Future Capital Holdings

The Directors have pleasure in presenting the third Annual Report of
 Future Capital Holdings Limited (FCH) with the audited statement of
 accounts for the year ended March 31, 2008.
 
 FINANCIAL HIGHLIGHTS
 
 The standalone financial performance of the Company for the financial
 year ended March 31, 2008, is summarized below:
 
                                                      (Rs. In million)
 Particulars                           Year Ended      Year Ended
                                       March 31,       March 31,
                                       2008            2007       
 
 Total Income                          813.68          92.72
 Total Expenditure                     721.83          90.36
 Profit before tax                      91.85           2.36
 Provision for tax                       2.96           0.81
 (including Fringe Benefit Tax)
 Profit after  tax                      88.89           1.55
 Profit brought forward from             1.25           0.01
 Previous year / period
 Less: Adjustment on account
 of liability in respect of
 employee benefits, as on
 April 1, 2007,
 (net of deferred tax)                                 0.11
 Profit available for appropriation     90.03          1.56
 Appropriations:
 Transfer to Reserve Fund
 under section 45-IC of the
 Reserve Bank of India Act,           1934.17       780.31
 Balance carried forward to
 Balance Sheet                          72.25         1.25
                                        90.0         31.56
 
 OVERALL PERFORMANCE AND OUTLOOK
 
 The total income of the Company during the year stood at Rs.813.68
 million, as compared to Rs.92.72 million in the previous year. The
 Profit after tax was Rs.88.89 million, as compared to Rs.1.55 million
 in the previous year.  Of the above total income, income from
 Investment Advisory stood at Rs.173.76 million, income from Treasury
 and Wholesale Credit stood at Rs.191.92 million, income from Retail
 Financial Services stood at Rs.157.59 million, while other Income stood
 at Rs.290.41 million.
 
 An amount of Rs.17.78 million was transferred to Reserve Fund pursuant
 to Section 45-IC of the Reserve Bank of India Act, 1934.
 
 Initial Public Offer (IPO)
 
 During the financial year, FCH successfully completed its Initial
 Public Offer (IPO) of Equity Shares in January, 2008, raising total of
 Rs. 4,913 million. The significant highlights of the IPO were:
 
 * 6,422,800 equity shares of Rs. 10/- each were offered to the public
 at a premium of Rs.755/- per equity share.
 
 * Against the offer of 6,422,800 equity shares the Company had received
 applications for 846,511,648 equity shares, an aggregate
 oversubscription of 131.80 times.
 
 * Equity Shares of the Company were listed and commenced trading on the
 Bombay Stock Exchange Limited and the National Stock Exchange of India
 Limited with effect from February 1, 2008.
 
 DIVIDEND
 
 The operations of the Company being in a growth phase, your Directors
 consider it prudent to conserve resources and therefore do not
 recommend any dividend on equity shares for the financial year under
 review.
 
 MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
 
 As required under Clause 49 of the Listing Agreement with the Stock
 Exchanges, the Management Discussion and Analysis of the financial
 conditions and results of operations of the Company for the year under
 review, forms part of the Annual Report.
 
 SHARE CAPITAL
 
 Increase in the Authorised Share Capital
 
 During the year under review, pursuant to the resolution(s) passed by
 members at their Meeting(s), the Authorised Share Capital of the
 Company had been increased, in stages, from Rs.21.50 million divided
 into 2,150,000 (Two Million One Hundred Fifty Thousand) equity shares
 of Rs.10/- each to Rs.750 million divided into 75,000,000 (Seventy Five
 Million) equity shares of Rs.10/- each.
 
 Increase in Issued, Subscribed and Paid-up Share Capital
 
 During the year under review, the Company has issued and allotted, in
 aggregate, 12,360,185 (Twelve Million Three Hundred Sixty Thousand One
 Hundred and Eighty Five) equity shares of Rs.10/- each at a premium,
 including 5,252,185 (Five Million Two Hundred Fifty Two Thousand One
 Hundred and Eighty Five) equity shares allotted to the Promoters upon
 exercise of outstanding warrants.
 
 Under the IPO, the Company has issued and allotted, in aggregate
 6,422,800 (Six Million Four Hundred Twenty Two Thousand and Eight
 Hundred) equity shares of Rs.10/- each at a premium of Rs.755/- per
 equity share.  Consequent to above allotment of equity shares, the
 issued, subscribed and paid-up capital has increased from Rs.444.44
 million to Rs.632.28 million as at the end of the financial year.
 
 SUBSIDIARIES
 
 During the year under review, FCH Centrum Direct Limited (formerly
 Centrum Direct Limited) and FCH Centrum Wealth Managers Limited
 (formerly Centrum Wealth Managers Limited) have become subsidiaries of
 the Company.
 
 Subsequent to the financial year end, the Company has incorporated a
 subsidiary, Axon Development Solutions Limited, towards undertaking
 development and leasing activities on behalf of the Kshitij Investment
 Advisory Company Limited, a wholly owned subsidiary of the Company.
 
