Placement Document December 16

8/8/2019 Placement Document December 16

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Not for Circulation

PANTALOON RETAIL (INDIA) LIMITED(Incorporated in the Republic of India with limited liability under the Companies Act, 1956)

Pantaloon Retail (India) Limited (the Company) is issuing 6,265,060 Equity Shares of Rs. 2 each at a price of Rs. 415 per Equity

Share, including a premium of Rs.413 per Equity Share, aggregating Rs.2,599.99 million.The Company has split one Equity Share ofRs. 10 face value into five Equity Shares of Rs. 2 each pursuant to an AGM resolution dated November 17, 2006.

ISSUEINRELIANCEUPONCHAPTERXIII-AOFTHESEBIGUIDELINES

THIS OFFERING AND THE DISTRIBUTION OF THIS PLACEMENT DOCUMENT IS BEING DONE IN RELIANCE

UPON CHAPTER XIII-A OF THE SEBI (DISCLOSURE AND INVESTOR PROTECTION) GUIDELINES, 2000, AS

AMENDED (THE SEBI GUIDELINES). THIS PLACEMENT DOCUMENT IS PERSONAL TO EACH PROSPECTIVE

INVESTOR, AND DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR EQUITY SHARES OR

SOLICITATION OF AN OFFER TO THE PUBLIC OR TO ANY OTHER PERSON OR CLASS OF INVESTORS.

Invitations, offers and sales of Equity Shares shall only be made pursuant to the Placement Document, Placement Document andConfirmation of Allocation Note. See Issue Procedure. The distribution of this Placement Document or the disclosure of its contentswithout our prior consent to any person, other than Qualified Institutional Buyers (as defined in the SEBI Guidelines) and personsretained by Qualified Institutional Buyers to advise them with respect to their purchase of Equity Shares, is unauthorized and

prohibited. Each prospective investor, by accepting delivery of this Placement Document agrees to observe the foregoing restrictions,

and to make no copies of this Placement Document or any documents referred to in this Placement Document.

This Placement Document has not been and will not be registered as a prospectus with the Registrar of Companies in India, and willnot be circulated or distributed to the public in India.

Investments in equity and equity-related securities involve a degree of risk and prospective investors should not invest any

funds in this Issue unless they are prepared to take the risk of losing all or part of their investment. Investors are advised to

read the risk factors carefully before taking an investment decision in this Issue. Each prospective investor is advised to

consult its advisers about the particular consequences to it of an investment in the Equity Shares being issued pursuant to this

Placement Document.

The information on the Companys website or any website directly or indirectly linked to such websites does not form part of thisPlacement Document and prospective investors should not rely on such information.

Applications shall be made for the listing of the Equity Shares on the Bombay Stock Exchange Limited (the BSE), the NationalStock Exchange of India Limited (NSE) and the Delhi Stock Exchange Association Limited (DSE) (together the StockExchanges). The Stock Exchanges assume no responsibility for the correctness of any statements made, opinions expressed or reportscontained herein. Admission of the Equity Shares to trading on the Stock Exchanges should not be taken as an indication of the merits

of the Company or the Equity Shares.YOU MAY NOT AND ARE NOT AUTHORIZED TO (1) DELIVER THE PLACEMENT DOCUMENT TO ANY OTHERPERSON OR (2) REPRODUCE SUCH PLACEMENT DOCUMENT IN ANY MANNER WHATSOEVER. ANY DISTRIBUTIONOR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITHTHIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SEBI GUIDELINES OR OTHER APPLICABLE LAWS OF INDIAAND OTHER JURISDICTIONS.

A copy of the Preliminary Placement Document has been delivered to the Stock Exchanges. A copy of the Placement Document willbe filed with the Stock Exchanges. A copy of the Placement Document will also be delivered to the Securities and Exchange Board ofIndia (the SEBI) for record purposes.

THIS PLACEMENT DOCUMENT HAS BEEN PREPARED BY THE COMPANY SOLELY FOR PROVIDING INFORMATIONIN CONNECTION WITH THE PROPOSED ISSUE OF THE EQUITY SHARES DESCRIBED IN THIS PLACEMENTDOCUMENT.

THIS ISSUE IS BEING MADE IN INDIA ONLY AND NON-RESIDENTS CANNOT PARTICIPATE IN THIS ISSUE.

This Placement Document is dated December 15, 2006

Sole Bookrunner

ENAM FINANCIAL CONSULTANTS PRIVATE LIMITED

801/802, Dalamal TowersNariman Point, Mumbai 400 021

Serial no.


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NOTICE TO INVESTORS

The Company accepts responsibility for the information contained in this Placement Document and to the best knowledge and belief of the Company, having made all reasonable enquiries, confirms that thisPlacement Document contains all information with respect to the Company and the Equity Shares which ismaterial in the context of this Issue. The statements contained in this Placement Document relating to the

Company and the Equity Shares are, in every material respect, true and accurate and not misleading, theopinions and intentions expressed in this Placement Document with regard to the Company and the EquityShares are honestly held, have been reached after considering all relevant circumstances, are based oninformation presently available to the Company and are based on reasonable assumptions. There are noother facts in relation to the Company and the Equity Shares, the omission of which would, in the contextof the Issue, make any statement in this Placement Document misleading in any material respect. Further,all reasonable enquiries have been made by the Company to ascertain such facts and to verify the accuracyof all such information and statements. The Sole Bookrunner has not separately verified the informationcontained in this Placement Document (financial, legal or otherwise). Accordingly, neither the SoleBookrunner nor any member, employee, counsel, officer, director, representative, agent or affiliate of theSole Bookrunner makes any express or implied representation, warranty or undertaking, and noresponsibility or liability is accepted, by the Sole Bookrunner, as to the accuracy or completeness of theinformation contained in this Placement Document or any other information supplied in connection with

the Equity Shares. Each person receiving this Placement Document acknowledges that such person has notrelied on the Sole Bookrunner nor on any person affiliated with the Sole Bookrunner in connection with itsinvestigation of the accuracy of such information or its investment decision, and each such person must relyon its own examination of the Company and the merits and risks involved in investing in the Equity Shares.Prospective investors should not construe anything in this Placement Document as legal, business, tax,accounting or investment advice.

No person is authorized to give any information or to make any representation not contained in thisPlacement Document and any information or representation not so contained must not be relied upon ashaving been authorized by or on behalf of the Company or the Sole Bookrunner. The delivery of thisPlacement Document at any time does not imply that the information contained in it is correct as at anytime subsequent to its date.

The distribution of this Placement Document and the issue of the Equity Shares in certain jurisdictions maybe restricted by law. As such, this Placement Document does not constitute, and may not be used for or inconnection with, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation isnot authorized or to any person to whom it is unlawful to make such offer or solicitation. In particular, noaction has been taken by the Company or the Sole Bookrunner which would permit an offering of theEquity Shares or distribution of this Placement Document in any jurisdiction, other than India, where actionfor that purpose is required. Accordingly, the Equity Shares may not be offered or sold, directly orindirectly, and neither this Placement Document nor any offering materials in connection with the EquityShares may be distributed or published in or from any country or jurisdiction except under circumstancesthat will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

In making an investment decision, investors must rely on their own examination of the Company and theterms of this Issue, including the merits and risks involved. Investors should not construe the contents ofthis Placement Document as legal, tax, accounting or investment advice. Investors should consult their own

counsel and advisors as to business, legal, tax, accounting and related matters concerning this offering. Inaddition, neither the Company nor the Sole Bookrunner is making any representation to any offeree orpurchaser of the Equity Shares regarding the legality of an investment in the Equity Shares by such offereeor purchaser under applicable legal, investment or similar laws or regulations. Each purchaser of the EquityShares in this offering is deemed to have acknowledged, represented and agreed that it is eligible to investin India and in the Company under Indian law, including Chapter XIII-A of the SEBI Guidelines and is notprohibited by the SEBI or any other statutory authority from buying, selling or dealing in securities. Eachpurchaser of Equity Shares in this offering also acknowledges that it has been afforded an opportunity torequest from the Company and review information relating to the Company and the Equity Shares.


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This Placement Document contains summaries of certain terms of certain documents, but reference is madeto the actual documents, copies of which will be made available upon request during the offering period for physical inspection at the Registered Office of the Company located at Mumbai, Maharashtra, India,subject to applicable confidentiality restrictions. All such summaries are qualified in their entirety by thisreference.

