Pantaloon Retail

The Directors are pleased to present the Twenty First Annual Report
 together with the Audited Statements of Accounts for the year ended
 30th June 2008.
 
 FINANCIAL HIGHLIGHTS
 
 The operating results of the Company for the year under review are as
 follows:
 
                                                        (Rs. in Crores)
                                                2007-2008     2006-2007
 
 Sales (Net of Taxes)                            4,776.33      3,031.44
 Operating Income                                  272.58        205.29
 Other Income                                        3.76         92.03
 Total Income                                     5052.67      3,328.76
 Profit before Depreciation & Tax                  279.01        217.87
 Less: Depreciation                                 83.39         36.86
 Profit before Tax                                 195.62        181.01
 Less: Earlier Years Income Tax                    (0.03)         0.06
 Less: Tax Expenses                                 69.68         60.96
 Profit after Tax                                  125.97        119.99
 Add: Profit brought forward from
 previous year                                     215.76        116.59
 Surplus available for appropriation               341.73        236.58
 Appropriation
 Proposed Dividend                                  10.67          7.54
 Tax on Proposed Dividend                            1.81          1.28
 Transfer to General Reserve                        12.60         12.00
 Balance carried to Balance Sheet                  316.65        215.76
 
 Review Of Performance
 
 We are pleased to inform you that your Company has crossed  billion
 turnover mark during the year under review, having recorded a robust
 growth in both the topline as well as in bottom line. Income from
 operations went up from Rs.3236.74 Crores in FY06-07 to Rs.5048.91
 Crores in FY07-08, recording a growth of 55.98 percent.
 
 PBDIT stood at Rs.464.29 Crores in FY07-08, an increase of 113 percent
 over the preceding year. PAT for FY07-08 was Rs.125.97 Crores. This
 amounts to an increase of 111 percent over the preceding year as the
 Net Profit of Rs.119.99 Crores in FY06-07 included an extraordinary
 income, of profit from sale of investments, of Rs.88.87 Crores.
 
 The Company increased its retail presence from around 5 million square
 feet in 42 cities to approximately 8 million square feet in 63 cities
 during FY07-08.
 
 Dividend
 
 The Board of Directors of the Company has recommended a dividend of
 Rs.0.60/- (30%) per equity share. The dividend would be payable on all
 equity shares of the Company including Class B Shares, if issued and
 allotted on or before the Book Closure / record date announced for the
 dividend. If allotted. Class B Shares would be entitled to 5%
 additional dividend as per the terms of issue of Class B Shares (Series
 1). Further, warrants converted into shares on or before the Book
 Closure / record date announced for the dividend, would also be
 entitled to dividend declared by the members at the ensuing Annual
 
 General Meeting. The dividend will be declared at the ensuing Annual
 General Meeting based on approval by the Shareholders.
 
 EQUITY SHARE CAPITAL Authorised Share Capital
 
 The Authorised Share Capital of your Company has been increased from
 Rs.35 crores to Rs.45 crores by addition of 50 lacs Equity Shares and
 450 lacs Class B Shares, carrying Differential Rights for voting and/or
 dividends.  The increase in authorised capital has been effected by a
 Postal Ballot passed on 20th September 2008.  In view of further
 requirements, it is proposed to increase the Authorised Capital at the
 ensuing Annual General Meeting. Detail of the same has been given in
 the accompanying notice of the Annual General Meeting.  Paid-up Share
 Capital
 
 The equity share capital of the Company has been increased from
 Rs.29,35,02,730/- to Rs.31,85,83,042/- due to the following further
 issue of capital as follows:
 
 > Allotment of 40,00,000 equity shares of Rs.2/- each at a premium of
 Rs.498/- per equity share to Bennett, Coleman & Co. Limited and other
 investors, on preferential basis pursuant to Chapter XIII of the
 Securities and Exchange Board of India (Disclosure and Investor
 Protection) Guidelines, 2000.
 
