2009 set aside the aforesaid notification and circular. The Union of India has filed a special leave petition before the Supreme

401

Court of India praying that the order dated April 18, 2009 passed by the Delhi High Court be quashed and an interim stay in the matter be allowed. The Supreme Court of India through their order dated June 2, 2009 has issued a notice to the respondents, but no interim stay in the matter has been granted. The special leave petition is currently pending. 2. A writ Petition has been filed in 2010 before the Delhi High Court by HSRIL against the Union of India and others seeking a stay on levy of service tax on renting of immovable property. The petitioner has challenged the provisions of Section 65(90a) read with Section 65(105)(zzzz) of the Finance Act, 2007, Finance Act, 2008 and the Finance Act, 2010 as null and void and ultra vires to the Constitution of India. The Delhi High Court has granted interim stay through its order dated May 18, 2010 restraining the respondents from acting upon the impugned notices. Against the interim order, a special leave petition has been filed by the Union of India and others before the Supreme Court of India. The Supreme Court of India has disposed off the special leave petition and continued the interim order till the disposal of the writ petition. The writ petition is currently pending.

K.

Myra Mall Management Company Limited (MMCL) Tax Related Matters Cases filed by Myra Mall Management Company Limited 1. An appeal has been filed before the Commissioner of Income-tax (Appeals) Mumbai by Myra Mall Management Company Limited for the assessment year 2007-2008. The amount involved is ` 1.63 lakhs. The matter is currently pending. An appeal has been filed before the Commissioner of Income-tax (Appeals) Mumbai by Myra Mall Management Company Limited for the assessment year 2008-2009. The amount involved is ` 20.63 lakhs. The matter is currently pending.

2.

L.

FCH Securities & Advisors Limited (erstwhile Ambit Investment Advisory Company Limited) Tax Related Matters Cases filed by FCH Securities & Advisors Limited (erstwhile Ambit Investment Advisory Company Limited) An appeal has been filed before the Commissioner of Income-tax (Appeals) VII Mumbai by Ambit Investment Advisory Company Limited for the assessment year 2006-2007. The amount involved is ` 16.04 lakhs. The order of the CIT (A) was received by the company and the company has filed an appeal before the Income Tax Appellate Tribunal, Mumbai. The matter is currently pending.

M.

Future Capital Investment Advisors Limited Tax Related Matters Cases filed by Future Capital Investment Advisors Limited 1. An appeal has been filed before the Commissioner of Income-tax (Appeals) VII Mumbai by Future Capital Investment Advisors Limited for the assessment year 2006-2007. The order of the CIT (A) was received by the company and filed an appeal before the Income Tax Appellate Tribunal, Mumbai The amount involved is ` 89.15 lakhs. The matter is currently pending. An appeal has been filed before the Commissioner of Income-tax (Appeals) VII Mumbai by Future Capital Investment Advisors Limited for the assessment year 2008-2009. The amount involved is ` 3.04 lakhs. The matter is currently pending.

2.

402

N.

Kshitij Investment Advisory Company Limited Tax Related Matters Cases filed by Kshitij Investment Advisory Company Limited 1. An appeal has been filed before the Commissioner of Income-tax (Appeals) 21 Mumbai Kshitij Investment Advisory Company Limited for the assessment year 2007-2008. The amount involved is ` 36.10 lakhs. The matter is currently pending. An appeal has been filed before the Commissioner of Income-tax (Appeals) 21 Mumbai Kshitij Investment Advisory Company Limited for the assessment year 2008-2009. The amount involved is ` 1.67 lakhs. The matter is currently pending.

2.

Other Matters Cases filed against Kshitij Investment Advisory Company Limited A civil suit for specific performance has been filed in 2009 before the Bombay High Court by Sports and Leisure Apparels Limited against the company and others in respect of shops no. 6A and 6B situated at ground floor, Cross Road Mall, 28 Pandit M. M. Malviya Road, Haji Ali, Mumbai. The plaintiffs have sought an injunction against the defendants from creating any third party right, interest and parting with possession or inducting third party in possession of the demised property until the final disposal of the suit and has claimed compensation of ` 191 Lakhs towards the loss of business and ` 791 Lakhs as damages. The notice of motion for an ad-interim relief was duly dismissed by an order dated July 3, 2009. An appeal was filed against the said order, which was also dismissed. The matter is currently pending. O. Galaxy Entertainment Corporation Limited Cases filed against Galaxy Entertainment Corporation Limited A suit has been filed in 2009 by Artlite Illumination Private Limited before the Court of the Civil Judge, Delhi against Galaxy Entertainment Corporation Limited for non payment of dues of ` 2.35 lakhs in relation to work done in Bangalore, Nagpur and Ahmedabad. The matter is currently pending. Cases filed by Galaxy Entertainment Corporation Limited 1. Two separate writ petitions have been filed in 2007 before the Lucknow High Court by Galaxy Entertainment Corporation Limited against the demand raised by Entertainment tax department. The amount involved is ` 14.57 lakhs. These cases are currently pending at various stages of adjudication. A writ petition has been filed before the High Court of Karnataka at Bangalore by Galaxy Entertainment Corporation Limited against the demand raised by Entertainment Tax Department, Bangalore. The amount involved is ` 16.04 lakhs. The matter is pending.

2.

P.

Weavette Texstyles Limited Cases filed by Weavette Texstyles Limited An arbitration proceeding has been initiated by Weavette Texstyles Limited through Hindustan Chambers of Commerce against Douceur Sportswear Manufacturing Private Limited, Mumbai, for outstanding pending against purchase order for fabrics supplied to Douceur Sportswear Manufact uring Private Limited. The amount involved in the matter is `57.09 lakhs. The matter is pending.

Q. R.

FLSL Distribution Services Limited: Nil Sprint Advisory Services Private Limited (formerly known as Sain Advisory Services Private Limited): Nil

403

S. T.

Shendra Advisory Services Private Limited: Nil Agre Developers Limited (formerly Future Mall Management Limited):

Notices issued against Agre Developers Limited Equinox Business Parks Private Limited (Equinox) has issued a legal notice dated April 5, 2011 to Agre Developers Limited (Agre), Kishore Biyani and the directors of Agre. Agre had entered into a leave and license agreement dated October 11, 2010 (Agreement) with Equinox for the use and occupation of certain commercial premises from January 1, 2011 to November 30, 2015. Equinox has alleged that Agre has failed to take possession of the premises as per the Agreement and has demanded a sum of ` 820.24 lakhs towards payment of license fee, amenities charges, common area maintenance charges and brokerage. Further, Equinox has issued another notice in relation to the aforesaid cause of action and has demanded a sum of ` 75.71 lakhs.
U. V. W. X. Y. Z. AA. BB. Akar Estate Finance Private Limited: Nil Anchor Investment and Trading Private Limited: Nil Asian Retail Lighting Limited: Nil Axon Development Solutions Limited: Nil Clarks Future Footwear Limited: Nil ESES Commercials Private Limited: Nil Erudite Knowledge Services Limited: Nil Fashion Global Retail Limited:

Arbitration Matters

Cases filed against Fashion Global Retail Limited

An arbitration proceeding has been initiated in 2008 by Symmetric Textiles & Woolens Private Limited against Fashion Global Retail Limited at Lucknow in respect of premises comprising of 1550 sq. ft. taken on lease at Halwasiya House, Hazratganj, Lucknow. The period of lease was agreed for nine years from the date of commencement with lock in period of 33 months, which had however been vacated prematurely. The amount involved is ` 45 lakhs. The matter is currently pending.
CC. DD. EE. FF. GG. HH. Future Axiom Telecom Limited: Nil Future Capital Home Finance Private Limited: Nil Future E-Commerce Infrastructure Limited: Nil Future Entertainment Private Limited: Nil Future Finance Limited: Nil Future Freshfoods Limited: Nil

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II. JJ. KK. LL. MM. NN. OO.

Future Hospitality Management Limited: Nil Future Human Development Limited: Nil Future Ideas Realtors India Limited: Nil Future Learning and Development Limited: Nil Future Outdoor Media Solutions Limited: Nil Kshitij Property Solutions Private Limited: Nil Manz Retail Private Limited:

Tax Related Cases Cases filed by Manz Retail Private Limited (MRPL) 1. The Deputy Commissioner of Income Tax - Range-8(2), Mumbai has reopened the assessment of MRPL for the assessment year 2004-2005. The Assessing Officer disallowed (i) ` 7.63 lakhs under section 14A r.w. Rule 8D of the Income Tax Act, 1961, (ii) Rs 67.90 lakhs towards payment for purchase of the tenancy rights and (iii) income from capital gain of ` 407.70 lakhs has been treated as income from business vide order dated December 24, 2009. MRPL has filed appeal before CIT (Appeal) 17, Mumbai on January 20, 2010 against the order framed by the Assessing Officer. Further, disputed amount of demand for the said assessment year is ` 184.03 lakhs. The appeal is currently pending with CIT (Appeal). The Deputy Commissioner of Income Tax - Range-8(2), Mumbai has passed the assessment order for the assessment year 2006-07 and disallowed (i) ` 25.92 lakhs under section 14A r.w. Rule 8D of the Income Tax Act, 1961, (ii) addition of ` 143.50 lakhs towards unexplained cash credit under section 68 of the Income Tax Act, 1961 and (iii) income from capital gain of ` 132.92 lakhs has been treated income from business vide order dated December 30, 2008. MRPL has filed appeal before with CIT (Appeal) 17, Mumbai on January 28, 2009 against the order framed by Assessing Officer. Further, disputed amount of demand for the said assessment year is ` 98.25 lakhs. The appeal is currently pending with CIT (Appeal). The Additional Commissioner of Income Tax - Range-8(2), Mumbai has passed an assessment order for the assessment year 2007-08 and disallowed (i) ` 55.35 lakhs u/s 14A r.w. Rule 8D of the Income Tax Act, 1961, (ii) addition of ` 143.50 lakhs towards unexplained cash credit u/s 68 of the Income Tax Act, 1961 (iii) income from capital gain of ` 543.08 lakhs has been treated income from business and (iv) ` 0.46 lakhs towards expenses for increase in authorised capital vide order dated December 29, 2009. MRPL has filed an appeal before CIT (Appeal) 17, Mumbai on January 20, 2010 against the order framed by Assessing Officer. Further, disputed amount of demand for the said assessment year is ` 252.20 lakhs. The appeal is currently pending with CIT (Appeal). The Deputy Commissioner of Income Tax - Range-8(2), Mumbai has passed an assessment order for the assessment year 2008-09 and disallowed (i) ` 71.46 lakhs u/s 14A r.w. Rule 8D of the Income Tax Act, 1961, and (ii) income from capital gain of ` 87.21 lakhs has been treated income from business vide order dated November 30, 2010. MRPL has filed appeal before CIT (Appeal) 17, Mumbai on January 10, 2011 against the order framed by Assessing Officer. The appeal is currently pending with CIT (Appeal).

2.

3.

4.

PP.

Rural Fairprice Wholesale Limited: Nil

405

QQ. RR. SS.

Samreen Multitrading Private Limited: Nil Sanavi Multitrading Private Limited: Nil Splendor Fitness Private Limited (formerly known as Talwalkars Pantaloon Fitness Private Limited) (SFPL):

Civil Cases Cases filed by SFPL An appeal has been filed before the District and Sessions Judge, Nagpur by Talwalkars Pantaloon Fitness Private Limited against Nagpur Municipal Commissioner, Assistant Commissioner (Octroi) and Assistant Octroi Superintendent for/ against the issuance of bill for penal octroi duty as well as notice of demand for a sum of ` 36.32 lakhs towards the payment of octroi duty and penalty and the same was issued incorrectly, arbitrarily and totally on the false basis and presumption. The case is currently pending.
TT. UU. VV. Taraka Infrastructure Private Limited: Nil Whole Wealth Limited: Nil Winner Sports Limited: Nil

Litigation involving the Business Ventures

A.

AND Designs India Limited Civil Case Cases filed against AND Designs India Limited A case has been filed in 1999 before the Bombay High Court by Bonnie D Souza (the Plaintiff) against Cross D Souza (the Defendant) seeking a declaration that the Defendants are bound by a deed of partition dated April 2, 1971 and not entitled to transfer or sell the suit property situated in Bandra any third party. By a deed of conveyance and other requisite documents, the defendant transferred his right title and interest in the suit property to Masque Clothing Company Private Limited (now AND Designs India Limited). The Plaintiff prays for reliefs including inter alia that a temporary injunction restrained the Defendants from alerting or transferring the suit property be issued and the representative and servants of the Defendants be restrained from parting possession of the suit property. AND Designs India Limited currently operates a wellness division from the suit premises. The matter is currently pending. Cases filed by AND Designs India Limited A case has been filed in 2010 before the Bombay High Court by AND Designs India Limited (Petitioner) against Union of India and others (Respondents) for non-payment of service tax on renting of immovable property services. In this regard, temporary relief was given by the Bombay High Court till the next date of hearing. The matter is currently pending.

B.

Biba Apparels Private Limited Tax Related Matter Case filed against Biba Apparels Private Limited A case was filed for delay on payments of value added tax in Delhi. The amount involved is ` 1.26 lakhs. The assessing officer imposed a penalty and interest. BIBA Apparels Private Limited appealed in the matter and the penalty was waived. BIBA Apparels Private Limited is required to pay the interest.

406

Civil Matter Case filed against Biba Apparels Private Limited A civil suit for permanent injunction has been filed in 2011 before the Delhi High Court by Ritika Private Limited restraining unfair competition and infringement of copyright. The matter is currently pending.

C.

SSIPL Retail Limited Civil Cases Cases filed against SSIPL Retail Limited 1.

A civil case has been filed by M.S. Bindra in relation to the dispute arising out of a leave and license agreement with Nike shoes. The amount involved in the matter is ` 70.00 lakhs. The matter is currently pending.
A civil case has been filed by Abhay Realtors in relation to the dispute arising out of a rent agreement for a shore store in Kolkata. The amount involved in the matter is ` 85.52 lakhs. The matter is currently pending. A demand notice was issued by the Sports Authority of India seeking payment for arrears of rent and electricity. The matter is pending for service of fresh notice before the Estate Officer, Sports Authority of India. The amount involved in the matter is ` 2.26 lakhs. A case has been filed by the High Street for alleged manufacturing dispute of certain products. The amount involved in the matter is ` 13.03 lakhs. The matter is currently pending. Jeevan Singh, a bus driver, filed a suit against Revere Pentland Private Limited (RPPL) (now merged with SSIPL Retail Limited) before the District Judge, Nahan, Himachal Pradesh, for the recovery of ` 7.70 lakhs approximately alongwith interest as damages. The plaintiff has alleged that his contract with RPPL for transportation of labour was terminated without serving a termination notice, as a result of which he incurred huge financial losses. The matter is pending before the aforesaid court.

2.

3.

4.

5.

Consumer Cases Two separate consumer complaints have been filed by certain person on grounds arising from complaints with a Nike sweater and a pair of Nike shoes respectively. The amount involved aggregates to ` 1.23 lakhs. The matter is currently pending. Tax Cases Cases filed against SSIPL Retail Limited 1. There are seven sales tax cases (including one value added tax case) pending against SSIPL Retail Limited before different forums involving an aggregate liability of ` 27.79 lakhs. The matters are pending. There is a service tax case pending against SSIPL Retail Limited before the Delhi High Court in relation to rent for immovable properties for the financial year 2008-09 and 2009-10. The aggregate amount involved is ` 98.13 lakhs. The matter is pending. The Local Area Development, Haryana issued a notice against SSIPL Retail Limited in relation to local area development tax imposed by the Government of Haryana for an aggregate amount of ` 168.39 lakhs. SSIPL Retail Limited has paid an amount of 15.82 lakhs towards the claim. SSIPL and other have approached the Supreme Court against the imposition of tax. The matter is pending.

2.

3.

407

D.

Capital Foods Exportts Private Limited Tax Matters Cases filed by Capital Foods Exportts Private Limited 1. An appeal has been filed before the Income Tax Appellate Tribunal by Capital Foods Exportts Private Limited aggrieved by an order passed by CIT, Mumbai for disallowing the deduction claimed in connection with the income of assessment year 2007-08. The amount involved in the matter is ` 6.69 lakhs. The matter is currently pending. An appeal has been filed before the Commissioner of Income Tax (Appeals), Mumbai by Capital Foods Exportts Private Limited aggrieved by an order passed by Deputy CIT, Mumbai for disallowing the deduction claimed in connection with the income of assessment year 2008-09. The amount involved in the matter is ` 27.07 lakhs. The matter is currently pending.

2.

E.

Turtle Limited Tax Matters 1. An appeal has been filed before the Commissioner of Central Excise- Appeals, Kolkata by Turtle Limited on grounds of being aggrieved by an order passed by the Additional Commissioner of Central Tax II, Kolkata dated November 27, 2008 in a matter of under section 35 F of the Central Excise Act, 1944. The amount involved in the matter is ` 0.60 Lakh. An appeal has been filed in 2010 before the Senior Joint Commissioner Sales Tax, Kolkata by Turtle Limited for the assessment year 2007-2008. The amount involved in the matter is ` 98.71 lakhs. The matter is pending.

2.

F.

Celio Future Fashion Limited: Notices issued against Celio Future Fashion Limited (CFFL)

A notice has been received on January 4, 2011 from the Pune Municipal Corporation against Celio Future Fashion Limited for violation of the Maharashtra Regional and Town Planning Act, 1966 alleging that CFFL had, without authorization, converted a residential property into a commercial property and had also extended the useable area. A reply to the notice has been filed. The matter is pending. G. H. Holli Accessories Private Limited: Nil Amar Chitra Katha Private Limited (ACKPL): Civil Cases Cases filed by ACKPL India Book House Private Limited (IBHPL) had initiated legal proceedings against Diamond Comics Private Limited ("Diamond Comics") in Bombay High Court for the infringement of copyright by Diamond Comics as Diamond Comics had continued the use of copyrighted material of IBHPL provided to Diamond Comics pursuant to the distribution agreement dated February 07, 1994 executed by IBHPL with Diamond Comics even after termination of the said agreement. After the assignment of the relevant intellectual properties to ACKPL under the aforesaid assignment deed, ACKPL applied for amendment of the plaint to substitute itself in place of IBHPL as the plaintiff. The matter is currently pending. Notices issued against ACKPL A legal notice dated May 25, 2009 has been issued to M/ s. Uranus Holdings Private Limited, Samir Patil

408

and Sudhesh Pawar by the Brihan Mumbai Electric Supply & Transport Undertaking ("BMEST") on grounds of tampering with calibration of the electric current as well as the electricity meter installed on the premises at 4th Floor, Flat No. 14, Marthanda, 84, Dr. Annie Besant Road, Worli 400 018 (Worli Premises). BMEST vide the said notice claimed an amount of ` 10.29 lakhs as losses and a compounding fee of ` 1.23 lakhs was also claimed from ACKPL. The concerned Worli Premises was occupied by ACKPL under a leave and license agreement dated May 1, 2009. In view of the same, ACKPL responded to the aforementioned notice issued by BMEST vides its letter dated May 25, 2009 and enclosed three (3) cheques for an aggregate amount of ` 11.52 lakhs. ACKPL, vide its letters dated May 25, 2009 and May 27, 2009 has requested BMEST not to deposit cheques worth ` 5.27 lakhs till the time the case for theft of electricity has been reviewed and has further requested BMEST to waive off compounding charges of ` 1.23 lakhs. The matter is currently pending. Notices issued by ACKPL 1. ACKPL had issued a legal notice dated December 04, 2007 to the Association of Grandparents of Indian Immigrants ("AGII") for infringement of its rights in the trade mark AMAR CHITRA KATHA, copyright in the literary work and artistic contents of books sold under the brand name AMAR CHITRA KATHA and copyright in the graphical representation and names of cartoon characters which appear in the comics sold under the brand of AMAR CHITRA KATHA. The matter is currently pending. ACKPL has issued a legal notice dated December 04, 2007 to Nataraj Books for infringement of the rights its trademark and copyrights by Nataraj Books which, in the capacity of the authorized distributor of AGII, is responsible for marketing and distributing books sold under the title of AMAR CHITRA KATHA without the permission of ACKPL. The matter is currently pending. ACKPL has issued a legal notice dated July 19, 2008 to East and West Series for infringement of copyright. East and West Series has refrained from infringing any intellectual property rights of ACKPL after the issue of the said legal notice. The matter is currently pending.

2.

3.

Material Developments In the opinion of the Board, there has not arisen, since the date of the last audited financial statements disclosed in this Prospectus, any circumstances that materially or adversely affect or are likely to affect the profitability of the Company on a consolidated basis or the value of our consolidated assets or our ability to pay our material liabilities within the next twelve months except for certain agreements entered into by the Company. For a description of the material terms of such agreements, please see the section entitled History and Certain Corporate Matters Material Agreements on page 150.

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GOVERNMENT APPROVALS In view of the approvals listed below, the Company can undertake this Issue and its current business activities and no further major approvals from any government or regulatory authority or any other entity are required to undertake the Issue or continue its business activities. Unless otherwise stated, these approvals are all valid as of the date of this Prospectus. Approvals to carry on the Business 1. The Company was granted certificate of registration, bearing registration no. 07.00137, dated March 9, 1998 by the RBI under section 451A of RBI Act, 1934 to commence / carry on the business of a NBFC without accepting public deposits. The Company was granted a fresh certificate of registration dated June 18, 2007 pursuant to change of name bearing registration no. 07.00137. The Company was again granted a fresh certificate of registration dated October 9, 2007 pursuant to the change of name of the Company to Future Ventures India Limited bearing registration no. 07.00137. The Company was granted a fresh certificate of registration dated August 13, 2009 bearing registration no. B-13.01945 by RBI, Mumbai consequent to shifting of the Registered Office of the Company from the State of Tamil Nadu to the State of Maharashtra. The Reserve Bank of India does not accept any responsibility or guarantee about the present position as to the financial soundness of the Company or for the correctness of any of the statements or representations made or opinions expressed by the Company and for discharge of liability by the Company. Neither is there any provision in law to keep, nor does the Company keep any part of the deposits with the Reserve Bank of India and by issuing the Certificate of Registration to the Company, the Reserve Bank neither accepts any responsibility nor guarantee for the payment of the deposit amount to any depositor. (a) Letter no. DNBS.MRO.CMD.6319/13.06.49/2010-11 dated March 10, 2011 issued by the Reserve Bank of India granting extension of exemption from paragraph 18(1) of the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 relating to exemption from the single party/ group exposure norms for loan/ investments subject to the satisfaction of the following conditions: (i) The Company should not be accessing public funds both directly and indirectly through public deposits, commercial papers, debentures, inter-corporate deposits and bank finance during the period of exemption and not issuing guarantees. The Company should comply with prudential norms to the extent applicable. The Company should comply with the RBI Act and directions issued thereunder. Subject to review, the exemption is granted till March 31, 2012. The exemption would stand automatically withdrawn if any of the terms are violated.

2.

(ii) (iii) (iv) (v)

The exemption is subject to review of RBI at the end of one year from March 10, 2011. 3. Letter (no. 47/115/2009/CL-III) dated March 16, 2009 issued by the Ministry of Corporate Affairs granting exemption of attaching certain particulars to the balance sheet of Aadhaar Retailing Limited, Star Shopping Centers Private Limited, Indus-League Clothing Limited and Indus Tree Crafts Private Limited for the fiscal year 2010. Permanent Account Number (PAN) of the Company as issued by the Income Tax Department is AABCS0279B. Service Tax Registration number of the Company, as issued by the Central Excise Officer is AABCS0279BST002.

4.

5.

410

6.

Tax Deduction Number (TAN) of the Company, as issued by the Income Tax Department is MUMF05770C. Taxpayer Identification Number (TIN) of the Company, as issued by the Income Tax Department is S AABC0279B. The Company has obtained registration (no.760173542) under the Bombay Shops and Establishments Act, 1948 for its registered office at Knowledge House, Shyam Nagar, Off. Jogeshwari Vikhroli Link Road, Jogeshwari (East), Mumbai 400 060. The certificate is valid till December 31, 2012.

7.

8.

Other Approvals The Company has received an approval from the FIPB through letter dated January 20, 2011, for foreign equity participation of up to 25.13% (increasing by 25% from the existing 0.13%) by way of issue and allotment of equity shares in the initial public offer of the Company to FIIs and NRIs under the portfolio investment scheme. As per the approval, the foreign investment should be up to ` 30,000 lakhs (approximately). The approval is subject to certain conditions, including compliance with the RBI regulatory framework of CIC as announced by RBI in August 2010. The Company has undertaken to comply with the terms and conditions of the FIPB approval. The Company may be required to be classified or registered as a CIC in the future. For further details on the consequences of registration of the Company as a CIC, please see the Risk Factor no. 50 on page 30. Pending Approvals The Company has applied for the registration of its trade mark under classes 16, 35, 36, 39 and 42.

411

OTHER REGULATORY AND STATUTORY DISCLOSURES Authority for the Issue The Board of Directors has, pursuant to resolutions dated July 12, 2010 and August 10, 2010 authorised the Issue. The shareholders of the Company have authorised the Issue pursuant to a special resolution dated August 10, 2010 under Section 81(1A) of the Companies Act. The Company has received an approval from the FIPB through letter dated January 20, 2011, for foreign equity participation of up to 25.13% (increasing by 25% from the existing 0.13%) by way of issue and allotment of equity shares in the initial public offer of the Company to FIIs and NRIs under the portfolio investment scheme. As per the approval, the foreign investment should be up to ` 30,000 lakhs (approximately). The approval is subject to certain conditions, including compliance with the RBI regulatory framework of CIC as announced by RBI in August 2010. The Company has undertaken to comply with the terms and conditions of the FIPB approval. The Company may be required to be classified or registered as a CIC in the future. For further details on the consequences of registration of the Company as a CIC, please see the risk factor no. 50 of the section entitled Risk Factors on page 30. Prohibition by SEBI The Company, its Promoters, its Directors, Promoter Group entities and Group Companies and natural persons behind our corporate Promoters have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI. The companies, with which Promoters, Directors or persons in control of the Company are associated as promoters, directors or persons in control have not been prohibited from accessing or operating in capital markets under any order or direction passed by SEBI. Details of the entities that the Directors are associated with, which are engaged in securities market related business and are registered with SEBI for the same, have been provided to SEBI. Prohibition by RBI Neither the Company nor its Promoter, the relatives of Promoter (as defined under the Companies Act) or the Group Companies have been identified as willful defaulters by the RBI or any other governmental authority. There are no violations of securities laws committed by any of them in the past or pending against them. Eligibility for the Issue The Company is eligible for the Issue in accordance with Regulation 26(1) of the SEBI Regulations as explained under the eligibility criteria calculated in accordance with standalone financial statements under Indian GAAP: The Company has net tangible assets of at least ` 300 lakhs in each of the preceding three full years (of 12 months each), of which not more than 50% are held in monetary assets; The Company has distributable profits in accordance with Section 205 of the Companies Act, for at least three of the immediately preceding five years; The Company has a net worth of at least ` 100 lakhs in each of the three preceding full years (of 12 months each); The aggregate of the proposed Issue of ` 75,000 lakhs and the previous issues made by the Company for the nine months period ended December 31, 2010 does not exceed five times the pre-Issue net worth of the Company, as per the audited balance sheet for the Fiscal 2010; and

412

The Company has not changed its name within the last one year. The Companys net profit, dividend, net worth, net tangible assets and monetary assets derived from the financial information included in this Prospectus as at, and for the last five years ended Fiscal 2010 are set forth below: (In ` lakhs) Fiscal 2006 0.27 42.97 42.97 27.21 63.32%

Particulars

Fiscal 2010

Fiscal 2009

Fiscal 2008

Distributable Profits(1) 1,492.50 (1,119.03) (431.48) Net Worth(2) 57,931.11 35,348.61 35,967.64 Net Tangible assets(3) 57,931.11 35,348.61 35,967.64 Monetary assets(4) 1,134.96 715.37 128.39 Monetary assets as a percentage of the net 1.96% 2.02% 0.36% tangible assets (1) Distributable profits have been defined in terms of Section 205 of the Companies Act. (2) Net worth has been defined as the aggregate of equity share capital and reserves, excluding preference share redemption reserve, revaluation reserve and miscellaneous expenditures, if any. (3) Net tangible assets means the sum of all net assets of the Company excluding intangible assets as defined in Accounting Standard 26 notified by the Central Government. (4) Monetary assets comprise of cash and bank balances and public deposit accounts with the Government.