DISCLAIMER CLAUSE OF THE STOCK EXCHANGES

As required, a copy of the Preliminary Placement Document has been submitted to the Stock Exchanges.The Stock Exchanges do not in any manner:

1. warrant, certify or endorse the correctness or completeness of any of the contents of thePreliminary Placement Document

2. warrant that this Companys Equity Shares will be listed or will continue to be listed onthe Stock Exchanges; or

3. take any responsibility for the financial or other soundness of this Company, its

promoters, its management or any scheme or project of this Company;

and it should not for any reason be deemed or construed to mean that the Preliminary Placement Documenthas been cleared or approved by Stock Exchanges. Every person who desires to apply for or otherwiseacquires any securities of this Company may do so pursuant to an independent inquiry, investigation andanalysis and shall not have any claim against Stock Exchanges whatsoever by reason of any loss whichmay be suffered by such person consequent to or in connection with such subscription/acquisition whetherby reason of anything stated or omitted to be stated herein or for any other reason whatsoever.


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PRESENTATION OF FINANCIAL AND USE OF MARKET DATA

We prepare our financial statements in accordance with Indian GAAP. All discrepancies in the tablesincluded herein between the amounts listed and the totals thereof are due to rounding off.

We publish our financial statements in Rupees.

In this Placement Document, unless otherwise indicated or the context otherwise requires, all references toPantaloon Retail (India) Limited, PRIL, the Company, we, our, us, or similar terms are toPantaloon Retail (India) Limited, and references to you are to the prospective investors in the EquityShares. References in this Placement Document to India are to the Republic of India and theGovernment are to the Governments of India, central or state, as applicable.

Our shareholders vide the annual general meeting dated November 17, 2006 approved the stock split of ourequity shares of Rs. 10 each to Rs. 2 each. As such the presentation of share data has been adjusted toreflect the split in the face value of our shares unless specified otherwise. As of December 12, 2006, theEquity Shares of the Company are being traded on the Stock Exchanges with the face value of Rs. 2 each.The equity shares issued pursuant to this Placement Document and the existing Equity Shares shall rankpari passu in all respects from the date of allotment.

The financial data presented in this Placement Document as of June 30, 2006, 2005 and 2004 have not beenadjusted to reflect the stock split.


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INDUSTRY AND MARKET DATA

Information regarding market position, growth rates and other industry data pertaining to our businesscontained in this Placement Document consists of estimates based on data reports compiled by professionalorganizations and analysts, data from other external sources and our knowledge of markets in which wecompete. The statistical information included in this Placement Document has been reproduced fromvarious trade, industry and government publications and websites. This data is subject to change and cannotbe verified with complete certainty due to limits on the availability and reliability of the raw data and otherlimitations and uncertainties inherent in any statistical survey. In many cases, there is no readily availableexternal information (whether from trade or industry associations, government bodies or otherorganizations) to validate market-related analyses and estimates, so we rely on internally developedestimates. While we have compiled, extracted and reproduced this data from external sources, includingthird parties, trade, industry or general publications, we accept responsibility for accurately reproducingsuch data. However, neither we nor the Sole Bookrunner have independently verified this data and neitherwe nor the Sole Bookrunner make any representation regarding the accuracy of such data. Similarly, whilewe believe our internal estimates to be reasonable, such estimates have not been verified by anyindependent sources and neither we nor the Sole Bookrunner can assure potential investors as to theiraccuracy.


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FORWARD-LOOKING STATEMENTS

All statements contained in this Placement Document that are not statements of historical fact constituteforward-looking statements. All statements regarding our expected financial condition and results ofoperations, business, plans and prospects are forward-looking statements. These forward-lookingstatements include statements as to our business strategy, our revenue and profitability, planned projectsand other matters discussed in this Placement Document regarding matters that are not historical facts.These forward-looking statements and any other projections contained in this Placement Document(whether made by us or any third party) are predictions and involve known and unknown risks,uncertainties and other factors that may cause our actual results, performance or achievements to bematerially different from any future results, performance or achievements expressed or implied by suchforward-looking statements or other projections. All forward looking statements are subject to risks,uncertainties and assumptions about us that could cause actual results to differ materially from thosecontemplated by the relevant forward-looking statement. Important factors that could cause actual results todiffer materially from our expectations include, among others:

Change in the composition of cost of goods;

Competitive pressures;

Changes in consumer spending pattern;

Other capital market and economic conditions; and

Changes in regulatory laws.

Investors can generally identify forward-looking statements by terminology 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 our strategies,objectives, plans or goals are also forward-looking statements.

All forward looking statements are subject to risks, uncertainties and assumptions about us that could causeactual results and property valuations to differ materially from those contemplated by the relevantstatement. Additional factors that could cause actual results, performance or achievements to differmaterially include, but are not limited to, those discussed under Managements Discussion and Analysis ofFinancial Condition and Results of Operations, Industry and Business.

The forward-looking statements contained in this Placement Document are based on the beliefs ofmanagement, as well as the assumptions made by and information currently available to management.Although we believe that the expectations reflected in such forward-looking statements are reasonable atthis time, we cannot assure investors that such expectations will prove to be correct. Given theseuncertainties, investors are cautioned not to place undue reliance on such forward-looking statements. Ifany of these risks and uncertainties materialize, or if any of our underlying assumptions prove to beincorrect, our actual results of operations or financial condition could differ materially from that describedherein as anticipated, believed, estimated or expected. All subsequent written and oral forward-lookingstatements attributable to us are expressly qualified in their entirety by reference to these cautionarystatements.


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DEFINITIONS AND ABBREVIATIONS

Definitions of Certain Capitalized Terms Used in this Placement Document

The following list of defined terms is intended for the convenience of the reader only and is not exhaustive.

TermDescription

Pantaloon Retail (India)Limited or PRIL or theCompany or ourCompany

Pantaloon Retail (India) Limited, a public limited company incorporated

under the Companies Act, 1956.

We or us or our Refers to Pantaloon Retail (India) Limited and where the context requires,

its subsidiaries, which are enumerated in the section titled Business.

Allocated, Allocation The determination of QIBs for the purposes of inviting submission of

CAN, done in consultation with the Sole Bookrunner and in compliance

with Chapter XIII-A of the SEBI Guidelines.

Allotment Unless the context otherwise requires, the allotment of Equity Shares to

the successful Investors pursuant to the Issue.

Articles/Articles ofAssociation

Articles of Association of our Company.

Auditor M/s. NGS & Company, formerly known as S.M. Kabra & Company

Bid An indication of QIBs interest, including all revisions and modifications

of interest, as provided in the Bid Form to subscribe for Equity Shares of

the Company under this Issue.

Bid Closing Date December 15, 2006

Bid Opening Date December 14, 2006

Bid Form The form pursuant to which a QIB shall submit a Bid.

Board of Directors/Board The board of directors of our Company or a committee constituted

thereof.

BOLT BSE On-Line Trading

CAN/Confirmation ofAllocation Note

Note or advice or intimation to QIBs for Allotment of Equity Shares after

discovery of the Issue Price.

Companies Act The Companies Act, 1956 as amended from time to time.

Cut-off Price The Issue Price which shall be finalized by the Company in consultation

with the Sole Bookrunner.

Depository A depository registered with SEBI under the SEBI (Depositories and

Participant) Regulations, 1996, as amended from time to time.

Depositories Act The Depositories Act, 1996, as amended from time to time.

Depository Participant A depository participant as defined under the Depositories Act.

Director(s) Director(s) on the Board of our Company, unless otherwise specified.

Equity Shares Equity shares of the Company of face value of Rs. 2 each, unless


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specified otherwise in the context thereof. The Company has split oneEquity Share of Rs. 10 face value into five Equity Shares of Rs. 2 eachpursuant to an AGM resolution dated November 17, 2006.

FEMA The Foreign Exchange Management Act, 1999, as amended from time to

time, and the regulations framed thereunder.

FII Foreign Institutional Investor (as defined under the Securities and

Exchange Board of India (Foreign Institutional Investors) Regulations,

1995) registered with SEBI under applicable laws in India.

Floor Price Rs. 326.58 which has been calculated in accordance with clause 13A.3 of

the SEBI Guidelines. The floor price has been adjusted to reflect the split

in Equity Shares to Rs. 2 per Equity Share

Investors Any prospective investor who makes a Bid pursuant to the terms of the

Preliminary Placement Document.

Issue The issue of Equity Shares to Qualified Institutional Buyers, pursuant toChapter XIII-A of the SEBI Guidelines.

Issue Price A price per Equity Share of Rs. 415.

Issue Size The issue of6,265,060 Equity Shares aggregating to Rs. 2,599.99 million.

Memorandum/Memorandum ofAssociation

The Memorandum of Association of our Company.

Mutual Fund A mutual fund registered with SEBI under the SEBI (Mutual Funds)

Regulations, 1996.

Pay-in Date The last date specified in the CAN sent to QIBs, as applicable.

Placement Document This Placement Document dated December 15, 2006, issued in

accordance with Chapter XIII-A of the SEBI Guidelines.

