DIRECTORS’ REPORT To, The Members, Your Directors have pleasure in presenting the Twenty Seventh Annual Report together with Audited Statement of Accounts of Future Retail Limited for the financial year ended March 31, 2015. REVIEW OF PERFORMANCE This was first full year of performance after realignment of all value retail business under one Company. The Company is now operating in supermarket, home fashion and electronic business which interalia includes formats like Big Bazaar, Food Bazaar, fbb, Food Hall, Home Town and eZone. We are pleased to inform you that the Retail business of the Company has been showing growth trend during the financial year under review. During the year the Company has recorded growth through increase in presence in various cities. Income from operations for the financial year 2014-15, for the year under review was at Rs. 10,341.66 Crore, which was at Rs. 11,577.44 Crore (on 12 months ended March 2014 basis Rs. 9,241.16 Crore) during the financial period of 2013-14. EBIDTA excluding exceptional items, stood at Rs. 1,142.76 Crore during the financial year 2014-15, which was at Rs. 1067.50 Crore (on 12 months ended March 2014 basis Rs. 887.11 Crore) in the previous financial period. PAT for the financial year under review was Rs. 74.06 Crore, which was at Rs. 2.81 Crore (on 12 months ended March 2014 basis Rs. 7.71 Crore) for the preceding financial period. Due to various realignment exercises undertaken by the Company and different duration of the current financial year and previous financial period, the current financial year result is not comparable with the previous financial period result, which was of fifteen months. During the financial year 2014-15, the Company is operating through 11.36 million square feet of retail space, spread over pan India basis. DIVIDEND The Board of Directors of the Company has recommended a dividend of Rs. 0.60 (30%) per equity share (previous financial period Rs. 0.60 (30%) per equity share) and dividend of Rs. 0.64 (32%) per Class B share (Series I) (previous financial period Rs. 0.64 (32%) per Class B Share) for the Financial year ended March 31, 2015. The said dividend shall be subject to the approval of the members at the ensuing annual general meeting. The dividend, if approved by the shareholders in the Annual General meeting shall based on the paid up share capital as at the date of this report, entail a payout of Rs. 29.95 Crore including dividend distribution tax of Rs. 4.99 Crore. The dividend is free of tax in the hands of the shareholders SHARE CAPITAL During the year under review, the Company has issued and allotted 17,26,67,884 Equity Shares and 99,47,227Class B (Series I) Shares of the Company as under: • 2,88,594 Equity Shares were issued and allotted under Employees' Stock Option Scheme - 2012, to the eligible employees of the Company; •1,53,84,615 Equity Shares were issued and allotted to Investor on Preferential basis at a price of Rs. 130 per Equity Share (including share premium of Rs. 128 per Equity Share); • 76,92,307 Equity and 1,34,98,300 Class B (Series I) warrants were issued and allotted at a price of Rs. 130 per Equity Share (including share premium of Rs. 128 per Equity Share) and Rs. 68.69 per Class B (Series I) shares (including share premium of Rs. 66.69 per Class B (Series I) Share) respectively to Future Corporate Resources Limited, a promoter group company of which 76,92,307 Equity Shares were issued and allotted on exercise of option by Future Corporate Resources Limited (FCRL) as equity Warrant holder, at a price of Rs. 130 per Equity Share (including share premium of Rs. 128 per Equity Share). Class B Warrant holder have not exercised option for allotment of Class B (Series I) Shares in the financial year. The option for the same can be exercised till expiry of eighteen months from the date of allotment of Warrants i.e. August 19, 2014. • 14,93,02,369 Equity Shares and 99,47,227 Class B(Series I) Shares were issued and allotted to Shareholders' on Rights basis at as price of Rs. 103 (including share premium of Rs. 101 per Equity Share) and Rs. 50.25 (including share premium of Rs. 48.25 per Class B (Series I) Share). RIGHTS ISSUE During the year under review, your Company issued and allotted 14,93,02,369 Equity Shares of Rs. 2 each at a premium of Rs. 101 per equity share and 99,47,227 Class B (Series I) Shares of Rs. 2 each at a premium of Rs. 48.25, aggregating to Rs. 1589.55 Crore to the existing shareholders of the Company on a rights basis (the "Rights Issue"). The total shares allotted pursuant to the Rights Issue were admitted for listing and