Fiscal 2007 0.81 44.12 44.12 34.95 79.22%

Further, we shall ensure that the number of prospective allottees to whom the Equity Shares will be allotted shall not be less than 1,000; otherwise the entire application money will be refunded forthwith. In case of delay, if any, in refund the Company shall pay interest on the application money at the rate of 15% per annum for the period of delay. DISCLAIMER CLAUSE OF SEBI AS REQUIRED, A COPY OF THE DRAFT RED HERRING PROSPECTUS HAS BEEN SUBMITTED TO SEBI. IT IS TO BE DISTINCTLY UNDERSTOOD THAT SUBMISSION OF THE DRAFT RED HERRING PROSPECTUS TO SEBI SHOULD NOT, IN ANY WAY, BE DEEMED OR CONSTRUED THAT THE SAME HAS BEEN CLEARED OR APPROVED BY SEBI. SEBI DOES NOT TAKE ANY RESPONSIBILITY EITHER FOR THE FINANCIAL SOUNDNESS OF ANY SCHEME OR THE PROJECT FOR WHICH THE ISSUE IS PROPOSED TO BE MADE OR FOR THE CORRECTNESS OF THE STATEMENTS MADE OR OPINIONS EXPRESSED IN THE DRAFT RED HERRING PROSPECTUS. THE BOOK RUNNING LEAD MANAGERS HAVE CERTIFIED THAT THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE GENERALLY ADEQUATE AND ARE IN CONFORMITY WITH SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 IN FORCE FOR THE TIME BEING. THIS REQUIREMENT IS TO FACILITATE INVESTORS TO TAKE AN INFORMED DECISION FOR MAKING AN INVESTMENT IN THE PROPOSED ISSUE. IT SHOULD ALSO BE CLEARLY UNDERSTOOD THAT WHILE THE COMPANY IS PRIMARILY RESPONSIBLE FOR THE CORRECTNESS, ADEQUACY AND DISCLOSURE OF ALL RELEVANT INFORMATION IN THE DRAFT RED HERRING PROSPECTUS, THE BOOK RUNNING LEAD MANAGERS ARE EXPECTED TO EXERCISE DUE DILIGENCE TO ENSURE THAT THE COMPANY DISCHARGES ITS RESPONSIBILITY ADEQUATELY IN THIS BEHALF AND TOWARDS THIS PURPOSE, THE BOOK RUNNING LEAD MANAGERS, HAVE FURNISHED TO SEBI, A DUE DILIGENCE CERTIFICATE DATED AUGUST 13, 2010 WHICH READS AS FOLLOWS: WE, THE LEAD MERCHANT BANKER(S) TO THE ABOVE MENTIONED FORTHCOMING ISSUE, STATE AND CONFIRM AS FOLLOWS:

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1.

WE HAVE EXAMINED VARIOUS DOCUMENTS INCLUDING THOSE RELATING TO LITIGATION LIKE COMMERCIAL DISPUTES, PATENT DISPUTES, DISPUTES WITH COLLABORATORS, ETC. AND OTHER MATERIAL IN CONNECTION WITH THE FINALISATION OF THE DRAFT RED HERRING PROSPECTUS (IN CASE OF A BOOK BUILT ISSUE) / DRAFT PROSPECTUS (IN CASE OF A FIXED PRICE ISSUE) / LETTER OF OFFER (IN CASE OF A RIGHTS ISSUE) PERTAINING TO THE SAID ISSUE; ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE ISSUER, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES, AND INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE DOCUMENTS AND OTHER PAPERS FURNISHED BY THE ISSUER, WE CONFIRM THAT: (A) THE DRAFT RED HERRING PROSPECTUS FILED WITH THE BOARD IS IN CONFORMITY WITH THE DOCUMENTS, MATERIALS AND PAPERS RELEVANT TO THE ISSUE; ALL THE LEGAL REQUIREMENTS RELATING TO THE ISSUE AS ALSO THE REGULATIONS GUIDELINES, INSTRUCTIONS, ETC. FRAMED/ISSUED BY THE BOARD, THE CENTRAL GOVERNMENT AND ANY OTHER COMPETENT AUTHORITY IN THIS BEHALF HAVE BEEN DULY COMPLIED WITH; AND THE DISCLOSURES MADE IN THE DRAFT RED HERRING PROSPECTUS ARE TRUE, FAIR AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL INFORMED DECISION AS TO THE INVESTMENT IN THE PROPOSED ISSUE AND SUCH DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COMPANIES ACT, 1956, THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 AND OTHER APPLICABLE LEGAL REQUIREMENTS.

2.

(B)

(C)

3.

WE CONFIRM THAT BESIDES OURSELVES, ALL THE INTERMEDIARIES NAMED IN THE DRAFT RED HERRING PROSPECTUS ARE REGISTERED WITH THE BOARD AND THAT TILL DATE SUCH REGISTRATION IS VALID. WE HAVE SATISFIED OURSELVES ABOUT THE CAPABILITY OF THE UNDERWRITERS TO FULFIL THEIR UNDERWRITING COMMITMENTS. WE CERTIFY THAT WRITTEN CONSENT FROM PROMOTERS HAS BEEN OBTAINED FOR INCLUSION OF THEIR SPECIFIED SECURITIES AS PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN AND THE SPECIFIED SECURITIES PROPOSED TO FORM PART OF PROMOTERS CONTRIBUTION SUBJECT TO LOCK-IN SHALL NOT BE DISPOSED / SOLD / TRANSFERRED BY THE PROMOTER DURING THE PERIOD STARTING FROM THE DATE OF FILING THE DRAFT RED HERRING PROSPECTUS WITH THE BOARD TILL THE DATE OF COMMENCEMENT OF LOCK-IN PERIOD AS STATED IN THE DRAFT RED HERRING PROSPECTUS. WE CERTIFY THAT REGULATION 33 OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, WHICH RELATES TO SPECIFIED SECURITIES INELIGIBLE FOR COMPUTATION OF PROMOTERS CONTRIBUTION, HAS BEEN DULY COMPLIED WITH AND APPROPRIATE DISCLOSURES AS TO COMPLIANCE WITH THE SAID REGULATION HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS. COMPLIED WITH AND NOTED FOR COMPLIANCE. WE UNDERTAKE THAT SUB-REGULATION (4) OF REGULATION 32 AND CLAUSE (C) AND (D) OF SUB-REGULATION (2) OF REGULATION 8 OF THE SECURITIES AND EXCHANGE

4.

5.

6.

7.

414

BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 SHALL BE COMPLIED WITH. WE CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS CONTRIBUTION SHALL BE RECEIVED AT LEAST ONE DAY BEFORE THE OPENING OF THE ISSUE. WE UNDERTAKE THAT AUDITORS CERTIFICATE TO THIS EFFECT SHALL BE DULY SUBMITTED TO THE BOARD. WE FURTHER CONFIRM THAT ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT PROMOTERS CONTRIBUTION SHALL BE KEPT IN AN ESCROW ACCOUNT WITH A SCHEDULED COMMERCIAL BANK AND SHALL BE RELEASED TO THE ISSUER ALONG WITH THE PROCEEDS OF THE PUBLIC ISSUE. NOTED FOR COMPLIANCE. 8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE MAIN OBJECTS LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION. WE CONFIRM THAT NECESSARY ARRANGEMENTS HAVE BEEN MADE TO ENSURE THAT THE MONEYS RECEIVED PURSUANT TO THE ISSUE ARE KEPT IN A SEPARATE BANK ACCOUNT AS PER THE PROVISIONS OF SUB-SECTION (3) OF SECTION 73 OF THE COMPANIES ACT, 1956 AND THAT SUCH MONEYS SHALL BE RELEASED BY THE SAID BANK ONLY AFTER PERMISSION IS OBTAINED FROM ALL THE STOCK EXCHANGES MENTIONED IN THE PROSPECTUS. WE FURTHER CONFIRM THAT THE AGREEMENT ENTERED INTO BETWEEN THE BANKERS TO THE ISSUE AND THE ISSUER SPECIFICALLY CONTAINS THIS CONDITION. NOTED FOR COMPLIANCE. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES IN DEMAT OR PHYSICAL MODE. NOT APPLICABLE. AS THE OFFER SIZE IS MORE THAN 10 CRORES, HENCE UNDER SECTION 68B OF THE COMPANIES ACT, 1956, THE EQUITY SHARES ARE TO BE ISSUED IN DEMAT ONLY. 11. WE CERTIFY THAT ALL THE APPLICABLE DISCLOSURES MANDATED IN THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 HAVE BEEN MADE IN ADDITION TO DISCLOSURES WHICH, IN OUR VIEW, ARE FAIR AND ADEQUATE TO ENABLE THE INVESTOR TO MAKE A WELL INFORMED DECISION. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE DRAFT RED HERRING PROSPECTUS: (A) AN UNDERTAKING FROM THE ISSUER THAT AT ANY GIVEN TIME, THERE SHALL BE ONLY ONE DENOMINATION FOR THE EQUITY SHARES OF THE ISSUER AND AN UNDERTAKING FROM THE ISSUER THAT IT SHALL COMPLY WITH SUCH DISCLOSURE AND ACCOUNTING NORMS SPECIFIED BY THE BOARD FROM TIME TO TIME.

9.

10.

12.

(B)

13.

WE UNDERTAKE TO COMPLY WITH THE REGULATIONS PERTAINING TO ADVERTISEMENT IN TERMS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009 WHILE MAKING THE ISSUE.

415

14.

WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS BACKGROUND OF THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS STANDS, THE RISK FACTORS, PROMOTERS EXPERIENCE, ETC. WE ENCLOSE A CHECKLIST CONFIRMING REGULATION-WISE COMPLIANCE WITH THE APPLICABLE PROVISIONS OF THE SECURITIES AND EXCHANGE BOARD OF INDIA (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2009, CONTAINING DETAILS SUCH AS THE REGULATION NUMBER, ITS TEXT, THE STATUS OF COMPLIANCE, PAGE NUMBER OF THE DRAFT RED HERRING PROSPECTUS WHERE THE REGULATION HAS BEEN COMPLIED WITH AND OUR COMMENTS, IF ANY.

15.

The filing of the Draft Red Herring Prospectus does not, however, absolve the Company from any liabilities under Section 63 or Section 68 of the Companies Act or from the requirement of obtaining such statutory and/or other clearances as may be required for the purpose of the proposed issue. SEBI further reserves the right to take up at any point of time, with the Book Running Lead Managers, any irregularities or lapses in the Draft Red Herring Prospectus. All legal requirements pertaining to the Issue will be complied with at the time of filing of the Prospectus with the Registrar of Companies, Mumbai at Maharashtra, in terms of Section 56 and Section 60 of the Companies Act. Caution - Disclaimer from the Company, the Directors, the BRLMs and the CBRLMs The Company, the Directors, the BRLMs and the CBRLMs accept no responsibility for statements made otherwise than in this Prospectus or in the advertisements or any other material issued by or at our instance and anyone placing reliance on any other source of information, including the Companys website www.futureventures.in, would be doing so at his or her own risk. The BRLMs and the CBRLMs accept no responsibility, save to the limited extent as provided in the Issue Agreement entered into between the BRLMs, the CBRLMs and the Company and the Underwriting Agreement to be entered into between the Underwriters and the Company. All information shall be made available by the Company, the BRLMs and the CBRLMs to the public and investors at large and no selective or additional information would be available for a section of the investors in any manner whatsoever including at road show presentations, in research or sales reports, at bidding centres or elsewhere. Neither the Company nor the Underwriters are liable for any failure in downloading the Bids due to faults in any software/hardware system or otherwise. Investors who Bid in the Issue will be required to confirm and will be deemed to have represented to the Company, the Underwriters and their respective directors, officers, agents, affiliates, and representatives that they are eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company and will not Issue, sell, pledge, or transfer the Equity Shares of the Company to any person who is not eligible under any applicable laws, rules, regulations, guidelines and approvals to acquire Equity Shares of the Company. The Company, the Underwriters and their respective directors, officers, agents, affiliates, and representatives accept no responsibility or liability for advising any investor on whether such investor is eligible to acquire Equity Shares of the Company. The BRLMs, the CBRLMs and their respective associates and affiliates may engage in transactions with, and perform services for, the Company and its Group Companies, affiliates or associates or third parties in the ordinary course of business and have engaged and its Group Companies, or may in future engage, in commercial banking and investment banking transactions with the Company, affiliates or associates or third parties, for which they have received, and may in future receive, compensation.

416

Disclaimer in respect of Jurisdiction This Issue is being made in India to persons resident in India (including Indian nationals resident in India who are not minors, HUFs, companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in shares, Indian Mutual Funds registered with SEBI, Indian financial institutions, commercial banks, regional rural banks, co-operative banks (subject to RBI permission), or trusts under applicable trust law and who are authorised under their constitution to hold and invest in shares, permitted insurance companies and pension funds) and to FIIs, eligible NRIs and other eligible foreign investors (viz. FVCIs, multilateral and bilateral development financial institutions). For further details, please see the section entitled Other Regulatory and Statutory Disclosures - Authority for the Issue on page 414. This Prospectus does not, however, constitute an invitation to purchase shares offered hereby in any jurisdiction other than India to any person to whom it is unlawful to make an offer or invitation in such jurisdiction. Any person into whose possession this Prospectus comes is required to inform himself or herself about, and to observe, any such restrictions. Any dispute arising out of this Issue will be subject to the jurisdiction of appropriate court(s) in Mumbai, India only. No action has been, or will be, taken to permit a public offering in any jurisdiction where action would be required for that purpose, except that this Prospectus has been filed with SEBI for its observations and SEBI shall give its observations in due course. Accordingly, the Equity Shares represented thereby may not be offered or sold, directly or indirectly, and this Prospectus may not be distributed, in any jurisdiction, except in accordance with the legal requirements applicable in such jurisdiction. Neither the delivery of this Prospectus nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date hereof or that the information contained herein is correct as of any time subsequent to this date. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. Disclaimer Clause of the BSE BSE has given vide its letter dated September 30, 2010, permission to the Company to use BSEs name in this Prospectus as one of the stock exchanges on which the Companys securities are proposed to be listed. BSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. BSE does not in any manner: (i) warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red Herring Prospectus; or warrant that the Companys securities will be listed or will continue to be listed on BSE; or take any responsibility for the financial or other soundness of the Company, its promoters, its management or any scheme or project of the Company;

(ii) (iii)

and it should not for any reason be deemed or construed to mean that the Draft Red Herring Prospectus has been cleared or approved by BSE. Every Person who desires to apply for or otherwise acquires any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against BSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or for any other reason whatsoever. Disclaimer Clause of the NSE As required, a copy of the Draft Red Herring Prospectus had been submitted to NSE. NSE has given vide its letter October 15, 2010, permission to the Company to use NSEs name in this Prospectus as one of the stock exchanges on which the Companys securities are proposed to be listed. NSE has scrutinised the Draft Red Herring Prospectus for its limited internal purpose of deciding on the matter of granting the aforesaid permission to the Company. It is

417

to be distinctly understood that the aforesaid permission given by NSE should not in any way be deemed or construed that the Draft Red Herring Prospectus has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of the Draft Red Herring Prospectus; nor does it warrant that the Companys securities will be listed or will continue to be listed on the NSE; nor does it take any responsibility for the financial or other soundness of the Company, its promoters, its management or any scheme or project of the Company. Every person who desires to apply for or otherwise acquire any securities of the Company may do so pursuant to independent inquiry, investigation and analysis and shall not have any claim against NSE whatsoever by reason of any loss which may be suffered by such person consequent to or in connection with such subscription/ acquisition whether by reason of anything stated or omitted to be stated herein or any other reason whatsoever. Filing A copy of the Draft Red Herring Prospectus has been filed with SEBI at Corporation Finance Department, Plot No.C4-A,'G' Block, Bandra Kurla Complex, Bandra (East), Mumbai 400 051. A copy of the Red Herring Prospectus, along with the documents required to be filed under Section 60B of the Companies Act, have been delivered for registration to the ROC and a copy of the Prospectus to be filed under Section 60 of the Companies Act would be delivered for registration with the ROC at the Office of the Registrar of Companies, Everest, 5th Floor, 100, Marine Drive, Mumbai 400 002. Listing Applications have been made to the BSE and NSE for permission to deal in and for an official quotation of the Equity Shares, the Bombay Stock Exchange Limited will be the Designated Stock Exchange with which the Basis of Allotment will be finalised. If the permissions to deal in and for an official quotation of the Equity Shares are not granted by any of the Stock Exchanges mentioned above, the Company will forthwith repay, without interest, all moneys received from the applicants in pursuance of this Prospectus. If such money is not repaid within eight days after the Company becomes liable to repay it, i.e. from the date of refusal or within 70 days from the Bid/Issue Closing Date, whichever is earlier, then the Company and every Director of the Company who is an officer in default shall, on and from such expiry of eight days, be liable to repay the money, with interest at the rate of 15% per annum on application money, as prescribed under Section 73 of the Companies Act. The Company shall ensure that all steps for the completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges mentioned above are taken within 12 Working Days of finalisation of the Bid/ Issue Closing Date. Consents Consents in writing of: (a) the Directors, the Company Secretary and Compliance Officer, the Auditors, Bankers to the Company and Bankers to the Issue; and (b) Book Running Lead Managers, Co-Book Running Lead Managers and Syndicate Member, Escrow Collection Bankers, Registrar to the Issue, the Legal Advisor to the Issue, to act in their respective capacities, will be obtained and will be filed along with a copy of the Prospectus with the ROC, as required under Sections 60 and 60B of the Companies Act and such consents shall not be withdrawn up to the time of delivery of the Prospectus for registration with the ROC. In accordance with the Companies Act and SEBI Regulations, the Companys statutory auditors, have given their written consent to the inclusion of their standalone and consolidated reports both dated March 26, 2011 and statement of the tax benefits dated May 4, 2011 beginning on pages 350 and 89, respectively in the form and context in which it appears in this Prospectus and such consent has not be withdrawn up to the time of submission of the Prospectus with the RoC.

418

Credit Analysis and Research Limited, the IPO Grading Agency engaged by us for the purpose of obtaining IPO grading in respect of this Issue, has given its written consent to the inclusion of its name and its report in the form and context in which they will appear in this Prospectus and such consents and reports will not be withdrawn up to the time of delivery of this Prospectus and the Prospectus to the Designated Stock Exchange. Experts to the Issue Except the report of the Auditors dated March 26, 2011 and the statement of tax benefits dated May 3, 2011 on pages 230 and 89, respectively and the report of Credit Analysis and Research Limited in respect of the IPO grading of this Issue annexed herewith to this Prospectus, the Company has not obtained any opinions from an expert as per the Companies Act. Expenses of the Issue The expenses of this Issue include, among others, brokerage, underwriting and management fees, selling commission, printing and distribution expenses, legal fees, statutory advertisement and marketing expenses and listing fees. For further details of Issue related expenses, please see the section entitled Objects of the Issue on page 82. The listing fee and all expenses with respect to the Issue will be borne by the Company. Fees Payable to the BRLMs, the CBRLMs and the Syndicate The total fees payable to the BRLMs, the CBRLMs and the Syndicate will be as per the engagement letters issued by the Company, copies of which are available for inspection at the Registered Office of the Company. Fees Payable to the Registrar to the Issue The fees payable by the Company to the Registrar to the Issue for processing of application, data entry, printing of CAN/refund order, preparation of refund data on magnetic tape, printing of bulk mailing register will be as per the agreement between the Company and the Registrar to the Issue dated August 10, 2010, a copy of which is available for inspection at the Registered Office of the Company. The Registrar to the Issue will be reimbursed for all out of pocket expenses including cost of stationery, postage, stamp duty, and communication expenses. Adequate funds will be provided to the Registrar to the Issue to enable them to send refund orders or allotment advice by registered post/speed post. Underwriting Commission, Brokerage and Selling Commission on Previous Issues Since this is the initial public offer of the Company, no sum has been paid or has been payable as commission or brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since the inception of the Company. Particulars regarding public or rights issue during the last five years The Company has not made any public or rights issue during the last five years. Previous issues of Equity Shares otherwise than for cash Except as stated in the sections entitled Capital Structure on page 71 and History and Corporate Matters on page 146, the Company has not issued any Equity Shares for consideration otherwise than for cash. Commission and Brokerage paid on previous issues of the Equity Shares Since this is the initial public issue of Equity Shares, no sum has been paid or has been payable as commission or

419

brokerage for subscribing to or procuring or agreeing to procure subscription for any of the Equity Shares since the Companys inception. Previous capital issue during the previous three years by listed Subsidiaries, Group Companies and associates of the Company Future Capital Holdings Limited (FCH) had undertaken an initial public offering (FCH IPO) of its equity shares in January 2008 for an amount aggregating ` 49,134.42 lakhs. The proceeds of FCH IPO were utilised for the objects stated in the prospectus dated January 17, 2008. The equity shares of FCH were credited to the demat account of the members on January 30, 2008. For the fiscal year 2010, FCH shall pay a dividend of ` 1 per share as resolved in the annual general meeting dated August 9, 2010. Details of public/ rights issue Galaxy Entertainment Corporation Limited made an initial public offering of equity shares of having a face value of ` 10 each that took place in 1987. The details of the same are not available with this company. Galaxy Entertainment Corporation Limited has not made any public or rights issue in the last three years. Promise vis--vis Performance Public/ Rights Issue of the Company and/ or listed Subsidiaries, Group Companies and associates of the Company Future Capital Holdings Limited had undertaken an initial public offering (FCH IPO) of its equity shares in January 2008 for an amount aggregating ` 49,134.42 lakhs. The proceeds of FCH IPO were utilised for the objects stated in the prospectus dated January 17, 2008. Outstanding Debentures or Bonds The Company does not have any outstanding debentures or bonds as of the date of filing this Prospectus. Outstanding Preference Shares The Company does not have any outstanding preference shares as of the date of filing this Prospectus. Stock Market Data for the Equity Shares of the Company This being an initial public offering of the Company, the Equity Shares of the Company are not listed on any stock exchange. Mechanism for Redressal of Investor Grievances The agreement between the Registrar to the Issue and the Company will provide for retention of records with the Registrar to the Issue for a period of at least one year from the last date of despatch of the letters of allotment, demat credit and refund orders to enable the investors to approach the Registrar to the Issue for redressal of their grievances. All grievances relating to the Issue may be addressed to the Registrar to the Issue, giving full details such as name, address of the applicant, number of Equity Shares applied for, amount paid on application and the bank branch or collection centre where the application was submitted. All grievances relating to the ASBA process may be addressed to the relevant SCSB, giving full details such as name, address of the applicant, application number, number of Equity Shares applied for, amount paid on application and the Designated Branch or the collection centre of the SCSB where the ASBA Bid cum Application Form was submitted by the ASBA Bidders. Investor grievances pending against the Company, listed Group Companies and the listed companies under the same management

420

Company A letter dated December 29, 2010 (the CB Letter) from Chandubala Bagrecha (CB) was forwarded to the Company by SEBI on January 11, 2011. The CB Letter contained certain allegations regarding irregularities in the shareholding of Pantaloon Retail (India) Limited in Future Value Retail Limited. The Company has replied to the complaint vide letter dated January 17, 2011. Subsequently, the Company was informed by SEBI that the reply had been posted to the wrong address. Accordingly, the Company posted the same reply to the address provided by SEBI on February 25, 2011. The Company has not received any further complaint from the Complainant. Agre Developers Limited (Agre) As of the date of the Prospectus, there are no investor grievances pending against Agre. All investor grievances would be redressed within an average period of 15 days from the date of the receipt of the grievance. Investors can contact Agres share transfer agent i.e. Link Intime (India) Limited or the compliance officer or the secretarial department of Agre in case of any share transfer related problems. Galaxy Entertainment Corporation Limited As of date of the Prospectus, there are no investor grievances pending against Galaxy Entertainment Corporation Limited. Galaxy Entertainment Corporation Limited normally takes seven days in disposal of various types of investor grievances. Future Capital Holdings Limited (FCH) As of date of the Prospectus, there is one investor grievance pending against FCH. FCH normally takes 7-10 days in disposal of various types of investor grievances. Pantaloon Retail (India) Limited (PRIL) As of date of the Prospectus, there are three investor grievances pending against PRIL. PRIL normally takes 8-10 days in disposal of various types of investor grievances. Disposal of Investor Grievances The Company estimates that the average time required by the Company, or the Registrar to the Issue or the SCSBs in case of ASBA Bidders for the redressal of routine investor grievances shall be 10 working days from the date of receipt of the complaint. In case of non-routine complaints and complaints where external agencies are involved, the Company will seek to redress these complaints as expeditiously as possible. The Company has constituted a Shareholders/ Investor Grievance Committee comprising of Anand Balasundaram as Chairman and Kishore Biyani as member. The Company has also appointed Manoj Gagvani, Company Secretary of the Company as the Compliance Officer for this Issue and he may be contacted in case of any pre-Issue or post-Issue related problems, at the following address: Manoj Gagvani Company Secretary and Head-Legal Knowledge House, Shyam Nagar,

421

Off Jogeshwari Vikhroli Link Road, Jogeshwari (E), Mumbai 400 060 Changes in Auditors in the last three years There has been no change in the auditors of the Company during the last three years. Capitalisation of Reserves or Profits The Company has not capitalised its reserves or profits during the last five years, except as stated in the section Capital Structure on page 71. Revaluation of Assets The Company has not revalued its assets in the last five years.

422

TERMS OF THE ISSUE The Equity Shares being issued are subject to the provisions of the Companies Act, the SCRR, the Memorandum and Articles of Association, the terms of this Prospectus and the Prospectus, Bid cum Application Form, ASBA Bid cum Application Form, the Revision Form, ASBA Revision Form, the CAN and other terms and conditions as may be incorporated in the allotment advices and other documents/ certificates that may be executed in respect of the Issue. The Equity Shares shall also be subject to laws, guidelines, notifications and regulations relating to the issue of capital and listing and trading of securities issued from time to time by SEBI, the Government, Stock Exchanges, ROC, RBI and/or other authorities, as in force on the date of the Issue and to the extent applicable. Ranking of Equity Shares The Equity Shares being issued shall be subject to the provisions of the Memorandum and Articles of Association and shall rank pari-passu with the existing Equity Shares of the Company including rights in respect of dividend. The Allotees in receipt of Allotment of Equity Shares under this Issue will be entitled to dividends and other corporate benefits, if any, declared by the Company after the date of Allotment. For further details, please see the section entitled Main Provisions of the Articles of Association on page 461. Mode of Payment of Dividend The Company shall pay dividends to its shareholders in accordance with the provisions of the Companies Act, the Articles and the provision of the Listing Agreements. Face Value and Issue Price The face value of the Equity Shares is `10 each and the Issue Price is ` 10 per Equity Share. At any given point of time there shall be only one denomination for the Equity Shares. Compliance with SEBI Regulations The Company shall comply with all disclosure and accounting norms as specified by SEBI from time to time. Rights of the Equity Shareholder Subject to applicable laws, the equity shareholders shall have the following rights: Right to receive dividend, if declared; Right to attend general meetings and exercise voting powers, unless prohibited by law; Right to vote on a poll either in person or by proxy; Right to receive offers for rights shares and be allotted bonus shares, if announced; Right to receive surplus on liquidation; Right of free transferability; and Such other rights, as may be available to a shareholder of a listed public company under the Companies Act, the terms of the listing agreement executed with the Stock Exchanges, and the Companys Memorandum and Articles of Association. For a detailed description of the main provisions of the Articles relating to voting rights, dividend, forfeiture and lien and/or consolidation/splitting, see the section entitled Main Provisions of the Articles of Association on page 461.

423

Market Lot and Trading Lot In terms of Section 68B of the Companies Act, the Equity Shares shall be Allotted only in dematerialised form. Pursuant to the SEBI Regulations, the trading of Equity Shares shall only be in dematerialised form. Since trading of the Equity Shares is in dematerialised form, the tradable lot is one Equity Share. Allotment in this Issue will be only in electronic form in multiples of one Equity Share subject to a minimum Allotment of 600 Equity Shares. The Price Band and the minimum Bid Lot size for the Issue will be decided by the Company, in consultation with the BRLMs, and advertised in all editions of Financial Express in the English language, all editions of Jansatta in the Hindi language and Mumbai edition of Navshakti in the Marathi language at least two Working Days prior to the Bid/ Issue Opening Date. Jurisdiction Exclusive jurisdiction for the purpose of this Issue is with the competent courts/authorities in Mumbai. Nomination Facility to Investor In accordance with Section 109A of the Companies Act, the sole or First Bidder, along with other joint Bidders, may nominate any one person in whom, in the event of the death of sole Bidder or in case of joint Bidders, death of all the Bidders, as the case may be, the Equity Shares Allotted, if any, shall vest. A person, being a nominee, entitled to the Equity Shares by reason of the death of the original holder(s), shall in accordance with Section 109A of the Companies Act be entitled to the same advantages to which he or she would be entitled if he or she were the registered holder of the Equity Share(s). Where the nominee is a minor, the holder(s) may make a nomination to appoint, in the prescribed manner, any person to become entitled to Equity Share(s) in the event of his or her death during the minority. A nomination shall stand rescinded upon a sale of equity share(s) by the person nominating. A buyer will be entitled to make a fresh nomination in the manner prescribed. Fresh nomination can be made only on the prescribed form available on request at the Registered Office or to the Registrar and Transfer Agents of the Company. Further, any person who becomes a nominee shall, upon the production of such evidence as may be required by the Board, elect either: To register himself or herself as the holder of the Equity Shares; or To make such transfer of the Equity Shares, as the deceased holder could have made. Further, the Board may at any time give notice requiring any nominee to choose either to be registered himself or herself or to transfer the Equity Shares, and if the notice is not complied with within a period of 90 days, the Board may thereafter withhold payment of all dividends, bonuses or other moneys payable in respect of the Equity Shares, until the requirements of the notice have been complied with. Since the Allotment of Equity Shares in the Issue will be made only in dematerialised form, there is no need to make a separate nomination with the Company. Nominations registered with respective depository participant of the applicant would prevail. If the investors want to change their nomination, they are requested to inform their respective depository participant. Minimum Subscription If the Company does not receive the minimum subscription of 90% of the Issue, including devolvement of underwriters within 60 days from the Bid/Issue Closing Date, the Company shall forthwith refund the entire subscription amount received. If there is a delay beyond eight days after the Company becomes liable to pay the amount, the Company shall pay interest prescribed under Section 73 of the Companies Act. Further, the Company shall ensure that the number of prospective Allotees to whom Equity Shares will be Allotted

424

shall not be less than 1,000. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction. Arrangement for disposal of Odd Lots There is no arrangement for the disposal of odd lots. Restriction on transfer of shares Except for lock-in of the pre-Issue Equity Shares and Promoters and minimum contribution as detailed in the section entitled Capital Structure on page 71, and except as provided in the Articles of Association, there are no restrictions on transfers of Equity Shares. There are no restrictions on transfers of debentures except as provided in the Articles of Association. There are no restrictions on transmission of shares/ debentures and on their consolidation/ splitting except as provided in the Articles of Association. For further details, please see the section entitled Main Provisions of the Articles of Association on page 461.