Preliminary PlacementDocument

The Preliminary Placement Document, issued in accordance with Chapter

XIII-A of the SEBI Guidelines.

Promoter Kishore Biyani

QIBs or QualifiedInstitutional Buyers

A Qualified Institutional Buyer as defined under clause 2.2.2B (v) of the

SEBI Guidelines. However, non-residents including FIIs, FVCIs as well

as foreign multilateral and bilateral development financial institutions are

not eligible to participate in this Issue.

Registrar of Companies Registrar of Companies, Mumbai, Maharashtra.

Relevant Date August 23, 2006 (i.e., the day which is thirty days prior to the date on

which the meeting of general body of shareholders was held vizSeptember 22, 2006, in terms of sub-section (1A) of Section 81 of the

Companies Act, 1956).

SEBI Guidelines The SEBI (Disclosure and Investor Protection) Guidelines, 2000 issued

by SEBI, as amended, including instructions and clarifications issued by

SEBI from time to time.

SEBI Act The Securities and Exchange Board of India Act, 1992, as amended from


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time to time.

Sole Bookrunner Enam Financial Consultants Private Limited

Stock Exchanges BSE, NSE and DSE

GAAP Generally Accepted Accounting Principles

Abbreviations

Abbreviation Full Form

AGM Annual General Meeting of the Company.

AS Accounting Standards as issued by the Institute of Chartered Accountants

of India.

ASE Ahmedabad Stock Exchange Limited

BSE Bombay Stock Exchange Limited

CAGR Compounded Annual Growth Rate.

CEO Chief Executive Officer.

CDSL Central Depository Services Limited.

Collection Bank UTI Bank Limited

DSE The Delhi Stock Exchange Association Limited

EGM Extraordinary General Meeting.

EPS Earnings Per Share.

FDI Foreign Direct Investment.

FICCI Federation of Indian Chambers of Commerce and Industry

FII Foreign Institutional Investors

FVCI Foreign Venture Capital Investors

FY/ Fiscal Financial Year/ Fiscal year.

Financial year /Fiscal Year Period of twelve months ending June 30 of that particular year, unless

otherwise stated.

GDP Gross Domestic Production.

GoI Government of India.

IAS International Accounting Standards.

ICAI Institute of Chartered Accountants of India.

IFRS International Financial Reporting Standards.

I.T. Act The Income Tax Act, 1961, as amended from time to time.

MOU Memorandum of Understanding.

NAV Net Asset Value.


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NSDL National Securities Depository Limited.

NSE National Stock Exchange of India Limited.

p.a. Per annum.

P/E Price/Earnings Ratio.

PAN Permanent Account Number.

RBI The Reserve Bank of India.

RoC The Registrar of Companies, Mumbai, Maharashtra.

SEBI The Securities and Exchange Board of India constituted under the SEBI

Act, 1992.

Securities Act U.S. Securities Act of 1933, as amended.

Takeover Code SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,

1997.

Technical and Industry Terms and Abbreviations

Abbreviation Full FormAnchor Tenant A commercial retail business such as a national chain store or regional

department store, placed in a shopping centre which usually enjoys

privileged commercial terms

Aspirational Products Good quality and high priced lifestyle products

Catchment Studies Systematic study of consumption and spending habits of an individual orfamily in target area based on parameters such as age group, sex,preference, purchase category

Category Killers Dominant retailers in terms of profitability and growth of market shares.CDMA Code Division Multiple Access.

Department Store A retail organization that normally employs approximately 25 or more people and sells merchandise in the following categories: homefurnishings, apparel for men, women, and children, and home linens anddry goods.

Distribution Centres A warehouse which processes, moves and stores goods

A storage facility that takes orders and delivers products.

FMCG Fast moving consumer goods

Format It is a type of retail store to sell a specific nature of goods to a particularsegment of customers

GSM Global System for Mobile Communications

High Street A place or locality in a major city or principal street of a small town;which would be the main point of purchase from well known shopsstocking high quality, apparels and non-apparels

Hypermarkets A large retail operation which combines the features of a Supermarketand a discount house

IT Information Technology

ITES/BPO Information technology enabled Services and Business ProcessOutsourcing

Lifestyle Products/ Products that meet way of living centred around certain activities


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Lifestyle Merchandise

Lifestyle Retailing The stores under this category primarily retail non-food items such asapparel, footwear, accessories, cosmetics and household products.

Private Label Brands that are developed in house by the retailer

SKUs Stock keeping units, is the smallest unit available for keeping inventory

control.

Shrinkage Loss in inventory on account of a combination of employee theft,shoplifting, vendor fraud and administrative error

Supermarkets A self service store that satisfies regular shopping needs of consumers,including food and non food items

Square feet sq. ft.

Value Retailing The stores under this category retail mainly food and household items.These are primarily large stores with volume based discounted prices


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SUMMARY OF BUSINESS

Overview

We are one of Indias leading organised multi format retailers and are pioneers in Indian hyper marketbusiness, promoted by Kishore Biyani. We are a part of the Future Group.

From our beginning in 1987, we have today evolved as one of the leading retailer and are among the pioneers in setting up a nation-wide chain of large format stores in India. We believe that the variousinitiatives taken by us have played a key role in enhancing the standards of retail in the country. We are anentrepreneur driven, professionally managed retailer focused on meeting the customer requirements for alarge component of their spend across fashion, food, general merchandise, home in both value and lifestylesegments. We have also entered into partnerships and joint ventures to expand our offerings from home toapparel to household products to durables etc. We believe our focus on customers supported by systemsand processes and a committed work force are the key factors that have contributed to our success and willhelp us scale up as we embark on our strategic growth plan.

We started our operations with one store in Kolkata in 1996, occupying an area of 8000 sq ft. Presently weoperate 125 stores, (including franchisee stores and factory outlets) in over 25 cities spread across thecountry occupying an aggregate area of 3,165,498 sq ft (as on October 15, 2006). .

Our business is identifiable under two major segments (i) Value retailing; and (ii) Life Style retailing. Wecater the Life Style retailing segment through 22 Pantaloon stores, 3 Central Malls, and 10 speciality retailstores (includes 6 aLL stores, and 4 Blue Sky outlets). In Value Retailing segment, cater to our customersneeds through our 33 Big Bazaar, 48 Food Bazaar Outlets and 9 speciality retail stores (includes 5 FashionStations, 3 Depot Stores and 1 Health Village Outlet).

We believe that managing customer expectation by offering them all the requirements for their entirefamily under one roof is the key to being a successful retailer, and hence have built our business modelaround Family focus rather than individual focus. We believe addressing the family attracts morecustomers into the store.

We retail a range of branded and private label apparel, footwear, perfumes, cosmetics, jewellery, leatherproducts and accessories, home products, books, music and toys in our stores. To complete the idea of a

family store, besides garments, we also retail household items, consumer durables, and home furnishings,apart from food and personal care products. This is complemented by cafes, food stalls, entertainment,personal care and various beauty related services. Promotions and events are an integral part of our serviceoffering to our customer, which helps us create a unique shopping experience.

We believe our offerings provide to our customers a unique shopping experience, comprising of a vastrange of lifestyle and value retail products, mix of retailing formats coupled with the facility ofentertainment and leisure.

We have 14 subsidiaries and six joint venture entities supplementing our business.

Our Competitive Strengths

We believe our competitive strengths include the following;

Brand equity and early mover advantage;

Entrepreneur led, professionally managed by an experienced team;

Project execution and operations capabilities;

Vast range of lifestyle and value retail products and services;


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Strong focus on systems and processes;

Strong distribution and logistics network and supply chain;

strong distribution and logistics network, with our 21 distribution centres covering; and

Large base of customers.

Our Strategy

We intend to maintain and enhance our position as a leading retail entity through continued focus on theIndian market and investing further in our competitive strengths to grow our business. The key elements ofour business strategy include:

Provide Everything, Everywhere, Everytime to Every Indian Consumer;

Penetration in Key Markets;

Capturing share of consumer spend;

Property supply pipeline;

Private Labels and own brands;

Strategic Relationships; Learning and caring organisation; and

Robust and scalable systems.


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RECENT DEVELOPMENTS

Stock Split

The Company has split one Equity Share of Rs. 10 face value into five Equity Shares of Rs. 2 eachpursuant to an AGM resolution dated November 17, 2006. As of December 12, 2006, the Equity Shares ofthe Company are being traded on the Stock Exchanges with the face value of Rs. 2 each

Results of Operations for the Three Month Period Ended September 30, 2006

Our total income increased by 74.78 % to Rs. 6,389.12 million for the three month period ended September30, 2006 from Rs. 3,655.53 million for the three month period ended September 30, 2005. Our profit beforetax increased by 301.24 % to Rs.579.31 million for the three month period September 30, 2006 fromRs.192.31 million for the three month period ended September 30, 2005. Our profit after tax increased by185.72% to Rs. 386.38 million for the three month period ended September 30, 2006 from Rs.135.23million for the three month period ended September 30, 2005.

