Westside Annual Report 05-06

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A Enterprise Notice NOTICE is hereby given that the FIFTY - FOURTH ANNUAL GENERAL MEETING of TRENT LIMITED will be held at Bombay House Auditorium, Bombay House, 24, Homi Mody Street, Mumbai – 400 001 on Friday, 8th September, 2006 at 3.30 p.m. to transact the following business: 1] To receive, consider and adopt the Audited Profit and Loss Account for the year ended 31st March 2006 and the Balance Sheet as at that date together with the report of the Directors and Auditors thereon. 2] To declare a dividend. 3] To appoint a Director in place of Mr. K. N. Suntook, who retires by rotation and is eligible for reappointment. 4] To appoint a Director in place of Mr. B. S. Bhesania, who retires by rotation and is eligible for reappointment. 5] To consider and, if thought fit, to pass with or without modification, the following resolution as an Ordinary Resolution: “RESOLVED THAT Mr. Zubin S. Dubash, who was appointed by the Board of Directors as an Additional Director of the Company with effect from 27th October 2005 and who holds office upto the date of this Annual General Meeting of the Company in terms of Section 260 of the Companies Act, 1956 (“Act”) and in respect of whom the Company has received a notice in writing from a Member under Section 257 of the Act proposing his candidature for the office of Director of the Company, be and is hereby appointed a Director of the Company” . 6] To consider and, if thought fit, to pass with or without modification the following resolution as an Ordinary Resolution: “RESOLVED THAT in partial modification of Resolution No. 5 passed at the Annual General Meeting of the Company held on 3rd September 2004 and in accordance with the provisions of the Sections 198, 269, 309, 310 and other applicable provisions, if any, of the Companies Act, 1956 (“Act”) read with Schedule XIII of the Act, the Company hereby approves of the revision in the perquisites and allowances payable to Mr. N. N. Tata, Managing Director, (including the remuneration to be paid in the event of loss or inadequacy of profits in any financial year during the tenure of his appointment) with effect from April 1, 2006 for the remainder of the tenure of his contract as set out in the Explanatory Statement annexed to the Notice convening this meeting.” “RESOLVED FURTHER THAT the Board be and is hereby authorised to take all such steps as may be necessary, proper and expedient to give effect to this Resolution.” 7] To consider and, if thought fit, to pass with or without modification the following resolution as a Special Resolution: “RESOLVED THAT pursuant to the provisions of Section 309 and other applicable provisions, if any, of the Companies Act, 1956 (“Act”), a sum not exceeding one per cent per annum of the net profits of the Company, calculated in accordance with the provisions of Sections 198, 349 and 350 of the Act, be paid to and distributed amongst the Directors of the Company or some or any of them (other than the Managing Director and the Whole-time Director) in such amounts or proportions and in such manner and in all respects as may be directed by the Board of Directors and such payments shall be made in respect of the profits of the Company for each year of the period of five years commencing 1st April, 2006 and expiring with the financial year ending 31st March, 2011.” 8] To appoint Auditors and to fix their remuneration. Notes: [a] The relative Explanatory Statement pursuant to Section 173 of the Companies Act, 1956, in respect of the business under Items Nos. 5 to 7 set out above and the relevant details of directors seeking appointment / re-appointment under Items Nos. 3 to 5 above, pursuant to Clause 49 of the Listing Agreement, are annexed hereto. 1 Fifty-Fourth Annual Report 2005-2006 [b] A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLED TO APPOINT A PROXY TO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. PROXIES IN ORDER TO BE EFFECTIVE MUST BE RECEIVED BY THE COMPANY NOT LESS THAN 48 HOURS BEFORE THE MEETING. [c] The Register of Members and the Transfer Books of the Company will be closed from Tuesday 8th August 2006 to Tuesday 29th August 2006, both days inclusive. If the dividend as recommended by the Board of Directors is approved at the Meeting, payment of such dividend will be made on or after 9th September, 2006 as under: (i) To all beneficial owners in respect of shares held in electronic form as per the data as may be made available by the National Securities Depository Limited and the Central Depository Services (India) Limited as of the close of business hours on 7th August 2006. (ii) To all shareholders in respect of shares held in physical form after giving effect to valid transfers in respect of transfer requests lodged with the Company on or before the close of business hours on 7th August 2006. [d] The entitlement to the discount coupons issued by the Company to the shareholders is related to their shareholding. [e] Pursuant to Section 205A of the Companies Act, 1956, all unclaimed/unpaid dividends up to the financial year ended 31st March, 1995 have been transferred to the General Revenue Account of the Central Government. Shareholders, who have not yet encashed their dividend warrant(s) for the said period, are requested to forward their claims in prescribed Form No. II to the Companies Unpaid Dividend (Transfer to General Revenue Account of the Central Government) Rules, 1978 to the Office of the Registrar of Companies, Central Government Office Bldg., ‘A’ Wing, 2nd Floor, Next to Reserve Bank of India, CBD, Belapur 400 614, Telephone No. 27576802. Consequent upon the amendment to Section 205A of the Companies Act, 1956 and introduction of Section 205C by the Companies [Amendment] Act, 1999, the amount of dividend for the subsequent years remaining unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account of the Company shall be transferred to the Investor Education and Protection Fund (IEPF) set up by the Government of India and no payments shall be made in respect of any such claims by the IEPF. Accordingly, the Company has transferred to IEPF all unclaimed / unpaid dividends in respect of the Financial Years 1995-96 to 1997-98. Members who have not yet encashed their dividend warrant[s] for the financial year ended 31st March 1999 and subsequent financial years, are requested to make their claims to the Company accordingly, without any delay. It may be noted that the unclaimed dividend for the financial year ended 31st March 1999 is due for transfer to IEPF on 26th September 2006. [f ] Having regard to the difficulties experienced by shareholders in disposing of the shares held by them in physical form, TSR DARASHAW LIMITED, Registrars of the Company, has framed a Scheme for the purchase of such shares. Interested shareholders may contact TSR DARASHAW LIMITED for further details. [g] No Hand bags/Parcels of any kind will be allowed inside the auditorium. The same will have to be deposited outside the Auditorium on the counter provided, at the shareholders’/proxies’ own risks. By Order of the Board of Directors, MRS. H. R. WADIA Company Secretary Registered Office: Bombay House, 24, Homi Mody Street, Mumbai 400 001. Mumbai, 2nd August, 2006 2 A Enterprise EXPLANATORY STATEMENT PURSUANT TO THE PROVISIONS OF SECTION 173 (2) OF THE COMPANIES ACT, 1956 (THE ACT) The following Explanatory Statement sets out all material facts relating to the business mentioned under Item Nos. 5 to 7 in the accompanying Notice dated 2nd August, 2006. Item No. 5 Mr. Zubin Dubash was appointed as an Additional Director of the Company w.e.f. 27th October 2005. As per the provisions of Section 260 of the Act, Mr. Dubash holds office as Additional Director upto the date of the forthcoming Annual General Meeting of the Company and is eligible for appointment. The Company has received a notice pursuant to Section 257 of the Act, along with the requisite deposit from a member signifying an intention to propose Mr. Dubash as a candidate for the office of Director. The details of Mr. Dubash along with his brief resume are given in the Annexure to the Notice. Taking into account the experience and expertise of Mr. Dubash the Board recommends his appointment. None of the Directors except Mr. Zubin Dubash is deemed to be interested or concerned in passing of this Resolution. Item No. 6 Mr. N. N. Tata was re-appointed as the Managing Director of the Company for the period of 5 years with effect from 15th June 2004 on the terms and conditions and remuneration as approved by the Shareholders at the Annual General Meeting of the Company held on 3rd September 2004. In order to give flexibility to the Board of Directors (the Board) to decide upon the perquisites and allowances to be granted to Managing Director from time to time, within the overall ceilings prescribed under the Act, it is proposed to revise the terms of remuneration relating to perquisites and allowances of Mr. N. N. Tata with effect from 1st April, 2006. The Board of Directors at its meeting held on 28th June, 2006 have approved of the aforesaid proposal, subject to the approval of the Members. All the other terms and conditions of re-appointment and remuneration of Mr. N. N. Tata would remain unchanged. The revised terms of remuneration are as set out below: A. Remuneration: Salary up to a maximum of Rs. 4,00,000/- per month with annual increments effective 1st April every year as may be decided by the Board of Directors based on merit and taking into account the Company’s performance, benefits, perquisites and allowances as determined by the Board from time to time; and commission based on certain performance criteria to be prescribed by the Board. B. Minimum Remuneration: Notwithstanding anything to the contrary herein contained, where in any financial year during the currency of the tenure of Mr. Tata, the Company has no profits or its profits are inadequate, the Company will pay remuneration by way of salary and, perquisites and allowances, as specified above. The aggregate of the remuneration as aforesaid shall be within the maximum limits as laid down under Sections 198, 309 and all other applicable provisions, if any, of the Act read with Schedule XIII of the Act as amended from time to time. In compliance with the provisions of Section 309 and 310 read with Schedule XIII of the Act, the revised terms of the remuneration of Mr. Tata are now being placed before the Members in general meeting for their approval. The Board recommends the Resolution for approval by the Members. 