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ISSUE STRUCTURE Issue of 75,00,00,000 Equity Shares for cash at a price of ` 10 per Equity Share aggregating up to ` 75,000 lakhs. The Issue will constitute 47.58% of the post-Issue paid-up equity share capital of our Company. The Issue is being made through the Book Building Process. QIBs Number Shares(1) of Equity Not more than 37,50,00,000 Equity Shares Non-Institutional Bidders Not less than 11,25,00,000 Equity Shares available for allocation or Issue less allocation to QIB Bidders and Retail Individual Bidders. Retail Individual Bidders Not less than 26,25,00,000 Equity Shares available for allocation or Issue less allocation to QIB Bidders and Non-Institutional Bidders. Not less than 35% of the Issue or the Issue less allocation to QIB Bidders and Non-Institutional Bidders. Proportionate(3)

Percentage of Issue Size available for Allotment/allocation

Not more than 50% of the Issue Size being allocated. However, up to 5% of the QIB Portion shall be available for allocation proportionately to Mutual Funds only. Proportionate as follows: (3) (a) 37,50,00,000 Equity Shares shall be allocated on a proportionate basis to Mutual Funds; and (b) 1,87,50,000 Equity Shares shall be Allotted on a proportionate basis to all QIBs including Mutual Funds receiving allocation as per (a) above. Such number of Equity Shares that the Bid Amount exceeds. ` 2,00,000 and in multiples of 600 Equity Shares thereafter.

Not less than 15% of Issue or the Issue less allocation to QIB Bidders and Retail Individual Bidders.

Basis of Allotment/Allocation if respective category is oversubscribed

Proportionate(3)

Minimum Bid

Such number of Equity Shares that the Bid Amount exceeds ` 2,00,000 and in multiples of 600 Equity Shares thereafter. Such number of Equity Shares not exceeding the Issue subject to applicable limits.

600 Equity Shares and in multiples of 600 Equity Shares thereafter.

Maximum Bid

Such number of Equity Shares not exceeding the Issue, subject to applicable limits.

Such number of Equity Shares whereby the Bid Amount does not exceed ` 2,00,000. Compulsorily in dematerialised form. 600 Equity Shares

Mode of Allotment

Compulsorily form.

in

dematerialised

Compulsorily dematerialised form.

in

Bid Lot

600 Equity Shares and in multiples

600 Equity Shares and in

426

QIBs of 600 Equity Shares thereafter.

Non-Institutional Bidders multiples of 600 Equity Shares thereafter.

Retail Individual Bidders and in multiples of 600 Equity Shares thereafter. 600 Equity Shares and in multiples of one Equity Share thereafter. One Equity Share Resident Indian individuals, Eligible NRIs and HUF (in the name of Karta) (3)

Allotment Lot

600 Equity Shares and in multiples of one Equity Share thereafter.

600 Equity Shares and in multiples of one Equity Share thereafter.

Trading Lot Who can Apply (2)

One Equity Share Public financial institutions as specified in Section 4A of the Companies Act, scheduled commercial banks, mutual funds registered with SEBI, FIIs and subaccounts registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual, multilateral and bilateral development financial institutions, venture capital funds registered with SEBI, foreign venture capital investors registered with SEBI, state industrial development corporations, insurance companies registered with Insurance Regulatory and Development Authority, provident funds (subject to applicable law) with minimum corpus of `2,500 lakhs, pension funds with minimum corpus of `2,500 lakhs in accordance with applicable law, and National Investment Fund and insurance funds set up and managed by the army, navy or air force of the Union of India and insurance funds set up and managed by the Department of Posts, India. (3) Amount shall be payable at the time of submission of Bid cum Application Form to the Syndicate Members. (4) Full Bid Amount on Bidding

One Equity Share Resident Indian individuals, Eligible NRIs, HUF (in the name of Karta), companies, corporate bodies, scientific institutions societies and trusts, sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals. (3)

Terms of Payment

Amount shall be payable at the time of submission of Bid cum Application Form.
(4)

Margin Amount
(1)

Full Bid Bidding

Amount

on

Amount shall be payable at the time of submission of Bid cum Application Form.(4) Full Bid Amount on Bidding

Subject to valid Bids being received at or above the Issue Price. This Issue is made in accordance with Rule 19(2)(b)(i) of the Securities Contracts Regulations Rules, 1957 (SCRR), as amended under the SEBI Regulations where the Issue will be made through the Book Building Process wherein not more than

427

50% of the Issue will be allocated on a proportionate basis to QIB. Out of the QIB Portion 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder shall be available for allocation on a proportionate basis to QIBS and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. However, if the aggregate demand from Mutual Funds is less than 1,87,50,000 Equity Shares, the balance Equity Shares available for Allotment in the Mutual Fund Portion will be added to the QIB Portion and allocated proportionately to the QIB Bidders in proportion to their Bids. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to Non-Institutional Bidders and not less than 35% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. Subject to valid Bids being received at or above the Issue Price, under-subscription, if any, in the QIB Portion, the Non-Institutional Portion or the Retail Portion, would be allowed to be met with spill-over from other category or a combination of categories, at the discretion of the Company, in consultation with the BRLMs and the Designated Stock Exchange.
(2)

In case the Bid cum Application Form is submitted in joint names, the Bidders should ensure that the demat account is also held in the same joint names and are in the same sequence in which they appear in the Bid cum Application Form. The Company has received an approval from the FIPB vide letter dated January 20, 2011, for foreign equity participation of up to 25.13% (increasing by 25% from the existing 0.13%) by way of issue and allotment of equity shares in the initial public offer of the Company to FIIs and NRIs under the portfolio investment scheme. As per the approval, the initial FDI inflow by the foreign collaborator/investor would be ` 30,000 lakhs (approximately). In case of ASBA Bidders, the SCSB shall be authorised to block such funds in the bank account of the ASBA Bidder that are specified in the ASBA Bid cum Application Form.

(3)

(4)

Withdrawal of the Issue The Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue anytime after the Bid/Issue Opening Date. In such an event the Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. The BRLMs and the CBRLMs, through the Registrar to the Issue, shall notify the SCSBs to unblock the bank accounts of the ASBA Bidders within one day from the day of receipt of such notification. The Company shall also inform the Stock Exchanges on which the Equity Shares are proposed to be listed. In the event that the Company decides not to proceed with the Issue after Bid/ Issue Closing Date and thereafter determines that it will proceed with an initial public offering of its Equity Shares, the Company shall be required to file a fresh draft red herring prospectus with SEBI. Any further issue of Equity Shares by the Company shall be in compliance with applicable laws. Bid/Issue Programme BID/ISSUE OPENED ON BID/ISSUE CLOSED ON April 25, 2011 For QIB Bidders: April 27, 2011 For Retail Indivdual Bidders and Non-Institutional Bidders: April 28, 2011

Bids and any revision in Bids shall be accepted only between 10.00 a.m. and 5.00 p.m. (Indian Standard Time, IST) during the Bid/ Issue Period as mentioned above at the bidding centres mentioned on the Bid cum Application Form. On the Bid/ Issue Closing Date, the Bids shall be accepted only between 10.00 a.m. and 3.00 p.m. (IST) and shall be uploaded until (i) 4.00 p.m. (IST) in case of Bids by Non-Institutional Bidders, and (ii) until 5.00 p.m. (IST) or such extended time as permitted by the BSE and the NSE, in case of Bids by Retail Individual Bidders.

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On the QIB Bid/Issue Closing Date, the Bids would be uploaded till 5.00 p.m. It is clarified that the Bids not uploaded in the book would be rejected. Bids by the ASBA Bidders shall be uploaded by the SCSB in the electronic system to be provided by the Stock Exchanges. Due to limitation of time available for uploading the Bids on the Bid/ Issue Closing Date, the Bidders are advised to submit their Bids one day prior to the Bid/ Issue Closing Date and, in any case, no later than 3.00 p.m. (IST) on the Bid/ Issue Closing Date. Bidders are cautioned that in the event a large number of Bids are received on the Bid/ Issue Closing Date or the QIB Bid/Issue Closing Date, as is typically experienced in public offerings, some Bids may not get uploaded due to lack of sufficient time. Such Bids that cannot be uploaded will not be considered for allocation under the Issue. Bids will be accepted only on Business Days, i.e., Monday to Friday (excluding any public holiday). On the Bid/ Issue Closing Date, extension of time will be granted by the Stock Exchanges only for uploading the Bids received by Retail Individual Bidders after taking into account the total number of Bids received up to the closure of time period for acceptance of Bid cum Application Forms as stated herein and reported by the BRLMs and the CBRLMs to the Stock Exchange within half an hour of such closure. The Company, in consultation with the BRLMs, reserves the right to revise the Price Band during the Bid/ Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price disclosed at least two Working Days prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly. In case of revision of the Price Band, the Bid/Issue Period will be extended for at least three additional working days after revision of Price Band subject to the Bid/ Issue Period not exceeding 10 working days. Any revision in the Price Band and the revised Bid/ Issue Period, if applicable, will be widely disseminated by notification to the Stock Exchanges, by issuing a press release and also by indicating the changes on the websites of the BRLMs, the CBRLMs and at the terminals of the Syndicate.

429

ISSUE PROCEDURE This section applies to all Bidders. Please note that all Bidders can participate in the Issue through the ASBA process. ASBA Bidders should note that the ASBA process involves application procedures that may be different from the procedure applicable to Bidders other than the ASBA Bidders. Bidders applying through the ASBA process should carefully read the provisions applicable to such applications before making their application through the ASBA process. Please note that all the Bidders are required to make payment of the full Bid Amount along with the Bid cum Application Form. In case of ASBA Bidders, an amount equivalent to the full Bid Amount will be blocked by the SCSB. Book Building Procedure In terms of Rule 19(2)(b)(i) of the SCRR, this Issue is for more than 25% of the post-Issue equity share capital of our Company. This Issue is being made through the Book Building Process wherein not more than 50% of the Issue shall be available for allocation to QIBs on a proportionate basis. Out of the QIB Portion, 5% shall be available for allocation on a proportionate basis to Mutual Funds only. The remainder will be available for allocation on a proportionate basis to QIBs and Mutual Funds, subject to valid Bids being received from them at or above the Issue Price. Further, not less than 15% of the Issue will be available for allocation on a proportionate basis to NonInstitutional Bidders and not less than 35% of the Issue will be available for allocation on a proportionate basis to Retail Individual Bidders, subject to valid Bids being received at or above the Issue Price. All Bidders, other than the ASBA Bidders, are required to submit their Bids through the Syndicate. ASBA Bidders are required to submit their Bids through the SCSBs. Investors should note that the Equity Shares will be Allotted to all successful Bidders only in dematerialised form. The Bid cum Application Forms which do not have the details of the Bidders depository account, including DP ID, PAN and beneficiary account number, shall be treated as incomplete and will be rejected. Bidders will not have the option of being Allotted Equity Shares in physical form. Bid cum Application Form and ASBA Bid cum Application Form The prescribed colours of the Bid cum Application Forms for the various categories of Bidders are as follows: Category Non ASBA Bidders who are Resident Indians and Eligible NRIs applying on a nonrepatriation basis* Non ASBA Bidders who are Eligible NRIs FIIs or Foreign Venture Capital Investors, registered Multilateral and Bilateral Development Financial Institutions applying on a repatriation basis Bidding through ASBA* Colour of Bid cum Application Form White Blue

*Bid cum Application forms for ASBA Bidders will also be available on the website of the NSE (www.nseindia.com) and BSE (www.bseindia.com)

Bidders (other than ASBA Bidders) are required to submit their Bids through the Syndicate. Such Bidders shall only use the specified Bid cum Application Form bearing the stamp of a member of the Syndicate for the purpose of making a Bid in terms of the Red Herring Prospectus. The Bidder shall have the option to make a maximum of three Bids in the Bid cum Application Form and such options shall not be considered as multiple Bids. The prescribed colours of the ASBA Bid cum Application Forms for the various categories of Bidders are as follows: Category Resident Indians and Eligible NRIs applying on a non-repatriation basis Bidding through ASBA* Eligible NRIs FIIs or Foreign Venture Capital Investors, registered Multilateral and Colour of Bid cum Application Form** White Blue

430

Category Bilateral Development Financial Institutions applying on a repatriation basis (ASBA as well as non ASBA Bidders*

Colour of Bid cum Application Form**

*Bid cum Application forms for ASBA Bidders will also be available on the website of the NSE (www.nseindia.com) and BSE (www.bseindia.com) **Excluding ASBA Bid cum Application Form

ASBA Bidders shall submit an ASBA Bid cum Application Form through the SCSBs authorising blocking of funds that are available in the bank account specified in the ASBA Bid cum Application Form only. No separate receipts shall be issued for the money payable on the submission of Bid cum Application Form or Revision Form. However, the collection centre of the Syndicate will acknowledge the receipt of the Bid cum Application Forms or Revision Forms by stamping and returning to the Bidder the acknowledgement slip. This acknowledgement slip will serve as the duplicate of the Bid cum Application Form for the records of the Bidder. Upon filing of the Prospectus with the RoC, the Bid cum Application Form shall be considered as the Application Form. Upon completion and submission of the Bid cum Application Form to the Syndicate or the SCSB, the Bidder or the ASBA Bidder is deemed to have authorised the Company to make the necessary changes in the Red Herring Prospectus as would be required for filing the Prospectus with the RoC and as would be required by the RoC after such filing, without prior or subsequent notice of such changes to the Bidder or the ASBA Bidder. Who can Bid? Indian nationals resident in India who are competent to contract under the Indian Contract Act, 1872, as amended; Hindu Undivided Families or HUFs, in the individual name of the Karta. The Bidder should specify that the Bid is being made in the name of the HUF in the Bid cum Application Form as follows: Name of Sole or First bidder: XYZ Hindu Undivided Family applying through XYZ, where XYZ is the name of the Karta. Bids by HUFs would be considered at par with those from individuals; Companies, corporate bodies and societies registered under the applicable laws in India and authorised to invest in equity shares; Mutual Funds registered with SEBI; Eligible NRIs on a repatriation basis or on a non repatriation basis subject to applicable laws. NRIs other than Eligible NRIs are not eligible to participate in this issue; Indian financial institutions, scheduled commercial banks (excluding foreign banks), regional rural banks, co-operative banks (subject to RBI regulations and the SEBI Regulations and other laws, as applicable); FIIs and sub-accounts registered with SEBI, other than a sub-account which is a foreign corporate or foreign individual under the QIB category; Sub-accounts of FIIs registered with SEBI, which are foreign corporates or foreign individuals, only under the Non-Institutional Bidders category. Venture Capital Funds registered with SEBI; Foreign Venture Capital Investors registered with SEBI; Multilateral and bilateral development financial institutions; State Industrial Development Corporations;

431

Trusts/societies registered under the Societies Registration Act, 1860, as amended, or under any other law relating to trusts/societies and who are authorised under their respective constitutions to hold and invest in equity shares; Scientific and/or industrial research organisations authorised in India to invest in equity shares; Insurance companies registered with Insurance Regulatory and Development Authority; Provident Funds with a minimum corpus of ` 2,500 lakhs and who are authorised under their constitution to hold and invest in equity shares; Pension Funds with a minimum corpus of ` 2,500 lakhs and who are authorised under their constitution to hold and invest in equity shares; National Investment Fund; Insurance funds set up and managed by the army, navy or air force of the Union of India; Insurance funds set up and managed by Department of Posts, India; and Limited liability partnerships. As per the existing regulations, OCBs cannot participate in this Issue. Participation by associates and affiliates of the BRLMs, the CBRLMs and the Syndicate Member The BRLMs, the CBRLMs and the Syndicate Member shall not be allowed to subscribe to this Issue in any manner except towards fulfilling their underwriting obligations. However, the associates and the affiliates of the BRLMs, the CBRLMs and the Syndicate Member may subscribe to or purchase Equity Shares in the Issue, either in the QIB Portion or in Non-Institutional Portion as may be applicable to such Bidders, where the allocation is on a proportionate basis. Bids by Mutual Funds An eligible Bid by a Mutual Fund shall first be considered for allocation proportionately in the Mutual Fund Portion. In the event that the demand in the Mutual Funds portion is greater than 1,87,50,000 Equity Shares, allocation shall be made to Mutual Funds proportionately, to the extent of the Mutual Fund Portion. The remaining demand by the Mutual Funds shall, as part of the aggregate demand by QIBs, be available for allocation proportionately out of the remainder of the QIB Portion, after excluding the allocation in the Mutual Fund Portion. Bids made by asset management companies or custodians of Mutual Funds shall specifically state names of the concerned schemes for which such bids are made. In case of a Mutual Fund, a separate Bid can be made in respect of each scheme of the Mutual Fund registered with SEBI and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. No Mutual Fund scheme shall invest more than 10% of its net asset value in equity shares or equity related instruments of any single company provided that the limit of 10% shall not be applicable for investments in index funds or sector or industry specific funds. No Mutual Fund under all its schemes should own more than 10% of any companys paid-up share capital carrying voting rights.

432

Bids by Eligible NRIs 1. Bid cum Application Forms have been made available for Eligible NRIs applying on a repatriation basis at the Registered Office of the Company and with the Syndicate and the Registrar to the Issue. Eligible NRIs should note that the Bids that are accompanied by payment in free foreign exchange should use the Bid cum Application Form for non-resident Bidders which is Blue in colour, to be considered for Allotment. Eligible NRIs who intend to make payment through Non-Resident Ordinary (NRO) accounts should use the form meant for residents which is white in colour, to be considered for Allotment.

2.

Bids by FIIs As per the current regulations, the following restrictions are applicable for investments by FIIs: The issue of Equity Shares to a single FII should not exceed 10% of total post-Issue paid up share capital. In respect of an FII investing in the Equity Shares on behalf of its sub-accounts, the investment on behalf of each sub-account shall not exceed 10% of the Companys total paid up share capital or 5% of the Companys total paid up share capital in case such sub-account is a foreign corporate or a foreign individual. As of now, the aggregate FII holding in the Company cannot exceed 24% of its total paid-up share capital. In the event that the aggregate FII holding in the Company reaches 22% of the total paid-up share capital of the Company, RBI may caution all designated bank branches from purchasing any more Equity Shares on behalf of FIIs without the prior approval of RBI. With the approval of the Board and the shareholders by way of a special resolution, the aggregate FII holding in the Company can go up to 100% of the total paid-up share capital of the Company. Subject to compliance with all applicable Indian laws, rules, regulations guidelines and approvals in terms of Regulation 15A(1) of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations 1995, as amended (the SEBI FII Regulations), an FII, as defined in the SEBI FII Regulations, or its sub-account including FII affiliates of the BRLMs or the CBRLMs may issue or otherwise may otherwise deal in offshore derivative instruments (as defined under the SEBI FII Regulations as any instrument, by whatever name called, which is issued overseas by an FII against securities held by it that are listed or proposed to be listed on any recognised stock exchange in India, as its underlying) directly or indirectly, only in the event (i) such offshore derivative instruments are issued only to persons who are regulated by an appropriate regulatory authority; and (ii) such offshore derivative instruments are issued after compliance with know your client norms. An FII is also required to ensure that no further issue or transfer of any offshore derivative instrument is made by or on behalf of it to any persons that are not regulated by an appropriate foreign regulatory authority as defined under the SEBI FII Regulations. Associates and affiliates of the underwriters including the BRLMs, the CBRLMs and the Syndicate Member that are FIIs may issue offshore derivative instruments against Equity Shares Allotted to them in the Issue. Any such offshore derivative instrument does not constitute any obligation or claim on or an interest in, the Company. Bids by SEBI registered Venture Capital Funds and Foreign Venture Capital Funds The SEBI (Venture Capital Funds) Regulations, 1996 as amended and the SEBI (Foreign Venture Capital Investor) Regulations, 2000 as amended inter alia prescribe the investment restrictions on VCFs and FVCIs registered with SEBI. Accordingly, the holding by any individual VCF registered with SEBI in one venture capital undertaking should not exceed 25% of the corpus of the venture capital fund. Further, VCFs and FVCIs can invest only up to 33.33% of the investible funds by way of subscription to an initial public offering of a venture capital undertaking whose shares are proposed to be listed. The above information is given for the benefit of the Bidders. The Company, the BRLMs and the CBRLMs are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Prospectus. Bidders are advised to make their independent investigations and Bidders are advised to ensure that any single Bid from them does not exceed the applicable investment limits or maximum number of Equity Shares that can be held by them under applicable law or regulation or as

433

specified in this Prospectus. Maximum and Minimum Bid Size (a) For Retail Individual Bidders: The Bid must be for a minimum of 600 Equity Shares and in multiples of 600 Equity Shares thereafter, so as to ensure that the Bid Amount payable by the Bidder does not exceed ` 2,00,000. In case of revision of Bids, the Retail Individual Bidders have to ensure that the Bid Amount does not exceed ` 2,00,000. In case the Bid Amount is over ` 2,00,000 due to revision of the Bid or revision of the Price Band, the Bid would be considered for allocation under the Non-Institutional Portion. Only the Retail Individual Bidders can Bid at the Cut-Off Price and by Bidding at the Cut-Off Price, such Retail Individual Bidders indicate their agreement to purchase the Equity Shares at the final Issue Price as determined at the completion of the Book Building Process. For Other Bidders (Non-Institutional Bidders and QIBs,): The Bid must be for a minimum of such number of Equity Shares such that the Bid Amount exceeds ` 2,00,000 and in multiples of 600 Equity Shares thereafter. A Bid cannot be submitted for more than the Issue size. However, the maximum Bid by a QIB investor should not exceed the investment limits prescribed for them by applicable laws. A QIB Bidder cannot withdraw its Bid after the QIB Bid/Issue Closing Date and is required to pay the full Bid Amount upon submission of the Bid. In case of revision in Bids, the Non-Institutional Bidders have to ensure that the Bid Amount is greater than ` 2,00,000 for being considered for allocation in the Non-Institutional Portion. In case the Bid Amount reduces to ` 2,00,000 or less due to a revision in Bids or revision of the Price Band, such Bids by NonInstitutional Bidders would be considered for allocation under the Retail Portion subject to such Bidders being eligible to be considered as the Retail Individual Bidders. Non-Institutional Bidders and QIBs are not allowed to Bid at Cut-off Price. Information for the Bidders: (a) The Company and the BRLMs shall declare the Bid/Issue Opening Date and Bid/Issue Closing Date in the Red Herring Prospectus to be registered with the ROC and also publish the same in two national newspapers (one each in English and Hindi) and in one Marathi newspaper with wide circulation. This advertisement shall be in the prescribed format. The Company will file the Red Herring Prospectus with the ROC at least three days before the Bid/Issue Opening Date. Copies of the Bid cum Application Form and copies of the Red Herring Prospectus will be available with the Syndicate. For ASBA Bidders, Bid cum Application Forms will be available on the websites of the BSE and the NSE and the Designated Branches of the SCSBs. Any Bidder who would like to obtain the Red Herring Prospectus and/or the Bid cum Application Form can obtain the same from the Registered Office of the Company. Eligible Bidders who are interested in subscribing for the Equity Shares should approach any of the BRLMs, the CBRLMs or the Syndicate Member or their authorised agent(s) to register their Bids. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids. The Bids should be submitted on the prescribed Bid cum Application Form only. Bid cum Application Forms (other than the ASBA Bid cum Application Forms) should bear the stamp of the Syndicate, otherwise they will be rejected. Bids by ASBA Bidders shall be accepted by the Designated Branches of the SCSBs in accordance with the SEBI Regulations and any circulars issued by SEBI in this regard. Bidders applying through the ASBA process also have an option to submit the ASBA Bid cum Application Form in the electronic form.

(b)

(b)

(c)

(d)

(e)

(f)

434

(g)

The demat accounts of Bidders for whom PAN details have not been verified, excluding (i) persons resident in the state of Sikkim; (ii) the Central or State Governments and the (iii) officials appointed by the courts, who, may be exempted from specifying their PAN for transacting in the securities market, shall be suspended for credit and no credit of Equity Shares pursuant to the Issue will be made into the accounts of such Bidders.

The Bidders should note that if the DP ID, Client ID and PAN mentioned in the Bid cum Application Form and entered into the electronic bidding system of the Stock Exchanges by the Syndicate do not match with DP ID, Client ID and PAN or are not available in the database of Depositories, then such Bid cum Application Form is liable to be rejected. In terms of the circular dated July 29, 2010 issued by SEBI, with effect from August 16, 2010, the demat accounts for Bidders for which PAN details have not been verified shall be suspended for credit and no credit of Equity Shares pursuant to the Issue shall be made into accounts of such Bidders. Based on the information provided by the Depositories, the Issuer shall have the right to accept Bids belonging to an account for the benefit of a minor (under guardianship). Pre-Issue Advertisement Subject to section 66 of the Companies Act, the Company shall, after registering the Red Herring Prospectus with the RoC, publish a pre-Issue advertisement, in the form prescribed by the SEBI Regulations, in one English language national daily newspaper, one Hindi language national daily newspaper and one Marathi language daily newspaper, each with wide circulation. Method and Process of Bidding (a) The Company, in consultation with the BRLMs, will decide the Price Band and the minimum Bid lot size for the Issue and the same shall be advertised in two national newspapers (one each in English and Hindi) and one in Marathi newspaper with wide circulation at least two Working Days prior to the Bid/ Issue Opening Date. The members of the Syndicate and the SCSBs shall accept Bids from the Bidders during the Bid/Issue Period. The Bid/Issue Period shall be for a minimum of three Working Days and shall not exceed 10 Working Days. The Bid/ Issue Period maybe extended, if required, subject to the total Bid/Issue Period not exceeding 10 Working Days. In the event of any revision in the Price Band, the Bid/Issue Period shall be extended for a minimum period of at least three Working Days subject to the Bid/Issue Period not exceeding 10 Working Days. Any revision in the Price Band and the revised Bid/Issue Period, if applicable, will be published in two national newspapers (one each in English and Hindi) and one Marathi newspaper each with wide circulation and also by indicating the change on the websites of the BRLMs and the CBRLMs and at the terminals of the members of the Syndicate. During the Bid/Issue Period, Bidders, other than QIBs, who are interested in subscribing for the Equity Shares should approach the Syndicate or their authorised agents to register their Bids. The Syndicate shall accept Bids from all Bidders and have the right to vet the Bids during the Bid/ Issue Period in accordance with the terms of the Red Herring Prospectus. Bidders who wish to use the ASBA process should approach the Designated Branches of the SCSBs to register their Bids. Each Bid cum Application Form will give the Bidder the choice to Bid for up to three optional prices (for details refer to the paragraph entitled Bids at Different Price Levels and Revision of Bids below) within the Price Band and specify the demand (i.e., the number of Equity Shares Bid for) in each option. The price and demand options submitted by the Bidder in the Bid cum Application Form will be treated as optional demands from the Bidder and will not be cumulated. After determination of the Issue Price, the maximum number of Equity Shares Bid for by a Bidder at or above the Issue Price will be considered for allocation/Allotment and the rest of the Bid(s), irrespective of the Bid Amount, will become automatically invalid.