 > Allotment of 40,40,056 equity shares of Rs.2/- each at a premium of
 Rs.498/- per equity share to Erudite Trading Private Limited, an
 associate Company of the promoter group on preferential basis pursuant
 to Chapter XIII of the Securities and Exchange Board of India
 (Disclosure and Investor Protection) Guidelines, 2000.
 
 > Allotment of 45,00,000 equity shares of Rs.2/- each at a premium of
 Rs.498/- per equity share to Erudite Trading Private Limited and Chaste
 Investrade Private Limited, an associate Company of the promoter group
 on preferential basis pursuant to Chapter XIII of the Securities and
 Exchange Board of India (Disclosure and Investor Protection)
 Guidelines, 2000
 
 > Allotment of 100 equity shares of Rs.2/- each at a premium of Rs.98/-
 per share aggregating to Rs. 10,000/- which were earlier kept in
 abeyance in the Rights Issue of the Company in December 2005.
 
 Fixed Deposits
 
 The Company has not accepted any Deposits during the year. Unclaimed
 deposits at the end of the year is Rs. 15,000/-.
 
 Report On Corporate Governance
 
 A detailed report on Corporate Governance together with Auditors
 certificate as required under clause 49 of the listing agreement the
 has been included as an attachment to this Report.
 
 Management Discussion & Analysis Report
 
 The management discussion and analysis as required under clause 49 of
 the listing agreement has been dealt with extensively as part of this
 Annual Report.
 
 The Future
 
 Your Company would continue to pursue its aggressive growth to
 strengthen its position as a leading player in the consumption space in
 India, with an aim to capture increasing share of the consumers
 wallet. The Company would continue with its expansion plans and would
 continue to increase its presence on a pan-India basis by opening more
 retail outlets in tier 2 and tier 3 cities and by further strengthening
 its position in key metro cities.
 
 Your Company has planned to increase its operating retail space from
 around 8 million square feet currently to around 12 million square feet
 by FY08-09.  The various subsidiary companies of your Company, which
 have been created to cater to various consumption categories, are
 currently in initial set-up phase. In FY 08-09, most of them will come
 into their own, pursuing aggressive growth plans to achieve scale and
 garner increasing market share. The Company will also be able to unlock
 value out of these businesses by listing these subsidiary companies,
 and partnering with strategic partners in them, at an appropriate time.
 Your Company, operating in the consumption space, has added IT services
 and education to its portfolio of businesses, apart from the existing
 consumer finance, insurance, media, logistics and brand businesses. All
 these businesses will help in capitalizing on the synergies with the
 retail business to further enhance shareholders wealth.
 
 SUBSIDIARY COMPANIES & JOINT VENTURES SUBSIDIARY COMPANIES
 
 During the financial year 2007-08, seven new companies have become
 direct subsidiaries of the Company. Six companies became subsidiaries
 of its subsidiaries, and thus became fellow subsidiaries of the
 Company.
 
 Future Capital Holdings Limited
 
 Future Capital Holdings Limited (FCH) is designed to be the financial
 services arm of the Future Group. FCH is a capital holding company and
 is involved in asset management, investment advisory services, consumer
 credit and economic research. Post FCHs public offer, your Company has
 55.01% stake in FCH. During FY07- 08, FCH registered income from
 operations of Rs.52.33 Crores and its profit after tax stood at Rs.8.89
 Crores.
 
 Home Solutions Retail (India) Limited
 
 Home Solutions Retail (India) Limited (HSRIL) was incorporated to
 operate in the home and hard goods consumption space. The key product
 categories that the company deals with include Consumer Durables &
 Electronics (CDE), Furniture, Home furnishing & decor, Home improvement
 and Home services including design.
 
 HSRIL operates retail formats like Home Town, E-zone, Home Bazaar,
 Furniture Bazaar and Electronics Bazaar.  Your Company has 76.38% stake
 in HSRIL. During FY07-08, HSRIL registered an income from operations of
 Rs.891.05 Crores and a corresponding loss of Rs.60.53 Crores.
 