3 Fifty-Fourth Annual Report 2005-2006 Mr. N. N. Tata, Managing Director and Mrs. S. N. Tata, Chairman are concerned or interested in the Resolution mentioned in Item No. 6 of the Notice. This may also be treated as an abstract of the draft Agreement between Mr. N. N. Tata and the Company pursuant to Section 302 of the Act. Item No. 7 At the Annual General Meeting of the Company held on 27th August 2001, the members had approved of the payment of remuneration by way of commission to the non-whole-time Directors of the Company, of a sum not exceeding 1% per annum of the net profits of the Company, calculated in accordance with the provisions of the Act, for a period of five years commencing 1st April 2001. Taking into consideration the increased role of Directors in the emerging competitive environment, especially the added responsibilities of non-whole-time Directors, required by the new Corporate Governance regulations at various Board and Committee Meetings, it is appropriate that the Directors (apart from the Managing Director and Whole-time Directors, if any) be compensated and therefore, it is proposed that, in terms of Section 309 of the Act, the non-whole-time Directors be paid for each of the five financial years commencing from 1st April, 2006, a remuneration not exceeding 1% of the net profits of the Company, computed in accordance with the provisions of the Act. This remuneration will be distributed amongst all or some of the non-whole-time Directors in accordance with the directions given by the Board. The commission that will be paid will be in addition to the sitting fees for attendance of Board / Committee Meetings. All the Directors of the Company apart from the Managing Director are concerned or interested in the Resolution mentioned at Item 7 of the Notice to the extent of the remuneration that may be received by them. By Order of the Board of Directors, MRS. H. R. WADIA Company Secretary Registered Office: Bombay House, 24, Homi Mody Street, Mumbai 400 001. Mumbai, 2nd August, 2006 DETAILS OF MR. K. N. SUNTOOK, MR. B. S. BHESANIA AND MR. ZUBIN DUBASH AS REQUIRED UNDER CLAUSE 49 OF THE LISTING AGREEMENT Item No. 3 Mr. K. N. Suntook has been appointed on the Board of Directors w.e.f. 22 nd August, 1995. Mr. Suntook has experience in general and legal, in particular. His qualifications are B.A., LL.B. (Advocate), F.C.S. Names of the other Public Companies in which Mr. K. N. Suntook holds Directorships as on 31st March, 2006 4 : Tata Investment Corporation Ltd., National Peroxide Ltd., The Associated Building Company Ltd., Tata McGraw-Hill Publishing Co. Ltd. A Enterprise Chairman / Member of the Committees of the Board of other Companies on which Mr. K. N. Suntook is a Director as on 31st March, 2006 : Tata Investment Corporation Ltd. – Audit Committee (Chairman), Investment Committee, Remuneration Committee (Chairman), Asset / Liability Committee; National Peroxide Ltd. – Audit Committee, Remuneration Committee, Cricket Club of India Ltd. – Executive Committee, Investment Committee. : 275 Number of Shares held in the Company Item No. 4 Mr. B. S. Bhesania has been appointed on the Board of Directors of the Company w.e.f. 17th May 1983 and is a senior partner of M/s. Mulla & Mulla & Craigie Blunt & Caroe, with specialization in areas in shipping laws, corporate laws, property laws etc. His qualification are B.Sc. LL.M. Advocate, High Court, Mumbai and Supreme Court of India, Solicitor, High Court, Mumbai, Supreme Court of England & Wales and Supreme Court of Hongkong. Names of the other Public Companies in which Mr. B. S. Bhesania holds Directorships as on 31st March, 2006 : Bhansali Engineering & Polymers Ltd., Bombay Rayon Fashions Ltd, DGP Hinoday Industries Ltd., Gilt Edge Finance & Investments Ltd. Chairman / Member of the Committees of the : Bhansali Engineering & Polymers Ltd.– Board of other Companies on which Remuneration Committee; Bombay Rayon Fashions Mr. B. S. Bhesania is a Director as on 31st March, 2006 Ltd, Audit Committee Number of Shares held in the Company Item No. 5 Mr. Zubin Dubash is the Group Chief Financial Officer of WNS Global Services, the No.1 provider in leveraged offshore outsourcing solutions to the Global 500. He has over 24 years of international experience in finance and business development. Prior to joining WNS, Mr. Dubash served as Executive Director of the Indian Hotels Company Ltd (Taj Group of Hotels). He was directly responsible for strategic planning, business development and finance for the Taj Group. He has also served as a Director of Tata Financial Services, a division of Tata Sons Ltd and was involved in advising Tata Group companies on their corporate finance requirements. Mr. Zubin Dubash holds a Bachelors Degree in Commerce from Mumbai University and a Masters in Business Administration from The Wharton School, Philadelphia. He is also a Chartered Accountant from the Institute of Chartered Accountants in England and Wales. Names of the other Public Companies in which Mr. Zubin Dubash holds Directorships as on 31st March, 2006 Chairman / Member of the Committees of the Board of other Companies on which Mr. Zubin Dubash is a Director as on 31st March, 2006 Number of Shares held in the Company : None : Nil : None : Nil 5 Fifty-Fourth Annual Report 2005-2006 DIRECTORS’ REPORT TO THE MEMBERS, The Directors are pleased to present their Fifty Fourth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2006. FINANCIAL RESULTS 2005-2006 2004-2005 [Rupees [Rupees in Crores] in Crores] Total Income Profit before taxes and Exceptional Items Less: Exceptional Items Less: Provision for taxation Profit fo the year after Tax Add/Less: Excess/(Short) Tax Provision for prior years [Net] Net Profit Balance brought forward from previous year Balance available for appropriation Interim Dividiend Proposed Dividend Tax on Dividend Transfer to Debenture Redemption Reserve Transfer to General Reserve 357.59 35.04 0.75 9.91 24.38 246.10 24.56 5.31 19.25 The total Income of the Company for the fiscal year under review stood at Rs.357.59 Crores, i.e., an increase of 45% over the previous year, thus doubling its turnover in the last 2 years. Profit before taxes at Rs.34.29 Crores grew by 39% over the previous year and profit after taxes of Rs.24.38 Crores by 28%. On a consolidated basis, the turnover for the year was at Rs.419.11 Crores with a net profit after tax of Rs.28.80 Crores. DIVIDEND On 28 th June 2006, the Board of Directors recommended a final dividend of Rs. 6.50 per share (65%) on 1,44,27,811 shares, involving a distribution of Rs. 9.38 Crores. ISSUE OF PARTLY CONVERTIBLE DEBENTURES WITH DETACHABLE WARRANTS During the year, the Company issued 13,10,047 Partly Convertible Debentures of Rs.900/- each. The Convertible portion of Rs.400/- each has been converted into 1 equity share of a face value of Rs.10/- each at a premium of Rs.390/- each on the date of allotment. The Non-Convertible portion of a face value of Rs.500/- will be redeemable at a premium of Rs.98/- in July 2010. Further, a similar amount of warrants were also issued, entitling the holders to apply for 1 equity share of Rs.10/- at a premium of Rs.640 after expiry of 54 months from the date of allotment, or earlier in the event the Company proposes to issue further securities. Consequent to the above issue, the paid-up capital of the Company has increased from Rs.1311.78 Lakhs to Rs.1442.78 Lakhs on 31st March 2006. RETAILING BUSINESS The Retailing Business had another good year with a strong growth in revenue of 49% at Rs.338.93 Crores, 24.38 15.28 (0.19) 19.06 15.21 39.66 9.38 1.32 13.00 2.50 13.46 39.66 34.27 7.87 1.12 10.00 15.28 34.27 Profit carried forward 6 A Enterprise reinforced by a segment profit of Rs.24.91 Crores, i.e., 75% above the previous year. Six new stores were commissioned at various intervals, all performing in line with the Company’s expectations. These are mostly located in areas supporting existing flagship stores. STAR INDIA BAZAAR the first Hypermarket of the Company located in Ahmedabad, consolidated its position. A second hypermarket, situated in Bangalore will be opening soon. As of March end, the Company was operating 23 stores covering 600,000 sq ft. TREASURY INCOME Compared to the previous year the Company’s Treasury Income was lower by 5% as the Company only booked a modest profit on the sale of some of its long-term investments. NEW BUSINESS During 2005-06, the Company alongwith its subsidiaries acquired 79% interest in the partnership firm, LANDMARK, the largest book and music retailer in the country, which is poised for a rapid expansion. The cost of this acquisition was Rs.108.5 Crores. LANDMARK has been converted into a public limited company and is now a subsidiary of the Company. For the year 2005-06, LANDMARK recorded a turnover of Rs.96.01 Crores and posted a net profit after tax of Rs.6.69 Crores. The Company’s share of the profit for the period (31st August, 2005 to 31st March 2006) amounting to Rs. 2.38 Crores has been included in the financial results of Trent Limited. STOCK OPTIONS The Company has granted 45850 stock options, under the Employee Stock Option Scheme, to senior managers and selected officers of the Company. The entire cost of Rs.3.96 Crores will be amortized over the 24-month vesting period commencing 1st December 2005 as per SEBI Guidelines. The proportionate amortization cost for the year amounting to Rs.0.64 Crores has been debited to Profit & Loss Account. SUBSIDIARIES: TRENT BRANDS LIMITED Trent Brands Limited ended the year with a net profit of Rs.5.41 Crores in the year under review. The Company has declared an interim dividend of Rs. 1.95 Crores (60%) on 24th March, 2006. FIORA SERVICES LIMITED Fiora Services Limited continues to render various services to the Company, including sourcing and warehousing. It posted a profit of Rs.0.56 Crores for the year under review and did not declare any dividend. SATNAM DEVELOPERS & FINANCE PRIVATE LIMITED Satnam Developers & Finance Private Limited is a 100% subsidiary of the Company which is developing office space partly for the Company’s use in the Bandra-Kurla Complex. Construction work on the project is in progress after some initial delays due to late receipt of approvals. NAHAR THEATRES PRIVATE LIMITED The Company acquired 100% of the share capital of Nahar Theatres Private Limited, the owner of premises from where the Company operates its WESTSIDE Store at Lajpat Nagar, New Delhi, at a cost of Rs. 28.33 Crores. 7 Fifty-Fourth Annual Report 2005-2006 FIORA LINK ROAD PROPERTIES LIMITED Fiora Link Road Properties Limited is 100% subsidiary of the Company and holds 0.05% in the share capital of Landmark Limited. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT A Report on Corporate Governance and a Management Discussion and Analysis Report are attached to this Report. DIRECTORS COMMUNITY SERVICES The Company, being city-centered, has forged ahead with its support to 36 child welfare organizations, especially those involved with street children, in the cities where it operates. Our representatives have visited them to convey our appreciation and support for their laudable work. At the same time, the Company has continued supporting NGOs for sale of their products, either as suppliers to the Company or on special displays during the festival season. Combining our business purpose with our community responsibility, we shall continue to expand our initiatives focusing on children and women welfare. The Company also assisted various organizations/NGOs with donations in the field of health care and environment. In accordance with the provisions of the Companies Act, 1956, and the Company’s Articles of Association, Mr. K.N. Suntook and Mr. B.S. Bhesania retire at the ensuring Annual General Meeting and are eligible for re-appointment. Mr. Zubin Dubash has been appointed as an Additional Director, w.e.f. 27 th October 2005. However, as an Additional Director, Mr. Dubash holds office up to the date of the Annual General Meeting and is eligible for appointment. The Directors recommend the appointment of Mr. Zubin Dubash as Director on the Board of the Company. AUDITORS The Auditors of the Company, M/s. N.M. Raiji & Co., retire at the ensuing Annual General Meeting and offer themselves for re-appointment. DIRECTORS RESPONSIBILITY STATEMENT Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors, based on the representations received from the Operating Management, confirm that: i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures; APPRECIATION The Directors wish to thank each and every employee for their contribution to the good performance of the Company. The culture of efficiency, dedication and integrity witnessed at all levels of the organization will continue to sustain a profitable growth. Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is annexed and forms an integral part of this Report. 8 A Enterprise ii) they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period; ENERGY, TECHNOLOGY & FOREIGN EXCHANGE Information relating to energy conservation is not applicable to the Company as per Section 217(1) C of the Companies Act, 1956. Foreign Exchange earnings and outgo are stated on Page 41, Note 16 & 17 on the Balance Sheet and Profit and Loss Accounts. The Company earned Rs.10.49 crores in foreign currency from retail sales through international credit cards. iii) they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities. iv) they have prepared the annual accounts on a going concern basis. On behalf of the Board of Directors, SIMONE N. TATA Chairman Mumbai, 2nd August, 2006 Distribution of Revenue 2005-2006 (Rs. in Lakhs) Employees Rs. 2,027.92 (6%) Repairs and Maintenance Rs. 680.37 (2%) Operation and Other Expenses Rs. 9,700.63 (27%) Depreciation Rs. 800.05 (2%) Shareholders Rs. 937.81 (3%) Reserves Rs. 1,368.49 (4%) Governments Rs. 2,787.79 (8%) Materials Rs. 17,455.94 (48%) 9 Fifty-Fourth Annual Report 2005-2006 MANAGEMENT DISCUSSION & ANALYSIS REPORT INDUSTRY DEVELOPMENT The high growth rate of the Indian economy has once again been the highlight of the year under review with the service and industrial sectors in the forefront. It is expected that this momentum will be further sustained in the current year with a general buoyancy extending to all segments of the economy. The organised retailing industry has also been on a high growth path for several years fuelled by favourable economic conditions. Whilst added competition has developed nationwide over the last 6 years, consumer demand has, nevertheless, accelerated and expanded resulting in a much larger customer audience than hitherto. Noteworthy, is the contribution of the service industry which absorbs year after year a larger number of well remunerated young Indians, eager to spend and share in the “Good Life” reserved so far to a few privileged ones. OPERATIONS - WESTSIDE Your Company has had another successful year and grew from 16 to 22 stores. The new entrants are located in Bangalore, Vadodara, Kolkata, Ghaziabad, Gurgaon and Delhi, thus extending its coverage in existing large cities and expanding to new ones. Three of our properties have also been expanded at Lajpat Nagar (Delhi), Noida and in Mumbai’s Kala Goda. In keeping with its objective of fashion leadership, new initiatives have been undertaken in many fields. Noteworthy, has been the re-launch of the Men’s Fashion Department, with upgradations in styles, quality of fabric and designs. Lately, the Company launched a new brand, ASCOT, aimed at discerning customers. This new line has been extremely well received and is widening and strengthening the range of our men’s apparel. The Footwear line, after its initial success, has also been expanded to more stores. STAR INDIA BAZAAR The Company’s hypermarket located in Ahmedabad progressed substantially in the later part of the year, 10 which has seen a large upsurge in its footfalls. The opening of a second hypermarket in Bangalore had to be postponed to the current year, due to non-completion of the building. LANDMARK During the year 2005-06, the Company acquired 79% interest in LANDMARK, a partnership firm engaged primarily in retailing books and music, which is the largest in India. By the close of the financial year, it operated 5 stores located in Chennai and Bangalore, and it recorded a turnover of Rs.96.01 crores. In May 2006, a new store was opened in Andheri, Mumbai. LANDMARK expects to end the current financial year with a total of 10 stores. The Company holds over 100,000 book titles and is a treasure trove for all avid readers. Besides it has a strong presence in toys and furnishings. TREASURY INCOME As the stock market witnessed a phenomenal bull run in the period under review, the Company marginally increased its investments into the equity market which yielded good results. Compared to the previous year, however, Treasury Income was lower as only a small part of its profit on long term investments was realized. TECHNOLOGY & MANAGEMENT In October 2004, the Company successfully completed the implementation of SAP IS Retail for its Hypermarket Division, which was the first of its kind in India. This has been acknowledged as a success story on its completion by the SAP Management. The Company has embarked on a further plan to upgrade the IT infrastructure of its WESTSIDE Stores, including the introduction of SAP. This project will be completed by the end of this financial year. In July 2005 the Company became the second Indian Company to be inducted in the Hall of Fame of the Balance Score Card (BSC), which is a strategy focused organization concept. The BSC implementation has been instrumental in driving significant growth in profitability, turnover and customer satisfaction. A Enterprise OUTLOOK 2006-07 The emergence and growth of modern retailing, such as witnessed in the last 6 years is a reflection of the aspirations of the young generation as well as of the new dynamism which has spread in the economic activities of the nation, creating a much larger middle and affluent class. As witnessed, incomes have been fast growing and discretionary spending is following the same curve, a clear indication of the potential ahead for the retail industry. First-time customers will also drive consumption as they will upgrade their buying habits. Exploiting demographic and geographic opportunities whilst adhering to its price-value equation, remain the corner stone of the Company philosophy. In 2007, WESTSIDE will be expanding by another 6 stores and one STAR INDIA BAZAAR and will then cover 900,000 sq ft. Some will be in new destinations and others by expanding in existing areas. Other properties have already been signed on, and will become operational only in 2007-08. This will take the total area covered by the Company to 1.25 million sq ft. RISK & CONCERNS The challenge posed by the competitive landscape in which the Company operates has considerably evolved and expanded since the Company’s inception. This more than ever requires a deep understanding of consumer demand, taste and trends, as also the know-how to address them on a continuous and sustained manner. However, the positive environment and the innovative culture prevailing in the Company, and its significant success in building its own brand, will no doubt sustain its growth pattern. At the same time the country has witnessed a frenzy in the property market leading to a manifold increase in land and property prices. If this trend continues it will adversely affect the growth/profits of the Industry as a whole. Also the speed of growth of the retail industry has far outstripped the supply of retail manpower which combined with the reluctance of new retailers to train their manpower is leading to an explosion of manpower costs. ANNEXURE TO DIRECTORS ‘ REPORT Information as per Section 217(2A) read with the Companies (Particulars of Employees) Rules, 1975 and forming part of the Directors’ Report for the year ended 31st March, 2006. Name Designation/ Nature of Duties (2) Vice- President – Operations Head of Buying [Hypermarket] Vice- President – Corp. Planning Managing Director General ManagerMarketing Remuneration Received Rs. (3) 41,49,448 30,91,046 40,81,364 94,72,200 28,58,024 Net Remuneration Rs. (4) 22,52,275 17,55,336 20,08,355 59,92,176 14,57,573 Qualifications Experience Date of Commencement of Employment (7) 17.08.1998 19.12.2005 04.08.1986 03.02.1998 03.11.2000 Age Last Employment before joining the Company (9) Vice President – Fiora Cosmetics Ltd. Trent Limited Sr. Manager – Finance – Hindustan Construction Co. Ltd. Managing Director – Lakme Exports Ltd. Heinz India Limited (1) Anand P.K. Newman Gary* Phene S.V. Tata N.N. Himanshu Chakrawarti (5) M.Com B.A.( Eco) B.Com, A.C.A. (6) 31 35 28 (8) 52 57 50 49 39 B.A. ( Eco) 23 Univ. of Sussex, IEP,INSEAD, France B.E & P.G.D.M 15 NOTES : 1. ‘Remuneration Received’ includes salary, taxable value of perquisites and Company’s contribution to Provident and Superannuation Funds, wherever applicable. 2. ‘Net Remuneration’ is arrived at by deducting from the Gross Remuneration, Income tax and Company’s contribution to Provident and Superannuation Funds and the monetary value of non-cash perquisites, wherever applicable. 3. The Company has made a provision for contribution to the Employees’ Gratuity Fund based on actuarial valuation. This amount has not been included in ‘Gross Remuneration’ as no separate figures are available for individual employees. 4. * The employee was in service only for a part of the year. 5. All the employees have adequate experience to discharge the responsibilities assigned to them. 6. The nature of employment in all cases is contractual. 