(b)

(c)

(d)

435

(e)

A Bidder cannot Bid on another Bid cum Application Form after Bids on one Bid cum Application Form have been submitted to any member of the Syndicate or the SCSBs. Submission of a second Bid cum Application Form to either the same or to another member of the Syndicate or SCBS will be treated as multiple Bid and is liable to be rejected either before entering the Bid into the electronic bidding system, or at any point of time prior to the allocation or Allotment of Equity Shares in the Issue. However, a Bidder can revise the Bid through the Revision Form, the procedure for which is detailed under the paragraph Build up of the Book and Revision of Bids. The members of the Syndicate/the SCSBs will enter each Bid option into the electronic bidding system as a separate Bid and generate a Transaction Registration Slip (TRS), for each price and demand option and give the same to the Bidder. Therefore, a Bidder can receive up to three TRSs for each Bid cum Application Form. Along with the Bid cum Application Form, all Bidders (other than ASBA Bidders) will make payment in the manner described in Escrow Mechanism - Terms of payment and payment into the Escrow Accounts in the section entitled Issue Procedure on page 432. Upon receipt of the ASBA Bid cum Application Form, submitted whether in physical or electronic mode, the Designated Branch of the SCSB shall verify if sufficient funds equal to the Bid Amount are available in the ASBA Account, as mentioned in the ASBA Bid cum Application Form, prior to uploading such Bids with the Stock Exchanges. If sufficient funds are not available in the ASBA Account, the Designated Branch of the SCSB shall reject such Bids and shall not upload such Bids with the Stock Exchanges. If sufficient funds are available in the ASBA Account, the SCSB shall block an amount equivalent to the Bid Amount mentioned in the ASBA Bid cum Application Form and will enter each Bid option into the electronic bidding system as a separate Bid and generate a TRS for each price and demand option. The TRS shall be furnished to the ASBA Bidder on request. The Bid Amount shall remain blocked in the aforesaid ASBA Account until finalisation of the Basis of Allotment and consequent transfer of the Bid Amount against the Allotted Equity Shares to the Public Issue Account, or until withdrawal/failure of the Issue or until withdrawal/rejection of the ASBA Bid cum Application Form, as the case may be. Once the Basis of Allotment is finalized, the Registrar to the Issue shall send an appropriate request to the SCSB for unblocking the relevant ASBA Accounts and for transferring the amount allocable to the successful Bidders to the Public Issue Account. In case of withdrawal/failure of the Issue, the blocked amount shall be unblocked on receipt of such information from the Registrar to the Issue.

(f)

(g)

(h)

(i)

(j)

(k)

INVESTORS ARE ADVISED NOT TO SUBMIT THE BID CUM APPLICATION FORMS TO THE ESCROW COLLECTION BANKS. BIDS SUBMITTED TO THE ESCROW COLLECTION BANKS SHALL BE REJECTED AND SUCH BIDDERS SHALL NOT BE ENTITLED TO ANY COMPENSATION ON ACCOUNT OF SUCH REJECTION. Bids at Different Price Levels and Revision of Bids (a) The Company, in consultation with the BRLMs, and without the prior approval of, or intimation, to the Bidders reserve the right to revise the Price Band during the Bid/ Issue Period, provided that the Cap Price shall be less than or equal to 120% of the Floor Price and the Floor Price shall not be less than the face value of the Equity Shares. The revision in Price Band shall not exceed 20% on the either side i.e. the floor price can move up or down to the extent of 20% of the floor price disclosed at least two days prior to the Bid/ Issue Opening Date and the Cap Price will be revised accordingly. The Company, in consultation with the BRLMs, will finalise the Issue Price within the Price Band, without the prior approval of, or intimation, to the Bidders.

(b)

436

(d)

The Bidders can Bid at any price within the Price Band. The Bidder has to Bid for the desired number of Equity Shares at a specific price. Retail Individual Bidders may Bid at the Cut-off Price. However, bidding at Cut-off Price is prohibited for QIB and Non-Institutional Bidders and such Bids from QIB and NonInstitutional Bidders shall be rejected. Retail Individual Bidders, who Bid at Cut-off Price agree that they shall purchase the Equity Shares at any price within the Price Band. Retail Individual Bidders, shall submit the Bid cum Application Form along with a cheque/demand draft for the Bid Amount based on the Cap Price with the members of the Syndicate. In case of ASBA Bidders (excluding Non-Institutional Bidders and QIB Bidders) bidding at Cut-off Price, the ASBA Bidders shall instruct the SCSBs to block an amount based on the Cap Price.

(e)

Escrow mechanism, terms of payment and payment into the Escrow Accounts For details of the escrow mechanism and payment instructions, please see the section entitled Issue Procedure Payment Instructions on page 447. Electronic Registration of Bids (a) The members of the Syndicate and the SCSBs will register the Bids using the on-line facilities of the Stock Exchanges. The Syndicate and the SCSBs will undertake modification of selected fields in the Bid details already uploaded within one Working Day from the Bid/Issue Closing Date. There will be at least one on-line connectivity facility in each city, where a stock exchange is located in India and where Bids are being accepted. The Syndicate Member shall be responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by the Syndicate Member, (ii) the Bids uploaded by the Syndicate Members, or (iii) the Bids accepted but not uploaded by the Syndicate Members .There will be at least one on-line connectivity facility in each city, where a stock exchange is located in India and where Bids are being accepted. The SCSBs shall be responsible for any acts, mistakes or errors or omission and commissions in relation to, (i) the Bids accepted by the SCSBs, (ii) the Bids uploaded by the SCSBs, (iii) the Bids accepted but not uploaded by the SCSBs, or (iv) the Bids accepted and uploaded without blocking funds in the ASBA Accounts. It shall be presumed that for Bids uploaded by the SCSBs, the Bid Amount has been blocked in the relevant ASBA Account. The Stock Exchanges will offer an electronic facility for registering Bids for the Issue. This facility will be available with the Syndicate and their authorised agents and the SCSBs during the Bid/ Issue Period. The Syndicate Members and the Designated Branches of the SCSBs can also set up facilities for off-line electronic registration of Bids subject to the condition that they will subsequently upload the off-line data file into the on-line facilities for Book Building on a regular basis. On the Bid/ Issue Closing Date, the members of the Syndicate and the Designated Branches of the SCSBs shall upload the Bids till such time as may be permitted by the Stock Exchanges. This information will be available with the BRLMs and the CBRLMs on a regular basis. Based on the aggregate demand and price for Bids registered on the electronic facilities of the Stock Exchanges, a graphical representation of consolidated demand and price as available on the websites of the Stock Exchanges would be made available at the Bidding centres during the Bid/Issue Period. At the time of registering each Bid other than ASBA Bids, the members of the Syndicate shall enter the following details of the Bidders in the on-line system: Investor Category and Sub-Category Individual, Corporate, FII, NRI, Mutual Fund, etc.

(b)

(c)

(d)

(e)

(f)

(g)

(h)

437

Number of Equity Shares Bid for; Bid Amount; Cheque amount; Cheque number; Bid cum Application Form number; DP ID and client identification number of the beneficiary account of the Bidder, and PAN (of the First Bidder, in case of joint Bidders). With respect to Bids by ASBA Bidders, at the time of registering such Bids, the SCSBs shall enter the following information pertaining to the ASBA Bidders into the online system: Application Number; PAN (of the First Bidder, in case of joint Bidders); Investor Category and Sub-Category Individual, Corporate, FII, NRI, Mutual Funds, etc.: DP ID and client identification number of the beneficiary account of the Bidders; Number of Equity Shares Bid for ; Quantity; Price per Equity Share; Bid Amount; and Bank account number. (i) TRS will be generated for each of the bidding options when the Bid is registered. It is the Bidders responsibility to obtain the TRS from the members of the Syndicate or the Designated Branches of the SCSBs. The registration of the Bid by the member of the Syndicate or the Designated Branches of the SCSBs does not guarantee that the Equity Shares shall be allocated/Allotted either by the members of the Syndicate or the Company. Such TRS will be non-negotiable and by itself will not create any obligation of any kind. In case of QIB Bidders only the BRLMs and the CBRLMs and the respective affiliate members of the Syndicate have the right to accept the Bid or reject it. However, such rejection shall be made at the time of receiving the Bid and only after assigning a reason for such rejection in writing. In case of NonInstitutional Bidders and Retail Individual Bidders, Bids will be rejected on technical grounds listed herein. The members of the Syndicate may also reject Bids if all the information required is not provided and the Bid cum Application Form is incomplete in any respect. The SCSBs shall have no right to reject Bids, except on technical grounds. The permission given by the Stock Exchanges to use their network and software of the online IPO system should not in any way be deemed or construed to mean that the compliance with various statutory and other requirements by the Company and/or the BRLMs and/ or the CBRLMs are cleared or approved by the

(j) (k)

(l)

438

Stock Exchanges; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the compliance with the statutory and other requirements nor does it take any responsibility for the financial or other soundness of the Company, the Promoters, the management or any scheme or project of the Company; nor does it in any manner warrant, certify or endorse the correctness or completeness of any of the contents of this Prospectus; nor does it warrant that the Equity Shares will be listed or will continue to be listed on the Stock Exchanges. (m) Only Bids that are uploaded on the online IPO system of the Stock Exchanges shall be considered for allocation/ Allotment. Members of the Syndicate and the SCSBs will be given up to one day after the Bid/Issue Closing Date to verify the DP ID and Client ID uploaded in the online IPO system during the Bid/Issue Period, after which the Registrar to the Issue will receive this data from the Stock Exchanges and will validate the electronic bid details with depositories records. The details uploaded in the online IPO system shall be considered as final and Allotment will be based on such details.

(n)

Build up of the book and revision of Bids (a) Bids received from various Bidders through the members of the Syndicate and the SCSBs shall be electronically uploaded to the Stock Exchanges mainframe on a regular basis. The book gets built up at various price levels. This information will be available with the BRLMs and the CBRLMs at the end of the Bid/Issue Period. During the Bid/Issue Period, any Bidder who has registered his or her interest in the Equity Shares at a particular price level is free to revise his or her Bid within the Price Band using the printed Revision Form, which is a part of the Bid cum Application Form. Revisions can be made in both the desired number of Equity Shares and the Bid Amount by using the Revision Form. Apart from mentioning the revised options in the Revision Form, the Bidder must also mention the details of all the options in his or her Bid cum Application Form or earlier Revision Form. For example, if a Bidder has Bid for three options in the Bid cum Application Form and such Bidder is changing only one of the options in the Revision Form, the Bidder must still fill the details of the other two options that are not being revised, in the Revision Form. The members of the Syndicate and the Designated Branches of the SCSBs will not accept incomplete or inaccurate Revision Forms. The Bidder can make this revision any number of times during the Bid/Issue Period. However, for any revision(s) in the Bid, the Bidders will have to use the services of the same member of the Syndicate or the SCSB through whom such Bidder had placed the original Bid. Bidders are advised to retain copies of the blank Revision Form and the revised Bid must be made only in such Revision Form or copies thereof. In case of an upward revision in the Price Band announced as above, Retail Individual Bidders who had Bid at Cut-off Price could either (i) revise their Bid or (ii) shall make additional payment based on the cap of the revised Price Band (such that the total amount i.e., original Bid Amount plus additional payment does not exceed ` 2,00,000 if the Bidder wants to continue to Bid at Cut-off Price), with the members of the Syndicate to whom the original Bid was submitted. In case the total amount (i.e., original Bid Amount plus additional payment) exceeds ` 2,00,000, the Bid will be considered for allocation under the NonInstitutional Portion in terms of the Red Herring Prospectus. If, however, the Bidder does not either revise the Bid or make additional payment and the Issue Price is higher than the cap of the Price Band prior to revision, the number of Equity Shares Bid for shall be adjusted downwards for the purpose of allocation, such that no additional payment would be required from the Bidder and the Bidder is deemed to have approved such revised Bid at Cut-off Price. In case of a downward revision in the Price Band, announced as above, Retail Individual Bidders, who have Bid at Cut-off Price could either revise their Bid or the excess amount paid at the time of bidding would be refunded from the Escrow Account.

(b)

(c)

(d)

(e)

(f)

(g)

439

(h)

The Company, in consultation with the BRLMs, shall decide the minimum number of Equity Shares for each Bid to ensure that the minimum application value is within the range of ` 5,000 to ` 7,000. Any revision of the Bid shall be accompanied by payment in the form of cheque or demand draft for the incremental amount, if any, to be paid on account of the upward revision of the Bid. With respect to the Bids by ASBA Bidders, if revision of the Bids results in an incremental amount, the relevant SCSB shall block the additional Bid Amount. In case of Bids, other than ASBA Bids, the members of the Syndicate shall collect the payment in the form of cheque or demand draft if any, to be paid on account of the upward revision of the Bid at the time of one or more revisions by the QIB Bidders. In such cases, the members of the Syndicate will revise the earlier Bids details with the revised Bid and provide the cheque or demand draft number of the new payment instrument in the electronic book. The Registrar will reconcile the Bid data and consider the revised Bid data for preparing the Basis of Allotment. When a Bidder revises his or her Bid, he or she should surrender the earlier TRS and request for a revised TRS from the members of the Syndicate or the SCSB, as proof of his or her having revised the previous Bid.

(i)

(j)

Price Discovery and Allocation (a) Based on the demand generated at various price levels, the Company, in consultation with the BRLMs, shall finalise the Issue Price. Under-subscription, if any, in any category, would be allowed to be met with spill-over from any other category or combination of categories at the discretion of the Company, in consultation with the BRLMs and the Designated Stock Exchange. Allocation to Non-Residents, including Eligible NRIs and FIIs registered with SEBI, applying on repatriation basis will be subject to applicable law, rules, regulations, guidelines and approvals. QIB Bidders shall not be allowed to withdraw their Bid after the QIB Bid/Issue Closing Date. If an ASBA Bidder wants to withdraw the ASBA Bid cum Application Form during the Bid/Issue Period, the ASBA Bidder shall submit the withdrawal request to the SCSB, which shall perform the necessary actions, including deletion of details of the withdrawn ASBA Bid cum Application Form from the electronic bidding system of the Stock Exchanges and unblocking of funds in the relevant bank account. If an ASBA Bidder, excluding QIBs, wants to withdraw the ASBA Bid cum Application Form after the Bid/Issue Closing Date, such ASBA Bidder shall submit the withdrawal request to the Registrar to the Issue before finalization of basis of Allotment. The Registrar to the Issue shall delete the withdrawn Bid from the Bid file. The instruction for and unblocking of funds in the relevant bank account, in such withdrawals, shall be forwarded by the Registrar to the Issue to the SCSB once the basis of Allotment has been approved by the Designated Stock Exchange.

(b)

(c)

(d) (e)

(f)

Signing of the Underwriting Agreement and RoC Filing (a) The Company, the BRLMs, the CBRLMs and the Syndicate Member intend to enter into an Underwriting Agreement after the finalisation of the Issue Price. After signing the Underwriting Agreement, the Company will update the Red Herring Prospectus and file the updated Red Herring Prospectus with the RoC in accordance with the applicable law, which then would be termed as the Prospectus. The Prospectus will contain details of the Issue Price, Issue size and underwriting arrangements, and will be complete in all material respects.

(b)

440

Advertisement regarding Issue Price and Prospectus The Company will issue a statutory advertisement after the filing of the Prospectus with the RoC. This advertisement, in addition to the information that has to be set out in the statutory advertisement, shall indicate the Issue Price. Any material updates between the date of the Red Herring Prospectus and the date of Prospectus will be included in such statutory advertisement. The final allocation is subject to the physical application being valid in all respect along with receipt of stipulated documents and Allotment by the Board of Directors. Designated Date and Allotment of Equity Shares (a) The Company will ensure that (i) the Allotment of Equity Shares; and (ii) credit to the successful Bidders depositary account will be completed within 12 Working Days of the Bid/Issue Closing Date. In accordance with the Companies Act, Equity Shares will be issued and Allotment shall be made only in the dematerialised form to the Allottees. Allottees will have the option to re-materialise the Equity Shares so Allotted as per the provisions of the Companies Act and the Depositories Act.

(b)

(c)

Investors are advised to instruct their Depository Participant to accept the Equity Shares that may be allocated/ Allotted to them pursuant to this Issue. Issuance of Allotment Advice (a) Upon approval of the Basis of Allotment by the Designated Stock Exchange, the Registrar shall send to the Syndicate a list of the Bidders who have been Allotted Equity Shares in the Issue. (b) The Registrar will dispatch Allotment Advice to the Bidders who have been Allotted Equity Shares in the Issue. (c) The dispatch of Allotment Advice shall be deemed a valid, binding and irrevocable contract for the Bidder. GENERAL INSTRUCTIONS Dos: (a) (b) (c) (d) Check if you are eligible to apply; Ensure that you have Bid within the Price Band; Read all the instructions carefully and complete the Bid cum Application Form; Ensure that the details about the Depository Participant and the beneficiary account are correct as Allotment of Equity Shares will be in the dematerialised form only; Ensure that the Bids are submitted at the bidding centres only on forms bearing the stamp of a member of the Syndicate or with respect to ASBA Bidders, ensure that your Bid is submitted at a Designated Branch of the SCSB where the ASBA Bidder or the person whose bank account will be utilised by the Bidder for bidding has a bank account; With respect to Bids by ASBA Bidders ensure that the ASBA Bid cum Application Form is signed by the account holder in case the applicant is not the account holder. Ensure that you have mentioned the correct bank account number in the ASBA Bid cum Application Form; Ensure that you request for and receive a TRS for all your Bid options;

(e)

(f)

(g)

441

(h)

Ensure that you have funds equal to the Bid Amount in your bank account maintained with the SCSB before submitting the ASBA Bid cum Application Form to the respective Designated Branch of the SCSB; Ensure that you have funds equal to the Bid Amount in your bank account before submitting the Bid cum Application Form to the Syndicate; Ensure that the full Bid Amount is paid for the Bids submitted to the Syndicate and funds equivalent to the Bid Amount are blocked in case of any Bids submitted though the SCSBs; Instruct your respective banks to not release the funds blocked in the bank account under the ASBA process; Submit revised Bids to the same member of the Syndicate/SCSB through whom the original Bid was placed and obtain a revised TRS; Except for Bids (i) on behalf of the Central or State Governments and the officials appointed by the courts, who, in terms of a SEBI circular dated June 30, 2008, may be exempt from specifying their PAN for transacting in the securities market, and (ii) Bids by persons resident in the state of Sikkim, who, in terms of a SEBI circular dated July 20, 2006, may be exempted from specifying their PAN for transacting in the securities market, all Bidders should mention their PAN allotted under the IT Act; Ensure that the Demographic Details (as defined herein below) are updated, true and correct in all respects; Ensure that the name(s) given in the Bid cum Application Form is exactly the same as the name(s) in which the beneficiary account is held with the Depository Participant. In case the Bid cum Application Form is submitted in joint names, ensure that the beneficiary account is also held in same joint names and such names are in the same sequence in which they appear in the Bid cum Application Form.

(i)

(j)

(k)

(l)

(m)

(n) (o)

Donts: (a) (b) (c) Do not Bid for lower than the minimum Bid size; Do not Bid/ revise Bid Amount to less than the Floor Price or higher than the Cap Price; Do not Bid on another Bid cum Application Form after you have submitted a Bid to the members of the Syndicate or the SCSBs, as applicable; Do not pay the Bid Amount in cash, by money order or by postal order or by stockinvest; Do not send Bid cum Application Forms by post; instead submit the same to a member of the Syndicate or the SCSBs, only; Do not submit the Bid cum Application Forms to Escrow Collection Bank(s); Do not Bid at Cut-off Price (for QIB Bidders and Non-Institutional Bidders, for Bid Amount in excess of ` 2,00,000); Do not Bid for a Bid Amount exceeding ` 2,00,000 (for Bids by Retail Individual Bidders); Do not fill up the Bid cum Application Form such that the Equity Shares Bid for exceeds the Issue Size and/ or investment limit or maximum number of Equity Shares that can be held under the applicable laws or regulations or maximum amount permissible under the applicable regulations; Do not submit a Bid if not competent to enter into a contract under the Indian Contract Act, 1872, as amended;

(d) (e)

(f) (g)

(h) (i)

(j)

442

(k)

Do not submit a Bid in case you are not eligible to acquire Equity Shares under applicable law or their relevant constitutional documents or otherwise; Do not submit a Bid that does not comply with the securities laws of your respective jurisdictions; Do not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground; and Do not submit the Bids without the full Bid Amount.

(l) (m) (n)

INSTRUCTIONS FOR COMPLETING THE BID CUM APPLICATION FORM 1. 2. Bids must be made only in the prescribed Bid cum Application Form or Revision Form, as applicable. Bids must be completed in full, in BLOCK LETTERS in ENGLISH and in accordance with the instructions contained herein, in the Bid cum Application Form or in the Revision Form. Incomplete Bid cum Application Forms or Revision Forms are liable to be rejected. Bidders should note that the members of the Syndicate and / or the SCSBs, as appropriate, will not be liable for errors in data entry due to incomplete or illegible Bid cum Application Forms or Revision Forms. Information provided by the Bidders will be uploaded in the online IPO system by the members of the Syndicate and the SCSBs, as the case may be, and the electronic data will be used to make allocation/ Allotment. The Bidders should ensure that the details are correct and legible. For Retail Individual Bidders, the Bid must be for a minimum of 600 Equity Shares and in multiples of 600 thereafter subject to a maximum Bid Amount of ` 2,00,000. For Non-Institutional Bidders and QIB Bidders, Bids must be for a minimum of such number of Equity Shares in multiples of 600 that the Bid Amount exceeds or equal to ` 2,00,000 and in multiples of 600 Equity Shares thereafter. Bids cannot be made for more than the Issue size. Bidders are advised to ensure that a single Bid from them should not exceed the investment limits or maximum number of Equity Shares that can be held by them under the applicable laws or regulations. Bids must be in single name or in joint names (not more than three, and in the same order as their Depository Participant details). Thumb impressions and signatures other than in the languages specified in the Eighth Schedule to the Constitution of India must be attested by a Magistrate or a Notary Public or a Special Executive Magistrate under official seal.

3.

4.

5.

6.

7.

Bidders PAN, Depository Account and Bank Account Details Bidders should note that on the basis of PAN of the Bidders, DP ID and beneficiary account number provided by them in the Bid cum Application Form, the Registrar will obtain from the Depository the demographic details including address, Bidders bank account details, MICR code and occupation (hereinafter referred to as Demographic Details). These bank account details would be used for giving refunds (including through physical refund warrants, direct credit, NECS, NEFT and RTGS) or unblocking of ASBA Account. Hence, Bidders are advised to immediately update their bank account details as appearing on the records of the Depository Participant. Please note that failure to do so could result in delays in despatch/ credit of refunds to Bidders or unblocking of ASBA Account at the Bidders sole risk and neither the BRLMs, the CBRLMs or the Registrar or the Escrow Collection Banks or the SCSBs nor the Company shall have any responsibility and undertake any liability for the same. Hence, Bidders should carefully fill in their Depository Account details in the Bid cum Application Form. IT IS MANDATORY FOR ALL THE BIDDERS TO GET THEIR EQUITY SHARES IN DEMATERIALISED FORM. ALL BIDDERS SHOULD MENTION THEIR DEPOSITORY

443

PARTICIPANTS NAME, DEPOSITORY PARTICIPANT IDENTIFICATION NUMBER AND BENEFICIARY ACCOUNT NUMBER IN THE BID CUM APPLICATION FORM. INVESTORS MUST ENSURE THAT THE NAME GIVEN IN THE BID CUM APPLICATION FORM IS EXACTLY THE SAME AS THE NAME IN WHICH THE DEPOSITORY ACCOUNT IS HELD. IN CASE THE BID CUM APPLICATION FORM IS SUBMITTED IN JOINT NAMES, IT SHOULD BE ENSURED THAT THE DEPOSITORY ACCOUNT IS ALSO HELD IN THE SAME JOINT NAMES AND ARE IN THE SAME SEQUENCE IN WHICH THEY APPEAR IN THE BID CUM APPLICATION FORM. The Demographic Details would be used for all correspondence with the Bidders including mailing of the refund orders/CANs/Allocation Advice and printing of bank particulars on the refund orders or for refunds through electronic transfer of funds, as applicable. The Demographic Details given by Bidders in the Bid cum Application Form would not be used for any other purpose by the Registrar. By signing the Bid cum Application Form, the Bidder would be deemed to have authorised the Depositories to provide, upon request, to the Registrar, the required Demographic Details as available on its records. Refund orders/ Allotment Advice would be mailed at the address of the Bidder as per the Demographic Details received from the Depositories. Bidders should note that delivery of refund orders/ Allotment Advice may get delayed if the same once sent to the address obtained from the Depositories are returned undelivered. In such an event, the address and other details given by the Bidder (other than the ASBA Bidders) in the Bid cum Application Form would be used only to ensure dispatch of refund orders. Please note that any such delay shall be at such Bidders sole risk and neither the Company, the Escrow Collection Banks, the Registrar, the BRLMs, the CBRLMs shall be liable to compensate the Bidder for any losses caused to the Bidder due to any such delay or liable to pay any interest for such delay. In case no corresponding record is available with the Depositories, which matches the three parameters, namely, PAN of the Bidder, the DP ID and Client ID, then such Bids are liable to be rejected. Bids by Non-Residents including Eligible NRIs, FIIs and Foreign Venture Capital Investors on a repatriation basis Bids and revision to Bids must be made in the following manner: 1. On the Bid cum Application Form or the Revision Form, as applicable (white in colour), and completed in full in BLOCK LETTERS in ENGLISH in accordance with the instructions contained therein. In a single name or joint names (not more than three and in the same order as their Depositary Participant Details). Bids on a repatriation basis shall be in the names of individuals, or in the name of FIIs but not in the names of minors, OCBs, firms or partnerships, foreign nationals (excluding NRIs) or their nominees.

2.

3.

Refunds, dividends and other distributions, if any, will be payable in Indian Rupees only and net of bank charges and / or commission. In case of Bidders who remit money through Indian Rupee drafts purchased abroad, such payments in Indian Rupees will be converted into US Dollars or any other freely convertible currency as may be permitted by the RBI at the rate of exchange prevailing at the time of remittance and will be dispatched by registered post or if the Bidders so desire, will be credited to their NRE accounts, details of which should be furnished in the space provided for this purpose in the Bid cum Application Form. The Company will not be responsible for loss, if any, incurred by the Bidder on account of conversion of foreign currency. There is no reservation for Eligible NRIs and FIIs and all Bidders will be treated on the same basis with other categories for the purpose of allocation. The Company has received an approval from the FIPB vide letter dated January 20, 2011, for foreign equity participation of up to 25.13% (increasing by 25% from the existing 0.13%) by way of issue and allotment of

444

equity shares in the initial public offer of the Company to FIIs and NRIs under the portfolio investment scheme. As per the approval, the initial FDI inflow by the foreign collaborator/investor would be ` 30,000 lakhs (approximately). Bids under Power of Attorney In case of Bids made pursuant to a power of attorney or by limited companies, corporate bodies, registered societies, FIIs, Mutual Funds, insurance companies and provident funds with a minimum corpus of ` 2,500 lakhs (subject to applicable law) and pension funds with a minimum corpus of ` 2,500 lakhs, a certified copy of the power of attorney or the relevant resolution or authority, as the case may be, along with a certified copy of the memorandum of association and articles of association and/or bye laws must be lodged along with the Bid cum Application Form. Failing this, the Company in consultation with the Syndicate Member, reserves the right to accept or reject any Bid in whole or in part, in either case, without assigning any reason therefor. In addition to the above, certain additional documents are required to be submitted by the following entities: (a) With respect to Bids by FIIs and Mutual Funds, a certified copy of their SEBI registration certificate must be lodged along with the Bid cum Application Form. With respect to Bids by insurance companies registered with the Insurance Regulatory and Development Authority, in addition to the above, a certified copy of the certificate of registration issued by the Insurance Regulatory and Development Authority must be lodged along with the Bid cum Application Form. With respect to Bids made by provident funds with a minimum corpus of ` 2,500 lakhs (subject to applicable law) and pension funds with a minimum corpus of ` 2,500 lakhs, a certified copy of a certificate from a chartered accountant certifying the corpus of the provident fund/pension fund must be lodged along with the Bid cum Application Form. With respect to Bids made by limited liability partnerships registered under the Limited Liability Partnership Act, 2008, a certified copy of certificate of registration issued under the Limited Liability Partnership Act, 2008, must be attached to the Bid cum Application Form.