 Future Logistic Solutions Limited
 
 Future Logistic Solutions Limited (FLSL) is designed to operate in the
 logistics, transportation, distribution and warehousing space. FLSL
 provides solutions in the areas of integrated Supply Chain Management,
 warehousing, distribution and Multimodal transportation. Your Company
 has 100% stake in FLSL. The company has warehousing space of 3.50
 Million square feet spread over all across India. The company is
 currently building large scale warehousing facilities and will focus on
 providing 3PL logistics solutions. During FY07-08, FLS>L registered
 income from operations amounted to Rs.112.95 Crores and the loss stood
 at Rs.2.45 Crores.  Pantaloon Food Product (India) Limited Pantaloon
 Food Product (India) Limited (PFPIL) is designed to strengthen sourcing
 and distribution of staples and other food products for the Company.
 PFPIL has sourcing and distribution bases at all key cities across the
 country.  The company has also started a no frill low cost food retail
 format KBs Fair Price. It presently operates 138 stores spread over
 Mumbai, Delhi, Bangalore, Hyderabad and Ahmedabad. The Company has
 94.81% stake in PFPIL. During FY07-08, PFPIL registered income from
 operations amounting to Rs.1 90.00 Crores and loss stood at Rs.3.04
 Crores.  Future Media (India) Limited
 
 Future Media (India) Limited (FMIL) is designed to be the Groups media
 venture, aimed at creation of media properties in the ambience of
 consumption and thus offers active engagement to brands and consumers.
 FMIL offers relevant engagement through its media properties like
 Visual Spaces, Print, Radio, Television and Activation.  Your Company
 has 93.60% stake in FMIL. During FY07- 08, FMIL registered income from
 operations amounting to Rs.21.10 Crores and the loss stood at Rs.6.55
 Crores.  Future E-Commerce Infrastructure Limited Future E-Commerce
 Infrastructure Limited (FECIL) is designed to capture the consumption
 space through the internet, as well as other technology based and
 digital modes. The Company has 72% stake in FECIL. During FY07-08,
 FECIL registered income from operations amounting to Rs.21.71 Crores
 and the loss stood at Rs.9.45 Crores.
 
 Future Mobiles and Accessories Limited Future Mobile and Accessories
 Limited (FMAL) is designed to cater to the consumers need in the space
 of telecommunications products. The Company has 100% stake in FMAL.
 During FY07-08, FMAL registered income from operations amounting to
 Rs.0.09 Crores and loss stood at Rs.1.20 Crores.  Future Brands Limited
 
 Future Brands Limited (FBL), a brand and IPRs (Intellectual Property
 Rights) development specialist company focuses on creating, developing,
 managing, nurturing and acquiring brands. The Company has 100% stake in
 FBL. The company owns brands like John Miller, Bare, DJ&C, RIG,
 Shrishti, Buffalo, Dreamline, Koryo, Sensei, Tasty Treat, Fresh & Pure,
 Cleanmate, Caremate etc.  The company also has licence for Italian
 apparel brand UMM for the Indian sub-continent. During FY07-08, FBL
 registered income from operations amounting to Rs.1.93 Crores and the
 loss stood at Rs.2.37 Crores.  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. Your
 Company is presently holding 99.74% in FBIL. Futurebazaar.com was
 launched in 2007. FBIL is successfully operating its e-retailing
 business and during FY07-08, FBIL registered income from operations
 amounting to Rs.15.62 Crores and its profit after tax stood at Rs.3.95
 Crores.  Future Consumer Products Limited Future Consumer Products
 Limited (FCPL) has been incorporated to launch consumer products in
 various categories like Childrens clothing, health foods, and FMCG
 products. These products will be endorsed by Sachin Tendulkar and will
 retail under the brand names of Sach and S-Drive. Sachin Tendulkar
 will be having 10% equity stake in the company.  Future Knowledge
 Services Limited Future Knowledge Services Limited (FKSL) is a retail
 technology service provider for high quality, low cost services model
 catering to the entire retail value chain. It will provide consolidated
 Technology Design and Support, Business Process Management, and Contact
 Centre for all Group Companies and partners. The Company has 100% stake
 in FKSL. During FY07-08, FKSL registered income from operations
 amounting to Rs.2.85 Crores and loss stood at Rs.1.64 Crores.  Whole
 Wealth Limited
 
