TO THE MEMBERS OF TRENT LIMITED
The Directors present their Sixty First Annual Report together with the AuditedStatement of Accounts for the year ended 31st March 2013.
|1. Financial Results ||2012-2013 ||2011-2012 |
| ||Rs Crores ||Rs Crores |
|Total Income ||996.19 ||912.04 |
|Profit before tax ||80.77 ||44.58 |
|Less: Provision for taxation ||18.51 ||(2.69) |
|Profit after tax ||62.26 ||47.27 |
|Add: Balance brought forward from previous year ||70.12 ||52.79 |
|Balance available for Appropriations ||132.38 ||100.06 |
|Appropriations || || |
|Proposed Dividend on: || || |
|Equity Shares ||23.26 ||17.72 |
|Preference Shares ||0.01 ||0.01 |
|Tax on dividend ||3.95 ||2.21 |
|Transfer to Debenture Redemption Reserve ||5.00 ||5.00 |
|Transfer to General Reserve ||8.00 ||5.00 |
|Balance carried forward ||92.16 ||70.12 |
| ||132.38 ||100.06 |
Income for the year at Rs 996.19 crores increased by 9.23% from the previousyears Rs 912.04 crores while profit after tax for the year at Rs 62.26 croresincreased by 31.71% from the previous years Rs 47.27 crores.
(i) 0.1% Redeemable Preference Shares
The Board of Directors at its meeting held on 29th May 2013 has approved the payment ofan interim dividend on the 70,000 unlisted Cumulative Redeemable Preference Shares of Rs1000 each @ 0.1% p.a. for the period 1st April 2012 to 1st June 2013. The said shareswould be redeemed on 1st June 2013.
(ii) Equity Shares
The Board of Directors recommend the payment of a Dividend @ 70% i.e. Rs 7 per EquityShare (previous year @ 65% i.e. Rs 6.50 per share) on the expanded capital consisting of3,32,31,544 Equity Shares of Rs 10 each for the year ended 31st March 2013 (previous year2,72,49,519 Equity Shares of Rs 10 each). This alongwith dividend distribution taxrepresents a payout ratio of around 44% of the profit after tax.
3. Conversion of Cumulative Compulsorily Convertible Preference Shares intoEquity Shares and Preferential Allotment
The Company had issued Cumulative Compulsorily Convertible Preference Shares (CCPS) ona Rights basis to the Members of the Company in August 2010, comprising of 44,51,414 CCPSSeries A and 44,51,414 CCPS Series B aggregating to Rs 489.66 crores. Each CCPS of facevalue of Rs 10 has been issued at a premium of Rs 540 each. 44,51,414 CCPS Series A werecompulsorily and automatically converted into 44,51,414 fully paid-up Equity Shares of Rs10 each on 1st September 2011.
44,51,414 CCPS Series B were compulsorily and automatically converted into 44,51,414fully paid-up Equity Shares of Rs 10 each on 1st September 2012.
During the financial year 2012-13, the Company had allotted 15,30,611 Equity Shares ofRs 10 each at a price of Rs 980 per share aggregating to Rs 150 crores to Promoter /Promoter Group on preferential allotment basis.
Consequent to the conversion of CCPS Series B into equity shares and the preferentialallotment, the paid up equity share capital of the Company has increased from Rs 27.25crores to Rs 33.23 crores.
4. Scheme of Amalgamation and Arrangement
The Board of Directors of the Company at its meeting held on 4th March 2013 approved aScheme of Amalgamation and Arrangement (The Scheme) between Landmark Limited,Fiora Link Road Properties Limited and Trexa ADMC Private Limited with the Company. TheAppointed Date for the merger shall be 1st April 2013.
As Landmark Limited, Fiora Link Road Properties Limited and Trexa ADMC Private Limitedare wholly owned subsidiaries of the Company, no shares of the Company will be issued andallotted pursuant to the proposed Scheme.
The Scheme is subject to the requisite approval of the members and/or creditors as maybe directed by the High Court of Judicature at Bombay and subject to all such requisiteapprovals from the relevant Regulatory Authorities and sanction of the High Court ofJudicature at Bombay.
5. 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 andNational 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: Details on the performance of the two key operatingsubsidiaries of the Company viz., Trent Hypermarket Limited (Star Bazaar-Hypermarketbusiness) and Landmark Limited (books, music, gaming and toys business) is included in theMD&A.
- 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 of the Company, the Corporate Office ofthe Company and also at the Registered Offices of the subsidiary companies.
- Purchase of shares of Landmark Limited: During the year under review, the Company haspurchased from TVS Shriram Growth Fund I ("the Fund"), a minority shareholder,the entire shares held by them in Landmark Limited, a subsidiary of the Company.Consequently, Landmark Limited has become a wholly owned subsidiary of the Company. TheFund retains an option to invest in a minority stake in Westland Limited (also asubsidiary of the Company).