7. Mr. N.N. Tata is a relative of a Director of the Company. On behalf of the Board of Directors, Mumbai SIMONE N. TATA Chairman Date :2nd August, 2006 11 Fifty-Fourth Annual Report 2005-2006 ANNEXURE TO DIRECTORS’ REPORT Disclosure pursuant to the provisions of Securities and Exchange Board of India (Employee Stock Option Scheme) Guidelines, 1999 Sl. No. Particulars Disclosures a) Options granted 45,850 b) Pricing Formula Rs.10/- per share at face value as approved by the shareholders c) Options vested NA since options not exercisable before the expiry of two years from the grant of option d) Options exercised NA e) Total number of shares arising as a result of exercise of option NA f) Options lapsed (as at 31st March 2006) 950 g) Variation of terms of options There has been no variation in the terms of options h) Money realised by exercise of options NA i) Total number of options in force (as at 31st March 2006) 44,900 j) Employee wise details of options granted to N N Tata - Managing Director - 5000 Options i) Senior Management Personnel; S V Phene - V.P Corporate Planning - 1500 Options P K Anand - V.P Operations - 1500 Options ii) Any other employee who receives a grant in any one year of option amounting to 5% or more of option granted during the year; None iii) Identified employees who were granted option during any year equal to or exceeding 1% of the issued capital (excluding outstanding warrants and conversions) of the Company at the time of grant. None k) Diluted Earnings Per Share (EPS) pursuant to issue of shares on exercise of option calculated in accordance with Accounting Standard (AS) 20 ‘Earnings Per Share’ Rs.16.84 l) i) Method of calculation of employee The company has calculated the employee compensation cost compensation cost using the intrinsic value method of accounting to account for options issued. The stockbased compensation cost as per the intrinsic value method for the year ending on 31st March 2006 is Rs. 64.75 lakhs ii) Difference between the employee Had the fair value method been used the compensation cost so computed at employee compensation cost would have been (i) above and the employee compensation lower by Rs. 3.29 lakhs cost that shall have been recognized if it had used the fair value of the Options iii) The impact of this difference on profits Had the fair value method been used, in respect and on EPS of the company of stock options granted, Profit after tax would have been higher by Rs.3.29 lakhs and the basic and diluted earnings per share would have been higher by Re.0.02 & Re.0.02 respectively. m) Weighted average execrcise price and weighted average fair value NA n) Fair value of Options based on Black Scholes methodology Assumptions Risk-free rate 6.25% Expected life 2.13 years Expected volatility 47.98% Expected dividends Rs. 6 per share Closing market price of share on date of option grant Rs. 865.20 12 A Enterprise CORPORATE GOVERNANCE REPORT FOR THE YEAR 2005-2006 1] A brief statement on Company’s philosophy on Code of Governance The Company’s philosophy, since its inception, has always looked at good Corporate Governance as a way of life, observing the highest level of ethics in all its dealings, in line with the Tata Group long standing legacy of fair and transparent governance. Included in its objectives are the protection of the interest of its shareholders, suppliers, customers, employees and society at large. 2] Board of Directors The Board of Directors comprises of eight Directors including the Non -Executive Chairman and one Managing Director. More than one-third of the total number of Directors are independent Directors. The requirements of having more than 50% of the Board comprising of Non-Executive Directors, is complied with by the Company. The Directors of the Company make necessary disclosures regarding the Committee positions held by them in all the Companies in which he or she is a Director. None of the Directors of the Company is a Member on more than ten Committees and a Chairman on more than five Committees across all the Companies in which he or she is a Director. The constitution of the Board, the attendance at Board Meetings and at the last Annual General Meeting and the number of Directorships and Committee Memberships held by them in other Public Companies are given below: Name Category No. of Board Meetings attended during 2005-06 NE NE-P IND. - NE IND. - NE IND. - NE NE-P IND. - NE 14 14 14 14 13 12 4 ## Whether attended last AGM held on 27th September, 2005 Yes Yes Yes Yes Yes Yes N. A. Appointed after the AGM Yes No. of Directorships in other Public Limited Companies Chairman No. of Committee positions held in other Companies Member# Chairman Member# 5 4 2 3 4 3 1 4 1 1 2 - Mrs. S. N. Tata Mr. N. A. Soonawala Mr. B. S. Bhesania Mr. A. D. Cooper Mr. K. N. Suntook Mr. F. K. Kavarana Mr. Zubin S. Dubash* 1 1 1 5 - Mr. N. N. Tata EXE. DIR 14 - 6 1 - # Membership excludes Chairmanship ## Details provided from the date of appointment. * Appointed w.e.f. 27th October, 2005. The listing above excludes private, foreign and Companies registered under Section 25 of Companies Act, 1956. Chairmanship / Membership of Board committees includes only Audit and Shareholders / Investor Grievance Committee. 13 Fifty-Fourth Annual Report 2005-2006 NE-P means Non-Executive-Promoter Director, IND. – NE means Independent Non-Executive Director, EXE. DIR means Executive Director. The Board of Directors of the Company met fifteen times during the year 2005-2006, on 27th April 2005, 17 th June 2005, 21st July 2005, 16th August 2005, 22nd August 2005, 30th August 2005, 27th September 2005, 27th October 2005, 28th November 2005, 18th January 2006, 2nd March 2006, 9th March 2006, 20th March 2006, 21st March 2006 and 31st March 2006. The gap between two Meetings did not exceed three months. The required information as enumerated in Annexure I to clause 49 of the Listing Agreement is made available to the Board of Directors for discussions and consideration at Board meetings. The Company did not have any pecuniary relationship or transactions with Non-Executive Directors during the year ended 31st March 2006 except for payment of sitting fees and Commission. Code of Conduct: The Company has adopted the Tata Code of Conduct for its Managing Director, senior management personnel and other executives of the Company. The Company has received confirmations from the Managing Director as well as senior management personnel regarding compliance of the Code during the year under review. The Company has also adopted the Code of Conduct for Non-Executive Directors of the Company. The Company has received confirmations from the Non-Executive Directors regarding compliance of the Code for the period ended 31st March 2006. A declaration to this effect duly signed by the Managing Director (CEO) is annexed hereto. Both the Codes are posted on the website of the Company. 3] Audit Committee The Audit Committee comprises of three independent, non-executive Directors, thus complying with the requirements of Clause 49 II [A] of the Listing Agreement. During the year under review, the Audit Committee of Directors held discussions with the Statutory Auditors and Internal Auditor of the Company concerning the accounts of the Company, internal control systems, scope of internal audit and reports of the Internal Auditor, compliance with Accounting Standards and Listing Agreement, reviewed the quarterly, half yearly and annual financial Statements before they were submitted to the Board of Directors. The Audit Committee of Directors also reviewed the matters prescribed under Clause 49 II [D] of the Listing Agreement. At the Audit Committee Meetings, the Statutory Auditors of the Company were invited and their findings / observations were also discussed. Minutes of the Audit Committee Meetings are circulated to the Members of the Board, discussed and taken note of. The composition of the Audit Committee and the details of Meetings attended by the Directors are given below: Name of Members Mr. A. D. Cooper, Chairman Mr. B. S. Bhesania, Member Mr. K. N. Suntook, Member No. of Committee Meetings attended during the year 2005-2006 Independent Non-Executive 5 Independent Non-Executive 5 Independent Non-Executive 3 Category Members of the Audit Committee have requisite financial, legal and management expertise. The Company Secretary also acts as the Secretary of the Audit Committee Meeting. During the year 2005-06, five Audit Committee meetings were held on 17th June 2005, 21st July 2005, 27th October 2005, 6th December 2005, and 18th January 2006 The Chairman of the Audit Committee, Mr. A. D. Cooper, was present at the Annual General Meeting held on 27th September 2005. Whistle Blower Policy: The Board of Directors on the recommendations of the Audit Committee has approved and adopted a Whistle Blower Policy that provides a formal mechanism for all employees of the Company to approach the Ethics Counsellor / Chairman of the Audit Committee of the Company and make 14 A Enterprise protective disclosures about the unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct. 4] Remuneration Committee The Remuneration Committee of the Company is empowered to review the remuneration of wholetime directors and retirement benefits to be paid to them under the Retirement Benefit Guidelines adopted by the Board. The composition of the Remuneration Committee and the details of meetings attended by the Directors are given below: No. of Committee Meetings attended during the year 2005-2006 Mr. A. D. Cooper, Chairman Independent Non-Executive 1 Mr. N. A. Soonawala, Member Non-Executive-Promoter 1 Mr. B. S. Bhesania, Member Independent Non-Executive 1 st th For the year ended 31 March, 2006, the Remuneration Committee met on 14 June, 2005, when all the Members were present. The Chairman of the Remuneration Committee, Mr. A. D. Cooper, was present at the Annual General Meeting held on 27th September 2005. The non-mandatory requirement of Clause 49 regarding the Remuneration Committee has been complied with by the Company as stated above. Remuneration Policy The remuneration of the Managing Director is decided by the Board, based on the recommendation of the Remuneration Committee, within the ceilings fixed by the Shareholders of the Company. The Company pays remuneration by way of salary, perquisites and allowances (fixed component), and commission (variable components) to its Managing Director. Annual increments are decided by the Remuneration Committee with the salary scale approved by the Members and are effective from 1st April annually. The Remuneration Committee decides on the commission payable to the Managing Director on determination of profits for the financial year, within the ceilings on net profits prescribed under sections 198 and 309 of the Companies Act, 1956 (the Act). In the last few years, efforts have been made to link the annual variable pay of senior managers with the performance of the Company in general and their individual performance for the relevant year measured against specific Key Result Areas, which are closely aligned, to the Company’s objectives. The remuneration by way of commission to the non-executive directors is distributed to them based on their attendance and contribution at the Board and certain committee meetings, as well as time spent on operational matters other than at the meetings. Details of remuneration paid in 2005-2006 Non-Executive Directors Name of the Director Commission for the financial year Sitting Fees for attending 2004-2005 Board and Committee Meetings [Rs.] [Rs.] Mrs. S. N. Tata 4,50,000/73,000/Mr. N. A. Soonawala 3,60,000/1,04,000/Mr. B. S. Bhesania 3,90,000/1,07,000/Mr. A. D. Cooper 2,90,000/1,04,000/Mr. H. N. Sethna* 1,65,000/Mr. F. K. Kavarana 20,000/80,000/Mr. K. N. Suntook 2,90,000/95,000/Mr. Z. S. Dubash** 20,000/* Up to 1st November 2004. ** Appointed as Director w.e.f. 27th October, 2005. Commission for the financial year 2005-2006 is payable in 2006-2007. 