trading on BSE Limited and the National Stock Exchange of India Limited with effect from February 11, 2015. Your Directors take this opportunity to thank all the shareholders for their overwhelming response and for the confidence reposed by them in the Company. The issue proceeds are being utilised for the purpose as stated in the Letter of Offer and same is also being reviewed by the monitoring agency appointed for the said purpose. SUBSIDIARY COMPANIES, JOINT VENTURES AND ASSOCIATE COMPANIES SUBSIDIARY COMPANIES (In Alphabetical The Company has following Subsidiaries (including step down subsidiaries), as at the end of financial year ended March 31, 2015. Futurebazaar India Limited Futurebazaar India Limited (FBIL) is set up as the e-Retailing arm of the Future Group for providing on-line shopping experience through e-portal www.futurebazaar.com. Your Company holds 100% in FBIL. FBIL is successfully operating its e-retailing business and during the financial year ended March 31, 2015, it has registered income from operations amounting to Rs. 12.15 Crore and its net loss stood at Rs. 0.41 Crore. Future Media (India) Limited Future Media (India) Limited (FMIL) is the Group's media venture, aimed at creation of media properties in the ambience of consumption and thus offers active engagement to brands and consume. FMIL offers relevant engagement through its media properties like Visual Spaces, Television and Activation. The Company holds equity capital of 93.10% in FMIL however, considering the total capital comprising of convertible preference capital the Company's holding in the total capital of FMIL works out to 35.37%. FMIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2015, FMIL registered income from operations amounting to Rs. 32.79 Crore and the net loss stood at Rs. 2.76 Crore. Future Supply Chain Solutions Limited Future Supply Chain Solutions Limited (FSCSL) is designed to operate in the logistics, transportation, distribution and warehousing space. FSCSL provides solutions in the areas of integrated Supply Chain Management, warehousing, distribution and Multi Modal transportation. Your Company has 70.17% stake in FSCSL. FSCSL has warehousing space of 3.6 million square feet spread over all across India. FSCSL is currently building large scale warehousing facilities and also increasing its presence in 3PL logistics solutions. During the year ended March 31, 2015, FSCSL has registered income from operations amounting to Rs. 407.96 Crore and the earned net profit of Rs. 24.73 Crore. During the year under review, FSC Distribution Services Limited, a 100% subsidiary company of FSCSL was merged with FSCSL with effect from October 05, 2014, with appointed date of April 1,2014. Staples Future Office Products Limited Staples Future Office Products Limited (SFOPL) is designed to capture the consumption space of office supplies, office equipments and products. SFOPL was formed as a Joint Venture between the Company and Staples Asia Investment Limited (a subsidiary of Staples Inc USA). Your Company holds equity capital of 60% in SFOPL however, considering the total capital comprising of convertible preference capital the Company's holding in the total capital of SFOPL works out to 52.17%. During the financial year ended March 31, 2015, SFOPL has registered income from operations amounting to Rs. 80.26 Crore and the net loss stood at Rs. 4.92 Crore. Office Shop Private Limited Office Shop Private Limited (OSPL) was incorporated to deal in the business of distribution services. OSPL is 100% subsidiary of SFOPPL and accordingly, is step down subsidiary of the Company. OSPL has earned revenue of Rs. 51.54 Crore & incurred net loss of Rs. 9.62 Crore during the year ended March 31, 2015. During the year under review, following companies ceased to be subsidiaries and joint venture of the Company. Future Home Retail Limited Future Freshfoods Limited Future Knowledge Services Limited Future Learning and Development Limited Home Solutions Retail (India) Limited Integrated Food Park Private Limited NuZone Ecommerce Infrastructure Limited Winner Sports Limited ASSOCIATES Galaxy Entertainment Corporation Limited Galaxy Entertainment Corporation Limited (GECL) is a leisure and entertainment organization. The company is into operation of family entertainment gaming centers, food courts in shopping malls and restaurants. GECL also undertakes sponsorship contracts. Your Company has 31.55% stake in GECL. During the financial year ended March 31, 2015, GECL has registered income from operations amounting to Rs. 40.42 Crore and the net profit stood at Rs. 2.95 Crore