(b)

(c)

(d)

The Company in its absolute discretion, reserves the right to relax the above condition of simultaneous lodging of the power of attorney along with the Bid cum Application form, subject to such terms and conditions that the Company and the BRLMs may deem fit. PAYMENT INSTRUCTIONS Escrow Mechanism for Bidders other than ASBA Bidders The Company and the Syndicate shall open Escrow Accounts with one or more Escrow Collection Bank(s) in whose favour the Bidders shall make out the cheque or demand draft in respect of his or her Bid and/or revision of the Bid. Cheques or demand drafts received for the full Bid Amount from Bidders would be deposited in the Escrow Account. The Escrow Collection Banks will act in terms of the Red Herring Prospectus and the Escrow Agreement. The Escrow Collection Banks shall maintain the monies in the Escrow Account for and on behalf of the Bidders until the Designated Date. The Escrow Collection Banks shall not exercise any lien whatsoever over the monies deposited therein and shall hold the monies therein in trust for the Bidders. On the Designated Date, the Escrow Collection Banks shall transfer the funds represented by allocation of Equity Shares (other than ASBA funds with the SCSBs) from the Escrow Account, as per the terms of the Escrow Agreement, into the Public Issue Account with the Bankers to the Issue. The balance amount after transfer to the Public Issue Account shall be transferred to the Refund Account. Payments of refund to the Bidders shall also be made from the Refund Account as per the terms of the Escrow Agreement and the Red Herring Prospectus. The Bidders should note that the escrow mechanism is not prescribed by SEBI and has been established as an

445

arrangement between the Company, the Syndicate, the Escrow Collection Banks and the Registrar to facilitate collections from the Bidders. Payment mechanism for ASBA Bidders The ASBA Bidders shall specify the bank account number in the ASBA Bid cum Application Form and the SCSB shall block an amount equivalent to the Bid Amount in the bank account specified in the ASBA Bid cum Application Form. The SCSB shall keep the Bid Amount in the relevant bank account blocked until withdrawal/ rejection of the ASBA Bid or receipt of instructions from the Registrar to unblock the Bid Amount. In the event of withdrawal or rejection of the ASBA Bid cum Application Form or for unsuccessful ASBA Bid cum Application Forms, the Registrar shall give instructions to the SCSB to unblock the application money in the relevant bank account within one day of receipt of such instruction. The Bid Amount shall remain blocked in the ASBA Account until finalisation of the Basis of Allotment in the Issue and consequent transfer of the Bid Amount to the Public Issue Account, or until withdrawal/ failure of the Issue or until rejection of the Bids by ASBA Bidder, as the case may be. Payment into Escrow Account for Bidders other than ASBA Bidders Each Bidder shall draw a cheque or demand draft or, remit the funds electronically through the RTGS mechanism for the Bid Amount payable on the Bid as per the following terms: 1. All Bidders would be required to pay the full Bid Amount at the time of the submission of the Bid cum Application Form. The Bidders shall, with the submission of the Bid cum Application Form, draw a payment instrument for the Bid Amount in favour of the Escrow Account and submit the same to the members of the Syndicate. If the payment is not made favouring the Escrow Account along with the Bid cum Application Form, the Bid of the Bidder shall be rejected. The payment instruments for payment into the Escrow Account should be drawn in favour of: (a) (b) (c) In case of Resident QIB Bidders: Escrow Account FVIL IPO QIB-R In case of Non-Resident QIB Bidders: Escrow Account FVIL IPO QIB-NR In case of Resident Retail and Non-Institutional Bidders: Escrow Account FVIL IPO Non QIB R In case of Non-Resident Retail and Non-Institutional Bidders: Escrow Account FVIL IPO Non QIB-NR

2.

3.

(d)

4.

In case of Bids by NRIs applying on repatriation basis, the payments must be made through Indian Rupee drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance. Payment will not be accepted out of Non-Resident Ordinary (NRO) Account of a Non-Resident Bidder bidding on a repatriation basis. Payment by drafts should be accompanied by bank certificate confirming that the draft has been issued by debiting to NRE Account or FCNR Account. In case of Bids by NRIs applying on non-repatriation basis, the payments must be made through Indian Rupee Drafts purchased abroad or cheques or bank drafts, for the amount payable on application remitted through normal banking channels or out of funds held in Non-Resident External (NRE) Accounts or Foreign Currency Non-Resident (FCNR) Accounts, maintained with banks authorised to deal in foreign exchange in India, along with documentary evidence in support of the remittance or out of a Non-Resident Ordinary (NRO) Account of a Non-Resident Bidder bidding on a non-repatriation basis. Payment by drafts

5.

446

should be accompanied by a bank certificate confirming that the draft has been issued by debiting an NRE or FCNR or NRO Account. 6. In case of Bids by FIIs, the payment should be made out of funds held in a Special Rupee Account along with documentary evidence in support of the remittance. Payment by drafts should be accompanied by a bank certificate confirming that the draft has been issued by debiting the Special Rupee Account. The monies deposited in the Escrow Account will be held for the benefit of the Bidders till the Designated Date. On the Designated Date, the Escrow Collection Banks shall transfer the funds from the Escrow Account as per the terms of the Escrow Agreement into the Public Issue Account with the Bankers to the Issue. On the Designated Date and no later than 12 Working Days from the Bid/Issue Closing Date, the Escrow Collection Bank shall also refund all amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on bidding, if any, after adjusting for allocation/Allotment to such Bidders. Payments should be made by cheque, or a demand draft drawn on any bank (including a co-operative bank), which is situated at, and is a member of or sub-member of the bankers clearing house located at the centre where the Bid cum Application Form is submitted. Outstation cheques/bank drafts drawn on banks not participating in the clearing process will not be accepted and applications accompanied by such cheques or bank drafts are liable to be rejected. Cash/stockinvest/money orders/postal orders will not be accepted.

7.

8.

9.

10.

OTHER INSTRUCTIONS Joint Bids in the case of Individuals Bids may be made in single or joint names (not more than three). In the case of joint Bids, all payments will be made out in favour of the Bidder whose name appears first in the Bid cum Application Form or Revision Form. All communications will be addressed to the First Bidder and will be dispatched to his or her address as per the Demographic Details received from the Depository. Multiple Bids A Bidder should submit only one Bid (and not more than one) for the total number of Equity Shares required. In case of a Mutual Fund, a separate Bid may be made in respect of each scheme of the Mutual Fund and such Bids in respect of more than one scheme of the Mutual Fund will not be treated as multiple Bids provided that the Bids clearly indicate the scheme concerned for which the Bid has been made. After submitting a bid using an ASBA Bid cum Application Form either in physical or electronic mode, where such ASBA Bid has been submitted to the SCSBs and uploaded with the Stock Exchanges, an ASBA Bidder cannot Bid, either in physical or electronic mode, whether on another ASBA Bid cum Application Form, to either the same or another Designated Branch of the SCSB, or on a non-ASBA Bid cum Application Form. Submission of a second Bid in such manner will be deemed a multiple Bid and would be rejected before entering the Bid into the electronic Bidding system or at any point of time prior to the allocation or Allotment of Equity Shares in the Issue. However, ASBA Bidders may revise their Bids through the Revision Form, the procedure for which is described in Build Up of the Book and Revision of Bids below. More than one ASBA Bidder may Bid for Equity Shares using the same ASBA Account, provided that the SCSBs will not accept a total of more than five ASBA Bid cum Application Forms with respect to any single ASBA Account. Duplicate copies of ASBA Bid cum Application Forms downloaded and printed from the website of the Stock Exchanges bearing the same application number shall be treated as multiple Bids and are liable to be rejected.

447

The Company in consultation with the BRLMs, reserves the right to reject, in its absolute discretion, any or all multiple Bids in any or all categories. In this regard, the procedures which would be followed by the Registrar to the Issue to detect multiple Bids are given below: 1. All Bids will be checked for common PAN as per the records of Depository. For Bidders other than Mutual Funds and FII sub-accounts, Bids bearing the same PAN will be treated as multiple Bids and will be rejected. For Bids from Mutual Funds and FII sub-accounts, submitted under the same PAN, as well as Bids on behalf of the Bidders for whom submission of PAN is not mandatory such as the Central or State Government, an official liquidator or receiver appointed by a court and residents of Sikkim, the Bid cum Application Forms or the ASBA Bid cum Application Forms as the case maybe, shall be will be checked for common DP ID and beneficiary account numbers. In any such Bids which have the same DP ID and beneficiary account numbers, these will be treated as multiple Bids and will be rejected. The Registrar to the Issue will obtain, from the depositories, details of the applicants address based on the DP ID and beneficiary account number provided in the Bid cum Application Form or the ASBA Bid cum Application Form as the case maybe, and create an address master. All instances where more than 20 the Bid cum Application Forms or the ASBA Bid cum Application Forms as the case maybe, have the same address shall be reported to the Stock Exchanges and SEBI and such Equity Shares shall be kept in abeyance subsequent to finalization of the Basis of Allotment and shall be credited to such Bidders demat account upon receipt of appropriate confirmation from SEBI and the Stock Exchanges.

2.

3.

4.

Permanent Account Number or PAN Except for Bids on behalf of the Central or State Government and the officials appointed by the courts, the Bidders, or in the case of a Bid in joint names, each of the Bidders, should mention his/ her PAN allotted under the Income Tax Act. In accordance with the SEBI Regulations, the PAN would be the sole identification number for participants transacting in the securities market, irrespective of the amount of transaction. Any Bid cum Application Form without the PAN is liable to be rejected, except (i) persons resident in the state of Sikkim; (ii) the Central or State Governments and the (iii) officials appointed by the courts, may be exempted from specifying their PAN for transactions in the securities market. It is to be specifically noted that Bidders should not submit the GIR number instead of the PAN as the Bid is liable to be rejected on this ground. With effect from August 16, 2010, the demat accounts for Bidders for which PAN details have not been verified shall be suspended credit and no credit of Equity Shares pursuant to the Issue shall be made into accounts of such Bidders. REJECTION OF BIDS The Company has the right to reject Bids based on technical grounds. In case of QIB Bidders, the Company, in consultation with the BRLMs and the CBRLMs, may at the time of submission of Bid, reject such Bids provided that the reasons for rejecting the same shall be provided to such Bidders in writing. Consequent refunds shall be made by RTGS/NEFT/NES/Direct Credit/cheque or pay order or draft and will be sent to the Bidders address at the Bidders risk. With respect to Bids by ASBA Bidders, the Designated Branches of the SCSBs shall have the right to reject Bids by ASBA Bidders if at the time of blocking the Bid Amount in the Bidders bank account, the respective Designated Branch of the SCSB ascertains that sufficient funds are not available in the Bidders bank account maintained with the SCSB. Subsequent to the acceptance of the Bid by ASBA Bidder by the SCSB, the Company would have a right to reject the ASBA Bids only on technical grounds. Grounds for Technical Rejections Bidders are advised to note that Bids are liable to be rejected inter alia on the following technical grounds: Amount paid does not tally with the amount payable for the highest value of Equity Shares Bid for. With respect to Bids by ASBA Bidders, the amounts mentioned in the ASBA Bid cum Application Form does

448

not tally with the amount payable for the value of the Equity Shares Bid for; In case of partnership firms, Equity Shares may be registered in the names of the individual partners and no firm as such shall be entitled to apply; Bid by persons not competent to contract under the Indian Contract Act, 1872; PAN not mentioned in the Bid cum Application Form or ASBA Bid cum Application Form, except for Bids by or on behalf of the Central and State Government and the officials appointed by the courts and by investors residing in the State of Sikkim; GIR number furnished instead of PAN; Bids for lower number of Equity Shares than specified for that category of investors; Bids at a price less than the Floor Price; Bids at a price more than the Cap Price ; Signature of sole and/or joint Bidders missing; Submission of more than five ASBA Bid cum Application Forms per bank account; Bids at Cut-off Price by Non-Institutional and QIB Bidders; Bids for number of Equity Shares which are not in multiples of 600; Category not indicated; Multiple Bids as defined in the Red Herring Prospectus; In case of Bids under power of attorney or by limited companies, corporate, trust etc., relevant documents are not submitted; Bids accompanied by Stockinvest/money order/postal order/cash; Bid cum Application Forms does not have the stamp of the BRLMs, the CBRLMs or the Syndicate Member or the SCSB; Bid cum Application Forms does not have the Bidders depository account details; Bid cum Application Forms are not delivered by the Bidders within the time prescribed as per the Bid cum Application Forms, Bid/Issue Opening Date advertisement and the Red Herring Prospectus and as per the instructions in the Red Herring Prospectus and the Bid cum Application Forms; In case no corresponding record is available with the Depositories that matches the Depository Participants identity (DP ID) and the beneficiarys account number; With respect to ASBA Bids, inadequate funds in the bank account to block the Bid Amount specified in the ASBA Bid cum Application Form at the time of blocking such Bid Amount in the bank account; Bids for amounts greater than the maximum permissible amounts prescribed by the regulations; Bids where clear funds are not available in Escrow Accounts as per final certificate from the Escrow

449

Collection Banks; Bids by QIBs not submitted through the BRLMs or the CBRLMs or their affiliates in case of ASBA Bids for QIBs not intimated to the BRLMs or the CBRLMs; Bids by persons in the United States other than in reliance of Regulation S under the Securities Act; Bids by any person outside India if not in compliance with applicable foreign and Indian Laws; Bids not uploaded on the terminals of the Stock Exchanges; and Bids by persons prohibited from buying, selling or dealing in the shares directly or indirectly by SEBI or any other regulatory authority. IN CASE THE DP ID, CLIENT ID AND PAN MENTIONED IN THE BID CUM APPLICATION FORM AND ENTERED INTO THE ELECTRONIC BIDDING SYSTEM OF THE STOCK EXCHANGES OR THE SYNDICATE/THE SCSBs DO NOT MATCH WITH THE DP ID, CLIENT ID AND PAN AVAILABLE IN THE RECORDS WITH THE DEPOSITARIES, THE APPLICATION IS LIABLE TO BE REJECTED. EQUITY SHARES IN DEMATERIALISED FORM WITH NSDL OR CDSL As per the provisions of Section 68B of the Companies Act, the Allotment of Equity Shares in this Issue shall be only in a de-materialised form, (i.e., not in the form of physical certificates but be fungible and be represented by the statement issued through the electronic mode). In this context, two agreements have been signed among the Company, the respective Depositories and the Registrar: Agreement dated March 13, 2008 between NSDL, the Company and the Registrar to the Issue; Agreement dated March 14, 2008, between CDSL, the Company and the Registrar to the Issue. All Bidders can seek Allotment only in dematerialised mode. Bids from any Bidder without relevant details of his or her depository account are liable to be rejected. (a) A Bidder applying for Equity Shares must have at least one beneficiary account with either of the Depository Participants i.e either with NSDL or CDSL, prior to making the Bid. The Bidder must necessarily fill in the details (including the Beneficiary Account Number and Depository Participants identification number) appearing in the Bid cum Application Form or Revision Form. Allotment to a successful Bidder will be credited in electronic form directly to the beneficiary account (with the Depository Participant) of the Bidder. Names in the Bid cum Application Form or Revision Form should be identical to those appearing in the account details in the Depository. In case of joint holders, the names should necessarily be in the same sequence as they appear in the account details in the Depository. If incomplete or incorrect details are given under the heading Bidders Depository Account Details in the Bid cum Application Form or Revision Form, it is liable to be rejected. The Bidder is responsible for the correctness of his or her Demographic Details given in the Bid cum Application Form vis--vis those with his or her Depository Participant.

(b)

(c)

(d)

(e)

(f)

450

(g)

Equity Shares in electronic form can be traded only on the Stock Exchanges having electronic connectivity with NSDL and CDSL. All the Stock Exchanges where the Equity Shares are proposed to be listed have electronic connectivity with CDSL and NSDL. The trading of the Equity Shares of the Company would be in dematerialised form only for all Bidders in the demat segment of the respective Stock Exchanges. Non transferable advice or refund orders will be directly sent to the Bidders by the Registrar to the Issue.

(h)

(i)

Communications All future communications in connection with Bids made in this Issue should be addressed to the Registrar quoting the full name of the sole or First Bidder, Bid cum Application Form number, Bidders Depository Account Details, number of Equity Shares applied for, date of Bid cum Application Form, name and address of the member of the Syndicate or the Designated Branch of the SCSBs where the Bid was submitted and cheque or draft number and issuing bank thereof or with respect to ASBA Bids, bank account number in which the amount equivalent to the Bid Amount was blocked. Bidders can contact the Compliance Officer or the Registrar in case of any pre-Issue or post-Issue related problems such as non-receipt of letters of Allotment, credit of Allotted shares in the respective beneficiary accounts, refund orders etc. In case of ASBA Bids submitted to the Designated Branches of the SCSBs, the Bidders can contact the Designated Branches of the SCSBs. PAYMENT OF REFUND Bidders other than ASBA Bidders must note that on the basis of Bidders DP ID and beneficiary account number provided by them in the Bid cum Application Form, the Registrar to the Issue will obtain, from the Depositories, the Bidders bank account details, including the nine digit Magnetic Ink Character Recognition (MICR) code as appearing on a cheque leaf to make refund. On the Designated Date and no later than 12 Working Days from the Bid/Issue Closing Date, the Escrow Collection Bank shall despatch refund orders for all amounts payable to unsuccessful Bidders (other than ASBA Bidders) and also the excess amount paid on bidding, if any, after adjusting for allocation/Allotment to such Bidders. Mode of making refunds for Bidders other than ASBA Bidders The payment of refund, if any, for Bidders other than ASBA Bidders would be done through various modes in the following order of preference: 1. NECS Payment of refund would be done through NECS for applicants having an account at any of the centres where such facility has been made available. This mode of payment of refunds would be subject to availability of complete bank account details including the MICR code as appearing on a cheque leaf, from the Depositories. The payment of refunds is mandatory for applicants having a bank account at any of the centres where clearing houses are managed by the RBI, except where the applicant, is eligible and opts to receive refund through direct credit or RTGS. Direct Credit Applicants having bank accounts with the Refund Bank, as mentioned in the Bid cum Application Form shall be eligible to receive refunds through direct credit. Charges, if any, levied by the Refund Bank for the same would be borne by the Company. RTGS Applicants having a bank account at any of the centres where clearing houses are managed by the RBI and whose refund amount exceeds ` 2 Lakh will be considered to receive refund through RTGS. For such eligible applicants, IFSC code will be derived based on the MICR code of the Bidder as per depository records. In the event the same is not available as per depository records/RBI master, refund shall be made through NECS. Charges, if any, levied by the Refund Bank for the same would be borne by the Company.

2.

3.

451

Charges, if any, levied by the applicants bank receiving the credit would be borne by the applicant. 4. NEFT Payment of refund shall be undertaken through NEFT wherever the applicants bank has been assigned the Indian Financial System Code (IFSC), which can be linked to a MICR, if any, available to that particular bank branch. IFSC will be obtained from the website of RBI as on a date immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the applicants have registered their nine digit MICR number and their bank account number while opening and operating the demat account, the same will be duly mapped with the IFSC of that particular bank branch and the payment of refund will be made to the applicants through this method. For all other applicants, including those who have not updated their bank particulars with the MICR code, the refund orders will be despatched through Speed Post/ Registered Post for refund orders. Such refunds will be made by cheques, pay orders or demand drafts drawn on the Escrow Collection Banks and payable at par at places where Bids are received. Bank charges, if any, for cashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders.

5.

Mode of making refunds for ASBA Bidders In case of ASBA Bidders, the Registrar shall instruct the SCSBs to unblock the funds in the relevant ASBA Accounts to the extent of the Bid Amount specified in the ASBA Bid cum Application Forms for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing Date. DISPOSAL OF APPLICATIONS AND APPLICATION MONEYS AND INTEREST IN CASE OF DELAY With respect to Bidders other than ASBA Bidders, the Company shall ensure dispatch of Allotment advice, refund orders (except for Bidders who receive refunds through electronic transfer of funds) and give benefit to the beneficiary account with Depository Participants and submit the documents pertaining to the Allotment to the Stock Exchanges within two Working Days of the date of Allotment of Equity Shares. In case of applicants who receive refunds through NECS, direct credit or RTGS, the refund instructions will be given to the clearing system within 12 Working Days from the Bid/ Issue Closing Date. A suitable communication shall be sent to the Bidders receiving refunds through this mode within 15 days of Bid/Issue Closing Date, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund. The Company shall use best efforts to ensure that all steps for completion of the necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed, are taken within 12 Working Days of the Bid/Issue Closing Date. In accordance with the Companies Act, the requirements of the Stock Exchanges and the SEBI Regulations, the Company further undertakes that: Allotment of Equity Shares shall be made only in dematerialised form within 12 Working Days of the Bid/Issue Closing Date. With respect to Bidders other than ASBA Bidders, dispatch of refund orders or in a case where the refund or portion thereof is made in electronic manner, the refund instructions are given to the clearing system within 15 Working Days of the Bid/Issue Closing Date would be ensured. With respect to the ASBA Bidders, instructions for unblocking of the ASBA Bidders Bank Account shall be made within 12 Working Days from the Bid/Issue Closing Date. The Company shall pay interest at 15% per annum for any delay beyond 15 days from the Bid/Issue Closing Date, if Allotment is not made and refund orders are not dispatched or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given to the clearing system in the disclosed manner and/or demat credits are not made to investors within the 15 Working Days prescribed above. If such money is not repaid within eight days from the day the Company becomes liable to repay, the Company and every Director of the Company who is an officer in default

452

shall, on and from expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under the applicable law. IMPERSONATION Attention of the applicants is specifically drawn to the provisions of sub-section (1) of Section 68 A of the Companies Act, which is reproduced below: Any person who: (a) makes in a fictitious name, an application to a company for acquiring or subscribing for, any shares therein, or otherwise induces a company to allot, or register any transfer of shares, therein to him, or any other person in a fictitious name, shall be punishable with imprisonment for a term which may extend to five years.

(b)

BASIS OF ALLOTMENT A. For Retail Individual Bidders Bids received from the Retail Individual Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all the successful Retail Individual Bidders will be made at the Issue Price. The Issue size less Allotment to Non-Institutional and QIB Bidders will be available for Allotment to Retail Individual Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal to 26,25,00,000 Equity Shares at or above the Issue Price, full Allotment shall be made to the Retail Individual Bidders to the extent of their valid Bids. If the aggregate demand in this category is greater than 26,25,00,000 Equity Shares at or above the Issue Price, the Allotment shall be made on a proportionate basis up to a minimum of 26,25,00,000 Equity Shares. For the method of proportionate Basis of Allotment, refer below. B. For Non-Institutional Bidders Bids received from Non-Institutional Bidders at or above the Issue Price shall be grouped together to determine the total demand under this category. The Allotment to all successful NonInstitutional Bidders will be made at the Issue Price. The Issue size less Allotment to QIBs and Retail Portion will be available for Allotment to NonInstitutional Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price. If the aggregate demand in this category is less than or equal to 11,25,00,000 Equity Shares at or above the Issue Price, full Allotment shall be made to Non-Institutional Bidders to the extent of their demand. In case the aggregate demand in this category is greater than 11,25,00,000 Equity Shares at or above the Issue Price, Allotment shall be made on a proportionate basis up to a minimum of 11,25,00,000 Equity Shares and in multiples of 600 Equity Shares thereafter. For the method of proportionate Basis of Allotment refer below.

453

C.

For QIBs Bids received from the QIB Bidders at or above the Issue Price shall be grouped together to determine the total demand under this portion. The Allotment to all the successful QIB Bidders will be made at the Issue Price. The QIB Portion will be available for Allotment to QIB Bidders who have Bid in the Issue at a price that is equal to or greater than the Issue Price. Allotment shall be undertaken in the following manner: (a) In the first instance allocation to Mutual Funds for up to 5% of the QIB Portion shall be determined as follows: (i) In the event that Bids by Mutual Fund exceeds 5% of the QIB Portion, allocation to Mutual Funds shall be done on a proportionate basis for up to 5% of the QIB Portion. In the event that the aggregate demand from Mutual Funds is less than 5% of the QIB Portion then all Mutual Funds shall get full Allotment to the extent of valid Bids received above the Issue Price. Equity Shares remaining unsubscribed, if any, not allocated to Mutual Funds will be available for Allotment to all QIB Bidders as set out in (b) below;

(ii)

(iii)

(b)

In the second instance Allotment to all QIBs shall be determined as follows:

1.

In the event that the oversubscription in the QIB Portion, all QIB Bidders who have submitted Bids above the Issue Price shall be allotted Equity Shares on a proportionate basis for up to 95% of the QIB Portion. Mutual Funds, who have received allocation as per (a) above, for less than the number of Equity Shares Bid for by them, are eligible to receive Equity Shares on a proportionate basis along with other QIB Bidders. Under-subscription below 5% of the QIB Portion, if any, from Mutual Funds, would be included for allocation to the remaining QIB Bidders on a proportionate basis.

2.

3.

The aggregate Allotment (other than spill over in case of under-subscription in other categories) to QIB Bidders shall be upto 37,50,00,000 Equity Shares. Method of Proportionate Basis of Allotment in the Issue In the event of the Issue being over-subscribed, the Company shall finalise the Basis of Allotment in consultation with the Designated Stock Exchange. The executive director (or any other senior official nominated by them) of the Designated Stock Exchange along with the BRLMs and the Registrar to the Issue shall be responsible for ensuring that the Basis of Allotment is finalised in a fair and proper manner. The Allotment shall be made in marketable lots, on a proportionate basis as explained below: a) b) Bidders will be categorised according to the number of Equity Shares applied for. The total number of Equity Shares to be Allotted to each category as a whole shall be arrived at on a

454

proportionate basis, which is the total number of Equity Shares applied for in that category (number of Bidders in the category multiplied by the number of Equity Shares applied for) multiplied by the inverse of the over-subscription ratio. c) Number of Equity Shares to be Allotted to the successful Bidders will be arrived at on a proportionate basis, which is total number of Equity Shares applied for by each Bidder in that category multiplied by the inverse of the over-subscription ratio. In all Bids where the proportionate Allotment is less than 600 Equity Shares per Bidder, the Allotment shall be made as follows: The successful Bidders out of the total Bidders for a category shall be determined by draw of lots in a manner such that the total number of Equity Shares Allotted in that category is equal to the number of Equity Shares calculated in accordance with (b) above; and Each successful Bidder shall be Allotted a minimum of 600 Equity Shares. e) If the proportionate Allotment to a Bidder is a number that is more than 600 Equity Shares but is not a multiple of one (which is the marketable lot), the decimal would be rounded off to the higher whole number if that decimal is 0.5 or higher. If that number is lower than 0.5 it would be rounded off to the lower whole number. Allotment to all in such categories would be arrived at after such rounding off. If the Equity Shares allocated on a proportionate basis to any category are more than the Equity Shares Allotted to the Bidders in that category, the remaining Equity Shares available for Allotment shall be first adjusted against any other category, where the Allotted Equity Shares are not sufficient for proportionate Allotment to the successful Bidders in that category. The balance Equity Shares, if any, remaining after such adjustment will be added to the category comprising Bidders applying for minimum number of Equity Shares.

d)

f)

Letters of Allotment or Refund Orders or instructions to the SCSBs The Company shall credit the Allotted Equity Shares to the beneficiary account with depository participants within 12 Working Days from the Bid/Issue Closing Date. Applicants residing at the centres where clearing houses are managed by the RBI, will get refunds through NECS only except where applicant is otherwise eligible to get refunds through direct credit and RTGS. The Company shall ensure dispatch of refund orders, if any, by registered post or speed post at the sole or First Bidders sole risk within 12 Working Days of the Bid/Issue Closing Date. Bidders to whom refunds are made through electronic transfer of funds will be sent a letter through ordinary post, intimating them about the mode of credit of refund within 15 days from the Bid/ Issue Closing Date. In case of ASBA Bidders, the Registrar shall instruct the relevant SCSBs to, on receipt of such instructions from the Registrar, unblock the funds in the relevant ASBA Account to the extent of the Bid Amount specified in the ASBA Bid cum Application Form or the relevant part thereof for withdrawn, rejected or unsuccessful or partially successful ASBA Bids within 12 Working Days of the Bid/Issue Closing Date. Interest in case of delay in despatch of Allotment Letters or Refund Orders/ instruction to the SCSBs by the Registrar The Company agrees that (i) the Allotment of Equity Shares; and (ii) credit to the successful Bidders depositary accounts will be completed within 12 Working Days of the Bid/ Issue Closing Date. The Company further agrees that it shall pay interest at the rate of 15% p.a. if the Allotment letters or refund orders have not been despatched to the applicants or if, in a case where the refund or portion thereof is made in electronic manner, the refund instructions have not been given in the disclosed manner within 15 Working Days from the Bid/ Issue Closing Date, whichever is later. The Company will provide adequate funds required for dispatch of refund orders or Allotment advice to the Registrar.