The selected interim financial information presented below is unaudited standalone financials and isprepared and presented in accordance with Indian GAAP.

(Rs. Million)Sr. No. Particulars 3 Months

ended

September 30,

2006

3 Months ended

September 30,

2005

Gross Turnover 6,587.00 4,133.00

1 Net Sales/ Income from operations 6,033.66 3,648.31

2 Other Income 355.46 7.22

3 Total Expenditure 5,618.22 3,368.42

a) (Increase)/Decrease in Stock in trade (391.33) (450.46)

b) Consumption of Raw

Material/ Cost of finished goods

4,366.12 2,898.52

c) Staff Cost 454.43 185.90

d) Other Expenditure 1,189.00 734.46

4 Interest & Finance charges 124.64 57.22

5 Depreciation 66.95 37.58

6 Profit before Taxation (1+2-3-4-5) 579.31 192.31

7 Provision for taxation - -

a) Fringe Benefit Tax 4.02 2.02

b) Current Tax 76.18 24

c) Deferred Tax 112.73 30.99

8 Earlier years income tax - -

9 Net profit (6-7-8) 386.38 135.23

10 Paid-up Equity Share Capital(Face Value - Rs. 10/- per share)

268.85 219.98

11 Reserves excluding revaluation reserves - -

12 Basic EPS (in Rs.) 14.37 5.38


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13 Diluted EPS (in Rs.) 14.37 5.38

14 Basic EPS (in Rs.) (Face Value Rs. 2/-) 2.87 1.08

15 Diluted EPS (in Rs.) (Face Value Rs. 2/-) 2.87 1.08

Notes

The Company had raised Rs. 2,239.40 million through issue of shares on right basis and out of the saidamount Rs. 2,128.50 million has been deployed towards funding for setting up of new stores andwarehouses, renovation of existing stores and warehouses, expansion and upgrade, etc.

Paid up share capital of the Company has increased from Rs. 268,846,210 to Rs. 268,847,810 due toallotment of 160 shares to the shareholders whose entitlement were kept under abeyance in the Rightsissue.

Other Income for the quarter ended September 30, 2006 includes profit on sale of investment of Rs.338.00 million

Segment Reporting

(Rs. Million)

Sr.

No.

Particulars 3 Months

ended

September 30,

2006

3 Months ended

September 30,

2005

1 Segment Revenue

Value Retailing 4,364.93 2,446.79

Lifestyle :Retailing 1,656.56 1,101.92

Others 106.84 172.22

6,128.32 3,720.93

Less : Inter Segment Revenue 94.66 72.62

Net Sales/Income from Operation 6,033.66 3,648.31

2 Segment Profit

Profit Before Tax & Interest

Value Retailing 333.14 182.78

Lifestyle Retailing 226.95 162.21

560.09 344.98

Less : 1) Interest 124.64 57.22

2) Other Unallocable Expensenet of unallocable income

(143.86) 95.45

Total Profit Before Tax 579.31 192.31

3 Capital Employed

Value Retailing 7,227.61 3,050.23

Lifestyle Retailing 4,228.24 2,257.15

Unallocated 2,087.95 532.50

Total Capital Employed 13,543.81 5,839.88


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Others

The Delhi International Airport Private Limited has awarded the duty free shopping contract for the IndiraGandhi International Airport, New Delhi to the Alpha-Pantaloon consortium, which is a joint venturebetween UK based Alpha Airports Group Plc. and the Company.

Recent Corporate Announcements

1. Our Board at its meeting held on November 17, 2006 has approved the formation of a subsidiarycompany for carrying on business in office supplies and approved investment up to Rs 175.0million; and also approved the formation of a subsidiary Company in Hongkong to sourceproducts and approved an investment of up to US$ 1 million.

2. The Company has recently through its Board meeting dated October 27, 2006 approved a proposalto merge PAN India Restaurants Limited with a company forming a part of the promoter groupcalled Galaxy Entertainment Corporation Limited. The merger is subject to finalisation ofvaluations, exchange ratios, schemes etc.


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SUMMARY OF THE ISSUE

The following is a general summary of the terms of the Issue:

Issuer Pantaloon Retail (India) Limited

Issue Size 6,265,060 Equity Shares of the Company of Rs. 2

each. The Company has split one Equity Share ofRs. 10 face value into five Equity Shares of Rs. 2each pursuant to an AGM resolution datedNovember 17, 2006.

Issue Price Rs. 415/- per Equity Share

Eligible Investors QIBs

Equity Shares issued and outstanding

immediately prior to and after the Issue

134,423,105 (and 12,300 Equity Shares inabeyance totalling 134,435,405) Equity Sharesissued and outstanding immediately prior to theIssue. Immediately after the Issue, 140,688,165

Equity Shares will be issued and outstanding (excluding the shares arising out of conversion ofoutstanding warrants)

The Company has issued and allotted 1,212,480warrants with an option to the warrant holders toacquire, for every warrant, five fully paid up equityshare for Rs.2 each at a price of Rs. 1,635 perwarrant aggregating to a total of Rs. 198,24,04,800to the Promoter and promoter group on apreferential allotment basis. The issue of warrantshas been approved by the shareholders of theCompany in its extraordinary general meeting heldon September 22, 2006.

Listing The Company shall make applications to each ofthe Stock Exchanges to obtain in-principleapprovals for the listing of the Equity Shares on theStock Exchanges.

Transferability Restriction The Equity Shares being allotted pursuant to

this Issue shall not be sold for a period of one

year from the date of Allotment except on a

recognized stock exchange in India.

Use of Proceeds The net proceeds of this Issue (after deduction offees, commissions and expenses) are expected to be approximately Rs. 2,521.99.

We intend to use the net proceeds received fromthe Issue to accelerate further growth, fund variousexpansion plans, long-term working capitalrequirements, to finance investment opportunitiesand for general corporate purposes.


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RISK FACTORS

This offering involves a high degree of risk. You should carefully consider the risks described below beforemaking an investment decision. If any of the risks described below actually occur, our business, prospects,

financial condition and results of operation could be seriously harmed, the trading price of our shares could

decline and you may lose all or part of your investment.

Internal Risk Factors

Our products include a range of lifestyle merchandise, services and Aspirational Products which may be

seasonal due to the bunching of festivals like Durga Puja, Diwali, Christmas and Id in the second

quarter of our financial year and hence our ability to forecast and correctly understand fashion cycles

and customer preference is critical for our continued operations

We retail products and services that our customers require including Lifestyle and Aspirational Products.Our success is dependent on our ability to meet our customers requirements. We plan our products basedon forecasts of customers buying patterns as well as on forecasts of fashion and trends for forthcomingseasons. Any mismatch between our forecasts, our planning and the actual purchase by customers canimpact us adversely, leading to excess inventory and requiring us to resort to higher markdown and thuslower margins in order to clear such inventory. Customer preferences are susceptible to change with change

in fashion and trends, and their service level expectations too can change from time to time.

Our success depends partly upon our ability to forecast, anticipate and respond to such changing consumer preferences and fashion trends in a timely manner. Any failure by us to identify and respond to suchemerging trends in consumer preferences could have a material adverse effect on our business.

Further, the success of our Private Label strategy depends on our ability to understand fashion trends,introduce new designs/apparels and explore new business opportunities on a regular basis. Our inability toidentify and recognize international and domestic fashion trends and the risk of obsolescence couldadversely affect our business. We could be adversely affected if consumers lose confidence in the safetyand quality of certain food products sold as Private Labels and are discouraged from buying our products.

The success of our business is dependent on supply chain management

We strive to keep optimum inventory at our stores and distribution centre to control our working capitalrequirements. Inefficient supply chain management may lead to unavailability of merchandise. Ensuringshelf availability for our products warrants quick turnaround time and high level of coordination withsuppliers. Food and grocery items require efficient supply chain management as this involves items whichare perishable or have limited shelf life. For some of our perishable goods we outsource our supply chainmanagement to third party sources. Inefficient supply chain management could adversely affect the resultsfrom operations.

Failure to manage the integration of the businesses or facilities we acquire may cause our profitability to

suffer.