Future E-Commerce Infrastructure Limited Future E-Commerce Infrastructure Limited (FECIL) is to capture the consumption space through the internet, as well as other technology based and digital modes and provide infrastructure services for the same. The Company holds equity capital of 70.43 % however, considering total capital comprising of convertible preference capital the Company's holding in the total capital of FECIL works out to 40.33%. FECIL also has Convertible Preference Shares, which has not yet been converted into equity shares. During the financial year ended March 31, 2015, FECIL registered income from operations amounting to Rs. 11.96 Crore and the net loss stood at Rs. 2.06 Crore. JOINT VENTURES (In Alphabetical Order) Apollo Design Apparel Parks Limited and Goldmohur Design & Apparel Park Limited The Company has entered into joint venture with National Textile Corporation (NTC) for the restructuring and development of the Apollo Mills and Goldmohur Mills situated in Mumbai. For the same two separate SPV companies have been created viz. Apollo Design Apparel Parks Limited (ADAPL) & Goldmohur Design & Apparel Park Limited (GDAPL). The ADAPL & GDAPL would be working for the restructuring and development of the Apollo Mills and Goldmohur Mills respectively as per the memorandum of understanding and other documents signed with NTC. During the financial year ended March 31, 2015 ADAPL registered income from operations amounting to Rs. 257.23 Crore and earned net profit of Rs. 7.21 Crore. Further during the year GDAPL registered income from operations amounting to Rs. 245.91 Crore and earned net profit of Rs. 7.20 Crore. Future Generali India Life Insurance Company Limited Future Generali India Life Insurance Company Limited (FGI-Life) is Company's joint venture in the Life insurance sector. FGI-Life has introduced many insurance products to suit requirements of various categories of customers. During the financial year ended March 31, 2015, FGI-Life has registered income from operations of Rs. 587.83 Crore and net profit of Rs. 0.99 Crore. Future Generali India Insurance Company Limited Future Generali India Insurance Company Limited (FGI-Nonlife) is Company's joint venture in the general insurance sector. FGI-Nonlife has introduced insurance products for various general insurance needs of the different categories of customers. During the financial year ended March 31, 2015, FGI-Nonlife has registered income from operations of Rs. 1079.12 Crore and net profit of Rs. 60.29 Crore. Shendra Advisory Services Private Limited Shendra Advisory Services Private Limited (Shendra) is a SPV with respect to the Company's insurance arm Future Generali India Insurance Company Limited. During the financial year ended March 31, 2015, Shendra has registered income from operations of Rs. 0.02 Crore and net loss of Rs. 0.004 Crore. Sprint Advisory Services Private Limited Sprint Advisory Services Private Limited (Sprint) is a SPV with respect to the Company's insurance arm Future Generali India Life Insurance Company Limited. During the financial year ended March 31, 2015, Sprint has registered income from operations of Rs. 0.02 Crore and net profit of Rs. 0.01 Crore. A report on the performance and financial position of each of the subsidiaries, associates and joint venture companies as per the Companies Act, 2013 is provided as Annexure 1 as AOC-1 to this report forming part of Annual Report. DISCLOSURE REQUIREMENTS Policy for Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information are available on website of the Company at the link: http://www.futureretail.co.in/pdf/UPSI_Code.pdf Policy for CSR Policy is available on website of the Company at the link: http://www.futureretail.co.in/pdf/CSR-Policy.pdf Policy for Code of Conduct is available on website of the Company at the link: http://www.futureretail.co.in/pdf/Code_of_Conduct.pdf Policy for Independent Directors Familiarization is available on website of the Company at the link: http://www.futureretail.co.in/pdf/ID_Familiarization.pdf Policy for Terms and conditions of appointment of Independent Directors is available on website of the Company at the link: http://www.futureretail.co.in/pdf/TC_of_ID.pdf Policy for Material Subsidiary is available on website of the Company at the link: http://www.futureretail.co.in/pdf/Mat_Sub_Policy.pdf Policy for Vigil Mechanism is available on website of the Company at the link: http://www.futureretail.co.in/pdf/Vigil.pdf Policy for Related Party Transaction is available on website of the Company at the link: http://www.futureretail.co.in/pdf/RPT_Policy.pdf The Company