TO THE MEMBERS OF TRENT LIMITED
The Directors present their Sixty Second Annual Report together with the AuditedStatement of Accounts for the year ended 31st March 2014.
|1. Financial Results || || |
| ||2013-2014 ||2012-2013 |
| ||Rs. Crores ||Rs. Crores |
|Total Income ||1,319.21 ||996.19 |
|Profit before tax ||68.25 ||80.77 |
|Less: Provision for taxation ||14.01 ||18.51 |
|Profit after tax ||54.24 ||62.26 |
|Add: Balance brought forward from previous year ||92.16 ||70.12 |
|Balance available for Appropriations ||146.40 ||132.38 |
|Appropriations || || |
|Proposed Dividend on: || || |
|Equity Shares ||23.26 ||23.26 |
|Preference Shares ||- ||0.01 |
|Preference dividend paid (full figure Rs.11891) ||0.00 ||- |
|Tax on dividend ||3.95 ||3.95 |
|Transfer to Debenture Redemption Reserve ||5.00 ||5.00 |
|Transfer to General Reserve ||6.00 ||8.00 |
|Transfer to Capital Redemption Reserve ||7.00 ||- |
|Balance carried forward ||101.19 ||92.16 |
| ||146.40 ||132.38 |
Income for the year at Rs.1,319.21 crores increased by 32.43% from the previousyears Rs.996.19 crores while profit after tax for the year at Rs.54.24 croresdecreased by 12.88% from the previous years Rs.62.26 crores. The operating resultsof the Company for the year ended 31st March 2014 are lower consequent to themerger of Landmark Limited, Fiora Link Road Properties Limited and Trexa ADMC PrivateLimited with the Company.
2. Scheme of Amalgamation and Arrangement
The Honble High Court of Judicature at Bombay on 21st March 2014approved the Scheme of Amalgamation and Arrangement between Landmark Limited, Fiora LinkRoad Properties Limited and Trexa ADMC Private Limited with Trent Limited ("theCompany") and their respective Shareholders and Creditors ("the Scheme").The Scheme became effective on 23rd April 2014 upon obtaining all sanctions andapprovals as required under the Scheme. The Appointed Date for the merger is 1stApril 2013.
As Landmark Limited, Fiora Link Road Properties Limited and Trexa ADMC Private Limitedwere wholly owned subsidiaries of the Company, no shares of the Company were issued andallotted pursuant to the Scheme.
The Board of Directors recommend the payment of a Dividend @ 70% i.e. Rs.7 per EquityShare (previous year @ 70% i.e. Rs.7 per share) on 3,32,31,544 Equity Shares of Rs.10 eachfor the year ended 31st March 2014. This alongwith dividend distribution taxrepresents a payout ratio of 50.17% of the profit after tax.
4. Management Discussion and Analysis
A separate section on Management Discussion and Analysis (MD&A) is included in theAnnual Report as required in Clause 49 of the Listing Agreement with BSE Limited and TheNational Stock Exchange of India Limited. The MD&A includes discussion on thefollowing matters within the limits set by the Companys competitive position:industry prospects and developments, opportunities and risks, the performance of keyretail formats and the outlook for the business, risks and concerns, internal controlsystems & their adequacy and discussion on financial performance.
- Key operating subsidiaries:
Trent Hypermarket Limited ("THL") operates the Star Bazaar retail businessand is a wholly owned subsidiary of the Company. The Company, together with THL, hasentered into definitive agreements with Tesco Overseas Investments Limited ("TescoOverseas"), a wholly owned subsidiary of Tesco PLC, UK in respect of THL. Theagreements envisage Tesco Overseas would purchase part of the equity shares currently heldby the Company in THL for an amount of approximately Rs.150 Crores and would separatelysubscribe to additional THL equity shares for an amount of approximately Rs.700 Crores.Following the conclusion of the proposed investment, the Company and Tesco Overseas willeach hold a 50% stake in THL. Details on the performance of THL is included in theMD&A.
Landmark Limited, previously a key operating subsidiary of the Company, was merged withthe Company w.e.f. 1st April 2013.
- Other subsidiaries: Fiora Services Limited continues to render various services tothe Company in terms of sourcing activities, warehousing, distribution, clearing andforwarding.
The other subsidiaries of the Company continue to support primarily the Companysreal estate needs etc.
- Subsidiary Accounts: The Ministry of Corporate Affairs vide its circular dated 8thFebruary 2011 granted general exemption to holding companies from attaching the annualaccounts of its subsidiary companies subject to certain conditions.
Accordingly the said documents are not attached to the Balance Sheet of the Company. Astatement containing financial details of the Companys subsidiaries is included inthe consolidated Balance Sheet in the Annual Report. The Annual Accounts of the subsidiarycompanies and the related detailed information will be made available to the members ofthe holding and subsidiary companies seeking such information at any point of time.Further, the Annual Accounts of the subsidiary companies will also be kept open forinspection by any member at the Registered Office and the Corporate Office of the Companyand also at the Registered Offices of the subsidiary companies.