 Your Company holds 60% in Whole Wealth Limited (WWL). The company is
 the international sourcing arm of the group and operates out of Hong
 Kong and China to source various product categories from international
 markets.
 
 Pantaloon Future Ventures Limited
 
 Pantaloon Future Ventures Limited (PFVL) is a Special Purpose Vehicle
 (SPV) to own stake in Future Ventures Ltd., which is engaged in
 partnering with and promoting entrepreneurship in consumer focussed
 initiatives.
 
 Future Learning and Development Limited
 
 Future Learning and Development Limited is a wholly owned subsidiary of
 PRIL, and will provide recruitment, induction, training, re-training
 and development services for Retail Industry personnel. The company is
 yet to commence its operations.
 
 Future Value Retail Limited (Formerly known as Future Hypermarket
 Limited)
 
 Future Value Retail Limited was incorporated to carry on trade or
 retail business through retail formats including hyper markets, super
 markets, mega stores/ discount stores. Future Value Retail is a wholly
 owned subsidiary of PRIL. The company has not yet commenced its
 operations.
 
 Future Mall Management Limited
 
 Future Mall Management Limited has been incorporated to carry on the
 business of managing and maintaining malls, and to operate as a
 contractor, building, land and estate agent, and a land developer.
 Future Mall Management Limited is a wholly owned subsidiary of PRIL.
 The company has not yet commenced its operations.
 
 Future Speciality Retail Limited
 
 Future Speciality Retail Limited was incorporated to carry on trade or
 retail business through speciality retail formats. The company has not
 yet commenced its operations.
 
 CIG Infrastructure Private Limited
 
 CIG Infrastructure Private Limited (CIPL) was incorporated to deal in
 the business of real estate promotion and development. The Company is
 holding 51 % stake in CIPL.  CIPL is Special Purpose Vehicle (SPV) for
 development of real estate project at Noida (U.P.).
 
 FELLOW SUBSIDIARY COMPANIES
 
 Subsidiaries of Home Solutions Retail (India) Limited (HSRIL)
 
 Home Lighting India Limited
 
 Home Lighting India Limited (HLIL) is designed to capture consumption
 in the home lighting space, including designer ambience and mood
 lighting, through organized retail. HSRIL, a subsidiary of your
 Company, has 51% stake in HLIL. During FY07-08, HLIL registered income
 from operations amounting to Rs.3.44 Crores and its profit after tax
 stood at Rs.0.21 Crores.
 
 Home Solutions Services (India) Limited
 
 Home Solutions Services (India) Limited (HSSIL) is designed to operate
 in the business of being complete solutions provider in the area of
 home management services, society management services, administrative
 and management services on contract basis for homes, offices, clubs,
 complexes, stores etc. This company is a 100% subsidiary of HSRIL,
 which is subsidiary of your Company. The Company is yet to commence
 commercial activities.
 
 FH Residencies Limited
 
 FH Residencies Limited (FHRL) is engaged in the business to acquire,
 promote, develop, construct, build, repair, furnish, sell, lease,
 manage and otherwise deal in real estate, and properties of residential
 or commercial nature.  FHRL is 100% subsidiary of HSRIL.
 
 Subsidiaries of Future Capital Holdings Limited (FCH) FCH Centrum
 Wealth Managers Limited and FCH Centrum
 
 Direct Limited
 
 During the year, FCH Centrum Wealth Managers Limited (FCH Centrum
 Wealth) & FCH Centrum Direct Limited (FCH Centrum Direct) have become
 subsidiaries of the FCH, a subsidiary of your Company, on 1 2 March
 2008.
 