has formulated and disseminated a Whistle Blower Policy to provide Vigil Mechanism for employees and directors of the Company to report genuine concerns that could have serious impact on the operations and performance of the business of the Company. This Policy is in compliance of the provisions of Section 177(9) of the Act and the Clause 49 of the Listing Agreements with the Stock Exchanges. NUMBER OF BOARD MEETINGS The Board of Directors met 5 (Five) times during the financial year 2014-15. The details of Board meetings and the attendance of the Directors are provided in the Corporate Governance Report which forms part of the Annual Report. COMMITTEES OF THE BOARD OF DIRECTORS Details of Committees of the Company along with their terms of reference, composition and meetings held during the year, are provided in the Corporate Governance Report, which forms part of the Annual Report. EXTRACT OF ANNUAL RETURN In terms of provisions of Section 92(3) of the Companies Act, 2013, an extract of Annual Return in prescribed format is annexed to this Report as Annexure 11. DECLARATION UNDER SUB-SECTION (6) OF SECTION 149 OF THE COMPANIES ACT, 2013 The Company has received declaration from all the Independent Director(s) of the Company stating that they meet the criteria of independence as provided under sub Section (6) of Section 149 of the Companies Act, 2013 and Clause 49 of the Listing Agreement: a) Mr. S. Doreswamy b) Mr. Anil Harish c) Ms. Bala Deshpande d) Mr. V. K. Chopra PARTICULARS OF LOANS GRANTED, GUARANTEE PROVIDED AND INVESTMENTS MADE PURSUANT TO THE PROVISIONS OF SECTION 186 OF THE COMPANIES ACT, 2013: Details of Loans granted, Guarantee provided and Investment made by the Company which are covered under the provision of Section 186 of the Companies Act, 2013, is provided in note no. 50 of Notes forming part of Standalone Financial Statements. RELATED PARTY TRANSACTIONS All transactions entered into with related parties (as defined under Section 188(3) of the Companies Act, 2013 and Clause 49 of the Listing agreement) during the financial year under review were in the ordinary course of business and on arms length pricing basis. The particulars of contracts or arrangements with related parties are given under Section 188(I) of the Companies Act, 2013. As there were no materially significant transactions with the related parties during the financial year 2014-15, which were in conflict with the interest of the Company and hence, enclosure of Form AOC-2 is not required. RESERVES For the financial year 2014-15, there is Rs. 5091.90 Crore, amount which is proposed to be appropriated towards Reserves. CLAUSE 5A OF THE LISTING AGREEMENT Pursuant to clause 5A.11 of the Listing Agreement, the aggregate number of shareholders is 92 Equity and 84 Class B (Series I) amounting to 92,010 Equity and 9,250 Class B (Series I) outstanding shares which are lying in the Unclaimed Suspense Account as on April 01,2014. There were no shareholders who approached issuer for transfer of shares and to whom shares were transferred from Unclaimed Suspense Account upto March 31, 2015. The total shareholders remains to be 92 Equity and 84 as Class B (Series I) shares 92,010 Equity and 9,250 Class B (Series I) outstanding shares lying in the Unclaimed Suspense Account as on March 31,2015. All the unclaimed shares are credited to a Demat Unclaimed Suspense Account and all the corporate benefits in terms of securities, accruing on these unclaimed shares shall be credited to such account. The Voting rights on these shares shall remain frozen till the rightful owner of such shares claims the shares. Material Changes and Commitments Your Directors further state that there were no material changes have taken place that could have an impact on the financial position of the Company from the date of closure of financial year under review till the date of signing of Accounts, except as discussed about the demerger of the "Retail Undertaking" and transfer to Bharti Retail Limited and vesting of the demerged "Retail Infrastructure Undertaking" of Bharti Retail Limited with the Company. More detail related to the scheme has been given hereunder. FUTURE OUTLOOK The Board of Directors of the Company has approved the composite scheme of arrangement for the consolidation of the retail and retail infrastructure businesses of Bharti Retail Limited (BRL) and the Company. This will be achieved by way of two simultaneous demergers i.e. the FRL Demerger and the BRL Demerger as part of the composite scheme of arrangement. Accordingly, the Retail Business Undertaking of the Company shall stand