7. 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.
8. Corporate Sustainability
Corporate Sustainability at Trent Limited integrates economic progress and socialcommitment. We aspire to always fuse our business values, cultural pillars and operatingprinciples to exceed the expectations of our customers, employees, partners, investors,communities and the wider society. As part of Corporate Social Responsibility initiative,Trent provides sponsorship for NGO projects across store locations in areas of ChildEducation & Nutrition by providing financial support. This is done through Diwali andChristmas festival promotions (Star & Diya) initiatives in Westside stores. Thisprogramme enables the customers to participate in giving by lighting a diyaduring Diwali, or putting up a star on the Christmas tree during Christmas season; theproceeds of which are routed to select NGOs who are engaged in community work. Throughthis annual initiative, Trent supports children hailing from disadvantaged communities byproviding financial assistance in various forms like educational scholarships, middaymeals, infrastructure development. Organizational and store volunteers visit NGOs tointeract and explore opportunities to improve cooperation. We have channelized an amountof Rs 11.4 lacs towards setting up this initiative across our stores, and the storesraised an approximate amount of Rs 47 lacs that supported 21 education and nutritionprojects that benefitted nearly 2000 children.
Trent commissioned two water purification units at Mangalagiri (1000LPH) and Rajavolu(500LPH) villages of Andhra Pradesh. The villages, located near Vijaywada, have a big baseof fabric suppliers, and had been facing an acute shortage of clean drinking water. Withthe installation of these units, nearly 2300 weaver families in both villages arebenefitted, also keeping a check on water-borne diseases and ensuring healthy growth forchildren in the areas.
Trent Team also participated in the Standard Chartered Mumbai Marathon 2013; supportingSt. Judes Childcare Centre and also raised funds for Tata Medical Centre, TataMemorial Centre and V Connect Foundation.
We 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. Our focus areas are Education,Employment, Employability and other key allied social initiatives with an aim to improvethe quality of life of those we are associated with.
There is a constant need for talent especially at the front end of the storeoperations. The same is leveraged and aligned to our Affirmative Action (AA) policy. Inits responsibility to link business needs to AA activities, we endeavor to create a talentpool of youth from the marginalized communities by providing equal employability /employment opportunities. AA initiatives of Trent act as a stepping stone for people fromthe marginalized communities to learn skills, gain confidence and move ahead in life.
Looking at an alternative to the sourcing of human resources in a creative manner,Trents vocational training programme, called Saksham (Sanskrit for capable), aims toenhance 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 Trent but across other retailorganizations and formats. This helps in promoting employability and to an extentproviding employment opportunities to the target communities. We encourage our employeesto become involved in the communities by lending their voluntary support by conductingknowledge sharing sessions towards the Saksham programme. We have around 978 employeeshailing from affirmative action communities employed across our formats.
9. 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 National Stock Exchange of India Limited.
10. 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 annual accounts on a going concern basis.
In accordance with the provisions of the Companies Act, 1956 and the Articles ofAssociation of the Company, Mr. N. N. Tata and Mr. B. Bhat are liable to retire byrotation and are eligible for re-appointment. Brief particulars of Mr. N. N. Tata and Mr.B. Bhat are annexed to the Notice of the Annual General Meeting in accordance with theListing Agreement entered with the Stock Exchanges.
Considering the qualifications and rich experience of the Directors, the contributionmade by them at the Board and various Committee meetings, the time spent by them onoperational matters other than at the meetings and the diversified responsibilities beingundertaken by them in managing the growth of the Company and its subsidiaries businessesover these years, it is proposed to pay commission in excess of 1% of the net profits ofthe Company for the financial year ended 31st March 2013, to the non-whole time directorsof the Company as may be decided by the Board of Directors. The same is subject to theapproval of the members and the Central Government. Attention is drawn to the Item No. 7of the Notice of the Annual General Meeting.
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 up tothe conclusion of the Annual General Meeting for the year ending 31st March 2014.
13. Statutory Information
A. Fixed Deposits: During the year under review, the Company has not acceptedany fixed deposit from the public. As on 31st March 2013, there were no deposits whichwere unclaimed and due for repayment.
B. Particulars of employees: The particulars of employees as required to bedisclosed in accordance with the provisions of Section 217(2A) of the Companies Act, 1956,and the Companies (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.
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 75 in the notes to the Balance Sheet and Profit and Loss Account. The Companyearned Rs 15.96 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 |
| ||F. K. Kavarana |
|Mumbai, 29th May 2013 ||Chairman |