We have pursued acquisitions and strategic partnerships as part of our growth strategy. We intend to

continue entering into acquisitions and strategic alliances. Our acquisitions may not contribute to ourprofitability, and we may be required to incur or assume debt, or assume contingent liabilities, as part ofany acquisition. Our acquisitions may give rise to unforeseen contingent risks or latent liabilities relating tothese businesses that may only become apparent after the merger or the acquisition is finalised. We couldhave difficulty in assimilating and retaining the personnel, operations and assets of the acquired company.The loss of any available tax exemptions pursuant to an acquisition could adversely impact our results ofoperations. These difficulties could disrupt our ongoing business, distract our management and employeesand increase our expenses and materially affect our profits. Further, we may not be able to accuratelyidentify or forge an alliance with appropriate companies in line with our growth strategy. In the event thatthe alliance does not perform as estimated, our operations may be materially adversely affected.


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Further, larger number of stores will increase our fixed operating costs, and there can be no assurance thatwe will experience a commensurate increase in revenue or derive operational synergies to offset thesehigher costs. Our inability to manage our growth could have a material adverse effect on our business,financial condition and results of operations.

We have broad discretion in the use of the net proceeds of this Issue and you may not necessarily agree

with how we use such proceeds.

Subject to compliance with applicable laws and regulations, we intend to use the net proceeds receivedfrom the Issue to accelerate further growth, fund various expansion plans, long-term working capitalrequirements, to finance investment opportunities and for general corporate purposes. As of the date of thisPlacement Document, we have not entered into any letter of intent or any definitive commitment oragreement for the use of proceeds.

In accordance with the policies set up by our Board, the management will have flexibility in deploying theproceeds received by us from the Issue. Pending utilization for the purpose described above, we intend totemporarily invest funds in creditworthy instruments, including money market mutual funds and depositswith banks. Such investments would be in accordance with the investment policies approved by the Boardfrom time to time.

Our business plans may need substantial capital and additional financing in the form of debt and/orequity to meet our requirements.

Our proposed business plans are being substantially funded through this Issue and partly by our internalcash accruals. However the actual amount and timing of future capital requirements may differ fromestimates including but not limited to unforeseen delays or cost overruns, unanticipated expenses, marketdevelopments or new opportunities in the industry. We may also not be able to generate internal cash in ourCompany as estimated and may have to resort to alternate sources of funds. Sources of additional financingmay include commercial borrowings, vendor financing, or issue of equity or debt instruments. If we decideto raise additional funds through the debt route, the interest obligations would increase and we may besubject to additional covenants, which could limit our ability to access cash flows from the operations. Ifwe decide to raise additional funds through the equity route, your shareholding in the Company could getdiluted.

Any inability to manage our rapid growth could disrupt our business

We have experienced high growth in recent periods. Our sales and operating income has grown at a CAGRof 62.72% from FY 2002 to FY 2006. However, our future growth plans can place significant demands onour management and other resources. There can be no assurance that we will be able to execute our strategyon time and within the stipulated budget or that we will meet the expectations of the customers and achieveour planned growth.

Losses on account of shrinkage can negatively impact our profitability

Shrinkage in the retail buisness is defined as the loss in inventory on account of a combination of employeetheft, shoplifting, vendor fraud and administrative error. The retail industry the world over is affected by

shrinkage. Any increase in shrinkage levels at our existing and future stores can adversely impact resultsfrom operations.

We face growing and new competition from domestic and potential international players that may

adversely affect our competitive position and our profitability.

Significant additional competition in the retail industry may result in reduced prices and thereby negativelyaffect our revenues and profitability. Further, the introduction of foreign participation in the retail sectorwill result in the entry of multinational retail companies into the Indian market. We cannot assure you thatwe will be able to compete with large multinational players.


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International competitors may enjoy many of the same advantages that we do and may even have lowercost structures, enabling them to compete vigorously vis--vis pricing. Competition from these competitorsmay adversely impact our revenues. Global companies are significantly larger than us and havesignificantly stronger international market positions, production capacities and greater financial resourcesthan we do. We also face significant competition from Indian players. These market participants includeother small, limited-service providers and a number of full-service global companies. The largercompetitors have a much broader portfolio of business, greater resources and more experience than smallercompanies.

Competition may impede our ability to renew leases or licences entered into by us. Further, we may not

be able to attract concessionaires, which may affect our concessionaire income.

We face competition from other large retailers who compete for scarce real estate resources. We may not be able to renew our leases or licenses on terms acceptable to us. Our competitors may also provideattractive terms to concessionaires who currently operate from our stores which may reduce our ability toattract concessionaires. In the event that any of our leases or licenses are not renewed, and we are requiredto vacate our stores, we may be required to identify alternative real estate and enter into fresh lease or leaveand licence agreements which could result in loss of business and may adversely affect our operations andprofitability.

Any adverse impact on the title or ownership rights or development rights of our landlords from whose

premises we operate may impede our effective operations of our stores, offices or distribution centres in

the future

Some of the premises from which we operate our stores / offices / distribution centres are taken by us onlong term lease or sub-lease or leave and licence or on conducting basis and/or on the basis of othercontractual agreements with third parties. We may continue to enter into such transactions with third parties. Any adverse impact on the title / ownership rights / development rights of our landlords fromwhose premises we operate our stores may impede our business, our operations and our profitability. Thefinancial impact of such aforesaid risk cannot be quantified.

Additionally, some of our lease agreements prescribe a lock-in period. These lock in periods prevent us

from moving our stores in the event that there are events or circumstances that impede our profitability.Any such event and such restrictive covenants in our lease agreements affect our ability to move thelocation of our stores and may adversely affect our business, financial condition and results of operations.

We face the risk of potential liabilities from lawsuits or claims by consumers

We may face the risk of legal proceedings and claims being brought against us by our customers /consumers for any defective product sold or any deficiency in our services to them. We could faceliabilities should our customers / consumers face any loss or damage due to any unforeseen incident such asfire or accidents in our stores, which could cause financial or other damage to our customers / consumers.Any commencement of lawsuits as envisaged above against us could reduce our sales.

Changes in safety and health laws and regulations may adversely affect our results of operations and

our financial condition.

We are subject to a broad range of safety and health laws and regulations in the areas in which we operatesuch as the Consumer Protection Act, 1986, the Standards of Weights and Measures Act, 1976, Sale ofGoods Act, 1930 and similar state regulatory enactments like the Shop and Establishments Acts. Theselaws and regulations impose controls on our fire safety standards, and other aspects of our operations. Wehave incurred, and expect to continue to incur, operating costs to comply with such laws and regulations.In addition, we have made and expect to continue to make capital expenditures on an ongoing basis tocomply with safety and health laws and regulations. While we believe we are in compliance in all materialrespects with all applicable safety, health and environmental laws and regulations, we may nevertheless be


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liable to the Government of India or the State Governments or Union Territories with respect to our failuresto comply with applicable laws and regulations.

Further, the adoption of new safety and health laws and regulations, new interpretations of existing laws,increased governmental enforcement of laws or other developments in the future may require that we makeadditional capital expenditures or incur additional operating expenses in order to maintain our currentoperations or take other actions that could have a material adverse effect on our financial condition, resultsof operations and cash flow. Safety, health and environmental laws and regulations in India, in particular,have been increasing in stringency and it is possible that they will become significantly more stringent inthe future.

The costs of complying with these requirements could be significant. The measures we implement in orderto comply with these new laws and regulations may not be deemed sufficient by governmental authoritiesand our compliance costs may significantly exceed current estimates. If we fail to meet safety and healthrequirements, we may also be subject to administrative, civil and criminal proceedings by governmentalauthorities, as well as civil proceedings by our consumers / customers and other individuals, which couldresult in substantial fines and penalties against us as well as orders that could limit our operations.

There can be no assurance that we will not become involved in future litigation or other proceedings or beheld responsible in any such future litigation or proceedings relating to safety and health matters in the

future, the costs of which could be material. Remediation costs of our stores and outlets and relatedlitigation could adversely affect our cash flow, results of operations and financial condition.

Negative publicity if any, would adversely affect the value of our brand, and our sales.

Our business is dependent on the trust our customers have in the quality of our merchandise as well as onour ability to protect our trademarks and copyrights and our intellectual property to maintain our brandvalue. If we fail to adequately protect our intellectual property, competitors may market products similar toours. Any negative publicity regarding the Company, brands, or products, including those arising from adrop in quality of merchandise from our vendors, disputes concerning the ownership of intellectualproperty, mishaps at our stores, or any other unforeseen events could adversely affect our reputation ourbrand value, our operations and our results from operations.

We continue to launch new formats as divisions, subsidiaries or through joint ventures with partners. Alower than anticipated customer response to such formats, or the inability of our joint venture to

successfully meet customer requirements can adversely impact us.