15 Name of Members Category Fifty-Fourth Annual Report 2005-2006 Managing Director Name Mr. N. N. Tata Salary [Rs. Lakhs] 40.66 Perquisites & Allowances [Rs. Lakhs] 17.01 Commission [Rs. Lakhs] 55.00 Payable in 2005-2006 Term of Contract 5 years Options Granted to Managing Director Sr. No. Particulars Details 1. Stock Options granted 5000 2. Date of Grant 1st December 2005 3. Vesting Period 24 Months 4. Exercise Price (Rs.) 10/Investment Committee In order to monitor and optimize returns from investments of surplus funds of the Company, the Board of Directors has constituted an Investment Committee of Directors. The Investment Committee comprises of four Directors viz. Mr. N. A. Soonawala, Mr. F. K. Kavarana, Mr. K. N. Suntook and Mr. N. N. Tata. Mr. N. A. Soonawala is the Chairman of the Committee. During the year under review the Committee met four times to review the investments made by the Company and its subsidiaries and to recommend to the Board any new investments to be made by the Company. Shareholders’ / Investors’ Grievance Committee For redressal of Shareholders’ and Investors’ complaints/grievances, the Board has constituted a Shareholders’/Investors’ Grievance Committee comprising of Mrs. S. N. Tata and Mr. B. S. Bhesania. There being no major complaint / grievance during the year, the Committee met only once on 30th March 2006. The Company Secretary is also the Secretary of the Shareholders’/Investors’ Grievance Committee. The other details pertaining to this Committee’s meeting are as under: [a] Name of the Non - Executive Director heading the Committee: Mrs. S. N. Tata [b] Name and Designation of Compliance Officer: Mrs. H. R. Wadia, Company Secretary [c] No. of shareholders’ complaints/queries and communications received during the financial year: 2747 [d] No. of complaints not solved to the satisfaction of the shareholders: 0 [e] No. of pending share transfers / requests for dematerialisation of shares as on 31st March, 2006: 57 Subsidiary Companies: The Company does not have any material non-listed Indian subsidiary company and hence, it is not required to have an independent director of the Company on the Board of such subsidiary Company. The Audit Committee reviews the financial statements, particularly the investments made by the Company’s non-listed subsidiary companies. Attention of the Directors of the Company is drawn to all significant transactions and arrangements entered into by the subsidiary companies. General Body Meetings Location and time, where last three AGMs were held: Annual Date Time Venue No. of General Special Meeting Resolutions (AGM) passed 51st AGM 27thAugust, 2003 3.30 p.m. Bombay House One Auditorium, Bombay House, 24, Homi Mody Street, Mumbai 400 001. 52nd AGM 3rd September, 2004 3.30 p.m. Bombay House Auditorium, — Bombay House, 24, Homi Mody Street, Mumbai 400 001. 53rd AGM 27th September, 2005 3.30 p.m. Bombay House Auditorium, Two Bombay House, 24, Homi Mody Street, Mumbai 400 001. 5] 6] 7] 8] 16 A Enterprise No postal ballot was conducted during the year. At the last Annual General Meeting of the Company Special Resolutions were passed for: (a) Approval to the Company’s Employees Stock Option Scheme (the ESOS). (b) Approval for Grant of Stock Options under the ESOS to the employees of the Company’s Subsidiaries. 9] Disclosures [a] Transactions with the related parties are disclosed in Note 19 of the notes on the Balance Sheet and Profit and Loss Account in the Annual Report [b] A statement in summary form of transactions with related parties in the ordinary course of business has been periodically placed before the Audit Committee. [c] The Company has no material individual transactions with related parties, which are not in the normal course of business. [d] Details of material individual transactions with related parties or others, which are not on arm’s length basis are placed before the Audit Committee together with Management’s justification for the same. [e] There has been no instance of non-compliance by the Company on any matter related to capital markets, during the last three years. No penalties or strictures have been imposed by SEBI, the Stock Exchange or any statutory authority on the Company. [f ] The Company has fulfilled the following non – mandatory requirements as prescribed in Annexure ID to clause 49 of the listing agreement with the stock exchanges. (i) The Company has set up a Remuneration Committee. Please see para on Remuneration Committee for details. (ii) The Company has adopted a Whistle Blower Policy and has established necessary mechanism in line with clause 7 of Annexure ID to Listing Agreement with the stock exchanges, for employees to report concerns about unethical behaviours. No person has been denied access to the Audit Committee. [g] The Company follows Accounting Standards issued by the Institute of Chartered Accountants of India and in the preparation of financial statements, the Company has not adopted a treatment different from that prescribed in any Accounting Standard. [h] The Company has laid down a process of assessing risk management. The scope of Audit Committee includes review of Company’s financial and risk management policies. [i] The Company discloses to the Audit Committee the uses / applications of funds raised through the Rights Issue, on a quarterly and annual basis as a part of their declaration of financial results. This statement is certified by the Statutory Auditors of the Company. 10] Means of Communication The annual, half-yearly and quarterly results are posted by the Company on the Tata website www.tata.com on the Company’s website www.mywestside.com and on SEBI website www.sebiedifar.nic.in. These are also submitted to the Stock Exchange, Mumbai and the National Stock Exchange of India, in accordance with the Listing Agreement and published in leading newspapers like the Indian Express and the Loksatta. Whenever applicable, the Company also displays official news releases and meets the institutional investors/analysts. Management Discussion and Analysis Report forms part of the Annual Report. 17 Fifty-Fourth Annual Report 2005-2006 11] General Shareholder Information AGM: Date, time and venue Friday 8th September, 2006 at 3.30 p. m. at Bombay House Auditorium, Bombay House, 24, Homi Mody Street, Mumbai 400 001. As required under Clause 49VI [A], particulars of Directors seeking re -appointment are appended to the Notice of the Annual General Meeting to be held on 8th September, 2006. Financial Calendar Date of Book Closure Listing on Stock Exchanges Year ending 31st March AGM 8th September, 2006. Tuesday, 8th August, 2006 to Tuesday, 29th August, 2006 Bombay Stock Exchange, Limited; The National Stock Exchange of India Limited. The Company has paid annual listing fees to the Bombay Stock Exchange Limited and to the National Stock Exchange of India Limited for the financial year 2006-2007. Stock Code – EQUITY BSE NSE 500251 TRENTEQ NCDs 934770 TRENTN1 WARRANTS 961675 TRENTW1 Market Information: BSE Month April 2005 May 2005 June 2005 July 2005 August 2005 September 2005 October 2005 November 2005 December 2005 January 2006 February 2006 March 2006 Source BSE & NSE 18 High [Rs.] 586.80 680.50 714.05 681.25 907.00 891.60 917.95 873.10 935.30 1001.85 930.80 899.35 Low [Rs.] 531.25 542.55 658.30 652.60 660.90 827.40 737.20 761.75 837.70 907.90 884.05 857.40 High [Rs.] 586.45 682.20 715.30 683.30 911.45 893.15 919.5 875.25 940.90 1002.45 930.35 914.85 NSE Low [Rs.] 529.30 541.55 657.10 655.70 656.65 829.75 735.95 759.80 838.40 907.00 890.05 855.70 A Enterprise Comparision between Trent Limited Share Price and BSE Sensex 12000 1100 1000 11000 900 10000 800 700 600 8000 500 400 300 6000 200 5000 100 9000 7000 Apr-05 Sept-05 Dec-05 May-05 June-05 Nov-05 July-05 Feb-06 Oct-05 Jan-06 Trent Aug-05 Sensex Registrar and Transfer Agents: TSR Darashaw Limited, ( TSRDL) (formerly Tata Share Registry Limited) Army & Navy Building, 148, Mahatma Gandhi Road, Fort, Mumbai 400 001. Tel: 66568484 Fax: 66568494 E-mail: [email protected] Website: www.tsrdarashaw.com Branches of (TSRDL): TSR DARASHAW LTD. 503, Barton Centre (5th Floor) 84, Mahatma Gandhi Road, Bangalore – 560 001 E-mail: [email protected] Tel: 080 – 25320321; Fax: 080 – 25580019 TSR DARASHAW LTD. 2/42, Sant Vihar, Ansari Road, Daryaganj, New Delhi – 110 002 E-mail: [email protected] Tel: 011-23271805; Fax: 011-23271802 Share Transfer System: TSR DARASHAW LTD. Bungalow No.1, ”E” Road, Northern Town, Bistupur, Jamshedpur – 831 001 E-mail: [email protected] Tel: 0657-2426616; Fax: 0657-2426937 TSR DARASHAW LTD. Tata Centre, 1st Floor, 43, Chowringhee Road Kolkata – 700 071 E-mail: [email protected] Tel: 033-22883087; Fax: 033-22883062 Share Transfers in physical form can be lodged with TSR Darashaw Limited at the above mentioned address or at any of its branch offices. The Transfers are normally processed within 15 days from the date of receipt, if the documents are complete in all respects. Certain Directors and the Company Secretary are severally empowered to approve transfers. Mar-06 19 Fifty-Fourth Annual Report 2005-2006 Distribution of Shareholding: Number of Equity Shares Held Number of Shareholders 31st March 2006 [%] 94.37 4.12 0.85 0.25 0.05 0.04 0.11 0.21 100.00 1 to 500 501 to 1000 1001 to 2000 2001 to 3000 3001 to 4000 4001 to 5000 5001 to 10000 Over 10000 TOTAL Categories of Shareholders: Category Number of Shareholders Voting Strength Number of Equity Shares Held As on 31st March, 2006 Tata Group Companies Individuals Unit Trust of India Government & Other Public Financial Institutions Companies Nationalised Banks, Mutual Funds and Trusts Foreign Institutional Investors & Foreign Companies TOTAL 7 32,261 2 2 615 56 33 32,976 26.35 37.12 0.02 0.21 6.19 14.37 15.76 100.00 3801207 5355011 2889 29764 892574 2072748 2273618 14427811 Dematerialization of: 90.08% of the Company’s Share Capital is dematerialised as on 31st March, 2006. Shares and liquidity The Company’s shares are regularly traded on the Bombay Stock Exchange, Limited (BSE). And The National Stock Exchange of India Limited (NSE). Outstanding Warrants: The Company had allotted detachable warrants with partly convertible debentures on rights basis on 7th July 2005. Each warrant is convertible into equity share of Rs.10/- each on payment of Rs. 650/- each warrant after 54 months from the date of allotment or earlier in the event the Company proposes to issue further securities. 20 A Enterprise STORE LOCATIONS: WESTSIDE: 1. Abhijeet -V, Ellisbridge, Near Law Gardens, Ahmedabad - 380 006. 2. The Forum, 21, Hosur Road, Koramangla, Bangalore - 560 029. 3. No.77, Commercial Street, Bangalore - 560 007. 4. Garuda Mall, Magrath Road, Bangalore - 560 025. 5. 769, Spencer Plaza, Anna Salai, Chennai - 600 002. 6. Pacific Mall, Sahiabad Industrial Area – Ghaziabad (U. P.) – 201 010. 7. DLF Grand Mall, Gurgaon – 122 002. 8. Khan Lateef Khan Estate, Fateh Maidan Road, Hyderabad - 500 001. 9. 17, Racecourse Road, Indore - 452 003 10. 