 Kshitij Property Solutions Pvt. Ltd. (Formerly known as Kshitij Capital
 and & Mall Management Pvt. Limited.
 
 Kshitij Property Solutions Pvt. Ltd. (KPSPL) has become a subsidiary of
 FCH on 09 April 2008, which is a subsidiary of the Company. The company
 is in the business of providing mall management services. The company
 is managing the retail malls developed by the Kshitij Real Estate Fund.
 
 Axon Development Solutions Limited
 
 Axon Development Solutions Limited (ADSL) has become a subsidiary of
 FCH on 25 April 2008, which is subsidiary of your Company. ADSL is
 involved in the business of designing, developing, constructing,
 selling, leasing, licensing or strategizing the development of
 immovable property.
 
 Future Finance Limited (formerly known as Sivagami Finance &
 Investments Limited)
 
 Future Finance Limited (FFL) is a Chennai based NBFC and engaged in
 financing of vehicles & equipments. FCH, subsidiary of the Company, has
 100% stake in FFL.
 
 During FY07-08, FFL registered income from operations amounting to
 Rs.0.33 Crores and its profit after tax stood at Rs.0.06 Crores.
 
 Future Hospitality Management Services Limited
 
 Future Hospitality Management Services Limited (FHMSL) was incorporated
 for providing investment advisory services. FCH, subsidiary of the
 Company, has 100% stake in FHMSL. During FY07-08, FHMSL has yet to
 commence operations.
 
 Kshitij Investment Advisory Company Limited
 
 Kshitij Investment Advisory Company Limited (KIACL) is engaged in
 investment advisory services and provides these services to the Rs.350
 Crores Kshitij Venture Capital
 
 Fund and to the US $ 90 Million Horizon Development Management LLC,
 Mauritius.  FCH has 92% stake in KIACL. During FY07-08, KIACL
 registered income from operations amounting to Rs.25.32 Crores and
 profit after tax stood at Rs.2.73 Crores.
 
 Ambit Investment Advisory Company Limited
 
 Ambit Investment Advisory Company Limited (AIACL) is a 100% subsidiary
 of FCH. During FY07-08, AIACL registered profit after tax stood at
 Rs.0.03 Crores from other income.
 
 Indivision investment Advisors Limited
 
 Indivision Investment Advisors Limited (HAL.) acts as the domestic
 advisor to Mauritius based advisor of Indivision India Partners LLC,
 Mauritius. FCH has 100% stake in HAL. During FY07-08, HAL registered
 income from operations amounting to Rs.15.80 Crores and profit after
 tax stood at Rs.1.74 Crores.
 
 Myra Mall Management Company Limited
 
 Myra Mall Management Company Limited (MMMCL) is engaged in the business
 of acquisition and leasing of commercial properties. MMMCL owns office
 premises of 44,000 square feet at Peninsula plaza. FCH has 100% stake
 in MMMCL. During FY07-08, MMMCL registered income from operations
 amounting to Rs.9.07 Crores and the loss stood at Rs.0.77 Crores.
 
 Future Capital Financial Services Limited
 
 Future Capital Financial Services Limited (FCFSL) (formerly known as
 Future Finmart Limited) is in the business of retailing financial
 services products and is a 100% subsidiary of FCH. FFL is rolling out a
 financial supermarket format Future Money. During FY07-08, FCFSL
 registered income from operations amounting to Rs.0.47 Crores and the
 loss stood at Rs.9.73 Crores.
 
 Subsidiary of Future Knowledge Services Limited (FKSL)
 
 Erudite Knowledge Services Limited
 
 Erudite Knowledge Services Limited IEKSL) was incorporated on October
 8, 2007 and is involved in the business of BPO/ KPO and advisory and
 consultancy services in all kinds of business activities. EKSL is
 wholly owned subsidiary of FKSL.
 