455

Refunds will be made by cheques, pay-orders or demand drafts drawn on a bank appointed by the Company as a Refund Bank and payable at par at places where Bids are received. Bank charges, if any, for encashing such cheques, pay orders or demand drafts at other centres will be payable by the Bidders. UNDERTAKINGS BY THE COMPANY The Company undertakes the following: That the complaints received in respect of this Issue shall be attended to by the Company expeditiously and satisfactorily; That all necessary formalities for listing and commencement of trading at all the Stock Exchanges where the Equity Shares are proposed to be listed are completed within 12 Working Days of the Bid/Issue Closing Date; That funds required for making refunds to unsuccessful applicants as per the mode(s) disclosed shall be made available to the Registrar to the Issue by the Issuer; That where refunds are made through electronic transfer of funds, a suitable communication shall be sent to the applicant within 15 days from the Bid/ Issue Closing Date, as the case may be, giving details of the bank where refunds shall be credited along with amount and expected date of electronic credit of refund; That the Promoters contribution in full wherever required, shall be brought in advance before the Issue opens for public subscription and the balance, if any, shall be brought in pro rata basis before the calls are made on public; That the certificates of the Equity Shares/ refund orders to Eligible NRIs shall be despatched within specified time; That no further issue of Equity Shares shall be made till the Equity Shares offered through the Red Herring Prospectus are listed or until the Bid monies are refunded on account of non-listing, under-subscription etc.; and Those adequate arrangements shall be made to collect all ASBA Bid cum Application Forms and to consider them similar to non-ASBA applications while finalising the Basis of Allotment. The Company shall not have recourse to the Net proceeds until the final approval for listing and trading of the Equity Shares from all the Stock Exchanges where listing is sought, has been received. Withdrawal of the Issue The Company, in consultation with the BRLMs, reserves the right not to proceed with the Issue anytime after the Bid/Issue Opening Date. In such an event, the Company would issue a public notice in the newspapers, in which the pre-Issue advertisements were published, within two days of the Bid/ Issue Closing Date, providing reasons for not proceeding with the Issue. The Company shall also inform the same to Stock Exchanges on which the Equity Shares are proposed to be listed. Any further issue of Equity Shares by the Company shall be in compliance with applicable laws. Utilisation of Issue Proceeds The Board of Directors certifies that: All monies received out of the Issue shall be credited/transferred to a separate bank account other than the bank account referred to in sub-section (3) of Section 73 of the Companies Act;

456

Details of all monies utilised out of Issue shall be disclosed, and continue to be disclosed till the time any part of the issue proceeds remains unutilised, under an appropriate head in the balance sheet of the Company indicating the purpose for which such monies have been utilised; Details of all unutilised monies out of the Issue, if any shall be disclosed under an appropriate separate head in the balance sheet indicating the form in which such unutilised monies have been invested; The utilisation of monies received under Promoters contribution shall be disclosed, and continue to be disclosed till the time any part of the Issue proceeds remains unutilised, under an appropriate head in the balance sheet of the Company indicating the purpose for which such monies have been utilised; and The details of all unutilised monies out of the funds received under Promoters contribution shall be disclosed under a separate head in the balance sheet of the issuer indicating the form in which such unutilised monies have been invested.

457

RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES Foreign investment in Indian securities is regulated through the Industrial Policy, 1991 of the GoI, as notified through press notes and press releases issued from time to time, and FEMA and circulars and notifications issued thereunder. While the Industrial Policy, 1991 prescribes the limits and the conditions subject to which foreign investment can be made in different sectors of the Indian economy, FEMA regulates the precise manner in which such investment may be made. Under the Industrial Policy, unless specifically restricted, foreign investment is freely permitted in all sectors of the Indian economy up to any extent and without any prior approvals, but the foreign investor is required to follow certain prescribed procedures and reporting requirements for making such investment. The government bodies responsible for granting foreign investment approvals are FIPB and the RBI. Subscription by foreign investors (NRIs/FIIs) FIIs are permitted to subscribe to shares of an Indian company in a public offer without the prior approval of the RBI, so long as the price of the shares is not less than the price at which the shares are issued to residents. The transfer of shares between an Indian resident and a non-resident does not require the prior approval of the FIPB or the RBI, provided that (i) the activities of the investee company are under the automatic route under the FDI Policy and transfer does not attract the provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, as amended; (ii) the non-resident shareholding is within the sectoral limits under the FDI policy; and (iii) the pricing is in accordance with the guidelines prescribed by the SEBI/RBI. As per the existing policy of the Government of India, OCBs cannot participate in this Issue. The Equity Shares have not been and will not be registered, listed or otherwise qualified in any other jurisdiction outside India and may not be offered or sold, and Bids may not be made by persons in any such jurisdiction, except in compliance with the applicable laws of such jurisdiction. The above information is given for the benefit of the Bidders. The Company and the BRLMs and the CBRLMs are not liable for any amendments or modification or changes in applicable laws or regulations, which may occur after the date of this Prospectus. Bidders are advised to make their independent investigations and ensure that the Bids are not in violation of laws or regulations applicable to them.

458

SECTION VII: MAIN PROVISIONS OF ARTICLES OF ASSOCIATION Capitalised terms used in this section have meaning that has been given to such terms in the Articles of Association of Future Ventures India Limited. Pursuant to Schedule II of the Companies Act and the SEBI Regulations, the main provisions of the Articles of Association relating to voting rights, dividend, lien, forfeiture, restrictions on transfer and transmission of Equity Shares or debentures and/or on their consolidation/splitting are detailed below. Please note that the each provision herein below is numbered as per the corresponding article number in the Articles of Association and defined terms herein have the meaning given to them in the Articles of Association. Table A The Regulations contained in Table A in Schedule I to the Companies Act, 1956 shall apply to the Company except in so far as otherwise expressly incorporated hereinafter. Share Capital Article 3 provides that 3.1 The authorized share capital of the Company shall be such amount which may be stipulated in Clause V of the Memorandum of Association, with the Board, with the sanction of the Company in a General Meeting by ordinary resolution, having the power to increase or reduce the share capital of the Company and to divide the shares in the capital for the time being into several classes and to attach thereto respectively such preferential or special rights, privileges or conditions as may be determined by the Board in its sole discretion in accordance with these Articles and subject to the provisions of the Companies Act and to vary, modify, amalgamate or abrogate such rights, privileges or conditions in such manner as may for the time being be provided by these Articles or subject to the provisions of the Companies Act. The Board may from time to time, increase the authorized share capital of the Company by such sum to be divided into shares of such amount and of such classes with such rights and privileges attached thereto as the General Meeting shall direct by specifying the same in the resolution and if no directions be given as the Board may determine. The Company may, subject to the provisions of Sections 100 to 105 of the Companies Act reduce in any manner, from time to time, a. b. 3.4 by special resolution its share capital; any capital redemption reserve fund or any securities premium account.

3.2.

3.3.

Subject always to the provisions of these Articles, the shares shall be under the control of the Board and the Board may allot, grant, have option over or otherwise deal with or dispose of them to any Person any shares on such terms and conditions, as Board may deem fit. Subject to the provisions of these Articles, the Company shall have power to alter the conditions of the Memorandum relating to share capital as follows, that is to say that it may (a) (b) increase its share capital by such amount as it thinks expedient by issuing new shares; consolidate and divide all or any of its share capital into shares of larger denomination than its existing shares; sub-divide its shares or any of them into shares of smaller amount than is fixed by the Memorandum so, however, that, in the sub-division, the proportion between the amount paid and

3.5

(c)

459

the amount, if any, unpaid on each reduced share shall be the same as it was in the case of the share, from which the reduced share is derived; (d) cancel any shares which, at the date of the passing of the resolution in that behalf, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the shares as cancelled, provided, however, that the cancellation of shares in pursuance of the exercise of this power shall not be deemed to be a reduction of share capital within the meaning of the Act.

SHARES Article 4 provides that 4.1 Subject to the provisions of Section 81 of the Companies Act and these Articles, the share capital of the Company for the time being shall be under the control of the Board who may issue, allot or otherwise dispose of the same or any of them to such Persons, in such proportion and on such terms and conditions and either at a premium or at par or (subject to the compliance with the provision of Section 79 of the Companies Act) at a discount and at such time as they may from time to time think fit and with the sanction of the Company in a General Meeting to give to any Person the option or right to call for any shares either at par or premium during such time and for such consideration as the Board deem fit, and may issue and allot shares in the share capital of the Company on payment in full or part of any property sold and transferred or for any services rendered to the Company in the conduct of its business and any shares which may so be allotted may be issued as fully paid up shares and if so issued, shall be deemed to be fully paid shares. Provided, however, that the option or right to call for shares shall not be given to any Person without the sanction of the Company in a General Meeting. An application signed by or on behalf of an applicant for shares in the Company followed by an allotment of any shares therein, shall be an acceptance of shares within the meaning of these Articles and every Person who, thus or otherwise agrees to accept in writing the shares and whose name is entered on the register of Members shall for the purpose of these Articles, be a shareholder. If by the conditions of allotments of any shares, the whole or a part of the amount or issue price thereof shall be payable by installments, every such installment shall, when due, be paid to the Company by the Person who, for the time being and from time to time shall be the registered holder of the shares of his heirs, executors, administrators and legal representatives. Every Member or his heirs, executors, assignees or other representatives shall pay to the Company the portion of the share capital represented by his share or shares which may for the time being remain unpaid thereon, in such amounts at such time or times and in such manner as the Board shall, from time to time, in accordance with the Companys regulations require or fix for the payment thereof and so long as any moneys are due, owing and unpaid to the Company by any Member on any account. However, such Member in default shall not be entitled at the option of the Board, to exercise any rights or privileges available to him. If any shares stand in the name of two or more Persons, the one first named in the register of Members shall as regards receipt of dividend bonus or service of notice and all or any other matters connected with the Company, except voting at Meetings and the transfer of shares, be deemed the sole-holder thereof but joint holder of shares shall be severally as well as jointly liable for the payment of the installments and calls in respect of such shares and for all incidents thereof according to the Companys regulations. Any Debentures, debenture stock or other securities may be issued at a discount, premium or otherwise and may be issued on the condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) at the General Meeting, appointment of Directors and otherwise Debentures with a right of conversion into or allotment of shares shall be issued only with consent of the Company in General Meeting by special resolution.

4.2

4.3

4.4

4.5

460

CALLS ON SHARES Article 5 provides that 5.1 The Board may, from time to time and subject to the terms on which any shares have been issued and subject to the conditions of allotment, by a resolution passed at a meeting of the Board (and not by circular resolution) make such call as it thinks fit upon the Members in respect of all moneys unpaid on the shares held by them respectively, and each Member shall pay the amount of every call so made on him to the Person or Persons and at the times and places appointed by the Board. A call may be made payable by installments. Fifteen days notice in writing of any call shall be given by the Board specifying the time and place of payment, and the Person to whom such call shall be paid. A call shall be deemed to have been made at the time when the resolution authorizing such call was passed at a meeting of the Board. A call may be revoked or postponed at the discretion of the Board. The option or right to call of shares shall not be given to any Person except with the sanction of the Company in a General Meeting. The joint-holders of a share shall be jointly and severally liable to pay all calls in respect thereof. The Board may, from time to time at its discretion, extend the time fixed for the payment of any call, and may extend such time as to all or any of the Members who, the Board may deem fairly entitled to such extension, but no Member shall be entitled to such extension save as a matter of grace and favour. If any Member fails to pay any call due from him on the day appointed for payment thereof, or any such extension thereof as aforesaid, he shall be liable to pay interest of the same from the day appointed for the payment thereof to the time of actual payment at such rate as shall from time to time be fixed by the Board, but nothing in this Article shall render it obligatory for the Board to demand or recover any interest from any such Member. Any sum, which may be the terms of issue of a share becomes payable on allotment or at any fixed date, whether on account of the nominal value of the share or by way of premium, shall for the purposes of these Articles be deemed to be a call duly made and payable, on the date on which by the terms of issue the same becomes payable and in case of non-payment, all the relevant provisions of these Articles as to payment of interest and expenses, forfeiture or otherwise, shall apply as if such sum had become payable by virtue of a call duly made and notified. On the trial or hearing of any action or suit brought by the Company against any Member or his representatives for the recovery of any money claimed to be due to the Company in respect of his shares, it shall be sufficient to prove that the name of the Member, in respect of whose shares, the money is sought to be recovered appears entered on the register of Members as the holder, at or subsequent to the date at which the money is sought to be recovered, is alleged to have become due on the shares in respect of such money is sought to be recovered; that the resolution making the call is duly recorded in the minute book; and that notice of such call was duly given to the Member or his representatives used in pursuance of these Articles and that it shall not be necessary to prove the appointment of the Directors who made such call, nor that a quorum of Directors was present at the Board at which any call was made nor that the Meeting at which any call was made duly convened or constituted nor any other matters whatsoever, but the proof of the matter aforesaid shall be conclusive evidence of the debt. Neither the receipt by the Company of a portion of any money which shall from time to time be due from any Member to the Company in respect of his shares, either by way of principal or interest, nor any indulgence granted by the Company in respect of the payment of any such money, shall preclude the Company from thereafter proceeding to enforce a forfeiture of such shares as hereinafter provided.

5.2

5.3

5.4

5.5 5.6

5.7

5.8

5.9

5.10

461

a.

The Board may, if they think fit, subject to the provisions of Section 92 of the Companies Act, agree to and receive from any Member willing to advance the same, whole or any part of the moneys due upon the shares held by him beyond the sums actually called for and upon the amount so paid or satisfied in advance or so much thereof, as from time to time exceeds the amount of the calls then made upon the shares in respect of which such advance has been made, the Company may pay interest at such rate as the Member paying the sum in advance and the Board agree upon, provided that money paid in advance of calls shall not confer a right to participate in profits or dividend. The Board may at any time repay the amount so advanced. The Members shall not be entitled to any voting rights in respect of the moneys so paid by him until the same would but for such payment become presently payable. The provision of this Article shall mutatis mutandis apply to the calls on Debentures of the Company.

FORFEITURE OF SHARES Article 6 provides that 6.1 The notice aforesaid shall: (a) name further day (not being earlier than the expiry of fourteen days from the date of service of the notice) and a place or places on and at which such call or installment and such interest and expenses as aforesaid are to be paid; and state that in the event of non-payment on or before the day so named at the place appointed, the shares in respect of which the call was made or instalment is payable will be liable to be forfeited.

(b)

6.2

If the requirements of any such notice as aforesaid are not complied with, any shares, in respect of which the notice has been given, may, at any time thereafter before the payment required by the notice has been made, be forfeited by the resolution of the Board to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares and not actually paid before the forfeiture When any shares shall have been so forfeited, notice of the forfeiture shall be given to the Member in whose name it stood immediately prior to the forfeiture, and an entry of the forfeiture, with the date thereof, shall forthwith be made in the register of Members but no forfeiture shall be in any manner invalidated, by any omission or neglect to give such notice or to make any such entry as aforesaid. Any share so forfeited shall be deemed to be the property of the Company and may be sold, re-allotted or otherwise disposed off on such terms and in such manner, as the Board may think fit. At any time before a sale, re-allotment or disposal as aforesaid, the Board may cancel the forfeiture on such terms, as it thinks fit. A Person, whose shares have been forfeited, shall cease to be the Member in respect of the forfeited shares but shall, notwithstanding the forfeiture, remain liable to pay to the Company all moneys, all calls, or installment, interest and expenses, owing in respect of such share at the time of the forfeiture, together with interest thereon, from the time of forfeiture until payment, at such rate as the Board may determine and the Board may enforce the payment thereof, to any party thereof, without any deduction or allowance for the value of the shares at the time of forfeiture, but shall not be under any obligation to do so. The forfeiture of a share involves extinction, at the time of the forfeiture, of all interest and all claims and demands against the Company in respect of the share and all other rights, incidental to the share except only such of those rights as by these Articles are expressly saved. A duly verified declaration in writing that the declarant is a Director of the Company, and that certain shares in the Company have been duly forfeited on a date stated in the declaration shall be conclusive evidence of the facts therein stated as against all Persons claiming to be entitled to the shares and such declaration and the receipt of the Company for the consideration, if any, given for the shares on the sale/ or

6.3

6.4

6.5

6.6

6.7

6.8

462

disposition thereof shall constitute a good title to such shares; and the Person to whom any such share as sold shall be registered as the Member in respect of such share and shall not be bound to see to the application of the purchase money, nor shall his title to such share be affected by any irregularity or invalidity in the proceedings in reference to such forfeiture, sale or disposition. 6.9 Upon any sale, re-allotment or other disposal under the provisions of the preceding Articles, the certificate or certificates originally issued in respect of the relative shares shall (unless the same shall on demand by the Company have been previously surrendered to it by the defaulting Member) stand cancelled and become null and void and of no effect, and the Directors, shall be entitled to issue a duplicate certificate or certificates in respect of the said shares to the Person, entitled thereto.

TRANSFER OF SHARES Article 7 provides that 7.1 There shall be a common instrument of transfer which shall be in writing and all the provisions of Section 108 of the Companies Act and of any statutory modification thereof for the time being, shall be duly complied with in respect of all transfer of shares and the registration thereof. Every instrument of transfer duly stamped must be accompanied by the certificate of shares proposed to be transferred and such other evidence as the Board may require to prove the title of the transferor or his right to transfer the shares. No fee shall be charged for registration of transfer, transmission, probate, succession certificate and letters of administration, certificate of death or marriage, power of attorney or similar other document. Every such instrument of transfer shall be executed both by transferor and the transferee and the transferor shall be deemed to remain the holder of such share until the name of the transferee shall have been entered in the register of Members in respect thereof. The Board shall not issue or register a transfer of any share in favour of a minor (except in cases when they are fully paid up). The Board shall have power on giving seven days previous notice by advertisement in some newspaper circulating in the district in which the registered office of the Company is situated to close the transfer books, the register of Members or register of debenture holders at such time or times and for such period or periods, not exceeding thirty days at a time and not exceeding in the aggregate forty-five days in each year, as it may deem expedient. The Company shall incur no liability or responsibility whatsoever in consequence of its registering or giving effort to any transfer of shares made or purporting to be made by any apparent legal owner thereof (as shown or appearing in the register of Members) to the prejudice of Persons having or claiming any equitable right, title or interest to or in the said shares, notwithstanding that the Company may have had notice of such equitable right, title or interest or notice prohibiting registration of such transfer, and may have entered such notice, or deferred thereto, in any book of the Company, and the Company shall not be bound or required to regard or attend or give effect to any notice which may be given to it of any equitable right or interest, or be under any liability whatsoever for refusing or neglecting so to do, though it may have been entered or referred to in some book of the Company; but the Company shall nevertheless be at liberty to regard and attend to any such notice and give effect thereto, if the Board shall so think fit. Subject to the provisions of Section 111A, these Articles and other applicable provisions of the Act or any other law for the time being in force, the Board may refuse whether in pursuance of any power of the Company under these Articles or otherwise to register the transfer of, or the transmission by operation of law of the right to, any shares or interest of a Member in or debentures of the Company. The Company shall within one month from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to Company, send notice of the refusal to the transferee and the transferor or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. Provided that the registration of transfer shall not be refused on the ground of the transferor

7.2

7.3

7.4

7.5

7.6

7.7

463

being either alone or jointly with any other person or persons indebted to the Company on any account whatsoever except where the Company has lien on shares. 7.8 The Company shall keep at its registered office, the register of Members and shall therein firmly and distinctly enter the particulars of every transfer or transmission of shares. Subject to the provisions of Section 154 of the Companies Act, the Board shall have power to close the register of Members for such periods, not exceeding forty five days in aggregate in a year and thirty days at any one time, as may seem expedient to them.

TRANSMISSION OF SHARES Article 8 provides that 8.1 Every holder of shares in, or Debentures of the Company may at any time nominate, in the manner prescribed under the Companies Act, a Person to whom his shares in or Debentures of the Company shall vest in the event of death of such holder. Where the shares in, or Debentures of the Company are held by more than one Persons jointly, the joint holders may together nominate, in the prescribed manner, a Person to whom all the rights in the shares or Debentures of the Company, as the case may be, held by them shall vest in the event of death of all joint holders. Notwithstanding anything contained in any other law for the time being in force or in any disposition, whether testamentary or otherwise, or in these Articles, in respect of such shares in or Debentures of the Company, where a nomination made in the prescribed manner purports to confer on any Person the right to vest the shares in, or Debentures of the Company, the nominee shall, on the death of the shareholders or holder of Debentures of the Company or, as the case may be, on the death of all the joint holders become entitled to all the rights in the shares or Debentures of the Company to the exclusion of all other Persons, unless the nomination is varied or cancelled in the prescribed manner under the provisions of the Act. 8.2 Where the nominee is a minor, it shall be lawful for the holder of the shares or holder of Debentures to make the nomination to appoint, in the prescribed manner under the provisions of the Act, any Person to become entitled to the shares in or Debentures of the Company, in the event of his death, during the minority. Any Person who becomes a nominee by virtue of the provisions of these Articles upon production of such evidence as may be required by the Board and subject as hereinafter provided, elect, either: a) b) to be registered himself as holder of the shares or Debentures, as the case may be; to make such transfer of the shares or Debentures, as the case may be, as the deceased shareholder or Debenture holder, as the case may be, could have made; or if the nominee, so becoming entitled, elects himself to be registered as holder of the shares or Debentures, as the case may be, he shall deliver or send to the Company a notice in writing signed by him stating that he so elects and such notice shall be accompanied with death certificate of the deceased shareholder or Debenture holder and the certificate(s) of shares or Debentures, as the case may be, held by the deceased in the Company.

8.3

c)

8.4

Subject to the provisions of Section 109 B (3) of the Companies Act and these Articles, the Board may register the relevant shares or Debentures in the name of the nominee of the transferee as if the death of the registered holder of the shares or Debentures had not occurred and the notice or transfer were a transfer signed by that shareholder or Debenture holder, as the case may be. A nominee on becoming entitled to shares or Debentures by reason of the death of the holder, or joint holders shall be entitled to the same Dividend and other advantages to which he would be entitled if he were the registered holder of the share or Debenture, except that he shall not before being registered as

8.5

464

holder of such shares or Debentures, be entitled in respect of them to exercise any right conferred on a Member or Debenture holder in relation to Meetings of the Company. 8.6 The Board may, at any time, give notice requiring any such Person to elect either to be registered himself or to transfer the shares or Debentures, and if the notice is not complied with within ninety days, the Board may thereafter withhold payment of all dividends, bonuses, interest or other moneys payable or rights accrued or accruing in respect of the relevant shares or Debentures, until the requirements of the notice have been complied with. Subject to the provisions of these Articles, any Person becoming entitled to shares in consequence of the death, lunacy, bankruptcy or insolvency of any Member, or by any lawful means other than by a transfer in accordance with these presents, may with the consent of the Board (which it shall not be under any obligation to give) upon producing such evidence that he sustains the character in respect of which he proposes to act under this Article of his title, act, as the holder of the shares or elect to have some Person nominated by him and approved by the Board, registered as such holder, provided nevertheless, that if such Person shall elect to have his nominee registered he shall testify the election by executing to his nominee an instrument of transfer in accordance with the provisions herein contained and until he does so, he shall not be freed from any liability in respect of the shares. A Person entitled to a share by transmission shall, subject to the right of the Directors to retain such dividends or money as hereinafter provided, be entitled to receive and may give discharge for any dividends or other moneys payable in respect of the share.

8.7

8.8

FURTHER ISSUE OF SHARES Article 9 provides that 9.1 Where at the time after the expiry of two years from the formation of the Company or at any time after the expiry of one year from the allotment of shares in the Company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the Company by allotment of further shares either out of the unissued share Capital or out of the increased share Capital then: (a) Such further shares shall be offered to the Persons who at the date of the offer, are holders of the shares of the Company, in proportion, as near as circumstances admit, to the capital paid up on these shares at the date; Such offer shall be made by a notice specifying the number of shares offered and limiting a time not less than thirty days from the date of the offer and the offer if not accepted, within such time will be deemed to have been declined; The aforesaid offer shall be deemed to include a right exercisable by the Person concerned to renounce the shares offered to him or any of them in favour of any other Person and the notice referred to in sub-clause (b) shall contain a statement of this right. After expiry of the time specified in the aforesaid notice or on receipt of earlier intimation from the Person to whom such notice has been given that he declines to accept the shares offered, the Board may dispose off them in such manner and to such Personas they may think, in their sole discretion, fit.

(b)

(c)

(d)

9.2

Notwithstanding anything contained in Article 9.1 hereof, the further shares aforesaid may be offered to any Person (whether or not those Persons include the Persons referred to in clause (a) of Article 9.1 hereof) in any manner whatsoever. (a) If a special resolution to that affect is passed by the Company in General Meeting, or

465

(b)

Where no such special resolution is passed, if the votes cast (whether on a show of hands or on a poll as the case may be) in favour of the proposal contained in the resolution moved in the General Meeting (including the casting vote by the chairman) by the Members who, being entitled to do so, vote in person, or where proxies are allowed, by proxy, exceed the votes, if any, cast against the proposal by Members, so entitled and voting and the central government is satisfied on an application made by the Board in this behalf that the proposal is most beneficial to the Company.

9.3

Nothing in these Articles hereof shall be deemed: (a) (b) To extend the time within which the offer should be accepted; or To authorise any Person to exercise the right of renunciation for a second time on the ground that the Person in whose favour the renunciation was first made has declined to take the shares comprised in the renunciation.

9.4

Nothing in this Article shall apply to the increase of the subscribed capital of the Company caused by the exercise of an option attached to the Debentures issued or loans raised by the Company(i) (ii) To convert such Debentures or loans into shares in the Company; or To subscribe for shares in the Company (whether such option is conferred in these Articles or otherwise)

Provided that the terms of issue of such Debentures or the terms of such loans include a term providing for such option and such term: (a) Either has been approved by the Central Government before the issue of the Debentures or the raising of the loans or is in conformity with rules, if any, made by that Government in this behalf; and In the case of Debentures or loans or other than Debentures issued to or loans obtained from Government or any institution specified by the Central Government in this behalf, has also been approved by a special resolution passed by the Company in General Meeting before the issue of the Debentures or raising of the loans.

(b)

CERTIFICATE OF SHARES Article 10 provides that 10.1 Every Member shall be entitled, without payment, to one or more certificates in marketable lots, for all the shares of each class or denomination registered in his name, or if the Board so approves (upon paying such fee as the Board may from time to time determine) to several certificates, each for one or more of such shares and the Company shall complete and have ready for delivery such certificates within three months from the date of allotment, unless the conditions of issue thereof otherwise provide, or within two months of the receipt of applications of registration of transfer, transmission, sub-division, consolidation or renewal of any of its shares as the case may be. Every certificate of shares shall be under the seal of the Company and shall specify the number and distinctive numbers of shares in respect of which it is issued and amount paid-up thereon and shall be in such form as the Board may prescribe or approve, provided that in respect of a share or shares held jointly by several Persons, the Company shall not be bound to issue and deliver more than one certificate and delivery of a certificate of shares to one or several joint holders shall be sufficient delivery to all such holders. If any certificate be worn out, defaced, mutilated or torn or if there be no further space on the back thereof for endorsement of transfer, then upon production and surrender thereof to the Company, a new certificate may be issued in lieu thereof and if any certificate is lost or destroyed then upon proof thereof to the satisfaction of the Company and on execution of such indemnity as the Company deems adequate, being

10.2

466

given, a new certificate in lieu thereof shall be given to the party entitled to such lost or destroyed certificate. Every certificate under this Article shall be issued without payment of fees if the Board so decides, or on payment of such fees (not exceeding ` 2/- for each certificate) as the Board shall prescribe. Provided that no fee shall be charged for issue of a new certificates in replacement of those which are old, defaced or worn out or where there is no further space on the back thereof for endorsement of transfer. Provided that notwithstanding what is stated above the Board shall comply with such Rules or Regulation or requirements of any stock exchange or the Rules made under the Companies Act or the Rules made under the Securities Contracts (Regulation) Act, 1956 or any other Act, or Rules applicable in this behalf. The provisions of Article 10.2 shall mutatis mutandis apply to Debentures of the Company. DEMATERIALISATION OF SECURITIES Article 11 provides that 11.1 The provisions of this Article shall apply notwithstanding anything to the contrary contained in any other Articles. (a) The Company shall be entitled to dematerialize securities and to offer securities in a dematerialized form pursuant to the Depositories Act, 1996. Every holder of or subscriber to securities of the Company shall have the option to receive certificates for such securities or to hold the securities with a Depository. Such a Person who is the Beneficial Owner of the securities can at any time opt out of a Depository, if permitted by law, in respect of any securities in the manner provided by the Depositories Act, 1996 and the Company shall, in the manner and within the time prescribed, issue to the Beneficial Owner the required certificates for the securities. If a Person opts to hold his securities with the Depository, the Company shall intimate such Depository the details of allotment of the securities, and on receipt of the information, the Depository shall enter in its record the name of the allottee as the Beneficial Owner of the securities. All securities held by a Depository shall be dematerialized and be in fungible form. Nothing contained in Sections 153, 153A, 153B, 187B, 187C and 372A of the Companies Act shall apply to a Depository in respect of the securities held by on behalf of the Beneficial Owners. (i) Notwithstanding anything to the contrary contained in the Companies Act or these Articles, a Depository shall be deemed to be the registered owner for the purposes of effecting transfer of ownership of securities of the Company on behalf of the Beneficial Owner. Save as required by Applicable Law, the Depository as the registered owner of the securities shall not have any voting rights or any other rights in respect of the securities held by it. Every Person holding securities of the Company and whose name is entered as the Beneficial Owner of securities in the record of the Depository shall be entitled to all the rights and benefits and be subject to all the liabilities in respect of the securities which are held by a Depository and shall be deemed to be a Member of the Company.

(b)

(c)

(d)

(ii)

(iii)

(e)

Notwithstanding anything contained in the Companies Act or these Articles to the contrary, where securities of the Company are held in a Depository, the records of the Beneficiary Ownership may be served by such Depository on the Company by means of electronic mode or by delivery of floppies or discs.