We operate different formats like Pantaloons, Big Bazaar, Food Bazaar etc and continue to launch newformats like aLL, Fashion Station, Depot. The success of these formats depends upon the customerresponse. A lower than anticipated customer response can impact business. We have also entered into jointventure agreements to expand the scope of our products and services. Any inability of our joint venturepartner to successfully attract and meet with customer requirements may adversely affect our operationsand profitability.

The success of our business is substantially dependent on our management team, our inability to retain

them could adversely affect our businesses

We have a strong team of professionals to oversee the operations and growth of our businesses. Our abilityto sustain our growth depends, in large part, on our ability to attract, train, motivate and retain highlyskilled personnel. We believe that there is significant demand for personnel who possess the skills neededto perform the services we offer. Our inability to hire and retain additional qualified personnel will impairour ability to continue to expand our business. An increase in the rate of attrition for our experiencedemployees, would adversely affect our growth strategy. We cannot assure you that we will be successful inrecruiting and retaining a sufficient number of personnel with the requisite skills to replace those personnelwho leave. Further, we cannot assure you that we will be able to re-deploy and re-train our personnel tokeep pace with continuing changes in our business. The loss of the services of such personnel and our


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inability to hire and retain additional qualified personnel may have an adverse effect on our business,financial condition and results of operations.

Our Promoter and promoter group will control us as long as they own a substantial portion of our

Equity Shares, and our other shareholders may not be able to affect the outcome of shareholder voting

during such time

After completion of the Issue, the Promoter and promoter group will continue to own approximately 42.27% of our issued Equity Share Capital So long as the Promoter and promoter group own a substantialportion of our Equity Shares, they may be able to elect a substantial number of our board of directors andremove any director, by way of a resolution approved by a simple majority of shareholders in a generalmeeting. The Promoter and promoter group will be able to control most matters affecting us, including theappointment and removal of our officers; our business strategy and policies; any determinations withrespect to mergers, business combinations and acquisitions or dispositions of assets; our dividend payout;and our capital structure and financing. Further, the extent of Promoter and promoter group shareholding inus may result in delay or prevention of a change of management or control of our Company, even if such atransaction may be beneficial to our other shareholders.

Further, our Articles of Association confer certain rights on our Promoter Kishore Biyani and his father,Laxminarayan Biyani wherein Kishore Biyani shall be a permanent Director who shall be entitled to vacate

such position only upon him resigning or dying or retiring at his own will and Laxminarayan Biyani shallhave the right to nominate up to a maximum of 6 persons as Directors. Accordingly, Laxminarayan Biyaniand Kishore Biyani have the ability to exercise significant influence over the functioning of our Boardincluding matters that require our Boards approval or our shareholders approval.

The extent of this control may delay, hamper or prevent a change in control of us, impede a merger,consolidation, take over or discourage a potential buyer from making a tender or an offer or otherwiseattempt to take control over us.

Our indebtedness could adversely affect our financial condition and results of operations

We have entered into agreements with certain banks and financial institutions for long term borrowings.Some of these agreements contain restrictive covenants that require us to obtain the prior consent of our

lenders to take certain actions, including declaration of dividends, alteration of our capital structure,formulation of any scheme of amalgamation or reconstruction, expenditure in new projects, entering into borrowing arrangements, investing by way of share capital or lending or advancing funds or placingdeposits with other concerns, undertaking guarantee obligations, creating charge, lien, or its undertakings orany part thereof, entering into any contractual obligation of a long term nature or significantly affecting theCompany financially, changing Company practice with respect to the remuneration of directors,undertaking any other trading activity other than the sale of products arising out of the sale of itsmanufacturing operations, disposing off assets and compromising with any of its creditors, changing itsname or trade name, creating any subsidiary or permitting any company to become a subsidiary and makingchanges to the management, set up and key personnel. In addition, certain of these agreements require us tomaintain various financial ratios, and may provide certain lenders with the right to appoint a nomineedirector on our Board. In addition, certain of these agreements require us to obtain the prior consent of ourlenders for any variation of the shareholding of directors, promoters and principal shareholders, including

by issue of new shares or the transfer of shares.

We have a number of contingent liabilities, and our profitability could be adversely affected if any of

these contingent liabilities materialize

Our contingent liabilities as of June 30, 2006 include unexpired guarantees and letters of credit, billsdiscounted with banks and claims against us not acknowledged as debt amounting to Rs. 204.25 million. Ifany of these contingent liabilities materialize, our profitability may be adversely affected.


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There is a possibility of a conflict of interest with the entities forming part of the promoter group of the

Company.

The object clauses as contained in the memorandum of association of some of the companies forming partof the promoter group enable them to carry on the business of establishing/operating/managing retailoutlets. In case these companies decided to venture into the similar line of businesses, it may result in ourPromoters having a conflict of interest with our line of business.

We are a member of the Future Group and we utilise the logo and the trademark of the Future Group

as a part of our corporate identity

We have entered into a license agreement with Future Ideas Company Limited on October 14, 2006 for theuse of the trademark and logo appearing on the cover page of this document. The license agreement is validfor a period of one year from October 15, 2006 to October 14, 2007 and the period mutually agreed to bythe parties thereafter.

We operate in a competitive environment, where generating brand recognition will be a significant part ofour business and growth strategy. In the event that we fail to renew the licence agreement, we may need tochange our logo. Any such change could require us to incur additional costs and may adversely impact ourbusiness, financial condition and results of operation.

External Risk Factors

The success of our business is highly dependent on the number of customers that visit our stores.

Various factors affect the customer footfalls, including choice of location and nature of floor layout.Factors such as the regional economy, weather conditions, natural disasters, social unrest as well asgovernment regulations specific to the states in which we operate also affect our result from operations

Force majeure events, particularly those affecting the states of where our facilities are located, could

adversely affect our business

We are headquartered in the state of Maharashtra and our facilities are located across India. It is possiblethat earthquakes, cyclones, floods or other natural disasters in India, particularly those that directly affectthe areas in which our facilities and other operations are located, could result in substantial damage to ourmanufacturing facilities and other assets and adversely affect our operations and financial results.

There may not be an active or liquid market for our Equity Shares, which may cause the price of the

Equity Shares to fall and may limit your ability to sell the Equity Shares.

The offer price of the Equity Shares in this Issue will be determined by the Company in consultation withthe Sole Bookrunner based on the Bids received in compliance with Chapter XIII-A of the SEBIGuidelines, and it may not necessarily be indicative of the market price of the Equity Shares after this Issueis complete. You may be unable to resell your Equity Shares at or above the offer price and, as a result, you

may lose all or part of your investment. The price at which the Equity Shares will trade after this Issue willbe determined by the marketplace and may be influenced by many factors, including:

our financial results and the financial results of the companies in the businesses we operate in;

the history of, and the prospects for, our business and the sectors and industries in which wecompete;

an assessment of our management, our past and present operations, and the prospects for, andtiming of, our future revenues and cost structures;

the present state of our development; and


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the valuation of publicly traded companies that are engaged in business activities similar to ours.

In addition, the Indian stock market has from time to time experienced significant price and volumefluctuations that have affected the market prices for the securities of Indian companies. As a result,investors in the Equity Shares may experience a decrease in the value of the Equity Shares regardless of ouroperating performance or prospects.

The market price of our Equity Shares may fluctuate due to the volatility of the Indian securities market

The Indian securities markets may be more volatile than the securities markets in other countries. Stockexchanges in India have, in the past, experienced substantial fluctuations in the prices of listed securities.The stock exchanges in India have experienced problems, including broker defaults and settlement delays,which, if they were to continue or recur, could affect the market price and liquidity of the securities ofIndian companies, including the Equity Shares. In addition, the governing bodies of the various Indianstock exchanges have from time to time imposed restrictions on trading in certain securities, limitations onprice movements and margin requirements. Furthermore, from time to time disputes have occurred betweenlisted companies and stock exchanges and other regulatory bodies, which in some cases may have had anegative effect on market sentiment.

For example, in May 2006, the Indian stock exchanges witnessed substantial volatility. The BSE and the

NSE, Indias main stock exchanges, halted trading on May 22, 2006 after the respective indices fell morethan 10%. Trading was halted on these exchanges for one hour. The BSE fell 10.16% to 9,826.91 points,falling below 10,000 for the first time in three months.

Future issues or sales of our Equity Shares may significantly affect the trading price of our Equity

Shares

The future issue of Equity Shares by us or the disposal of Equity Shares by any of our major shareholdersor the perception that such issuance or sales may occur may significantly affect the trading price of theEquity Shares. Subject to these restrictions, no assurance may be given that we will not issue Equity Sharesor that such shareholders will not dispose of, encumber or pledge these Equity Shares in the future.

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, Equity Shares at a particular point intime.