 The Ministry of Corporate affairs has granted the exemption to the
 Company from the requirement to present detailed financial statement of
 each subsidiary.  A statement pursuant to section 21 2 of the Companies
 Act, 1956 relating to subsidiary companies has been given as an
 annexure to the Annual Report. Further annual accounts of the
 subsidiaries companies and related detailed information will be made
 available to the holding and subsidiaries investors, seeking such
 information at any point of time. The annual accounts of the subsidiary
 companies are kept for inspection by any investor at the head office of
 the Company and that of the respective subsidiary companys office.
 Further a separate statement is attached to the consolidated balance
 sheet giving information about the subsidiary as per requirement of the
 exemption letter.
 
 JOINT VENTURES
 
 Future Axiom Telecom Limited (formerly known as Convergem Communication
 (India) Limited) Joint Venture with Axiom Telecom LLC, UAE
 
 The Company has a 50% stake in Future Axiom Telecom Limited (FATL)
 which is a joint venture Company with Axiom Telecom LLC, UAE. The
 Company would be engaged in sourcing and wholesale distribution of
 mobile handsets, accessories and in setting up service centres for
 mobile handsets in India. During FY07-08, FATL registered income from
 operations amounting to Rs.73.73 Crores and loss stood at Rs.6.62
 Crores. FATL has one more line of activities as Authorised service
 centres operated through its 100% subsidiary Mobile Repair Service City
 India Limited.
 
 Future Generali India Life Insurance Company Limited Future Generali
 India Life Insurance Company Limited (FGI-Life) is Companys joint
 venture in the Life insurance sector. FGI-Life has commenced the
 commercial operations from September 2007. The Company has also entered
 into joint venture arrangements with Sain Advisory Services Private
 Limited which is SPV for this insurance venture of the Company.
 FGI-Life has commenced operations and introduced many insurance
 products to suit requirements of various categories of customers.
 
 Future Generali India Insurance Company Limited
 
 Future Generali India Insurance Company Limited (FGI-Nonlife) is
 Companys joint venture in the general insurance sector. FGI-Nonlife
 has commenced the commercial operations from September 2007. The
 Company has also entered into joint venture arrangements with Shendra
 Advisory Services Private Limited which is SPV for this insurance
 venture of the Company. FGI- Nonlife has also commenced operations and
 introduced insurance products for various general insurance needs of
 the different categories of customers.
 
 NTC joint ventures - Apollo Design Apparel Parks Limited & Goldmohur
 Design & Apparel Park Limited
 
 The Company has entered into joint venture with 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 (ASAPL) & Goldmohur
 Design & Apparel Park Limited (GDAPL). The ASAPL & GDAPL would be
 working for the restructuring and development of the Apollo Mills and
 GoldMohur Mills respectively.
 
 Staples Future Office Products Private Limited Staples Future Office
 Products Private Limited (SFOPPL) is designed to capture the
 consumption space of office supplies, office equipments and products.
 SFOPPL is a joint venture between the Company and Staples Asia
 Investment Limited (a subsidiary of Staples Inc USA). During FY07-08,
 SFOPPL registered income from operations amounting to Rs.22.42 Crores
 and the loss stood at Rs.6.38 Crores.  Pan India Food Solutions Private
 Limited Pan India Food Solutions Private Limited (PIFSPL) is involved
 in the business of restaurants and Food Courts.  PIFSPL is a 50-50
 joint venture between the Company and Blue Foods Private Limited. This
 company runs the food concepts of Cooper Chimney, Noodle Bar, Bombay
 Blue, Spaghetti Kitchen, and Spoon - the Food court. During FY07-08,
 PIFSPL registered income from operations amounting to Rs.26.49 Crores
 and loss after tax stood at Rs. 10.06 Crores.
 
 Talwalkars Pantaloon Fitness Private Limited Talwalkars Pantaloon
 Fitness Private Limited (TPFPL) is involved operates gymnasiums and
 deals with fitness equipments and other health products. TPFPL is a
 50-50 joint venture between the Company and Talwalkars Better Value
 Fitness Private Limited. The company is presently running 5 gymnasiums.
 During FY07-08, TPFPL registered income from operations amounting to
 Rs.3.21 Crores and loss after tax stood at Rs.3.41 Crores.
 