22, Camac Street, Kolkata - 700 017. 11. The Garihatta Mall, 13, Jamir Lane, Kolkata – 700 019. 12. 39, Hughes Road, Mumbai - 400 007. 13. Army & Navy Building, 148, M. G. Road, Fort, Mumbai - 400 001. 14. R-Mall, L. B. S. Marg, Mulund (W), Mumbai - 400 080. 15. Infinity Mall, Oshiwara, Andheri Link Road, Andheri (West), Mumbai - 400 058. 16. “Landmark” Ramdas Peth, Wardha Road, Nagpur - 440 001. , 17. 15A, 34/35, Ajmal Khan Road, Karol Bagh, New Delhi - 110008. 18. A-15, Feroze Gandhi Marg, Alankar Cinema Bldg, New Delhi - 110 024. 19. TDI Mall, Shivaji Place, Rajouri Gardan New Delhi – 110 027. 20. Centrestage Mall, L-1, Sector-18, Noida (U.P.) - 201 301. 21. 231, Kakade Magnum Mall, Moledina Road, - Pune 411 001. 22. Monalisa, Jatalpur, Race Course Road, Vadodara – 390 007. STAR INDIA BAZAR: ISCON Mall, Near Jodhpur Char Rasta Ahmedabad – 380 015. LANDMARK : 1. The Forum, 21, Hosur Road, Koramangla, Bangalore - 560 029. 2. Apex Plaza, 3, Nungambakkam, Chennai - 600 034. 3. 769, Spencer Plaza, Anna Salai, Chennai - 600 002. 4. Citi Centre, No. 10 & 11, Dr. Radhakrishnan Salai, Chennai - 600 004. 5. Infinity Mall, Oshiwara, Andheri Link Road, Andheri (West), Mumbai - 400 058. 6. Monalisa, Jatalpur, Race Course Road, Vadodara – 390 007. Address for : Trent Limited correspondence Navsari Buildings, 3rd Floor, 240, Dr. D. N. Road, Mumbai 400 001. Tel: 22077205 / 22071464 Fax: 22070216 E-mail: [email protected] 21 Fifty-Fourth Annual Report 2005-2006 CERTIFICATE To The Members of Trent Limited We have examined the compliance of the conditions of Corporate Governance by Trent Limited, for the year ended 31st March, 2006, as stipulated in Clause 49 of the Listing Agreement of the said Company with the Stock Exchanges. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination has been limited to a review of the procedures and implementations thereof, adopted by the Company for ensuring compliance with the conditions of Corporate Governance as stipulated in the said clause. It is neither an audit nor an expression of opinion on the financial statements of the Company. In our opinion and to the best of our information and according to the explanations given to us and the representations made by the Directors and the Management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in Clause 49 of the above mentioned Listing Agreement. As required by the Guidance Note issued by the Institute of Chartered Accountants of India, we have to state that based on the report issued by the Registrars of the Company to the Investors’ Grievance Committee, as on 31st March, 2006 there were no investor grievance matters against the Company remaining unattended / pending for more than 30 days. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company. For N. M. RAIJI & Co., Chartered Accountants M. N. THAKKAR Partner Membership No. 8873 Mumbai, 2nd August, 2006 DECLARATION BY THE CEO UNDER CLAUSE 49 OF THE LISTING AGREEMENT REGARDING ADHERENCE TO THE CODE OF CONDUCT In accordance with Clause 49 sub-clause I(D), of the Listing Agreement with the Stock Exchanges, I hereby confirm that all the Directors and the Senior Management Personnel of the Company have affirmed compliance to their respective Codes of Conduct, as applicable to them for the Financial Year ended 31st March, 2006. N.N. TATA Managing Director Mumbai, 28th June, 2006 22 A Enterprise Auditors’ Report To the Members of Trent Limited 1. We have audited the attached Balance Sheet of TRENT LIMITED, as at 31st March, 2006, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order, to the extent applicable. Further to our comments in the Annexure referred to above, we report that: (i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; (ii) in our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books; (iii) the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Mumbai, 30th June, 2006 23 report are in agreement with the books of account; (iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956, to the extent applicable; (v) on the basis of written representations received from the directors, as on 31st March, 2006, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2006 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; (vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2006; (b) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and (c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. For N. M. RAIJI & Co., Chartered Accountants M. N. THAKKAR Partner Membership No. 8873 2. 3. 4. Fifty-Fourth Annual Report 2005-2006 Annexure to the Auditors’ Report (Referred to in paragraph (3) of our report of even date) (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. As explained to us, physical verification of major items of fixed assets was conducted by the management during the year. In our opinion, the frequency of physical verification is reasonable having regard to the size and operations of the Company and the nature of its assets. On the basis of explanations received, in our opinion, the discrepancies found on physical verification were not significant. The Company has not disposed off substantial part of fixed assets during the year. The inventories have been physically verified by the management at reasonable intervals during the year. In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account. there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in internal control system. (v) Based on the audit procedures applied by us and according to the information and explanations given to us, there are no transactions that need to be entered into the register in pursuance of section 301 of the Companies Act, 1956. (vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits matured in earlier years that are outstanding during the year, the Company has complied with the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. As informed to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal. (vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business. (viii) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for the products of the Company. (ix) (a) According to the records of the Company, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth-tax, (b) (c) (ii) (a) (b) (c) (iii) The Company has neither granted nor taken any loans, secured or unsecured to / from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, subclause (b), (c) and (d) are not applicable. In our opinion and according to the information and explanations given to us, (iv) 24 A Enterprise Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues applicable to it. Based on our audit procedures and according to the information and explanations given to us, there are no arrears of undisputed statutory dues which remained outstanding as at 31st March 2006 for a period of more than six months from the date they became payable. (b) According to the records made available to us and the information and explanations given by the management, the details of the dues of sales tax / income tax / custom duty / wealth tax/ Service Tax / excise duty / cess, which have not been deposited on account of any dispute, are given below : Particulars Excise Duty Sales Tax Financial year to which Forum where the the matter pertains dispute is pending 1984-85,1985-86 1994-95, 1995-96, 2000-01, 2001-02, 2002-03 2002-03 Appellate Tribunal Deputy Commissioner Commissioner (Appeals) Commissioner (Appeals) Amount (Rs. in lakhs) 88.63 14.35 transactions and contracts and timely entries have been made in those records. All the investments of the Company are held in its own name except as permissible under section 49 of the Companies Act, 1956. (xv) On the basis of the information and explanations given to us, the Company has given guarantee for loans taken by its wholly owned subsidiary from Bank. The terms and conditions of the guarantee are not prejudicial to the interest of the Company. (xvi) The Company has not obtained any term loans. (xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for longterm investment. (xviii) As per the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. (xix) As per the information and explanations given to us, the Company has created security in respect of debentures issued. (xx) We have verified that the end use of the money raised by public issues is as disclosed in the notes to the financial statements. (xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management. For N. M. RAIJI & Co., Chartered Accountants M. N. THAKKAR Partner Mumbai, 30th June, 2006 Membership No. 8873 25 Income Tax 179.30 18.73 Custom Duty 1995-96 (x) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year. The Company has not taken any loans from any banks or financial institutions. There has been no repayment of any dues to debenture holders during the year. (xi) (xii) Based on our examination of the records and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. (xiii) The Company is not a chit / nidhi / mutual benefit fund / society. (xiv) Based on our examination of the records and evaluation of the related internal controls, we are of the opinion that in respect of the investment activity of the Company, proper records have been maintained of the Fifty-Fourth Annual Report 2005-2006 Balance Sheet as at 31st March, 2006 Schedule SOURCES OF FUNDS : 1. SHAREHOLDERS’ FUNDS : (a) Capital (b) Reserves and Surplus 2. LOAN FUNDS : (a) Secured Loans (b) Unsecured Loans Deferred Tax Liability (Net) (Note No. 4, Page 39] TOTAL FUNDS EMPLOYED A B C Page 30 30 31 6,550.24 22.14 6,572.38 632.94 34,165.31 25.88 25.88 709.51 22,448.73 Rupees in lakhs 1,442.78 25,517.21 26,959.99 Rupees in lakhs As at 31.03.2005 Rupees in lakhs 1,311.78 20,401.56 21,713.34 3. 4. APPLICATION OF FUNDS : 5. FIXED ASSETS : (a) Gross Block (b) Less : Depreciation (c) Net Block (d) Capital Work-in-Progress 6. 7. INVESTMENTS CURRENT ASSETS, LOANS AND ADVANCES : (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Loans and Advances Less: CURRENT LIABILITIES AND PROVISIONS : (a) Liabilities (b) Provisions D 31 9,154.03 2,501.20 6,652.83 542.95 7,651.84 1,766.22 5,885.62 363.22 7,195.78 23,296.62 5,336.29 198.90 1,342.77 7,242.01 14,119.97 7,829.12 2,617.94 10,447.06 3,672.91 – 34,165.31 For and on behalf of the Board, S. N. TATA Chairman 6,248.84 11,313.03 3,762.84 162.06 834.03 5,892.22 10,651.15 4,730.25 1,075.47 5,805.72 4,845.43 41.43 22,448.73 E F G H I 32 to 33 34 34 35 35 8. J K 36 36 9. NET CURRENT ASSETS 10. MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) 11. TOTAL ASSETS (NET) (For Schedule ‘M’ and notes see pages 37 to 45) As per our report attached. For N.M. RAIJI & CO., Chartered Accountants L 36 M.N. THAKKAR Partner Mumbai, 30th June, 2006 MRS. H.R. WADIA Company Secretary 28th June, 2006 N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA } Directors Managing Director 26 A Enterprise Profit and Loss Account for the year ended 31st March, 2006 Rupees in lakhs 34,644.09 1,114.91 35,759.00 28 31,348.57 800.05 32,148.62 96.19 10.02 106.21 32,254.83 4 29 1,014.00 53.91 (76.57) 991.34 2,437.83 2,437.83 1,527.49 3,965.32 250.00 1,300.00 937.81 131.53 1,345.98 3,965.32 17.19 16.84 For and on behalf of the Board, S. N. TATA For N.M. RAIJI & CO., Chartered Accountants N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA Chairman 3,504.17 75.00 Rupees in lakhs Previous Year Rupees in lakhs 23,448.24 1,161.46 24,609.70 21,699.49 454.18 22,153.67 0.03 0.03 22,153.70 2,456.00 498.50 32.66 531.16 1,924.84 (18.92) 1,905.92 1,520.87 3,426.79 1,000.00 787.07 112.23 1,527.49 3,426.79 14.11* 14.11* Schedule Page INCOME : 1. INCOME FROM OPERATIONS 2 2. OTHER INCOME 3 3. TOTAL INCOME EXPENDITURE : 4. MANUFACTURING AND OTHER EXPENSES 1 5. DEPRECIATION 6. INTEREST (a) DEBENTURES (b) OTHERS TOTAL EXPENDITURE PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS EXCEPTIONAL ITEMS PROVISION FOR TAXATION CURRENT TAX FRINGE BENEFIT TAX DEFERRED TAX 29 29 7. 