467

(f)

Nothing contained in Section 108 of the Companies Act or these Articles, shall apply to a transfer of securities effected by a transferor and transferee both of whom are entered as Beneficial Owners in the records of a Depository. Notwithstanding anything contained in the Companies Act or these Articles, where securities are dealt with by a Depository, the Company shall intimate the details thereof to the Depository immediately on allotment of such securities. Nothing contained in the Companies Act or these Articles regarding the necessity of having distinctive numbers for securities issued by the Company shall apply to securities held with a Depository. The register of Members and index of beneficial owners maintained by a Depository under the Depositories Act, 1996 shall be deemed to be the register and index of Members and security holders for the purposes of these Articles.

(g)

(h)

(i)

LIEN Article 12 provides that 12.1 The Company shall have a first and paramount lien upon all the shares/debentures (other than fully paid-up shares/debentures) registered in the name of each Member (whether solely or jointly with others) and upon the proceeds of sale thereof, for all monies (whether presently payable or not) called or payable at a fixed time in respect of such shares and no equitable interest in any shares shall be created except upon the footing and condition that this Article will have full effect. Any such lien shall extend to all dividends and bonuses from time to time declared in respect of such shares/ debentures. Unless otherwise agreed, the registration of a transfer of shares/ debentures shall operate as a waiver of the Companys lien, if any, on such shares/Debentures. The Board may at any time declare any shares/debentures wholly or in part to be exempt from the provisions of this clause.

PROCEEDINGS OF GENERAL MEETINGS Article 13 provides that 13.1 The Company shall in each year hold a General Meeting as its Annual General Meeting in addition to any other Meetings in that year. All General Meetings other than Annual General Meeting shall be Extraordinary General Meetings. An Annual General Meeting shall be held within six months after the expiry of the Financial Year in which the first Annual General Meeting was held and thereafter, an Annual General Meeting of the Company shall be held within six months after the expiry of each Financial Year, provided that, not more than fifteen months shall elapse between the date of one Annual General Meeting and that of the next. Nothing contained in the foregoing provisions shall be taken as affecting the right conferred upon the Registrar under the provisions of Section 166(1) of the Companies Act to extend the time within which any Annual General Meeting may be held. Every Annual General Meeting shall be called for on a time during business hours, on a day that is not a public holiday, and shall be held at the registered office or at some other place within the city in which the registered office is situated, as the Board may determine, and the notices calling the General Meeting shall specify it as the Annual General Meeting. The Company may in any Annual General Meeting fix the time for its subsequent Annual General Meeting. Every Member of the Company shall be entitled to attend either in person or by proxy and the auditor of the Company shall be entitled to attend and to be heard at any General Meeting which he attends on any part of the business that concerns him as the auditor. At every Annual General Meeting of the Company there shall be laid on the table the Directors report (if not already attached to the Audited statement of Accounts), the proxy register with proxies and the register of Directors share holdings of which the latter register shall remain open and accessible during the continuance of the General Meeting. The Board shall cause to be prepared the annual list of Members, summary of the share capital, balance sheet and profit and loss account and forward the same to the Registrar of Companies in accordance with Sections 159, 161 and 220 of the Companies Act.

468

13.2

The Board may, whenever it thinks fit, call an Extraordinary General Meeting and it shall do so upon a requisition in writing by any Member or Members holding in the aggregate not less than one-tenth of such of the Paid-Up Equity Share Capital as at the date carries the right of voting in regard to the matter in respect of which the requisition has been made. Any valid requisition so made by Members must state the objects of the Meeting proposed to be called and must be signed by the requisitionists and be deposited at the registered office provided that such requisition may consist of several documents in file form each signed by one or more requisitionists. Upon the receipt of any such requisition, the Board shall forthwith call an Extraordinary General Meeting, and if they do not proceed within twenty-one days from the date of the requisition being deposited at the Office to cause a Meeting to be called on a day not later than forty-five days from the date of deposit of the requisition, the requisitionists, or such of their number as represents either a majority in value, of the PaidUp Equity Share Capital of the Company as is referred to in Section 169(4) of the Companies Act, which ever is less, may themselves call the Meeting, but in either case, any Meeting so called shall be held within three months from the date of the delivery of the requisition as aforesaid. Any Meeting called under the foregoing Articles by the requisitionists shall be called in the same manner, as nearly as possible, as that in which General Meetings are to be called by the Board. Twenty-one days notice at least or a shorter notice thereof subject however to the provisions of Sections 171, 190 and 219 of the Companies Act of every General Meeting, Annual or Extraordinary and by whosoever called, specifying the day, place and hour of the Meeting, and the general nature of the business to be transacted thereat, shall be given in the manner hereinafter provided, to such Persons as are under these Articles entitled to receive notice from the Company. Provided that in the case of an Annual General Meeting with the consent in writing of all the Members entitled to vote thereat and in the case of any other Meeting, with the consent of Members holding not less than 95 % of such part of the Paid Up Capital of the Company as gives a right to vote at the Meeting may be convened by a shorter notice. In the case of an Annual General Meeting, if any business other than (a) the consideration of the accounts, balance sheets and reports of the Board of Directors and auditors, the declaration of dividend, the appointment of Directors in place of those retiring, the appointment of and fixing of remuneration of the auditors, is proposed to be transacted then in that event there shall be annexed to the notice of the General Meeting a statement setting out all materials facts concerning each such item of business including, in particular, the nature of concern or interest, if any, therein of every Director, and the manager (if any). Where any such item of special business relates to or affects any other company, the extent of shareholding interest in other company of every Director and the manager, if any, of the Company shall also be set out in the statement if the extent of such shareholding interest is not less than twenty %of the Paid-Up Equity Share Capital of that other company. Where any item of business consists of the according of approval to any document by the Meeting, the time and place where the document can be inspected shall be specified in the statement aforesaid.

13.3

13.4

13.5

13.6

(b) (c) (d)

13.7

The accidental omission to give any such notice as aforesaid to any of the Members or the non receipt thereof shall not invalidate the holding of the General Meeting or any resolution passed at any such General Meeting. No General Meeting, Annual or Extraordinary, shall be competent to enter upon, discuss or transact any

13.8

469

business which has not been mentioned in the notice or notices upon which it was convened. 13.9 A body corporate being a Member shall be deemed to be personally present if it is represented in accordance with Section 187 of the Companies Act. The chairman (if any) of the Board shall be entitled to take the chair at every General Meeting, whether Annual or Extraordinary, if there be no such chairman of the Board, or if at any meeting he shall not be present within fifteen minutes of the time appointed for holding such meeting, or if he shall be unable or unwilling to take the chair, then the Directors present may choose one of their Member to be the chairman of the meeting. If no Director be present or if all the Directors present decline to take the chair, then the Members present shall elect one of their number to be chairman. The chairman with the consent of the Members may adjourn any Meeting from time to time and from place to place in the city in which it is held but, no business shall be transacted at any adjourned Meeting other than the business, left unfinished at the Meeting from which the adjournment took place. When a Meeting is adjourned for more than 30 days, notice of the adjourned Meeting shall be given as in the case of an original Meeting. Save as aforesaid, it shall not be necessary to give any notice of the adjournment or of the business to be transacted at an adjourned Meeting. At any General Meeting a resolution put to vote at the Meeting shall be decided on a show of hands, unless a poll is before or on the declaration of the result of the show of hands, demanded by at least five Members having the right to vote on the resolution and present in person or by proxy, or by the chairman of the Meeting or by any Member or Members holding not less than one-tenth of the total voting power in respect of the resolution or by any Member or Members present in person or by proxy and holding shares in the Company conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid-up on all the shares conferring that right and unless a poll is demanded, a declaration by the chairman that a resolution has on a show of hands, been carried unanimously, or by a particular majority, or lost, and an entry to that effect in the minute book of the Company shall be conclusive evidence of the fact, without proof of the number or proportion of the votes recorded in favour of or against the resolution. In the case of an equality of votes, the chairman shall, both on a show of hands and at a poll (if any), have a casting vote in addition to the vote or votes to which he may be entitled as a Member. If a poll is demanded as aforesaid, the same shall, subject to these Articles be taken at such time (not later than forty-eight hours from the time when the demand was made) and place in the city or town in which the Office of the Company is for the time being situated and either by open voting or by ballot, as the chairman shall direct, and either at once or after an interval or adjournment or otherwise, and the result of the poll shall be deemed to be the resolution of the General Meeting at which the poll was demanded. The demand for a poll may be withdrawn at any time by the Person or Persons who made the demand. Where a poll is to be taken, the chairman of the Meeting shall appoint two scrutineers to scrutinize the vote given on the poll and to report thereon to him. One of the scrutinizers so appointed shall always be a Member (not being an officer or employee of the Company) present at the Meeting provided such Member is available and willing to be appointed. The chairman shall have power at any time before the result of the poll is declared to remove a scrutinizer from office and fill vacancies in the office of scrutinizer from such removal or from any other cause. Any poll duly demanded on the election of chairman of a Meeting or on any question of adjournment shall be taken at the Meeting forthwith. The demand for a poll except on the questions of the election of the chairman and of an adjournment shall not prevent the continuance of a Meeting for the transaction of any business other than the question on which the poll has been demanded.

13.10

13.11

13.12

13.13

13.14

13.15

13.16

13.17

13.18

Subject to these Articles, the quorum for a General Meeting shall be five shareholders present in Person or

470

by attorney. If the quorum is not present within half hour of the scheduled time for holding of the General Meeting, the Meeting shall be adjourned for two weeks and reconvened at the same time of the day and place and if such day is a public holiday then to the immediately succeeding day which is not a public holiday, and if at such rescheduled Meeting a is not present within thirty minutes of the time appointed for the Meeting, the shareholders present, being not less than the quorum, if any, prescribed under the Act, shall form the quorum for the General Meeting. XIV VOTING RIGHTS

Article 14 provides that 14.1 No Member shall be entitled to vote either personally or by proxy/attorney, at any General Meeting or meeting of a class of shareholders, either upon a show of hands or upon a poll in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or, in regard to which the Company has, and has exercised any right of lien. Subject to Section 87 of the Companies Act and these Articles, and save as provided below, every Member holding any Preference Shares shall, in respect of such Preference Share capital, have a right to vote only on resolutions placed before the Company which directly affect the rights attached to his Preference Shares. Provided that any resolution for winding up the Company or for the repayment or reduction of its share capital shall be deemed directly to affect the rights attached to Preference Shares within the meaning of this clause. Subject as aforesaid, every Member holding any Preference Share capital in the Company shall, in respect of such capital, be entitled to vote on every resolution placed before the Company at any meeting, if the dividend due on such capital or any part of such dividend has remained unpaid (i) in the case of cumulative Preference Shares, in respect of an aggregate period of note less than two years preceding the date of commencement of the Meeting; and in the case of non-cumulative Preference Shares, either in respect of a period of not less than two years ending with the expiry of the financial year immediately preceding the commencement of the Meeting or in respect of an aggregate period of not less than three years comprised in the six years ending with the expiry of the financial year aforesaid.

14.2

14.3

(ii)

14.4

For the purposes of this clause, dividend shall be deemed to be due on Preference Shares in respect of any period, whether a dividend has been declared by the company on such shares for such period or not, (a) on the last day specified for the payment of such dividend for such period, in the Articles or other instrument executed by the Company in that behalf; or in case no day is so specified, on the day immediately following such period; where the holder of any Preference Share has a right to vote on any resolution in accordance with the provisions of this sub-section, his voting right on a poll, as the holder of such Preference Share, shall, subject to the provisions of section 89 and sub-section (2) of section 92 of the Companies Act, be in the same proportion as the capital paid up in respect of the Preference Share bears to the total paid-up equity capital of the Company.

(b) (c)

14.5

Subject to the provisions of these Articles and without prejudice to any special privileges or restrictions as to voting for the time being attached to any class of shares for the time being forming part of the capital of the Company, every Member not disqualified by the last preceding Articles shall be entitled to be present in person or by proxy or by attorney and to speak and vote at such Meeting, and on a show of hands every Member present in person or through attorney shall have one vote and upon a poll the voting fights of every Member present in person or by proxy or by attorney shall be in proportion to his shares of the Paid-Up Equity Capital of the Company. Provided, however, if any preference shareholder be present at any

471

Meeting of the Company, save as provided in clause (b) of sub-section (2) of Section 87 of the Companies Act, he shall have a right to vote only on resolutions placed before the Meeting which directly affect the rights attached to his preference shares. 14.6 On a poll taken at Meeting of the Company a Member entitled to more than one vote, or his proxy or other Person entitled to vote for him, as the case may be, need not, if he votes, use all his votes or cast in the same way all the votes he used or may abstain from voting. A Member of unsound mind or in respect of whom an order has been made by any Court having jurisdiction in lunacy may vote whether on a show of hands or on a poll, by his committee or other legal guardian and any such committee or guardian may on poll vote by proxy, if any Member be a minor, the vote in respect of his share or shares shall be by his guardian, or any of his guardians, if more than one, to be selected in case of dispute by the chairman of the Meeting. If there be joint holders of any shares, anyone of such Person may vote at any Meeting or may appoint another Person (whether a Member or not) as his proxy or attorney in respect of such shares. The proxy so appointed shall not have any right to speak at the Meeting and, if more than one of such joint holders be present at any Meeting then one of the said Persons so present whose name stands higher on the register of Members shall alone be entitled to speak and to vote in respect of such shares, but the other joint-holder(s) shall be entitled to be present at the Meeting. Several executors or administrators of a deceased Member in whose name shares stand shall for the purpose of these Articles to be deemed joint holders thereof. Subject to the provisions of these Articles, votes may be given either personally or by proxy or by attorney. A body corporate being a Member may vote either by a proxy or by a representative duly authorised in accordance with Section 187 of the Companies Act, and such representative shall be entitled to exercise the same rights and powers (including the rights to vote by proxy) on behalf of the body corporate which he represents as the body could exercise if it were an Individual Member. Any Person entitled to transfer any share may vote at any General Meeting in respect thereof in the same manner, as if he were the registered holder of such shares, provided that forty eight hours at least before the time of holding the Meeting or adjourned Meeting, as the case may be at which he proposes to vote he shall satisfy the Directors of his right to transfer such shares and give such indemnity (if any) as the Directors may require or the Directors shall have previously admitted his right to vote at such Meeting in respect thereof. Every proxy (whether a Member or not) shall be appointed in writing under the hand of the appointer or his attorney, or if such appointer is a corporation under the common seal of such corporation, or be signed by an officer or any attorney duly authorised by it, and any Committee or guardian may appoint such proxy. The proxy so appointed shall not have any right to speak at the Meeting. An instrument of proxy may appoint a proxy either for the purpose of a particular Meeting specified in the instrument and any adjournment thereof or it may appoint for the purpose of every Meeting of the Company, or of every Meeting to be held before a date specified in the instrument and every adjournment of any such Meeting. A Member present by proxy shall be entitled to vote only on a poll. The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed or a notarised copy of that power or authority shall be deposited at the Office not later than forty eight hours before the time for holding the Meeting at which the Person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiration of twelve months from the date of its execution. Every instrument of proxy whether for a specified Meeting or otherwise shall, as nearly as circumstances will admit, be in any of the forms set out in Schedule IX of the Act.

14.7

14.8

14.9

14.10

14.11

14.12

14.13 14.14

14.15

472

14.16

A vote given in accordance with the terms of an instrument of proxy shall be valid notwithstanding the previous death or insanity of the principal, or revocation of the proxy of any power of attorney under which such proxy was signed, or the transfer of the share in respect of which the vote is given, provided that no intimation in writing of the death or insanity, revocation or transfer shall have been received at the Office before the Meeting. No objection shall be made to the validity of any vote, except at any Meeting or poll at which such vote shall be tendered, and every vote whether given personally or by proxy or by attorney, not disallowed at such Meeting or poll shall be deemed valid for all purposes of such Meeting or poll whatsoever. Notwithstanding any thing contained in the foregoing, the Company shall transact such business, as may be specified by the Central Government from time to time, through the means of postal ballot. In case of resolutions to be passed by postal ballot, no Meeting need to be held at a specified time and space requiring physical presence of Members to form a quorum. Where a resolution will be passed by postal ballot the Company shall, in addition to the requirements of giving requisite clear days notice, send to all the Members the following: (a) (b) (c) Draft resolution and relevant explanatory statement clearly explaining the reasons thereof. Postal ballot for giving assent or dissent, in writing by Members and Postage prepaid envelope (by registered post) for communicating assents or dissents on the postal ballot to the Company with a request to the Members to send their communications within thirty days from the date of dispatch of notice.

14.17

14.18

14.19

The Company shall also follow such procedure, for conducting vote by postal ballot and for ascertaining the assent or dissent, as may be prescribed by the Companies Act and the relevant Rules made thereunder. The chairman of any Meeting shall be the sole judge of the validity of every vote tendered at such Meeting. The chairman present at the taking of a poll shall be the sole judge of the validity of every vote tendered at such poll. MINUTES

14.20

XV.

Article 15 provides that 15.1 The Board shall respectively cause minutes of all proceedings of General Meetings and of all proceedings at meetings of the Board or of committee of the Board to be duly entered in Books to be maintained for that purpose in accordance with Section 193 of the Companies Act. The minutes of each meeting shall contain: (a) (b) The fair and correct summary of the proceedings thereat Each page of every such book shall be initialed or signed and the last page of the record of proceedings of such meeting in such Books shall be dated and signed by the chairman of the same meeting or in the event of the death or liability of that chairman within that period, by a Director duly authorised by the Board for the purpose. In no case the minutes of proceedings of a meeting shall be attached to any such book as aforesaid by pasting or otherwise. The names of the Directors present at the meeting, in case of meeting of the Board or committee of Board. The names of the Directors, if any, dissenting from or not consenting to the resolution, in the case

15.2

(c)

(d)

(e)

473

of each resolution passed at the meeting of Board or committee of Board. (f) (g) (h) All appointments of officers made at any meeting. Any such minutes shall be evidence of the proceedings recorded therein. The Book containing the minutes of proceedings of General Meetings shall be kept at the registered office and shall be open during business hours for such periods not being less in the aggregate than two hours in each day as the Directors determine, to the inspection of any Member without charge.

XVI.

THE BOARD

Article 16 provides that 16.1 Except as otherwise required by the Articles, all resolutions and decisions of the Board shall be by vote of a majority of the Directors present at a duly convened meeting of the Board. Except as otherwise required by the Articles of Association or the Act, any action which can be taken by the Board at a duly convened meeting may also be taken by a resolution by circulation as provided Article 17.6 below. Constitution of the Board (i) Until otherwise determined by a General Meeting of the Company, the number of Directors (excluding debenture and alternate Directors, (if any) shall not be less than three nor more than twelve. Subject to Article 16.5, Mr. Kishore Biyani will be a permanent Director of the Company. Mr. Kishore Biyani will not be liable to retire by rotation notwithstanding anything to the contrary contained in any other clause in the Articles of Association. If at any time the Company obtains any loan or any assistance in connection there with by way of guarantee or otherwise from any person, firm, body corporate, local authority or public body (hereinafter called the institution) or if at any time the Company issues any shares or debentures and enters into any contract or arrangement with the institution, whereby the institution subscribes for or underwrites the issue of the Companys shares or debentures or provides any assistance to the Company in any manner and it is a term of the relative loan, assistance, contract or agreement that the institution shall have the right to appoint one or more directors to the Board, subject to the terms and conditions of such loan, assistance, contract or arrangement, the institution shall be entitled to appoint one or more director or directors, as the case may be, to the Board and to remove from office any director so appointed and to appoint another in his place or in the place of the director so appointed who resigns or otherwise vacates his office. Any such appointment or removal shall be made in writing and shall be served at the registered office. The Director or Directors so appointed shall not be liable to retire by rotation and shall continue in the office for so long as the relative loan, assistance, contract or arrangement, as the case may be, subsists. If it is provided by the trust deed, securing or otherwise in connection with any issue of debentures of the Company, that any person or persons shall have power to nominate a Director of the Company, then in the case of any and every such issue of debenture, the person or persons having such power may exercise such power from time to time and appoint a Director accordingly. Any director so appointed is herein referred to as Debenture Director. A Debenture Director may be removed from office at any time by the person or persons in whom for the time being is vested the power under which he was appointed and another Director may be appointed in his place. A Debenture Director shall not be liable to retire by rotation and shall continue in office for so long as the debentures are not redeemed. If the Company at any time has a minimum paid up capital of Rupees five hundred lakhs or such

16.2

(ii)

(iii)

(iv)

(v)

474

sum as may be prescribed and at least one thousand or more small shareholders, then the Company may, suo motu or upon requisition of not less than one-tenth of the total number of small shareholders, proceed to appoint a nominee from among the small shareholders as a Director of the Company. The small shareholders director shall before his appointment, file his consent to act as a Director, in writing to the Company and the tenure of such appointment shall be three years at a time without retirement by rotation, but shall be eligible for reappointment for another tenure. He shall, however, not be appointed as Managing Director or whole time director under any circumstances and shall be subject to the same disqualifications and shall vacate his office on the same grounds as are applicable to other Directors, in pursuance of these presents and the subject to the provisions of the Act. The Company shall follow such rules as may be prescribed by the Central Government in this behalf. No small shareholders director appointed in accordance with the provisions of this Article shall hold office at the same time as small shareholders director in more than two companies. Provided that the number of Directors liable to retire by rotation shall not be less than two-thirds of the total number of Directors. (vi) In case the Company obtains any loans/other facilities from any financial institution(s) and it a term thereof that the said financial institutions shall have a right to nominate one or more Directors, then subject to such terms and conditions as may be agreed upon, the said financial institution(s) shall be entitled to nominate one or more Directors as the case may be, on the Board, and to remove from office any such Directors so appointed, and to nominate another in his place or in place of the Director so appointed who resigns or otherwise vacates his office. Any Director so appointed shall not be liable to retire by rotation. Any such nomination shall be in writing and shall be signed by the authority so appointing or by the person duly authorised by it, and shall be served at the registered office.

16.3

Additional Directors Subject to Applicable Law and these Articles, the Board shall have power, at any time and from time to time, to appoint any Person as a Director as an addition to the Board, but so that the total number of Directors shall not, at any time exceed the maximum number fixed by these Articles. Any Director so appointed shall hold office only until the next Annual General Meeting of the Company but shall be eligible for re-election at such Meeting. Alternate Directors If any Director is reasonably expected to be or is absent for a period of not less than three calendar months from the state in India where the meetings of the Board are ordinarily held, at the request of the shareholder who has nominated such Director and failing such request from such shareholder, at the request of such Director, the Board shall, at a meeting of the Board or by circulation of a written resolution of the Board in accordance with Applicable Law, appoint, subject to Section 313 of the Companies Act, an Individual as an alternate Director to such Director (the Alternate Director). The Alternate Director shall be an Individual, and the shareholders shall cause their nominees on the Board to approve the appointment of such Individual as an Alternate Director. An Alternate Director so appointed shall vacate office if and when the absentee Director returns to the state in which meeting of the Board are ordinarily held or the absentee Director vacates office as a Director Removal of Directors (i) The office of a Director shall ipso facto be vacated if: (a) he fails to obtain within two months after appointment as director, or at any time thereafter ceases to hold, the share qualification, if any, necessary for his appointment; or he is found to be unsound mind by a court of competent jurisdiction; or he has applied to be adjudicated as an insolvent and his application is pending; or

16.4

16.5

(b) (c)

475

(d) (e)

he is adjudged insolvent; or he is convicted by a court in India of any offence involving moral turpitude and is sentenced in respect thereof to imprisonment for not less than six months; or he fails to pay any call in respect of shares of the Company held by him, whether alone or jointly with others, within six months from the last date fixed for the payment of the call; or he absents from three consecutive meetings of the Board or from all meetings of the Board for a continuous period of three months, whichever is the longer, without obtaining leave of absence from the Board; or he whether by himself or by any person for his benefit or on his account, or any firm of which he is a partner or any private company of which he is a director, accepts a loan, or any guarantee or security for a loan, from the Company in contravention of the provisions of the Act; or he acts in contravention of any of the provisions of the Act; or he has been disqualified by an order of a court of competent jurisdiction under the provisions of the Act; or by notice in writing to the Company that he resigns his office; or any office or place of profit under the Company or under any subsidiary of the Company is held in contravention of Section 314 of the Companies Act and by operation of that section he is deemed to vacate the office.

(f)

(g)

(h)

(i) (j)

(k) (l)

(ii)

Notwithstanding any matter or thing in Article 16.5 (i) (d), (e) and (j), the disqualification referred to in those sub-clauses shall not take effect: (a) (b) for thirty days from the date of adjudication sentence or order; or where an appeal or petition is preferred, within the thirty days aforesaid against the adjudication, sentence or conviction resulting in the sentence, or order until the expiry of seven days from the date on which such appeal or petition is disposed of; or where within the seven days aforesaid any further appeal or petition is preferred in respect of the adjudication, sentence, conviction or order, and the appeal or petition, if allowed, would result in the removal of the disqualification until such further appeal or petition is disposed of.

(c)

(iii)

Each of the shareholders having the right under these Articles to appoint a nominee Director shall be entitled to require removal of any or all of its nominee Directors on the Board and to have another or others of its choice nominated for appointment in the place of such removed Directors. For effecting the removal of any of its nominee Directors by a shareholder, such shareholder shall, only by written instructions addressed to the Board and other shareholders, duly signed by an authorised representative of such shareholder, requisition a General Meeting of the Company, and upon receipt of such notice, the Board shall promptly convene a General Meeting of the Company for the removal of such nominee Director.

16.6

Remuneration Subject to Applicable Law and these Articles, such of the Directors, as the Board may decide, may be paid such remuneration as may be decided by the Board for services rendered. Such remuneration may be either a fixed salary or a percentage of net profits or partly in one form and partly in

476

the other and may also provide for perquisites to the Directors like food, medical benefit, club & school fees, etc. Further, the non-executive Directors may be paid sitting fees for attending the meetings of the Board or any committee thereof, as may be decided by the Board, for services rendered. In addition to the above remuneration and perquisites payable to them the Directors may be paid all travelling, hotel and other expenses actually incurred by them in connection with their travel from and to their usual residence or from any other place where they might be present at the relevant time to attend the meeting of the Board of Directors or any committee thereof or to attend to some other business of the Company. 16.7 The continuing Directors may, notwithstanding any vacancy in the Board but so long as their number is not reduced below the number fixed as the necessary quorum for a meeting, increase the number of Directors or for the purpose of summoning a General Meeting of the Company, but for no other purpose. Casual Vacancies Any casual vacancies occurring on the Board, including, but without limitation, as a result of death, resignation, removal or incapacity of any members of the Board, shall be filled by the Board at a meeting in accordance with Applicable Law, in accordance with the nomination made by the concerned shareholder. The Individual so appointed to fill such vacancy shall be an Individual nominated by the shareholder that had nominated the Director whose position is to be filled, and such Individual shall hold office until the date on which the Director in whose vacancy he is appointed would have held office had the vacancy not occurred. MEETINGS OF THE BOARD

16.8

XVII.

Article 17 provides that 17.1 Meetings of Directors The Directors shall meet at least once in every three months for the despatch of business and may adjourn and otherwise regulate their meetings and proceedings as they deem fit, provided that at least four such meetings shall be held in a year. Notice Notice of every meeting of the Board of Directors shall be given in writing to every Director for the time being in India, and at his usual address in India, to every other Director. Meeting through video-conferencing or tele-conferencing Subject to applicable provisions of the Companies Act or any other Applicable Law, the Company shall have the power to hold a meeting of the Board, and any committees thereof, through video-conferencing or tele-conferencing. Quorum for Board Meeting No business shall be transacted at any Board meeting unless a quorum is present at the meeting. In the first instance, the quorum for meetings of the Board shall be at least one- third of the Board, subject to Section 287 of the Companies Act. If within half an hour from the time appointed for a meeting, a quorum as aforesaid is not present, the meeting shall stand adjourned to the same day in the next week at the same time and place or to such other later day and at such other time and place as the chairman may determine. If at such adjourned meeting also, a quorum is not present, the meeting shall stand adjourned for a further half an hour and if the quorum as aforesaid is still not present but the Directors present are at least one third of the Board, they shall constitute a quorum. Voting Except as otherwise required by these Articles or the Companies Act, all resolutions and decisions of the Board shall be by vote of a majority of the Directors present at a duly convened meeting of the Board. Except as otherwise required by these Articles or the Companies Act, any action which can be taken by the Board at a duly convened meeting may also be taken by a resolution by circulation as provided in Article 17.6 below. Except the chairman, no Director shall have a second or a casting vote. Board Resolutions by Circulation Subject to Applicable Law, a written resolution that has been circulated in draft to all Directors (together with the necessary documents, if any) and signed by a majority of Directors shall be a valid and effectual as if it is a resolution passed at a duly convened Board meeting. For the purposes of this Article signed shall include signature transmitted through facsimile.