 Alpha Future Airport Retail Private Limited
 
 Alpha Future Airport Retail Private Limited (AFARPL) is in the business
 of retailing of consumer products, foods and beverages at airport
 terminals world-wide.  AFARPL is a 50:50 joint venture company between
 Alpha Airport Retail Holdings Private Limited and the Company.
 Presently, the company is running duty free retail shop at Delhi
 International Airport. With the change in ownership of Alpha Airport
 Retail Holdings globally, your Company is in the process of considering
 various alternatives for the future of this company.  Gupta
 Infrastructure (India) Private Limited Gupta Infrastructure (India)
 Private Limited (GIIPL) has been floated as a joint venture with Gupta
 Coal India Limited, and Cineline Entertainment India Private Limited.
 Your Company has 19.38% stake in GIIPL. This company is a Special
 Purpose Vehicle to develop a retail mall at Raipur, Chattisgarh.
 
 Planet Retail Holdings Private Limited
 
 Planet Retail Holdings Private Limited (PRHPL) is involved in retail
 and wholesale business of fashion, sports and lifestyle products. PRHPL
 operates a chain of sportswear goods and has licenses of international
 brands. The company operates Planet Sports, Guess, Bodyshop and Marks &
 Spencer in India. Your Company has a 49 % stake in PRHPL. During
 FY07-08, PRHPL registered income from operations amounting to Rs.
 112.25 Crores and loss after tax stood at Rs.2.67 Crores. PRHPL is also
 operating specialised segments of business in two of its 100%
 subsidiaries viz. Supreme Tradelinks Private Limited & Winner Sports
 Private Limited.  Other joint ventures of the subsidiaries companies
 Subsidiaries of the Companies have also entered into few joint
 ventures. Asian Retail Lighting Limited, is JV of Home Solutions Retail
 (India) Limited for the marketing of retail lighting venture.
 
 Realterm FCH Logistics Advisors Private Limited is the JV of Future
 Capital Holdings Limited for the undertaking the investment advisory
 services relating to logistics, warehousing facilities.  Directors
 
 Mr. Anil Harish and Dr. Darlie Koshy retire by rotation and being
 eligible, offer themselves for re-appointment. The details as required
 by clause 49 of the listing agreement, is given as part of the notice.
 Mr. Vijay Kumar Chopra was appointed as additional director of the
 Company w.e.f. 24th July, 2008. He holds office till the date of the
 ensuing Annual General Meeting. The Company has received requisite
 notice together with deposit, as provided under section 257 of the
 Companies Act, 1956, from a shareholder proposing the appointment of
 Shri Vijay Kumar Chopra as a director liable to retire by rotation.
 
 Mrs. Anju Poddar & Mr. Ved Prakash Arya resigned from the Company
 w.e.f. 24th July, 2008 due to their preoccupation and engagement in
 other activities. The Board of Directors place on record their
 appreciation for the valuable service rendered by Mrs. Anju Poddar &
 Mr. Ved Prakash Arya during their tenure as Directors of the Company.
 
 Directors Responsibility Statement Pursuant to Section 217(2AA) of the
 Companies Act, 1956, the Board of Directors of the Company hereby state
 and confirm that: -
 
 (i) in preparation of the annual accounts, the applicable accounting
 standards have been followed with proper explanation relating to
 material departures;
 
 (ii) the accounting policies selected have been applied consistently
 and judgments made and estimates given are reasonable and prudent so as
 to give a true and fair view of the state of affairs of the Company as
 on 30th June 2008 and the profit of the company for the year ended on
 that date;
 
 (iii) the proper and sufficient care have been taken for the
 maintenance of adequate accounting records in accordance with the
 provisions of the Companies Act, 1956 for safeguarding the assets of
 the company and for preventing and detecting fraud and other
 irregularities;
 
 (iv) the accounts have been prepared on a going concern basis.
 