We are subject to a daily circuit breaker imposed by all stock exchanges in India, which does not allowtransactions beyond specified increases or decreases in the price of the Equity Shares. This circuit breakeroperates independently of the index-based market-wide circuit breakers generally imposed by SEBI onIndian stock exchanges. The percentage limit on our circuit breakers is set by the stock exchanges based onthe 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 in effect from time totime, and may change it without our knowledge. This circuit breaker limits the upward and downwardmovements in the price of the Equity Shares. As a result of this circuit breaker, no assurance may be givenregarding your ability to sell your Equity Shares or the price at which you may be able to sell your Equity

Shares at any particular time.

There is no guarantee that the Equity Shares will 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 of the Equity Shares will not be granteduntil after those Equity Shares have been issued and allotted. Approval will require all other relevantdocuments authorizing the issuing of Equity Shares to be submitted. There could be a failure or delay in


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listing the Equity Shares on the BSE and the NSE. Any failure or delay in obtaining the approval wouldrestrict your ability to dispose of your Equity Shares.

The regulation and monitoring of Indian securities markets and the activities of investors, brokers and otherparticipants differ, in some cases significantly, from those in Europe and the U.S. The BSE and the NSEhave in the past experienced problems, including temporary exchange closures, broker defaults, settlementsdelays and strikes by brokerage firm employees, which, if continuing or recurring, could affect the marketprice and liquidity of the securities of Indian companies, including the Equity Shares, in both domestic andinternational markets. A closure of, or trading stoppage on, either of the BSE and the NSE could adverselyaffect the trading price of the Equity Shares. Historical trading prices, therefore, may not be indicative ofthe prices at which the Equity Shares will trade in the future.

The mechanism of Qualified Institutional Placement (QIP) under Chapter XIII-A of the SEBI

Guidelines has been recently introduced and hence the process is new.

The SEBI has introduced the mechanism of QIP by an amendment to the SEBI Guidelines dated May 8,2006 to provide for speedy and effective institutional placements by listed Indian companies. However, thismechanism and its efficiency has not yet been established. QIBs are thus advised to make their ownjudgment about investment through this mechanism.


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MARKET PRICE INFORMATION

As of September 30, 2006, 134,423,105 (and 12,300 shares in abeyance totalling 134,435,405) of ourEquity Shares were issued and outstanding. We issued 4,481,180 fully paid up equity shares of Rs. 10 each(equivalent to 22,405,900 Equity Shares of Rs. 2 each ) to equity shareholders on rights basis in the ratio ofone equity share of Rs. 10 each for every five equity shares of Rs. 10 each held on the Record DateDecember 22, 2005. Our Board of Directors approved the rights issue in the meeting held on August 25,2005. The equity shares started trading on an ex-right basis from December 15, 2005. The Equity Sharesarising out of the rights issue were allotted on February 17, 2006.

Market price information provided below for period prior to December 15, 2005 have been adjusted for theissue Equity Shares on a rights basis and therefore prices mentioned below are different from the actualprice at which our Equity Shares were traded or the volume of transaction recorded.

Our Equity Shares are listed on the BSE, NSE and DSE. As our Equity Shares are actively traded on theBSE and the NSE, our stock market data has been given separately for each of these Stock Exchanges.There has been no trading in our shares on DSE in the past three years.

BSE

Year

endingMarch 31

High (Rs.) Date of

High

Volume

on date ofhigh (no.

of shares)

Low (Rs.) Date of

Low

Volume

on date oflow (no.

of shares)

Average

price forthe year

(Rs.)

2004 337 February20, 2004

19,972 119.21 April 11,2003

1,244 229.28

2005 785.38 February15, 2005

8,551 324.08 April 05,2004

3,166 499.47

2006 2,035 March 21,2006

1,87,380 761.33 April 5,2005

8,626 1,429.71

Source: Market Price Information is sourced from Capital Line

NSE

Yearending

March 31

High (Rs.) Date ofHigh

Volumeon date of

high (no.

of shares)

Low (Rs.) Date ofLow

Volumeon date of

low (no.

of shares)

Averageprice for

the year

(Rs.)

2004 335.71 February20, 2004

30,855 119.63 April 11,2003

6,306 228.90

2005 786.29 February15, 2005

23,409 325.38 April 05,2004

7,630 499.46

2006 2,003.5 March 16,2006

96,054 761.17 April 5,2005

25,958 1,429.60


The high and low closing prices recorded on the BSE and the NSE and the number of Equity Shares tradedon the days such high and low prices were recorded, during the last six months, are stated below:

BSE

Month,

Year

High (Rs.) Date of

High

Volume

on date of

high (no.

of shares)

Low (Rs.) Date of

Low

Volume

on date of

low (no.

of shares)

Average

price for

the month

(Rs.)


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June 2006 1,607 June 2,2006

3,578 1,140.75 June 14,2006

18,749 1,397.62

July 2006 1,347.2 July 3,2006

675 1,112.4 July 25,2006

2,125 1,238.55

August2006

1,674 August 25,2006

5,424 1,254.2 August 1,2006

5,104 1,528.57

September2006 1,922.1 September,2006 13,444 1,547.3 September11, 2006 9,459 1,700.20

October2006

1,904.05 October21, 2006

2,188 1,747.85 October17, 2006

3,144 1,826.18

November2006

2,268.00 November28, 2006

8,279 1,885.00 November1, 2006

6,444 2129.46


NSE

Month,

Year

High (Rs.) Date of

High

Volume

on date of

high (no.

of shares)

Low (Rs.) Date of

Low

Volume

on date of

low (no.

of shares)

Average

price for

the month

(Rs.)

June 2006 1,618.1 June 2,2006

18,144 1147.1 June 14,2006

24,443 1,339.7

July 2006 1,339.70 July 3,2006

2,026 1116.5 July 25,2006

7,759 1,238.12

August2006

1,672.05 August 23,2006

5,421 1254.15 August 1,2006

9,728 1,528.96

September2006

1,926.2 September26, 2006

19,987 1551.7 September11, 2006

7,424 1,700.85

October2006

1,905.05 October21, 2006

7,263 1754.15 October17, 2006

1,7624 1,826.54

November2006

2,263.45 November28, 2006

18,942 1,885.4 November1, 2006

6,359 2,134.45


There was no trading on the DSE for the last six months.

The market price of our equity shares on BSE on August 25, 2006, the trading day immediately followingthe day on which the Board meeting was held to approve the Issue, was Rs. 1,674.00

The market price of our equity shares on NSE on August 25, 2006, the trading day immediately followingthe day on which the Board meeting was held to approve the Issue, was Rs. 1,668.30

The market data provided above does not reflect the split of Equity Shares of Rs. 10 each to Rs. 2 eachpassed by the Company in its AGM on November 17, 2006.As of December 12, 2006, the Equity Shares ofthe Company are being traded on the Stock Exchanges with the face value of Rs. 2 each.


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USE OF PROCEEDS

The total proceeds of the Issue will be Rs. 2,599.99 million. After deducting the issue expenses ofapproximately Rs. 78.00 million, the net proceeds of the Issue will be approximately Rs. 2,521.99 million.

Purpose of Issue

Subject to compliance with applicable laws and regulations, we intend to use the net proceeds receivedfrom the Issue to accelerate further growth, fund various expansion plans, long-term working capitalrequirements, to finance investment opportunities and for general corporate purposes.

In accordance with the policies set up by our Board, the management will have flexibility in deploying theproceeds received by us from the Issue. Pending utilization for the purpose, described above, we intend totemporarily invest funds in creditworthy instruments, including money market mutual funds and depositswith banks and corporates. Such investments would be in accordance with the investment policies approvedby the Board from time to time.


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CAPITALIZATION

The following table shows as at June 30, 2006:

our actual capitalization;

our adjusted capitalization, to give effect to the issuance of Equity Shares by us in this

Issue at a price of Rs. 415 per Equity Share.

This table should be read in conjunction with our consolidated audited financial statements as of and for theyear ended June 30, 2006, the related notes and Managements Discussion and Analysis of FinancialCondition and Results of Operations and the other financial information contained elsewhere in thisPlacement Document.

As at June 30,

2006

Actual

As adjusted for

the warrants

issue

As adjusted for

the Issue after

adjusting for

the warrants

issue

(Rs. Millions) (Rs. Millions) (Rs. Millions)

Loan Funds

Secured Loans 5,230.92 5,230.92 5,230.92Unsecured Loans 1,796.57 1,796.57 1,796.57Total Debt 7,027.49 7,027.49 7,027.49

Shareholders funds

Equity Share Capital of par value Rs. 2 eachoutstanding *

268.85 268.85 281.38

Warrant / Share Application money 66.48 264.72 264.72

Reserves & surplus 5,010.92 5,010.92 7,598.39

Total Shareholders Funds 5,346.24 5,544.49 8,144.49

Total Capitalization 1,2373.73 12,571.98 15,171.98* The Company has split one Equity Share of Rs. 10 face value into five Equity Shares of Rs. 2 each pursuant to an AGM

resolution dated November 17, 2006..