6. Quality Initiatives
The Company participates in the Tata Business Excellence Model (TBEM), which emphasizesquality, leadership, strategic planning, customer orientation and services, processorientation, human relations, shareholder value and commitment to community development.
7. Corporate Sustainability
Corporate Sustainability at the Company integrates economic progress and socialcommitment. The Company aspires to always fuse its business values, cultural pillars andoperating principles to exceed the expectations of its customers, employees, partners,investors, communities and the wider society. The Company provides sponsorship for NGOprojects across store locations in areas of Child Education & Nutrition by providingfinancial support. This is done through Diwali and Christmas festival promotions (Star& Diya) initiatives in Westside stores. This programme enables the customers toparticipate in giving by lighting a diya during Diwali, or putting up a staron the Christmas tree during Christmas season; the proceeds of which are routed to selectNGOs who are engaged in community work. Through this annual initiative, the Companysupports children hailing from disadvantaged communities by providing financial assistancein various forms like educational scholarships, midday meals, infrastructure development.Organizational and store volunteers visit NGOs to interact and explore opportunities toimprove cooperation. The stores raised an amount of Rs. 69 lacs that supported 23education and nutrition projects that benefitted nearly 4,000 children.
The Company donated goods and materials such as clothes, books, toys, footwear toresponsible NGO partners. Some of the partners benefiting out of this donation are ToyBank, Maharogi Sewa Samiti, Bigger Than Life and Umang Foundation.
In response to the Uttarakhand floods, the Company actively showed support to the causeby donating a sum of Rs.10 lacs through the Tata Relief Committee.
The Company, through its Westside stores across locations in India initiated an effortto raise funds for Tata Medical Center. The funds raised were used for treatment ofunderprivileged cancer patients.
The Company also uphold the group protocol for Affirmative Action (AA) initiative.Prioritization of the AA goals is based on the organizational core competency, scope ofintegration of the AA agenda, sphere of influence with respect to the communities itoperates from, and the capacity and capability to deliver. The Companys focus areasare Education, Employment, Employability and other key allied social initiatives with anaim to improve the quality of life of those the Company is associated with.
There is a constant need for talent especially at the front end of the storeoperations. The same is leveraged and aligned to the Companys Affirmative Action(AA) policy. In its responsibility to link business needs to AA activities, the Companyendeavor to create a talent pool of youth from the marginalized communities by providingequal employability / employment opportunities. AA initiatives of the Company acts as astepping stone for people from the marginalized communities to learn skills, gainconfidence and move ahead in life.
Looking at an alternative to the sourcing of human resources in a creative manner, theCompanys vocational training programme, called Saksham (Sanskrit for capable), aimsto enhance the employability skills and provide gainful employment to the underprivilegedsections of society. Through this programme, the sharing of retail knowledge, impartingretail skills and providing on-the-job training is done. These skills assist the youth infinding access to retail careers, not just with the Company but also across other retailorganizations and formats. This helps in promoting employability and to an extentproviding employment opportunities to the target communities. The Company encourage itsemployees to become involved in the communities by lending their voluntary support byconducting knowledge sharing sessions towards the Saksham programme. The Company hasaround 1,120 employees hailing from affirmative action communities employed across itsformats.
The Company also actively participated in the Tata Engage volunteering week held inMarch 2014. The Company, along with its corporate and store employees across locationsvolunteered to motivate students in the age group of 12-18 years on personalitydevelopment, career development and exploring opportunities in the field of retail. Intotal, 839 employees volunteered during the week.
8. Corporate Governance
A separate section on Corporate Governance is included in the Annual Report along withthe certificate from the Companys Auditors confirming compliance with conditions onCorporate Governance as stipulated in Clause 49 of the Listing Agreements with BSE Limitedand The National Stock Exchange of India Limited.
9. Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on therepresentations received from the Operating Management, confirm that:
i. in the preparation of the annual accounts, the applicable accounting standards havebeen followed and that there are no material departures;
ii. they have, in the selection of accounting policies, consulted the StatutoryAuditors, and have applied them consistently, and made judgments and estimates that arereasonable and prudent so as to give a true and fair view of the state of affairs of theCompany at the end of the financial year and of the profit of the Company for that period;
iii. they have taken proper and sufficient care, to the best of their knowledge andability, for the maintenance of adequate accounting records in accordance with theprovisions of the Companies Act, 1956, for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities; iv. they have prepared the annualaccounts on a going concern basis.