 In terms of the approval granted by the Ministry of Corporate Affairs
 (MCA) under Section 212(8) of the Companies Act, 1 956, copy of the
 Balance Sheet, Profit and Loss Account, Report of the Board of
 Directors and Auditors of the subsidiaries of the Company have not been
 attached with the Balance Sheet of the Company.  These documents will
 be made available upon request by any member of the Company interested
 in obtaining the same.  However, as directed by the MCA, the financial
 data of the subsidiaries has been furnished under Details of
 Subsidiaries, forming part of the Annual Report. Further pursuant to
 Accounting Standard (AS - 21) issued by the Institute of Chartered
 Accountants of India, Consolidated Financial Statements presented by
 the Company in this Annual Report include financial information of its
 subsidiaries.
 
 JOINT VENTURE COMPANIES
 
 Realterm FCH Logistics Advisors Private Limited
 
 During the year under review, the Company has entered into 50:50 joint
 venture with Aeroterm Mauritius Limited (AML), towards undertaking
 business of investment advisory services relating to logistics,
 warehousing facilities, etc.
 
 AML is an affiliate of Aeroterm LLC, one of the leading provider of
 capital, expertise, and facility-related services to airports
 throughout North America. Aeroterm has more than 15 years of experience
 working with airports and tenants specializing in air cargo operations
 and other airport-related activities.
 
 Kshitij Capita Land Mall Management Company Private Limited (KCMMCPL)
 Subsequent to the financial year end, the Company has acquired 342,000
 (Three Hundred Forty Two Thousand) equity shares of KCMMCPL of Rs.10/-
 each, being the stake of the joint venture partner CapitaLand and after
 the acquisition of the above equity shares, it has become a wholly
 owned subsidiary of the Company.  Further subsequent to the financial
 year end the name of KCMMCPL has been changed to Kshitij Property
 Solutions Private Limited.
 
 PUBLIC DEPOSITS
 
 The Company has not accepted any deposits from the public during the
 year under review and shall not accept any deposits without obtaining
 prior approval of the Reserve Bank of India.
 
 DIRECTORS
 
 During the year under review, Mr. Alok Oberoi, Mr. G.N. Bajpai and Mr.
 Shailesh Haribhakti were appointed as Additional Directors on the Board
 of the Company with effect from September 27, 2007. Mr. Dhanpal Jhaveri
 was appointed as an Additional Director on the Board on February 20,
 2008 and was also appointed as an Executive Director of the Company
 with effect from February 20, 2008.
 
 Pursuant to the provisions of Section 260 of the Companies Act, 1956,
 and the Articles of Association of the Company, the terms of
 appointment of the aforesaid Directors expire at the forthcoming Annual
 General Meeting and being eligible, they have offered themselves for
 reappointment. Individual Notice(s) have been received from the members
 of the Company pursuant to Section 257 of the Companies Act, 1956,
 proposing appointment of the aforesaid Directors.
 
 In terms of Article 146 of the Articles of Association of the Company,
 Mr. Kishore Biyani, Director, retires by rotation and being eligible
 offers himself for re-appointment at the forthcoming Annual General
 Meeting.  Mr. Krishan Kant Rathi, resigned as a Director of the Company
 with effect from September 27, 2007. The Directors place on record
 their appreciation for the services rendered by Mr. Krishan Kant Rathi
 during his association with the. Company.
 
 A brief resume of the Directors seeking appointment re- appointment at
 the ensuing Annual General Meeting, nature of their expertise and names
 of the companies in which they hold directorship is provided as the
 part of the Notice of the ensuing Annual General Meeting.
 
 DIRECTORS RESPONSIBILITY STATEMENT
 
 Pursuant to the requirements of Section 217(2AA) of the Companies Act,
 1 956, with respect to Directors Responsibility Statement, it is
 hereby confirmed:
 
 i) that in the preparation of the annual accounts for the financial
 year ended March 31, 2008; the applicable accounting standards have
 been followed along with proper explanation relating to material
 departures, if any.
 
 ii) that the Directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that are
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company at the end of the financial year and the
 profit of the Company for that period.
 
 iii) that the Directors had taken proper and sufficient care for the
 maintenance of adequate accounting records in accordance with the
 provisions of the said Act for safeguarding the assets of the Company
 and for preventing and detecting fraud and other irregularities.
 
 iv) that the Directors had prepared the annual accounts for the
 financial year ending March 31, 2008, on a going concern basis.
 
 CONSOLIDATED FINANCIAL STATEMENTS
 
 The Audited Consolidated Financial Statements are provided in this
 Annual Report in accordance with Accounting Standard (AS- 21) on
 Consolidated Financial Statements read with Accounting Standard (AS-23)
 on Accounting for Investments in Associates and Accounting Standard (AS
 27) on Financial Reporting of Interest in Joint Ventures. These
 statements have been prepared on the basis of the financial statements
 received from subsidiaries and joint-ventures, as approved by their
 respective Board of Directors.
 