8. 9. PROFIT FOR THE YEAR AFTER TAXES 10. SHORT TAX PROVISION FOR PRIOR YEARS (NET) NET PROFIT 11. BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR PROFIT AVAILABLE FOR APPROPRIATION 12. APPROPRIATIONS : (i) GENERAL RESERVE (ii) DEBENTURE REDEMPTION RESERVE (iii) INTERIM DIVIDEND (iv) PROPOSED DIVIDEND (v) TAX ON DIVIDEND (vi) BALANCE CARRIED TO BALANCE SHEET 13. Earnings Per Share (Rs.) (Note 20, page 45) Basic Diluted * Restated for adjustment on account of Rights Issue. (For Schedule ‘M’ and notes see pages 37 to 45) As per our report attached. M.N. THAKKAR Partner Mumbai, 30th June, 2006 MRS. H.R. WADIA Company Secretary 28th June, 2006 } Directors Managing Director 27 Fifty-Fourth Annual Report 2005-2006 Schedule forming part of the Profit and Loss Account Schedule ‘1’ (Item No. 4, page 27) MANUFACTURING AND OTHER EXPENSES Previous Year Rupees in lakhs 225.84 12,793.72 Rupees in lakhs (1) RAW MATERIALS CONSUMED (2) PURCHASE OF FINISHED PRODUCTS (3) PAYMENTS TO AND PROVISIONS FOR EMPLOYEES (a) Salaries, Wages, Bonus, etc. (refer note ‘c’ of schedule B, page 30) (b) Contribution to Provident, Superannuation and Gratuity Funds (c) Workmen and Staff Welfare Expenses Rupees in lakhs 234.25 18,875.51 1,807.87 115.17 104.88 2,027.92 1,296.18 92.87 77.00 1,466.05 199.11 156.44 679.60 312.14 89.54 74.53 470.80 382.28 43.45 2,117.22 188.07 202.84 53.47 134.28 109.23 845.70 1,368.14 894.59 4.69 20.00 101.37 16.42 11,479.39 291.32 1,559.82 31,348.57 8,463.91 222.15 1,472.18 21,699.49 (4) OPERATION AND OTHER EXPENSES (a) Processing Charges (b) Packing Materials Consumed (c) Power and Fuel (d) Repairs to Building (e) Repairs to Machinery (f ) Repairs Others (g) Rent (h) Rates and Taxes (i) Insurance (j) Advertisement and Sales Promotion (k) Travelling Expenses (l) Professional and Legal Charges (m) Printing and Stationery (n) Bank Charges (o) Postage, Telegrams and Telephones (p) General Expenses [Note 5(i), Page 39] (q) Retail Business Fees (r) Sales tax paid (s) Directors’ Fees (t) Commission to non Whole-time Directors (u) Store Launch Expenses Amortised (v) Excise Duty (5) FREIGHT AND FORWARDING CHARGES (6) CHANGES IN FINISHED PRODUCTS Accretion to stocks deducted 185.66 230.01 968.75 513.31 82.26 84.80 583.70 358.87 59.67 2,985.19 207.50 314.96 70.22 188.27 143.87 1,026.78 1,907.46 1,494.35 5.83 32.50 35.43 — 28 A Enterprise Schedules forming part of the Profit and Loss Account Schedule ‘2’ (Item No. 1, page 27) INCOME FROM OPERATIONS Rupees in lakhs (1) Sales (2) Other Operating Income (a) Display and Sponsorship Income (b) Commission on sales (c) Discounts and Fees (d) Others (3) Income from Current Investments - Non trade (a) Dividend on Current Investments (b) Profit on sale of Current Investments (Net) (c) Profit on valuation of Current Investments (Net) Rupees in lakhs 33,892.93 50.48 246.96 46.80 132.70 476.94 166.71 107.48 0.03 274.22 34,644.09 Schedule ‘3’ (Item No. 2, page 27) OTHER INCOME Rupees in lakhs (1) (2) (3) (4) Rent received Miscellaneous Income Liquidated Damages Interest on Loans and Advances - Gross [Tax deducted at source: Rs 31.77 lakhs (2004-2005: Rs 24.66 lakhs)] (5) Interest on Deposits with Banks - Gross [Tax deducted at source: Rs 4.60 lakhs (2004-2005: Rs 1.77 lakhs)] (6) Interest on Long Term Investments - Gross (7) Dividend on Long Term Investments - Gross (a) Trade (b) Subsidiary Company (c) Others (8) (9) (10) (11) Profit on Sale of long term Investments (Net) Profit on Fixed Assets sold/discarded (Net) Excess provision no longer required written back Share of Profit in Partnership - Landmark (for the period 31-08-2005 to 31-03-2006) Rupees in lakhs 50.90 97.44 — 149.87 17.05 2.98 3.00 195.00 187.63 385.63 86.03 86.64 0.35 238.02 1,114.91 Schedule ‘4’ (Item No. 8, page 27) EXCEPTIONAL ITEMS Rupees in lakhs Provision for Contingencies ( Note 2(e), Page No 38) 75.00 75.00 Previous Year Rupees in lakhs 22,793.37 65.49 164.86 49.57 76.50 356.42 226.98 70.52 0.95 298.45 23,448.24 Previous Year Rupees in lakhs 49.33 66.34 25.00 206.75 5.66 2.97 3.00 195.00 94.71 292.71 495.64 9.14 7.92 — 1,161.46 Previous Year Rupees in lakhs — — 29 Fifty-Fourth Annual Report 2005-2006 Schedules forming part of the Balance Sheet Schedule ‘A’ [Item No. 1(a), page 26] CAPITAL As at 31.3.2006 Rupees in lakhs 1,500.00 1,000.00 2,500.00 ISSUED, SUBSCRIBED AND PAID UP : 1,44,27,811 Equity Shares of Rs. 10/- each fully paid-up [2004-2005 : 1,31,17,764 Equity Shares of Rs. 10/- each fully paid-up] 1,442.78 1,442.78 As at 31.3.2005 Rupees in lakhs 1,500.00 1,000.00 2,500.00 1,311.78 1,311.78 AUTHORISED : 1,50,00,000 Equity Shares of Rs.10/- each 1,00,00,000 Unclassified Shares of Rs.10/- each Notes : Of the above (a) 1,08,81,021 Equity Shares were allotted as fully paid Bonus Shares by capitalisation of Share Premium and Reserves. (b) 1,12,616 Equity Shares were allotted as fully paid pursuant to Schemes of Amalgamation without payment being received in cash. (c) During the year, 13,10,047 equity shares were alloted as fully paid up on conversion of Partly Convertible Debentures. (d) During the year, the Company has issued 13,10,047 warrants to the shareholders along with Partly Convertible Debentures. The Warrant holder is entitled to apply for one equity share of Rs.10/- each at a premium of Rs. 640/- each within 30 days after the expiry of 54 months from 7th July 2005, being the date of allotment. (e) During the year, the Company has granted 45,850 stock options under the Employee Stock Option Scheme. Stock Option outstanding as on 31st March 2006, are 44,900. Schedule ‘B’ [Item No. 1(b), page 26] RESERVES AND SURPLUS Rupees in lakhs (1) SECURITIES PREMIUM ACCOUNT (a) Addition: Premium on issue of Equity Shares (b) Deduction: Premium on redemption of Non-Convertible Debentures (c) Deduction: Write off of Debentures issue expenses (2) DEBENTURE REDEMPTION RESERVE Transferred from Profit and Loss Account (3) EMPLOYEE STOCK OPTIONS a) Employee Stock Options Outstanding Additions Lapsed Outstanding b) Less: Deferred Employee Compensation Additions Amortised/Lapsed Balance Net Employee Stock Options (4) GENERAL RESERVE : (a) Balance as per last account (b) Add: Transferred from Profit and Loss Account (5) AMALGAMATION RESERVE : Arising out of Amalgamation (6) PROFIT AND LOSS ACCOUNT 5,109.18 1,283.85 142.92 As at 31.3.2006 Rupees in lakhs As at 31.3.2005 Rupees in lakhs — — — — — — — — — — — — 16,381.12 1,000.00 17,381.12 1,492.95 1,527.49 20,401.56 3,682.41 1,300.00 396.72 8.22 388.50 396.72 72.97 323.75 64.75 17,381.12 250.00 17,631.12 1,492.95 1,345.98 25,517.21 Notes: Of the above (a) Premium on issue of Equity Shares represents issue of 13,10,047 equity shares on conversion of Partly Convertible Debentures at a premium of Rs. 390/- per share. (b) The Expenditure incurred on Rights Issue and the provision for Premium on Redemption of Debentures have been debited to Securities Premium Account. (c) In respect of Options granted under the Company’s Employee Stock Options Scheme 2005 (ESOS), in accordance with guidelines issued by SEBI, the accounting value of options is accounted as deferred employee compensation, which is amortised on a straight line basis over the vesting period. Consequently, salaries, wages, bonus etc. include Rs. 64.75 lakhs (2004-2005: Rs. Nil), being the amortisation of deferred employee compensation after adjusting for reversals on account of options lapsed (refer Schedule M, note 10 page 37). 30 A Enterprise Schedules forming part of the Balance Sheet Schedule ‘C’ (Item No. 2, page 26) LOAN FUNDS As at 31.3.2006 Rupees in lakhs (1) SECURED LOANS : Non Convertible Debentures (2) UNSECURED LOANS : Sales Tax loan from Government of Maharashtra 6550.24 22.14 6,572.38 As at 31.3.2005 Rupees in lakhs — 25.88 25.88 Notes: (a) During the year, the Company issued 13,10,047 Partly Convertible Debentures of Rs. 900/- each. Of the above, Convertible Debenture of the face value of Rs. 400/- has been converted into one equity share of Rs. 10/- each at a premium of Rs. 390/- per share on the date of allotment. The Non Convertible Debenture of face value of Rs. 500/- are redeemable at a premium of Rs. 98/- each on 7th July, 2010. (b) The Non Convertible Debentures are secured by way of charge on assets of the Company costing at least 1.33 times of the value of the Debentures in favour of the Debenture Trustees. (c) Premium payable on redemption of Debentures amounting to Rs. 1,283.85 lakhs has been fully provided and debited to Securities Premium Account . (d) Of the above unsecured loans, amount repayable within a year Rs. 5.34 lakhs (2004-2005: Rs. 3.74 lakhs) Schedule ‘D’(Item No.5, page 26) FIXED ASSETS GROSS BLOCK (AT COST) As at Additions/ Deductions/ As at As at 1.4.2005 Adjustments Adjustments 31.3.2006 1.4.2005 Rupees Rupees Rupees Rupees Rupees in lakhs in lakhs in lakhs in lakhs in lakhs Freehold Land 400.08 — — 400.08 — (400.08) — — (400.08) (—) Buildings 2,310.03 159.63 78.46 2,391.20 519.99 (2,228.76) (87.40) (6.13) (2,310.03) (438.50) Plant and Machinery 2,045.74 461.67 15.57 2,491.84 393.80 (1,531.24) (533.00) (18.50) (2,045.74) (313.08) Furniture, Fixtures, Office and Other Equipment 2,825.33 953.84 5.53 3,773.64 829.89 (2,056.00) (774.96) (5.63) (2,825.33) (559.50) Vehicles 68.44 44.37 37.76 75.05 20.80 (86.85) (4.07) (22.48) (68.44) (24.57) Intangible Assets 2.22 20.00 — 22.22 1.74 (1.25) (0.97) — (2.22) (0.52) Total 7,651.84 1,639.51 137.32 9,154.03 1,766.22 (6,304.18) (1,400.40) (52.74) (7,651.84) (1,336.17) Capital Work-in-Progress Total ASSETS DEPRECIATION NET BLOCK Deductions/ For the As at As at Adjustments year 31.3.2006 31.3.2006 Rupees Rupees Rupees Rupees in lakhs in lakhs in lakhs in lakhs — — — 400.08 (—) (—) (—) (400.08) 38.67 89.91 571.23 1,819.97 (3.51) (85.00) (519.99) (1,790.04) 5.31 240.01 628.50 1,863.34 (6.60) (87.32) (393.80) (1,651.94) 3.21 (3.06) 17.88 (10.97) — (—) 65.07 (24.14) 461.28 1,287.96 2,485.68 (273.45) (829.89) (1,995.44) 6.27 9.19 65.86 (7.20) (20.80) (47.64) 2.58 4.32 17.90 (1.22) (1.74) (0.48) 800.05 2,501.20 6,652.83 (454.18) (1,766.22) (5,885.62) 542.95 (363.22) 7,195.78 (6,248.84) Notes : (1) Figures in brackets are in respect of previous year. (2) Included in Buildings is an amount of Rs. 1,050 (2004-2005: Rs.1,550) representing value of Shares in Co-operative Housing Societies/Condominium. 