transferred to and vested in BRL as a going concern and the Retail Infrastructure Undertaking of BRL shall stand transferred to and vested in the Company as a going concern. In consideration for the transfer and vesting of the Retail Business Undertaking of the Company in BRL, BRL shall issue and allot fully paid up equity shares to all the shareholders of FRL (which include holders of equity shares of FRL and holders of equity shares of FRL classified as Class B (Series-I) shares. The shares of BRL are proposed to be listed. Further, in consideration for the transfer and vesting of the Retail Infrastructure Undertaking of BRL in FRL, FRL shall issue and allot fully paid up equity shares to all the existing shareholders of BRL. Both the Companies will be under control of the Future Group. With the above consolidation of the retail and retail infrastructure business in two separate entities, will ensure unlocking of value, attribution of appropriate risk and valuation to the Core Retail Business based on its risk-return profile and cash flows, more focused leadership and dedicated management, greater visibility on the performance of Core Retail Business, segregation of other businesses and activities and other non-core assets from Core Retail Undertaking of FRL and emergence of BRL (to be renamed) as a Core Retail company focusing on in-store retail business. The Company continues to explore possibilities to monetise its non-core retail investments which will help in improving liquidity and net worth position of the Company With improved debt equity ratio, due to increase in net worth of the Company and subsequent reduction of the debts, the Credit Analysis & Research Limited (CARE), has revised its rating as under for Short Term borrowings to CARE AI+ [A One Plus] and Long Term borrowings as well as Long Term Non-Convertible Debentures to CARE AA - [Double A Minus] as of March 31, 2015. With positive outlook for the economy, the Company is confident to achieve better growth in the years to come and the benefits of the consolidation will ensure better profitability for the Company. PUBLIC DEPOSITS Your Company has not accepted any deposits from the public during the year under review. DIRECTORS AND KEY MANAGERIAL PERSONNEL During the year under review: In terms of the provisions of the Companies Act, 2013, Mr.Vijay Biyani retires from the Board of Directors of the Company by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The term of Mr. Kishore Biyani, as Managing Director, was for a period of 5 years from April 01, 2010 which expired on March 31, 2015. The Board is seeking to reappoint Mr. Kishore Biyani as a Managing Director for a period of 3 years. Detail of the proposal for appointment of Mr. Kishore Biyani is mentioned in the Statement under Section 102 of the Companies Act, 2013 of the Notice of the 27th Annual General Meeting. His appointment is appropriate and in the interest of the Company. The Notice convening the forthcoming Annual General Meeting includes the proposal for re-appointment of aforesaid Director. A brief resume of the Directors seeking re-appointment at the forthcoming Annual General Meeting and other details as required under to be disclosed in terms of Clause 49 of the Listing Agreement forms part of the said Notice. None of the Directors are disqualified for re-appointment under Section I64 of the Companies Act, 2013. The Company is also proposing resolution for the remuneration payable to Mr. Kishore Biyani as a Managing Director of the Company to be approved by the Shareholders, in view of the requirement to make application to the Central Government for approval of remuneration, due to inadequacy of profits. The details as required by clause 49 of the listing agreement, is given as part of the notice. CORPORATE GOVERNANCE A report on Corporate Governance together with Auditors' Certificate as required under Clause 49 of the Listing Agreement forms part of this Annual Report. The Company has established a vigil mechanism to provide a framework to promote responsible and secure whistle blowing and to provide a channel to the employee(s) and Directors to report to the management, concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy/ies of the Company, as adopted / framed from time to time. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the CEO / Chairman of the Audit Committee in exceptional cases. MANAGEMENT DISCUSSION & ANALYSIS REPORT The Management Discussion & Analysis Report as required under Clause 49 of the Listing Agreement is presented separately and forms part of this Report. CONSOLIDATED FINANCIAL STATEMENTS Your Directors have pleasure in attaching the Consolidated Financial Statements pursuant to Clause 32 of the Listing Agreement entered into with the Stock Exchanges and prepared in accordance with the Accounting Standards prescribed by the Institute of Chartered Accountants of India in this regard. AUDITORS AND AUDITORS' REPORT At the 26th Annual General Meeting of the Company held on August 02, 2014, M/s NGS & Co. LLP, Chartered Accountants, Mumbai was appointed as statutory auditors of the Company, for tenure of three years, to hold office till the conclusion of the 29th Annual General Meeting. In terms of the first proviso to section 139 of the Companies Act, 2013 the appointment of the auditors shall be placed before the members for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. NGS & Co. LLP, Chartered Accountants, Mumbai, as statutory auditors of the Company, placed before for ratification by the shareholders. The Auditors' Report does not contain any disqualification, reservation or adverse mark. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT The Company has appointed Mr.Virendra Bhatt, Practising Company Secretary to conduct Secretarial Audit of the Company for the financial year 2014-15 in terms of provisions of Section 204 of the Companies Act, 2013. The Secretarial Auditor Report is annexed to this report as Annexure 11I. DIRECTORS' RESPONSIBILITY STATEMENT Pursuant to the requirements of Section 134(5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is hereby confirmed that: a) in the preparation of the annual accounts for the financial year ended March 31, 2015, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2015 and of the profit of the Company for that year; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts for the financial year ended March 31, 2015, on a going concern basis. e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively. f) the Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively. PARTICULARS OF EMPLOYEE STOCK OPTION SCHEME 2012 (ESOS-2012) Future Retail Limited (FRL) has granted Options to eligible employees in 2013 under PRIL-Employee Stock Option Scheme 2012 ("ESOS 2012"). In a Scheme of demerger, "FRL" (Demerged Company) has transferred its Fashion business under the brand name "Pantaloons" and variations thereof to "Peter England Fashions and Retail Limited" (Resulting Company); demerger scheme has been duly sanctioned by the Bombay High Court in its order dated March 01, 2013. In a subsequent Scheme of demerger, "FRL" (Demerged Company) has transferred its fashion business carried on under the format brands of Central, Brand Factory, and Planet Sports to "Future Lifestyle Fashions Limited"; demerger scheme has been duly sanctioned by the Bombay High Court in its order dated May 10, 2013. The Employee Stock options of the Company has adjusted for the corporate actions on Value for Value exchange and hence there is no incremental benefit to the option grantee and also it does not result in change in aggregate Fair Value of the Options. FRL ESOP 2015 has been approved by the Shareholders of the Company vide resolution passed through postal ballot on March 30, 2015. The Shareholders of the Company through postal ballot have also approved formation of Future Retail Limited Employee Welfare Trust for implementation of FRL ESOP 2015. PARTICULARS OF ENERGY CONSERVATION,TECHNOLOGY ABSORPTION ON FOREIGN EXCHANGE EARNINGS AND OUTGO ETC. The particulars as required under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 relating to conservation of energy, technology absorption foreign exchange earnings and outgo, are provided in Annexure IV which forms part of this report. The Company being concentrating on the domestic consumption space does not have any specific exports initiatives to report to members. The disclosures as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 is made in prescribed form which is annexed to this Report as Annexure V. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 Your Company has always believed in providing a safe and harassment free workplace for every individual working in Future Retail premises through various interventions and practices. The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. NOMINATION AND REMUNERATION POLICY In terms of requirements prescribed under Companies Act, 2013, the Nomination and Remuneration Committee has approved Remuneration Policy for payment of remuneration to Directors and Key Managerial Personnel. Details of Remuneration Policy are provided in Annexure VI, which is annexed to this Report. PERFORMANCE EVALUATION OF BOARD Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of performance of its own, the Committees thereof and the directors individually. At the meeting of the Board all the relevant factors that are material for evaluating the performance of the Committees and of the Board were discussed in detail. A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as level of engagement and contribution, independence of judgment, safeguarding the interest of the Company and its minority shareholders, etc. The performance evaluation of the Independent Directors was carried out by the entire Board except the Independent Director being evaluated. The performance evaluation of the Chairman and Non-Independent Directors was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process. The Audit Committee of the Company comprises of Mr. S. Doreswamy, Independent Director as Chairman of the Committee and Mr. V. K. Chopra, Independent Director and Ms. Bala Deshpande, Independent Director, as Members of the Committee. There are no instances where the Board did not accept the recommendations of the Audit Committee. The terms of reference, powers and roles of the Committee are disclosed in the Corporate Governance Report, which forms part of the Annual Report. RISK MANAGEMENT POLICY AND INTERNAL ADEQUACY The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested Statutory as well as Internal Auditors. Significant audit observations and follow up actions thereon are reported to the Audit Committee. CORPORATE RESPONSIBILITY STATEMENT (CSR) The Company has constituted a Corporate Social Responsibility Committee ("CSR Committee") in accordance with Section 135 of the Companies Act, 2013. The Board of Directors of the Company has based on recommendation made by CSR Committee formulated and approved CSR Policy of the Company. The Company has identified the amount to be spent for the purpose of CSR. It is proposed to create a foundation at group level to carry on CSR initiative at group level. The process of creating the foundation is expected to complete by end of September 2015. PARTICULARS OF EMPLOYEES Disclosures with respect to the remuneration of Directors and employees as required under Section 197 of the Companies Act, 2013 read with Rule 5(I) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided under Annexure V11, which is annexed to this Report. In terms of the provisions of first proviso to Section 136 (I) of the Companies Act, 2013, information pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is excluded from the Annual Report being sent to the members of the Company and is available for inspection by the Members at registered office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary and the same shall be provided. The full Annual Report including aforesaid information is being sent electronically to all those Members who have registered their e-mail addresses and is available on the website of the Company. INTERNAL FINANCIAL CONTROL The details in respect of internal financial control and their adequacy are included in the Management Discussion & Analysis, which forms part of this report. AWARDS AND RECOGNITIONS • Hat-trick of Awards at INTEROP Awards 2014 Business Technology Services Scores A Hat-trick of Awards at INTEROP Awards 2014. • Asia Pacific HRM Congress 2014 Future Learning triumphs at Asia Pacific HRM Congress 2014 in the 'Innovation in Retention' category. • 'Power To The People' and 'From Grocery to Gift' at the esteemed EFFIE Awards Big Bazaar was awarded with 'Power To The People' and 'From Grocery to Gift' at the esteemed EFFIE Awards. • Images Most Admired Food & Grocery Retailer of the Year Big Bazaar won the 'Images Most Admired Food & Grocery Retailer of the Year in Food & Grocery category. • Images Excellence Awards for Largest National ExpansionFood Bazaar won the 'Images Excellence Awards for Largest National Expansion' for the year 2014 • Dun & Bradstreet (D&B) Corporate Award 2015 Future Retail won the Dun & Bradstreet (D&B) Corporate Award 2015 for its leading performance in the Retail sector. ACKNOWLEDGEMENT Your Directors would like to thank and place on record their appreciation for the support and co-operation provided to your Company by its Shareholders, Future Group entities, and in particular, their employees, regulatory authorities and its banks. Your Directors would also like to place on record their appreciation for the efforts put in by employees of the Company during the year. On behalf of the Board of Directors Kishore Biyani Managing Director Rakesh Biyani Joint Managing Director Mumbai May 25, 2015 |