 Auditors
 
 M/s. NGS & Co., Chartered Accountants, Mumbai, hold office as Statutory
 Auditors upto the conclusion of the ensuing Annual General Meeting and
 being eligible, otter themselves for re-appolntment. Shareholders are
 requested to appoint them as Statutory Auditors to hold office upto the
 conclusion of the next Annual General Meeting and to fix their
 remuneration. The observations made by the auditors are
 self-explanatory.  Consolidated Financial Statements The Audited
 consolidated financial statements are provided as part of the Annual
 Report in accordance with Accounting Standard AS-21, AS-23 & AS-27
 dealing with the consolidated financial reporting. 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.  Particulars Of Employees
 
 The statement containing particulars of employees as required under
 section 217(2A) of the Companies Act, 1956 and the rules made
 thereunder, is given as an annexure appended hereto and forms part of
 this report.  In terms of section 219(1)(iv) of the Act, the report and
 accounts are being sent to the shareholders excluding the aforesaid
 annexure. Any shareholder interested in obtaining the copy of annexure
 may write to the Dy. Company Secretary at the registered office of the
 Company.
 
 CONSERVATION OF ENERGY & TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS & OUTGO
 
 A Statement giving details of conservation of energy (in Form A) and
 foreign exchange earnings and outgo, as required under Section
 217(1)(e) of the Companies Act, 1 956 read with the Companies
 (Disclosure of Particulars in the Report of Directors) Rules, 1988, in
 Annexure I is attached and forms part of this report. However there is
 no expenditure on R&D, Technology absorption, adoption & innovation
 during the current financial year.  The Company being concentrating on
 the domestic consumption space, do not have any specific exports
 initiatives to report to members.
 
 AWARDS AND RECOGNITIONS
 
 The Reid & Taylor Awards For Retail Excellence 2008
 
 - Retail Leadership Award: Kishore Biyani
 
 - Retail Best Employer of the Year: Future Group
 
 - Retailer of The Year: Home Products and Office Improvements: HomeTown
 
 The Reid & Taylor Awards for Retail Excellence are an important feature
 of the Asia Retail Congress -Asias single most important global
 platform to promote world-class retail practices - and are aimed at
 honouring the best, in Asian Retail scenario. India played host to Asia
 Retail Congress 2008.  Coca-Cola Golden Spoon Awards 2008
 
 - Most Admired Food & Grocery Retailer of the Year - Supermarkets: Food
 Bazaar
 
 - Most Admired Food & Grocery Retailer of the Year - Hypermarkets: Big
 Bazaar
 
 - Most Admired Retailer of the Year - Dynamic Growth in Network
 Expansion across Food, Beverages & Grocery: Future Group
 
 - Most Admired Food & Grocery Retailer of the Year - Consumers Choice:
 Big Bazaar
 
 - Most Admired Food & Grocery Retail Visionary of the Year: Kishore
 Biyani
 
 The Coca-Cola Golden Spoon Awards 2008, were given away for the first
 time as a culmination of the Food Forum India 2008 - a two day
 convention which saw the participation of leading brands, retailers &
 retail support organizations from across the globe. The awards were
 presented to honour enterprise, innovation and achievement in the food
 retailing business as a benchmark of excellence.
 
 ACKNOWLEDGMENT
 
 The Board wishes to place on record their sincere appreciation to all
 the consumers, working capital consortium bankers lead by Bank of
 India, vendors, and other stakeholders for the continued support and
 patronage during the previous year. The board further wishes to record
 their sincere appreciation to the employees of the Company whose
 efforts, hard work and dedication has enabled the Company to achieve
 the targets and recognitions.
 
                                       For and on behalf of  the Board,
 
                                 Kishore Biyani       Rakesh Biyani
                               Managing Director    Wholetime Director
 
 Place: Mumbai
 Dated : 20th September, 2008