Mr. F. K. Kavarana who had been a Director of the Company since 2004 and as itsChairman since 2006 stepped down from the Board of Directors w.e.f. 30th March2014 in accordance with the Tata Policy on retirement of Non-Executive Directors. TheBoard places on record its sincere appreciation of the valuable contribution made by Mr.Kavarana to the Company as a Director and Chairman in providing advice and counsel withregard to the Companys business strategies, financial structure and investmentswhich significantly contributed to the Companys growth and stature in the retailindustry.
The Board appointed Mr. Noel N. Tata as the Chairman of the Board of Directors witheffect from 31st March 2014. Mr. Tata has been associated with the Companysince 1997. He was the Managing Director until 2010 and thereafter appointed as the ViceChairman. During these years, the Company has shown remarkable growth and diversification.Pursuant to the provisions of the Articles of Association of the Company, Mr. Noel N. Tatahas been nominated by Tata Sons Limited as a Special Director on the Board of Directors ofthe Company, not liable to retire by rotation, with effect from 31st March2014, in place of its earlier nominee Mr. F. K. Kavarana.
The Board on 1st April 2014 had appointed Mr. H. Bhat as an AdditionalDirector of the Company. He holds office upto the date of the forthcoming Annual GeneralMeeting and the Company has received a notice from a member intending to propose thecandidature of Mr. H. Bhat as a Director of the Company. In accordance with the provisionsof the Companies Act, 2013, Mr. B. Bhat is liable to retire by rotation and is eligiblefor re-appointment.
Mr. A. D. Cooper, Mr. Z. S. Dubash, Mr. S. Susman and Mr. B. N. Vakil are existingIndependent Directors of the Company. Pursuant to Section 149 of the Companies Act, 2013,it is proposed to appoint these Directors to hold office as per their tenure ofappointment mentioned in the notice of the forthcoming Annual General Meeting of theCompany. The Independent Directors are not liable to retire by rotation.
Brief particulars of the Directors proposed to be appointed or re-appointed are annexedto the Notice of the Annual General Meeting in accordance with the Listing Agreemententered with the Stock Exchanges.
The Board of Directors has re-appointed Mr. Philip N. Auld as the Chief ExecutiveOfficer and Manager of the Company pursuant to the provisions of the CompaniesAct, 2013, for a further period of three years w.e.f. 1st May 2014. Membersapproval is sought for his re-appointment and the payment of remuneration which may be inexcess of the limits prescribed under the Companies Act, 2013, as mentioned in the noticeof the forthcoming Annual General Meeting. The remuneration is also subject to theapproval of the Central Government.
The Auditors, M/s. N. M. Raiji & Co., Chartered Accountants, retire and areeligible for reappointment. It is proposed to reappoint the Auditors to hold office fromthe conclusion of this Annual General Meeting (AGM) till the conclusion of the Sixty FifthAGM of the Company to be held in the year 2017, subject to ratification of theirappointment at every AGM.
12. Statutory Information
A. Fixed Deposits: During the year under review, the Company has not accepted any fixeddeposit from the public. As on 31st March 2014, there were no deposits whichwere unclaimed and due for repayment.
B. Particulars of employees: The particulars of employees as required to be disclosedin accordance with the provisions of Section 217(2A) of the Companies Act, 1956, and theCompanies (Particulars of Employees) Rules, 1975, as amended, are annexed to theDirectors Report. However, as per the provisions of Section 219 (1)(b)(IV) of theCompanies Act, 1956, the Report and the Accounts are being sent to all members of theCompany excluding the aforesaid information. The aforesaid information is also availablefor inspection at the Registered Office of the Company. Any member interested in obtainingsuch particulars may write to the Company Secretary.
13. Policy on Prevention, Prohibition and Redressal of Sexual Harassment at workplace
The Company has adopted a Policy on Prevention, Prohibition and Redressal of SexualHarassment at the Workplace, to provide protection to employees at the workplace and forprevention and redressal of complaints of sexual harassment and for matters connected orincidental thereto, with the objective of providing a safe working environment, whereemployees feel secure. The Company has also constituted an Internal Complaints Committeeto consider and to redress complaints of sexual harassment. The Committee has not receivedany complaint of sexual harassment.
14. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings andOutgo
A. Conservation of Energy: The Company consciously makes all efforts to conserve energyacross all its operations.
B. Technology Absorption : Nil
C. Foreign Exchange Earnings and Outgo: Foreign Exchange earnings and outgo are statedon page 72 in the notes to the Balance Sheet and Profit and Loss Account. The Companyearned Rs. 22.68 crores in foreign currency from retail sales through International creditcards.
The Board wishes to place on record their sincere appreciation for the continuedsupport which the Company has received from its customers, suppliers, shareholders,promoters, bankers, group companies and above all, its employees.
| ||On behalf of the Board of Directors |
| ||Noel N. Tata |
|Mumbai, 28th May 2014 ||Chairman |