The Company has issued and allotted 1,212,480 warrants with an option to the warrant holders to acquire,for every warrant, five fully paid up Equity Share for Rs. 2 each at a price of Rs. 1,635 per warrantaggregating to a total of Rs. 198,24,04,800 to the Promoter and promoter group on a preferential allotmentbasis. The issue of warrants has been approved by the shareholders of the Company in its extraordinarygeneral meeting held on September 22, 2006. The option to acquire Equity Shares may be exercised by thewarrant holders at any time before the expiry of 18 months from the date of allotment of warrants. If thewarrant holders dont exercise the option given under the warrants within 18 months, the warrants shalllapse and the initial amount paid for the warrants shall be forfeited. The warrants shall be subject to a lock-

in period as specified under Chapter XIII of the SEBI Guidelines.


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DIVIDEND POLICY

Under the Companies Act, an Indian company pays dividends upon a recommendation by the board ofdirectors and approval by a majority of the shareholders, who have the right to decrease but not to increasethe amount of the dividend recommended by the board of directors. Under the Companies Act, dividendsmay be paid out of profits of a company in the year in which the dividend is declared or out of theundistributed profits or reserves of previous fiscal years or out of both.

The Company does not have any formal dividend policy. The declaration and payment of dividend will berecommended by our Board of Directors and approved by our shareholders, at their discretion, and willdepend on a number of factors, including but not limited to our profits, capital requirements and overallfinancial condition.

The dividends declared by us on Equity Shares during the last three Fiscal years have been presentedbelow.

Fiscal 2006 Fiscal 2005 Fiscal 2004

Face value of Equity Shares (Rs. Per share) 10 10 10Dividend (Rs. in million) 67.21 54.99 28.71Dividend Tax (Rs. in million)

9.43 7.71 3.75Dividend per Equity Share (Rs.) 2.50 2.50 1.50Dividend Rate (%) 25 25 15

The amounts paid as dividends in the past are not necessarily indicative of our dividend policy or dividendamounts, if any, in the future.

Dividends are payable within 30 days of approval by shareholders at our annual general meeting. TheArticles of Association also give the Board the discretion to declare and pay interim dividends withoutshareholder approval at an annual general meeting. When dividends are declared, all the shareholders whoappear in the share register as on the record date or book closure date are entitled to the dividenddeclared by us. Any shareholder, who ceases to be a shareholder prior to the record date or becomes ashareholder after the record date, will not be entitled to the dividend declared by us.

Currently, we pay a dividend distribution tax of 12.50%, a surcharge of 10.00% on the dividenddistribution tax and an educational cess of 2% on both the tax and the surcharge. These taxes are notpayable by the shareholders nor are they withheld or deducted from the dividend payments set forth above.For further details, see the section tilted Taxation.


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SELECTED HISTORICAL FINANCIAL INFORMATION

The selected financial information as of and for the three years ended June 30, 2006 set forth below havebeen derived from our audited financial statements included elsewhere in this Placement Document. Thefinancial information for the years ended June 30,2006 and June 30, 2004 are on consolidated basis whilefor the year ended June 30, 2005 , the same are on standalone basis. Hence to that extent the figures are not

comparable. For more details please refer to Schedule 20-Notes to Accounts. The financial informationincluded in this Placement Document does not reflect our results of operations, financial position and cashflows for the future and our past operating results are no guarantee of our future operating performance.Our audited financial statements are prepared and presented in accordance with Indian GAAP. For asummary of our significant accounting policies and the basis of the presentation of our financial statements,refer to the notes to the audited financial statements included in this Placement Document.

The selected financial and operational data set forth below should be read in conjunction withManagement's Discussion and Analysis of Financial Condition and Results of Operations and our auditedfinancial statements.

The financial data presented in this Placement Document as of June 30, 2006, 2005 and 2004 have not beenadjusted to reflect the stock split.

BALANCE SHEET

SOURCES OF FUNDS June 30,

2006

June 30,

2005

June 30,

2004

(Rupees

Million)

(Rupees

Million)

(Rupees

Million)

SHAREHOLDERS' FUNDS

Share Capital 268.85 219.98 191.37

Share/Warrant Application Money 66.48 30.00 -

Reserves & Surplus 5,010.92 1,965.28 739.18

5,346.24 2,215.25 930.55

Minority Interest 192.48 - -

LOAN FUNDS:

Secured Loans 5,230.92 2,561.70 2,152.86

10 % Unsecured Fully Convertible Debentures - - 213.55

Unsecured Loans 1,796.57 300.38 0.08

7,027.49 2,862.08 2,366.49

DEFERRED TAX LIABILITY (NET) 273.25 130.44 51.02

TOTAL 12,839.47 5,207.77 3,348.07

APPLICATION OF FUNDS

FIXED ASSETS

Gross Block 4,696.41 2,511.04 1,890.80

Less : Depreciation 602.22 373.63 271.13

Net Block 4,094.20 2,137.42 1,619.67

Capital work-in-progress including advances 909.60 157.92 144.41

GOODWILL (on consolidation) 58.15 - 0.24


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INVESTMENTS 416.08 319.16 3.93

CURRENT ASSETS, LOANS & ADVANCES

Inventories 5,813.20 2,759.26 1,575.97

Sundry Debtors 285.45 123.07 176.04

Cash & Bank Balances 387.43 215.00 138.48Loans & Advances 3,854.16 936.80 409.59

Other Current Assets 10.92 4.61 -

10,351.15 4,038.74 2,300.08

LESS : CURRENT LIABILITIES & PROVISIONS

Current Liabilities 2,654.42 1,264.75 654.64

Provisions 335.87 183.47 69.74

2,990.28 1,448.22 724.38

NET CURRENT ASSETS 7,360.87 2,590.52 1,575.70

MISCELLANEOUS EXPENDITURE 0.56 2.76 4.12

(To the extent not written off or adjusted)

TOTAL 12,839.47 5,207.77 3,348.07

PROFIT AND LOSS ACCOUNT

For the year ended June 30

PARTICULARS 2006 2005 2004

(Rupees

Million)

(Rupees

Million)

(Rupees

Million)

INCOME

Sales & Operating Income 19,336.71 10,527.97 6,434.03

Other Income 36.66 30.54 13.28

19,373.36

10,558.51 6,447.31

EXPENDITURE

Cost of goods consumed & sold 12,771.81 7,003.09 4,380.10

Personnel cost 1,225.70 506.54 277.05

Manufacturing & other expenses 3,979.99 2,109.78 1,228.76

Finance Charges 354.20 274.57 231.47

Depreciation 226.97 133.33 95.69

Goodwill written off 1.41 - 0.06

18,560.08 10,027.30 6,213.06

Profit Before Taxation 813.28 531.21 234.25Less: Earlier year's Income Tax 0.73 0.32 0.75

Less: Provision for Taxation

a) Current Tax 116.64 72.84 14.50

b) Deferred Tax 148.56 70.14

c) Fringe Benefit Tax 19.78 2.40 -

Profit After Taxation 527.58 385.51 191.03

Add: Share in the Profit of Associates - - 1.48

Share of Minority Interest (9.52) - -


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Profit After Minority Interest 537.10 385.51 192.52

Add : Balance brought forward 651.96 380.81 329.48

Available for Appropriation 1,189.07 766.32 522.00

Proposed Dividend 67.21 54.99 28.71

Dividend Tax 9.43 7.71 3.75Transfer to General Reserve 64.16 38.55 9.89

Brands Set-off -- 117.13

Balance carried to Balance Sheet 1,048.27 665.06 362.52

1,189.07

766.32 522.00

Earnings Per Share Rs. (Face value Rs.10) Rs. Rs. Rs.

Basic 21.18 16.54 10.16

Diluted 21.18 15.63 9.63


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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

You should read the following discussion of our financial condition and results of operations together with

our audited financial statements under Indian GAAP including the schedules, annexure and notes thereto

and the reports thereon, which appear in this Placement Document.The financial information for the yearsended June 30,2006 and June 30, 2004 are on consolidated basis while for the year ended June 30, 2005,the same are on standalone basis. Hence to that extent the figures are not strictly comparable.

Business Overview

We are one of Indias leading organised multi format retailers and are pioneers in Indian hyper marketbusiness, promoted by Kishore Biyani. We are a part of the Future Group.

From our beginning in 1987, we have today evolved as one of the leading manufacturer and are among the pioneers in setting up a nation-wi

Documents

Placement Document December 16