17.2

17.3

17.4

17.5

17.6

477

17.7

Powers of the Board The property, business and affairs of the Company shall be managed exclusively under the supervision and direction of the Board save and except as the Applicable Law and these Articles may otherwise provide or allocate responsibility for any matter to any shareholder or Director or any other Person. The Board may exercise all such powers of the Company and have such authority and do all such lawful acts and things as are permitted by Applicable Law and the Companys Memorandum of Association and these Articles. The Board shall exercise the following powers on behalf of the Company only by means of resolutions passed at meetings of the Board:(i) (ii) (iii) (iv) the power to make calls on shareholders in respect to money unpaid on their shares. the power to issue Debentures. the power to borrow moneys otherwise than on Debentures. the power to make loans.

The Board may, from time to time and subject to the restrictions contained in Section 292 of the Act, delegate to a committee or committees consisting of one or more Directors, or to such managers, secretaries, agents, officers, assistants and other employees or other Persons as it may deem fit, any of the powers, authorities and discretion for the time being vested in the Directors and may, at its own discretion, revoke such powers, authorities and discretions. Subject to provision of these Articles all deeds agreements and documents and all cheques, promissory notes, drafts, hundies, bills of exchange and other negotiable instruments and all receipts for moneys paid to the Company shall be signed, drawn, accepted or endorsed by the Persons authorised by the Board in this behalf. Subject to the provisions of Sections 297 and 299 of the Act, no Director shall be disqualified, by virtue of his office, for Contracting with the Company, either as vendor or purchaser or otherwise, nor shall any Contract or arrangement entered into by or on behalf of the Company with a Director or any Company or partnership firm in which a Director is a member or otherwise interested be avoided nor shall any Director so Contracting or being such member or so interested be liable to account to the Company for any profit realized from any such Contract or any arrangement by reason only of such Director holding that office or of the fiduciary relationship thereby established, provided that he shall disclose the nature of his interest at the meeting of the Board at which the Contract or arrangement is determined, if his interest then exists or in any other case at the first meeting of Board after the acquisition of his interest. 17.8 Notice By Interested Director A general notice that the Director is a member of a specified firm or company shall, as regards any such transaction be sufficient disclosure under this article and after such general notice it shall not be necessary for the interested Director to give any special notice relating to any particular transaction with such firm or company.

XVIII. CHAIRMAN Article 18 provides that 18.1 The Board shall appoint a chairman of its meetings and determine the period for which he is to hold office. If no chairman is appointed, or if at any meeting of the Board the chairman is not present within five minutes after the time appointed, for holding the same, the Directors present shall choose some one of their member to be the chairman of such meeting.

478

XIX.

MANAGING DIRECTOR AND WHOLETIME DIRECTORS

Article 19 provides that 19.1 Subject to Applicable Law and provisions hereof, the Board may, appoint one or more Directors as the Managing Director (by whatever name called) for the management of the Companys affairs, for such period and on such terms as it deems fit. His/their appointment shall be automatically terminated if he/they cease to be Director/Directors. His/Their remuneration shall be decided by the Board from time to time. The Managing Director shall be responsible for the conduct of the day-to-day management, business and affairs of the Company. The Managing Director shall undertake the management of the Company and perform all the administrative functions and other duties of the Company necessary for the effective transaction of its business with full powers to do all acts, matters and things deemed necessary, proper and expedient thereof and generally to exercise all the power and authorities of the Company except such of them as by the Act or any statutory modifications thereof for the time being in force or by these presents are or may be expressly directed to be exercised by the Company in a General Meeting or by the Board, provided that on subsequent regulation it shall not invalidate any prior act of the Managing Director which would have been valid if such regulation had not been made. The Managing Director shall be delegated by the Board adequate power and authority to undertake, conduct and carry on the day-to-day management, Business and affairs of Company. The Managing Director shall report to and function subject to the supervision, direction and Control of the Board. The Wholetime Directors shall act subject to the direction, supervision and control of the Board and shall report to the Managing Director. Their powers and duties shall be determined from time to time by resolution of the Board. The term of office of the Managing Director and the Wholetime Directors shall be determined by a resolution of the Board but in no event shall the term be longer than five years, subject however, to renewal at the end of each such term. Subject to Section 292 of the Act, and these Articles the Board may entrust to and confer upon the Managing Director any of powers exercisable by them upon such terms and conditions and with such restrictions as they may think fit and either collaterally with or to the exclusion of their own powers and may, from time to time, revoke, withdraw, alter, or vary all or any of such powers. The Managing Director shall have the following powers exercisable under the superintendence and Control of the Board until otherwise decided by the Company in a General Meeting. (i) To purchase or otherwise acquire for the Company any property rights or privileges which the Company is authorized to acquire and to sell, let exchange or otherwise dispose off or deal with all or any part of the property rights or privileges of the Company at such price and for such consideration and on such terms and conditions as he may deem expedient. To enter into, carryout, rescind or vary all financial arrangement with banks, Persons, companies, corporations or other bodies for or in connection with the Business of the Company. Subject to the limitations laid down by Board under Sections 58A and 292 of the Act, to raise or borrow, from time to time and at his discretion, any sums of money or make any arrangements for finance for the purpose of the Company and to secure the payment of, such sum or sums in such manner and upon such terms and conditions in all respects as he may think fit and in particular by making, drawing, accepting or endorsing on behalf of the Company any promissory notes or bills of exchange or by issuing receipts of the Company or by giving any security of the Company or by creating mortgage or charge overall or any part of the property of the Company. To appoint from time to time and at his discretion, for the purpose of the, Company, managers, secretaries, agents, experts and other officers, clerks, servants and other employees of the

19.2

19.3

19.4

19.5

19.6

(ii)

(iii)

(iv)

479

Company on such terms and conditions as he may deem expedient and to determine their powers and duties and at his discretion to terminate the services of any one or more of them as he may deem expedient. (v) To institute, defend, compromise, withdraw or abandon any legal proceedings by or against the Company or otherwise concerning the affairs of the Company and to act on behalf of the Company in all matters relating to any governmental agency or authority including those relating to taxation, licensing, excise and customs and in matters pertaining to the insolvency or liquidation and to apply for and obtain letters of administration, with or without a will, to the estate of Persons with whom the Company shall have dealings. To make, draw, sign, accept, endorse, negotiate and otherwise execute on behalf of the Company all cheques, promissory notes, drafts, pay orders, bills of exchange, bills of lading and other documents of titles and securities including securities of Government of India and other promissory notes, Contracts transfer deeds and other instruments as shall be necessary in his opinion for carrying on the Business of the Company. Subject to the over all limit fixed by the Board under Section 292 of the Act, to invest and deal with the moneys of the Company not immediately required for the purposes thereof in such securities or investments and in such manner as he thinks fit and from time to time, to vary or realize or otherwise deal, with such securities and investments. To negotiate and enter into any Contract and execute, rescind or vary all such Contracts and do all acts, deeds and things in the name and on behalf of the aforesaid or otherwise for the Business of the Company.

(vi)

(vii)

(viii)

XX.

BORROWING POWERS

Article 20 provides that 20.1 Subject to Sections 58A and 292 and any other applicable provisions of the Companies Act or other Applicable Law and these Articles, the Board may from time to time guarantee, raise or borrow any sums of money for and on behalf of the Company from the Members or from other Persons, companies or banks or financial institutions, or the Directors may themselves advance money to the Company on such terms and conditions as may be approved by the Board, provided that the Board shall not without the sanction of the Company in a General Meeting borrow any sum of money which together with money borrowed by the Company (apart from temporary loans obtained from the Companys bankers in the ordinary course of business) exceed the aggregate for the time being of the Paid Up Capital of the Company and its free reserves, that is to say, reserves not set aside for any specific purpose. Subject to the provisions of Applicable Law and these Articles, the Board may from time to time secure the payment of such money in such manner and upon such terms and conditions as it thinks fit and in particular by the issue of Debentures or bonds of the Company or by mortgage or charge on all or part of the properties of the Company. Any Debentures, Debenture stock or other securities may be issued at a discount, premium or otherwise and may be issued on the condition that they shall be convertible into shares of any denomination and with any privileges and conditions as to redemption, surrender, drawing, allotment of shares, attending (but not voting) the General Meeting, appointment of Directors and otherwise. Debentures with a right of conversion into or allotment of shares shall be issued only with the consent of the Company in the General Meeting by a special resolution.} Save as provided in Section 108 of the Companies Act, no transfer of debentures shall be registered unless a proper instrument of transfer duly stamped and executed by the transferor and transferee has been delivered to the Company together with the certificate or certificates of the Debentures.

20.2

20.3

20.4

480

20.5

If the Board refuses to register the transfer of any debentures, the Company shall, within one month from the date on which the instrument of transfer was lodged with the Company, send to the transferee and to the transferor the notice of such refusal. The Board shall cause a proper register to be kept in accordance with the provisions of Section 143 of the Companies Act, of all mortgages, debentures and charges specifically affecting the property of the Company, and shall cause the requirements of Sections 118 and 125 and 127 to 144, both inclusive of the Companies Act in that behalf to be duly complied with by the Board. The Company shall, if at any time it issues debentures, keep the register and index of debenture holders in accordance with Section 152 of the Act. The Company shall have the power to keep in any state or country outside India a branch register of debenture-holders resident in that state or country. DIVIDENDS AND RESERVES

20.6

20.7

XXI.

Article 21 provides that 21.1 The profits of the Company, subject to any special rights relating thereto created or authorized to be created by these Articles, and subject to the provisions of these Articles shall be divisible among the Members in proportion to the amount of capital paid-up on the shares held by them respectively. Subject to the provisions of these Articles, the Company in General Meeting may declare dividends but no dividend shall exceed the amount recommended by the Board. However, the Company in a General Meeting may declare a smaller dividend. Any General Meeting declaring a dividend may make a call on the Members of such amount as is decided at such Meeting. If the call on each Member does not exceed the dividend payable to him and the call is made payable at the same time as the dividend, the dividend may, if so arranged between the Company and the Member, be set off against the call. No dividends shall be paid otherwise than in cash or out of the profits of the year or any other undistributed profits of earlier years and no dividends shall carry interest as against the Company. The declaration of the Board of Directors as to the amount of the profits of the Company shall be conclusive. Subject to the provisions of these Articles, the Board of Directors may, from time to time, pay to Members such interim dividends as appear to be justified by the profits of the Company. (i) Subject to the rights of Persons if any, entitled to shares with special rights as to dividends, it shall be declared and paid according to the amounts paid or credited as paid on the shares in respect whereof the dividends are paid. No amount paid or credited as paid on shares in advance of calls shall be treated for the purposes of this Article as paid on the share. All dividends shall be apportioned and paid proportionately to the amounts paid or credited as paid on the shares during any portion or portions of the period in respect of which the dividends is paid but if any share is issued on terms providing that it shall rank for dividends as from a particular date, such share shall rank for dividend accordingly.

21.2

21.3

21.4

21.5

(ii)

(iii)

21.6

The Board may, from time to time, before recommending any dividend, set apart such portion of the profits of the Company as they think fit as a reserve fund, equalization fund or depreciation fund to meet contingencies or for the liquidation of any debentures, debts or other liabilities of the Company or for repairing, improving and maintaining any of the property of the Company, and for such other purposes of the Company as the Board in its absolute discretion may think prudent, and may invest the sum so set aside in such manner as it may think fit.

481

21.7

The Board of Directors may also carry forward any profits which it may think prudent not to divide without setting them aside as a reserve. The Board of Directors may retain any dividend or other moneys payable in respect of a share on which the Company has a lien, and may apply the same in or towards satisfaction of the debts, liabilities or engagements in respect of which the lien exists. If the Company has not provided for depreciation for any previous Financial Year or years, it shall, before declaring or paying a dividend for any Financial Year, provide for such depreciation out of the profits of the Financial Year or years. If the Company has incurred any loss in any previous Financial Year or years, the amount of the loss or any amount which is equal to the amount provided for depreciation for that year or those years whichever is less, shall be set off against the profits or the Company in the year for which the dividend is proposed to be declared or paid or against the profits of the Company for any previous Financial Year or years arrived at in both cases after providing for depreciation in accordance with the provisions of sub-section (2) of Section 205 of the Companies Act, or against both. Where capital is paid in advance of calls, such capital may carry interest but shall not in respect thereof confer a right to dividend or participate in profits. A transfer of shares shall not pass the right to any dividend thereon before the registration of the transfer. Any dividend, interest or other moneys payable in cash in respect of shares may be paid by cheque or warrant or by a pay order or receipt having the force of a cheque or warrant, sent through internationally or nationally recognized courier, to the registered address of the Members or Person entitled or in case of joint shareholders to the registered address of that one of the joint shareholders who is first named on the register of Members or to such Person and to such address as the shareholders of the joint shareholders may in writing direct. Every such cheque or warrant shall be made payable to the order of the Person to whom it is sent. The Company shall not be liable or responsible for any cheque warrant, pay order or receipt lost in transmission or for any cheque or warrant or the forged signature of any pay order or receipt or the fraudulent recovery of the dividend by any other means. Any one of two or more joint holders of a share may give effectual receipts for any dividends or other moneys payable in respect of such share. No Member shall be entitled to receive payments of any interest or dividend in respect of his share or shares, while any money may be due or owing from him to the Company in respect of such share or shares or otherwise howsoever, either alone or jointly with any other Person or Persons and the Board may deduct from the interest or dividend payable to any Member all sums of money so due from him to the Company. Where the Company has declared a dividend which has not been paid or the dividend warrant in respect thereof has not been posted within 30 days from the date of declaration to any shareholder entitled to the payment of the dividend the Company shall within seven days from the date of expiry of the said period of 30 days, open a special account in that behalf in any scheduled bank called Unpaid Dividend of Future Venture India Limited and transfer to the said account, the total amount of dividend which remains unpaid or in relation to which no dividend warrant has been posted. Any money transferred to the unpaid dividend account of the Company which remains unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company to the fund known as the Investor Education and Protection Fund, established under Section 205C of the Companies Act. No unclaimed or unpaid dividend shall be forfeited by the Board.

21.8

21.8

21.9

21.10

21.11 21.12

21.13

21.14

21.15

21.16

21.17

482

XXII.

CAPITALISATION OF PROFITS

Article 22 provides that 22.1. (i) The Company in General Meeting may, upon the recommendation of the Board, resolve that it is desirable to capitalize whole or any part of the amount for the time being standing to the credit of any of the Companys reserve account or to credit to the profit and loss account, and available for dividend or representing premiums received on the issue of shares and standing to the credit of the Securities Premium Account be capitalised and distributed among such of the Members as would be entitled to receive the same if distributed by way of dividend in the same proportions on the footing that they become entitled thereto as capital, and that all or any part of such capitalised fund be applied on behalf of such Members in paying up in full any unissued shares or debentures of the Company, which shall be distributed accordingly or in or towards payment of the uncalled liability on any issued shares, so that such distribution or payment shall be accepted by such Members in full satisfaction of their interest in the said capitalised sum. Provided that any sum standing to the credit of a Securities Premium Account or a Capital Redemption Reserve Fund may, in accordance with the applicable provisions of the Companies Act, for the purposes of these Articles, only be applied in the paying up of unissued shares to be issued to Members as fully paid bonus shares. The sum aforesaid shall not be paid in cash but shall be applied either in or towards: (a) (b) Paying up any amount for the time being unpaid on any shares held by such Members; Paying up in full unissued shares of the Company to be allotted, distributed and credited as fully paid up; Partly in the way specified in sub-clause (a) and partly in the way specified in sub-clause (b) above.

(ii)

(c)

(iii)

The Board shall give effect to the resolution passed by the Company in pursuance of this Article.

The Company in a General Meeting may resolve that any surplus money arising from the realization of any capital asset of the Company or any investments representing the same, or any other undistributed profits of the Company, be distributed among the Members. 22.2. The Board shall have power to: (a) make such provision for the issue of fractional certificates or for payment in cash or otherwise as they think fit, in the event shares become distributable in fractions and also: accept authorization of any Person to enter on behalf of all the Members entitled thereto, into an agreement with the Company providing for allotment to them respectively as fully paid up of any further shares to which they may be entitled upon such capitalisation or as the case may require for the paying up by the Company on their behalf by the application thereto, their respective proportions of the profits resolved to be capitalised of the amounts or any part of the amounts remaining unpaid on these existing shares. An agreement as such shall be effective and binding on all such Members.

(b)

(c)

XXIII. ACCOUNTS Article 23 provides that 23.1 The Board shall cause proper Books of accounts to be maintained under section 209 of the Companies Act.

483

23.2

The Board shall lay before each Annual General Meeting duly audited profit and loss account for the Financial Year and the balance sheet made upto the end of that year. The Directors shall, if they consider it to be necessary and in the interest of the Company, be entitled to amend the Audited Accounts of the Company, of any Financial Year which have been laid before the Company in General Meeting. The amendments to the Accounts effected by the Directors in pursuant of these Articles shall be placed before the Members in the General Meeting for their consideration and approval.

23.3

XXIV. AUDIT Article 24 provides that 24.1 The balance sheet and profit and loss account of the Company will be audited once a year by a qualified auditor for certification of correctness as per the provisions of the Companies Act. Statutory auditors shall be appointed and their rights and duties regulated in accordance with the provisions of the Act. The remuneration of the auditors shall be fixed by the Company in a General Meeting, or by the Board, if so decided at the General Meeting. Any casual vacancy in the office of the statutory auditors may be filled by the Company in a General Meeting or by the Board, if so decided at the General Meeting. INSPECTION

24.2

24.3

24.4

XXV.

Article 25 provides that 25.1 25.2 The Books shall be open for inspection by any Director during business hours. No Member (not being a Director) shall have any right to inspect any Books or accounts of the Company except as conferred by law or as authorized by the Board or by the Company in its General Meeting. The Board of Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the Books shall be open to the inspection of Members, not being Directors. Subject to the provisions of Section 209-A of the Companies Act, any Person, whether a Member or not, is entitled to inspect any register, return certificate, deed instrument or document required to be maintained by the Company, on his giving notice in writing of his intention, of not less than twenty four hours, be permitted to inspect the same during business hours. Subject to the provisions of Section 154(1) of the Companies Act, close the register of Members or the register of debenture holders, as the case may be.

25.3

25.4

25.5

XXVI. COMMON SEAL Article 26 provides that 26.1 The Board shall provide a common seal for the purpose of the Company, and shall have power from time to destroy the same and substitute a new seal in lieu thereof, and the Board shall provide for the safe custody of the seal for the time being, and the seal shall never be used except by the authority of a resolution of the Board or a committee of the Board.

484

26.2

Every deed or other instrument to which the seal of the Company is required to be affixed shall be signed by a Director and either by the Company Secretary or by any other Person authorized by the Board of Directors; provided nevertheless that certificates of shares shall be signed in accordance with the Companies (Issue of share certificate) Rules, 1960 and certificates of debentures may be signed by one Director, whose signatures on such certificates of shares or debentures, when so authorized by the Board may be affixed and reproduced by mechanical means. Save as otherwise provided in the Companies Act or in these Articles, a document or any resolution passed by the Company or the board and any books of the Company requiring authentication by the Company many be signed by a Director or the Company Secretary or an authorised officer duly appointed for this purpose by the Board or a committee of the Board, and need not be under the Companys Seal.

26.3

XXVII. NOTICE Article 27 provides that 27.1 Notice of documents may be given or served by the Company to any Member either personally or by sending it by post to him at his registered address or, if it has no registered address in India, at the address, if any which is supplied by him to the Company for the purpose of giving notice to him. All notices and communications shall be deemed received upon: (a) actual receipt thereof by the addressee; (b) actual delivery thereof to the appropriate address; or (c) in the case of a facsimile transmission, upon transmission thereof by the sender and the issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error. The Company shall comply with the provisions of Sections 51 and 53 of the Act.

27.2

XXVIII. WINDING UP Article 28 provides that 28.1 If the Company shall be wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by the Companies Act, divide among the Members, in specie or kind the whole or any part of the assets of the Company, whether they consist of property of the same kind or not. For the purposes aforesaid, the liquidator may set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Members or different classes of Members. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the contributories as the liquidator with the like sanction, shall think fit, but such that no Member shall be compelled to accept any share or other securities where on there is any liability.

28.2

28.3

XXIX. CONFIDENTIALITY Article 29 provides that 29.1 Subject to the provisions of the Act and these Articles, any Chairman, Director, Auditor, Managing Director or other officer of the Company and any trustee for the time being acting in relation to any affairs of the Company or their heirs and executors shall be entitled, if such Person thinks fit, to decline to answer any question by third parties concerning the business of the Company on the ground that the answer to such question would disclose or tend to disclose the secret of the Company. No Person (not being a Director) shall be entitled to enter upon the property of the Company or to inspect or examine the Companys premises or properties of the Company without the permission of the Board or to discover any information respecting any details of the trading of the Company or of any matter which is

29.2

485

or may be in the nature of a trade secret, mystery of trade or secret process, or of any matter whatsoever which may relate to the business of the Company, which in the opinion of the Board may not be in the interest of the Company to communicate. XXX. INDEMNIFICATION

Article 30 provides that 30.1 Subject to Section 201 and any other applicable provisions of the Companies Act, every Chairman, Director, Auditor, Chairman/Managing Director or other officer of the Company and any trustees for the time being acting in relation to any affairs of the Company and their heirs and executors (Indemnified Person) shall be indemnified out of the funds of the Company against all bona fide suits, proceedings, costs, charges, losses, damages or other liability that has been or may be incurred by such Indemnified Person, in the execution of their respective duties in their respective offices, except in relation to any acts of wilful neglect or default. LAW AND JURISDICTION These Articles shall be governed by, interpreted and construed in accordance with the substantive laws of India, without regard to the conflict of laws provisions thereof. Unless otherwise provided in the Act or any law for the time being in force, only courts in Mumbai shall have exclusive jurisdiction in all matters.

XXXI. 31.1

31.2

486

SECTION VIII: OTHER INFORMATION MATERIAL CONTRACTS AND DOCUMENTS FOR INSPECTION Copies of the following contracts which have been entered or are to be entered into by the Company (not being contracts entered into in the ordinary course of business carried on by the Company or contracts entered into more than two years before the date of this Prospectus) which are or may be deemed material have been attached to the copy of this Prospectus delivered to the Registrar of Companies, Maharashtra at Mumbai for registration. Copies of the abovementioned contracts and also the documents for inspection referred to hereunder, may be inspected at the Registered Office from 10.00 a.m. to 4.00 p.m. on working days from the date of this Prospectus until the date of closure of the Issue. A. Material Contracts to the Issue 1. Letter of Engagement dated August 12, 2010 for the appointment of Enam Securities Limited, JM Financial Consultants Private Limited and Kotak Mahindra Capital Company Limited as BRLMs. Letter of Engagement dated August 12, 2010 for the appointment of Edelweiss Capital Limited and ICICI Securities Limited as CBRLMs. Issue Agreement dated August 13, 2010 between the Company, the BRLMs and the CBRLMs. Agreement dated August 10, 2010 among the Company and the Registrar to the Issue. Escrow Agreement dated April 20, 2011 among the Company, BRLMs, CBRLMs, Escrow Collection Bank and the Registrar to the Issue. Underwriting Agreement dated May 3, 2011 among the Company, BRLMs, CBRLMs and the Syndicate Member. Syndicate Agreement dated April 20, 2011 among the Company, BRLMs, CBRLMs, the Syndicate Member and the Registrar to the Issue. Monitoring Agency Agreement dated April 15, 2011 between the Company and Allahabad Bank.

2.

3. 4. 5.

6.

7.

8. B.

Material Documents for Inspection 1. Certified copies of the updated Memorandum and Articles of Association of the Company as amended from time to time. Certificate of Incorporation of the Company, as amended. Copies of annual reports of the Company for last five years. Board and the shareholder resolutions of the Company authorising the Issue. General powers of attorney executed by the Directors in favour of person(s) for signing and making necessary changes to this Prospectus and other related documents. The report of Deloitte Haskins & Sells, Chartered Accountant, the statutory auditors, dated March 26, 2011 prepared as per Indian GAAP and mentioned in this Prospectus together with copies of balance sheet and profit and loss account of the Company referred to therein.

2. 3. 4. 5.

6.

487

7.

Consent from the Auditors for inclusion of their names as the statutory auditors and of their reports on accounts in the form and context in which they appear in this Prospectus. The Tax Benefit Report dated May 3, 2011 from the Companys statutory auditors. Consents of Bankers to the Company, the BRLMs, the CBRLMs, Syndicate Members, Registrar to the Issue, Banker to the Issue, Legal Counsel to the Issue, Directors of the Company, Monitoring Agency and Company Secretary and Compliance Officer, as referred to, in their respective capacities. Consent of Credit Analysis and Research Limited, a SEBI registered IPO grading agency, for inclusion of its grading of the Issue in the Prospectus. In-principle listing approval dated September 30, 2010 and October 15, 2010 from the BSE and the NSE respectively. Agreement between NSDL, the Company and the Registrar to the Issue dated March 13, 2008. Agreement between CDSL, the Company and the Registrar to the Issue dated March 14, 2008. Due diligence certificates dated August 13, 2010 to SEBI from Enam Securities Private Limited, JM Financial Consultants Private Limited and Kotak Mahindra Capital Company Limited. Consulting and Advisory Services Agreement dated February 20, 2008 between the Company and Future Capital Holdings Limited, as amended through amendment agreement dated August 10, 2010. Mentoring Services Agreement dated August 10, 2010 between the Company and PRIL. Master License Agreement between the Company and Future Ideas Company Limited dated August 10, 2010. Master Service Agreement on January 25, 2011 between the Company and Future Corporate Resources Limited.

8. 9.

10.

11.

12. 13. 14.

15.

16. 17.

18.

19.

Securities Purchase cum Shareholders Agreement dated on March 27, 2008 between the Company, Godrej Agrovet Limited and Aadhaar Retailing Limited. Investment Agreement dated November 30, 2008 between the Company, Mukesh Sawlani, Anita P Dongre and Meena Y Sehra and AND Designs India Limited. Securities Purchase Agreements entered by the Company with PIL Industries Limited (formerly known as Pantaloon Industries Limited) and PFH Entertainment Limited. Share Subscription Agreement and the Shareholders Agreement, both dated December 1, 2008, between the Company and the other shareholders of Indus Tree Crafts Private Limited. Subscription cum Shareholders agreement dated November 5, 2009 has been executed between the Company and Hidesign India Private Limited and Holii Accessories Private Limited.

20.

21.

22.

23.

24.

Share purchase agreement dated February 15, 2010 between Indivision India Partners and the Company along with the Deed of Adherence dated February 15, 2010.

488

25.

Share Warrant Subscription Agreement dated March 25, 2009 among Ajay Gupta and Indivision India Partners and Capital Foods Exportts Private Limited. Shareholders agreement dated September 12, 2007 entered between Pantaloon Retail (India) Limited and Sachin Ramesh Tendulkar along with the Deed of Adherence dated August 3, 2010 entered between the Company and PRIL.

26.

27.

Securities Purchase Agreement dated October 26, 2007 between the Company and Future Capital Holdings Limited.

28.

Share Purchase Agreement dated November 4, 2010 between the Company, Sanjay Bindra and BIBA Apparels Private Limited.

29.

Share Transfer cum Purchase Agreement dated December 20, 2010 between the Company, Sanjay Bindra, Punita Bindra, Siddharth Bindra, Meena Bindra and BIBA Apparels Private Limited.

30.

Share Subscription Agreement dated March 1, 2011 between the Company, Idream Holdings Private Limited, Shripal Morakhia, Samir Patil and Amar Chitra Katha Private Limited.

31.

Shareholders Agreement dated March 1, 2011 between the Company, Idream Holdings Private Limited, Shripal Morakhia, Samir Patil and Amar Chitra Katha Private Limited. SEBI observation letter no. CFD/DIL/ISSUES/SK/PM/2500/2011 dated January 21, 2011 and the in-seriatim reply to the same dated April 1, 2011.

32.

Any of the contracts or documents mentioned in the Prospectus may be amended or modified at any time if so required in the interest of the Company or if required by the other parties, without reference to the shareholders subject to compliance with the provisions contained in the Companies Act and other relevant statutes.

489

DECLARATION We, hereby declare that all relevant provisions of the Companies Act, 1956 and the guidelines issued by the Government or the regulations issued by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992, as the case may be, have been complied with and no statement made in this Prospectus is contrary to the provisions of the Companies Act, 1956, the Securities and Exchange Board of India Act, 1992 or the Rules made there under or guidelines issued, as the case may be. We further certify that all statements in this Prospectus are true and correct. SIGNED BY THE DIRECTORS OF THE COMPANY

________________________ G.N. Bajpai

Chairman, Non-Executive and Independent Director

_______________________ Kishore Biyani

Managing Director

_______________________ Anil Harish

Non-Executive and Independent Director

_______________________ Anand Balasundaram

Non-Executive and Non-Independent Director

_______________________ Jagdish Shenoy

Non-Executive and Independent Director

____________________________ Gopal Bihani Vice-President, Finance

Date: May 3, 2011 Place: Mumbai

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