 AUDITORS AND AUDITORS REPORT
 
 M/s. S. R. Batliboi & Company, Chartered Accountants, retire at the
 ensuing Annual General Meeting and have expressed their willingness to
 continue, if so appointed. As required under the provisions of Section
 224 (1 -B) of the Companies Act, 1956, the Company has obtained a
 written certificate from the Auditors proposed to be re-appointed to
 the effect that their re- appointment, if made, would be in conformity
 with the limits specified in the said section.  A proposal seeking
 their re-appointment is provided as part of the Notice of the
 forthcoming Annual General Meeting.
 
 PARTICULARS OF EMPLOYEES AND EMPLOYEE STOCK OPTION SCHEME
 
 In terms of the provisions of Section 21 7 (2A) of the Companies Act,
 1956, read with the Companies (Particulars of Employees) Rules, 1975,
 as amended, the name and other particulars of certain employees are
 required to be set out in the Annexure to the Directors Report.
 However, as per the provisions of the Section 219 (1) (b) (iv) of the
 said Act, the Directors Report excluding the aforesaid information is
 being sent to all the Members of the Company and others entitled
 thereto. Members who are interested in obtaining such particulars may
 write to the Company at its Registered Office.
 
 Pursuant to the approval of the shareholders at the Extra Ordinary
 General Meeting held on March 19, 2007, your Company has implemented
 the FCH Employee Stock Purchase Scheme - 2007 (ESPS - 2007). Under
 the ESPS - 2007 (implemented with involvement of an Employee Welfare
 Trust), 500,000 (Five hundred thousand) equity shares were allotted to
 eligible employees.
 
 Further, pursuant to the approval of the shareholders at the 2nd Annual
 General Meeting held on September 25, 2007, your Company has
 implemented the FCH Employees Stock Options Scheme - 2007 (ESOS -
 2007). Under the ESOS - 2007 1,000,000 (One Million) Options were
 granted to the eligible employee(s) / entities.
 
 The disclosure(s) as required under the Securities and Exchange Board
 of India (Employee Stock Option Scheme & Employee Stock Purchase
 Scheme) Guidelines, 1999, are given as an Annexure to this report.
 
 PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, EXPENDITURE
 ON RESEARCH AND DEVELOPMENT, FOREIGN EXCHANGE INFLOW/OUTFLOW, ETC.
 
 The requirements of disclosure with regard to Conservation of Energy in
 terms of Section 217 (1) (e) of the Companies Act, 1 956, read with the
 Companies (Disclosure of Particulars in the Report of Board of
 Directors) Rules, 1988, are not applicable to the Company.
 
 The activities of the Company do not require any technology absorption
 as mentioned in the aforesaid Rules. However the Company makes all
 efforts towards conservation of energy and ensuring safety.  The
 details of the earnings and outgo in Foreign Exchange during the year
 under review, are provided as Note No. 16 of Part C of the Schedule 16
 (Notes to Accounts) of the Balance Sheet as at March 31, 2008. The
 Members are requested to refer to the said Note for details in this
 regard.
 
 CORPORATE GOVERNANCE
 
 Report on Corporate Governance as required under Clause 49 of the
 Listing Agreement with the Stock Exchanges, forms part of this Annual
 Report.  A Certificate from the Auditors of the Company, M/s. S. R.
 Batliboi & Company, Chartered Accountants, confirming compliance with
 the conditions of Corporate Governance as stipulated under the
 aforesaid Clause 49, is annexed to this Report.
 
 HUMAN RESOURCE MANAGEMENT
 
 Motivated employees are vital for the success of our business.  We have
 created a favorable work environment that encourages innovation and
 meritocracy. We have also set up a recruitment and human resource
 management process, which enables us to attract and retain high caliber
 employees. Towards fostering a sense of ownership among the employees,
 we have and we shall continue to use programmes such as Employee Share
 Purchase Scheme /Employee Stock Option Scheme in the Company.
 
 As on March 31, 2008, we have issued shares/options amounting to 2.34%
 of the poid- up Equity Share Capital (diluted) to the employees across
 different levels.
 
 ACKNOWLEDGEMENT
 
 Besides the support of our parent Company, Pantaloon Retail (India)
 Limited, the Directors wish to acknowledge the guidance and
 co-operation provided by the concerned regulatory authorities including
 the Reserve Bank of India, the Securities and Exchange Board of India,
 the Stock Exchanges, the Foreign Investment Promotion Board and/ or
 other regulatory authorities.
 
 Your Directors express their deep sense of appreciation for the
 commitment, co-operation, active involvement and dedication displayed
 by all the employees. Your Directors look forward to their continued
 support in the future.
 
                                      On behalf of the Board of Directors
 
 
                    Kishore Biyani             Sameer Sain
                    Chairman                   Managing Director &
                                               Chief Executive Officer
 Date  : June 19, 2008
 Place : Mumbai