31 Fifty-Fourth Annual Report 2005-2006 Schedule forming part of the Balance Sheet Schedule ‘E’ (Item No. 6, Page 26) INVESTMENTS Balance as at 1.4.2005 No.of. Shares/Units Long Term Investment (at Cost less provision for diminution in value) Face Value of Rs 10/- each,Unquoted and fully paid-up unless otherwise stated Trade Investments at Cost (unquoted and fully paid unless otherwise stated) The Associated Building Company Limited (Equity shares of Rs. 900/- each ) Tata International Limited (Equity shares of Rs. 1000/- each ) Tata Services Limited (Equity shares of Rs. 1000/- each ) Total Trade Investment Other Investments at Cost (unquoted and fully paid unless otherwise stated) (a) In Subsidiary Company Nahar Theatres Pvt Ltd. (Equity shares of Rs. 1000/- each ) Nahar Theatres Pvt Ltd.- Pref Shares (9.5% Cumulative Redeemable Preference Shares of Rs 1000/- each) Satnam Developers & Finance Pvt. Ltd. (Change in Face Value of Equity shares from Rs. 100/- to Rs 10/- each ) Trent Brands Limited Fiora Link Road Properties Pvt Ltd. Fiora Services Limited (Equity shares of Rs. 100/- each ) Total Invstment in Subsidiary Companies (b) In Partnership Firm Landmark - Capital Account * Landmark - Right In Partnership Total Investment in Partnership Firm (c) In Other Company Associated Cement Co. Ltd(Quoted) Gail (India) Limited(Quoted) Hindalco Industries Limited(Quoted) (Equity shares of Rs. 1/- each ) Hindalco Industries Limited(Quoted) (Equity shares of Rs. 1/- each - Partly Paid Rs. 0.25 per share) ITC Limited(Quoted) - (Equity shares of Rs. 1/- each ) Larsen & Toubro Limited(Quoted) (Equity shares of Rs. 2/- each ) NTPC Limited(Quoted) Oil & Natural Gas Corporation Limited.(Quoted) Punjab National Bank Limited(Quoted) Reliance Capital Ventures Limited(Quoted) (Issued 3,000 Shares in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Communication Ventures Limited(Quoted) (Issued 3,000 Shares of Rs 5/- each in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Energy Ventures Limited(Quoted) (Issued 3,000 Shares in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Industries Limited(Quoted) Reliance Natural Resources Limited(Quoted) (Issued 3,000 Shares of Rs 5/- each in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Steel Authority of India Ltd(Quoted) Tata Investment Corporation Limited(Quoted) Tata Sons Limited 6% Cumulative Redeemable Preference Shares of Rs. 1,000/- each Tata Auto Comp System Limited 7% Cumulative Redeemable Preference Shares US-64 Bonds(Quoted) (6.75% Tax Free Bonds of Rs. 100/- each) Total Investment in Other Companies (d) In Mutual Funds Birla Bond Plus-Instl-Growth Birla Dividend Yield Plus Plan-A-Dividend DSP Merrill Lynch Floating Rate Fund-Growth DSP Merrill Lynch Short Term-Growth FT India Balanced Fund-Dividend FT India Monthly Income Plan-Plan A Dividend Grindlays Floating Rate Short Term-Instt Plan B-Growth HDFC Floating Rate IF Short Term Plan-Growth HDFC Short Term Plan-Growth — — Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs 50 1,000 45 0.45 2.00 0.45 2.90 — — — — — — — — — — — — 50 1,000 45 0.45 2.00 0.45 2.90 — — 10,000 32,50,000 — 39,000 — — 902.25 325.00 — 76.58 1,303.83 — — — 1,996 100 40,000 — 50,000 — 2,832.13 1.00 4.00 — 5.00 — — — — — — — — — — — — — 1,996 100 50,000 32,50,000 50,000 39,000 2,832.13 1.00 906.25 325.00 5.00 76.58 4,145.96 — — 390.00 8,761.57 — — — — — — 390.00 8,761.57 9,151.57 — — — — — — — — — — — — — — — 42,832 63,000 50,00,000 44,103 — — — — — — — — — — — — — — — 49.99 630.00 500.00 44.10 1,224.09 11,000 20,000 50,000 14,313 10,000 4,000 25,000 4,000 12,500 3,000 3,000 3,000 7,000 3,000 35,000 21,416 — — — 51.07 48.10 68.40 3.43 12.18 53.08 24.32 38.52 52.39 0.27 8.11 1.53 38.83 0.15 20.99 — — — — 8,000 — — — — 2,000 — — — — — — 4,000 — 35,000 — — — — 37.14 — — — — 26.54 — — — — — — 27.94 — 20.99 — — — — 3,000 20,000 50,000 14,313 10,000 2,000 25,000 4,000 12,500 3,000 3,000 3,000 3,000 3,000 — 64,248 63,000 50,00,000 44,103 13.93 48.10 68.40 3.43 12.18 26.54 24.32 38.52 52.39 0.27 8.11 1.53 10.89 0.15 — 49.99 630.00 500.00 44.10 1,532.85 — 17,32,044 — — 4,18,994 42,93,572 — — — — 214.55 — — 50.49 500.00 — — — 26,77,259 5,22,231 44,90,668 33,90,921 — — 45,14,265 52,25,742 24,69,868 337.00 60.48 500.00 398.24 — — 500.00 590.00 300.00 — — 44,90,668 — 4,18,994 42,93,572 45,14,265 43,96,687 — — — 500.00 — 50.49 500.00 500.00 496.40 — 26,77,259 22,54,274 — 33,90,921 — — — 8,29,056 24,69,868 337.00 275.03 — 398.24 — — — 93.60 300.00 32 A Enterprise Schedule forming part of the Balance Sheet Schedule ‘E’ (Item No. 6, Page 26) INVESTMENTS Balance as at 1.4.2005 No.of. Shares/Units — 20,00,000 2,60,000 — — — — — 30,00,000 20,00,000 6,21,863 — Rs. Lakhs — 200.00 26.00 — — — — — 300.00 200.00 87.97 — 1,579.01 4,109.83 Purchased during the year No.of. Shares/Units 47,76,270 56,076 — 48,20,281 62,00,559 77,80,830 20,00,000 67,02,807 — — — 32,222 Rs. Lakhs 500.00 5.67 — 500.00 699.01 1,000.00 200.00 700.00 — — — 400.00 Sold during the year No.of. Shares/Units — — 2,60,000 — — — — 67,02,807 — — 6,21,863 — Rs. Lakhs — — 26.00 — — — — 700.00 — — 87.97 — Balance as at 31.3.2006 No.of. Shares/Units 47,76,270 20,56,076 — 48,20,281 62,00,559 77,80,830 20,00,000 — 30,00,000 20,00,000 — 32,222 Rs. Lakhs 500.00 205.67 — 500.00 699.01 1,000.00 200.00 — 300.00 200.00 — 400.00 5,408.55 20,241.83 ING Vysya Select Debt Fund-Growth JM Equity & Derivative Fund Dividend JM MIP Fund-Dividend Kotak Flexi Debt Scheme-Growth Principal IF Short Term Instt Plan-Growth Pru ICICI Instt Short Term Plan-Cumulative Pru. ICICI Blended Plan A-Dividend Reliance Floating Rate Fund-Growth Tata Dividend Yield Fund-Dividend Tata Infrastructure Fund-Dividend Templeton India Montly Income Plan-Growth Templeton India Short Term Income Plan-Growth Total investment in Mutual Fund Total Investment in Long Term Current Investments Other Investments at Cost (unquoted and fully paid unless otherwise stated) ABN Amro Floating Rate Fund-Instt-Dividend Birla Floating Rate Fund Short Term Plan-Dividend Birla Cash Plus-Instt-Dividend Birla MIP II Wealth 25 Plan-Dividend Chola Liquid Instt Plus-Cumulative Deutsche Floating Rate Fund- Monthly Dividend Deutsche Insta Cash Plus Fund-Instt Plan-Dividend Deutsche Insta Cash Plus Fund-Regular Dividend Deutsche MIP Fund-Plan A monthly Dividend DSP Merrill Lynch Floating Rate Fund-Dividend DSP ML Liquidity Fund-Weekly Regular-Dividend DSP ML Liqudity Fund Weekly-Instt Plan-Dividend DSP Merrill lynch Savings Plus Aggressive-Dividend DSP Merrill lynch Savings Plus Moderate-Dividend Grindlays Cash Fund-Instt Plan B-Dividend GFRM Grindlays Floating Rate Fund-Dividend HDFC Cash Management-Savings Plan-Dividend HDFC Cash Management-Savings Plus Plan-Dividend HDFC Floating Rate IF Short Term Plan-Dividend HDFC Multiple Yield Fund-Growth HSBC Cash Fund-Institutional-Monthly Dividend HSBC Cash Fund-Institutional-Growth HSBC Floating Rate Fund Short Term Instt-Dividend HSBC MIP-Savings Plan-Dividend JM Floater Fund-Long Term Plan-Dividend JM Floater Fund-Short Term Plan-Dividend Kotak Liquid Instt Premium-Growth Magnum Instt Income Fund-Savings-Growth Principal Cash Mgmt Fund LO-IP-Dividend Principal MIP Plus-Dividend Pru ICICI Floating Rate Plan C-Dividend Pru ICICI Institutional Liquid Plan-Growth RLF-Treasury Plan-Instt Option-Dividend Sundaram Money Fund Institutional-Appreciation Tata Floating Rate Fund Short Term-Income/Bonus Tata Liquid SHIF-Monthly Dividend Templeton Floating Rate IF Short Term Plan-Growth Templeton India Treasury Management A/c-Growth UTI Liquid Cash Plan Institutional Growth Tata Chemicals Limited(Quoted) Total Current Investment Application for membership of Retailers Association of India (Equity shares of Rs. 1000/- each ) Total Investment Aggregate book value of Investments Unquoted Quoted [ Market value Rs.800.30 lakhs (2004-2005: Rs.203.24 lakhs)] Total — 73,55,000 — 41,55,276 — — — — 10,34,983 — — — 10,56,379 20,01,058 — 72,97,899 28,74,696 — — 20,00,100 — 38,61,927 — 52,02,916 30,54,737 38,94,902 — — — 10,39,007 93,48,464 22,83,360 — — 74,62,225 — 10,77,282 26,931 — 17,775 100 — 762.68 — 416.21 — — — — 103.89 — — — 105.76 209.55 — 731.79 305.58 — — 200.01 — 427.97 — 520.63 305.48 391.33 — — — 103.42 935.52 363.41 — — 747.87 — 124.59 439.67 — 6.84 7,202.20 1.00 11,313.03 11,212.10 100.93 11,313.03 30,06,571 21,547 56,24,108 63,410 21,96,627 29,60,417 63,47,672 67,36,450 22,543 49,94,162 40,32,893 50,199 13,547 19,959 43,90,294 61,870 3,67,92,941 73,81,666 24,95,776 — 47,94,042 — 79,92,922 75,174 1,36,919 56,00,921 48,03,571 27,74,926 1,40,58,633 16,195 12,50,074 6,05,265 24,77,256 21,19,183 1,31,79,340 1,70,905 — — 53,966 — 301.10 2.23 609.44 6.55 300.00 302.88 637.95 684.63 2.30 501.09 500.42 502.44 1.39 2.13 452.31 6.20 3,911.41 739.76 251.11 — 502.05 — 803.25 7.68 13.71 563.70 650.00 300.00 1,407.69 1.66 125.08 100.00 400.00 300.00 1,327.93 1,935.78 — — 600.00 — 30,06,571 73,76,547 56,24,108 42,18,686 21,96,627 29,60,417 12,46,366 67,36,450 10,57,526 49,94,162 40,32,893 50,199 10,69,926 20,21,017 14,55,957 73,59,769 3,96,67,637 73,81,666 24,95,776 — 47,94,042 38,61,927 79,92,922 52,78,090 — 94,95,823 48,03,571 27,74,926 1,40,58,633 10,55,202 49,88,974 28,88,624 24,77,256 21,19,183 1,49,24,763 1,70,905 — 26,931 13,458 — 301.10 764.91 609.44 422.76 300.00 302.88 125.26 684.63 106.19 501.09 500.42 502.44 107.15 211.68 150.00 737.99 4,216.99 739.76 251.11 — 502.05 427.97 803.25 528.31 — 955.03 650.00 300.00 1,407.69 105.08 499.36 463.41 400.00 300.00 1,500.46 1,935.78 — 439.67 148.45 — — — — — — — 51,01,306 — — — — — — — 29,34,337 — — — — 20,00,100 — — — — 31,91,655 — — — — — 56,09,564 — — — 57,16,802 — 10,77,282 — 40,508 17,775 100 — — — — — — 512.69 — — — — — — — 302.22 — — — — 200.01 — — — — 319.19 — — — — — 561.36 — — — 575.34 — 124.59 — 451.55 6.84 3,053.79 1.00 23,296.62 22,886.93 409.69 23,296.62 * Partners Share Trent Limited 78.00% Hemalatha Ramaiah 21.00% Trent Brands Limited 0.80% Fiora Services Limited 0.05% Fiora Link Road Properties Private Limited. 0.05% Satnam Developers & Finance Private. Limited. 0.05% Satnam Realtors Private. Limited. 0.05% Note: The Partnership Firm Landmark has been converted into Company Landmark Limited, under part IX of the Companies Act 1956, to carry on the business of Landmark Partnership Firm with effect from 1-04-2006. 33 Fifty-Fourth Annual Report 2005-2006 Schedules forming part of the Balance Sheet Schedule ‘F’ [Item No.7(a), page 26)] INVENTORIES As at 31.3.2006 Rupees in lakhs Stocks (1) (2) (3) (4) Raw Materials Packing Materials Finished Products Stocks-in-Transit 104.43 25.54 5,184.24 22.08 5,336.29 58.62 36.02 3,624.42 43.78 3,762.84 As at 31.3.2005 Rupees in lakhs Schedule ‘G’ [Item No.7(b), page 26] SUNDRY DEBTORS As at 31.3.2006 Rupees in lakhs (1) Debts outstanding for a period exceeding six months (2) Other Debts 94.12 105.40 199.52 (3) Less : Provision for Doubtful Debts 0.62 198.90 Considered Good - Unsecured 198.90 0.62 199.52 As at 31.3.2005 Rupees in lakhs 93.11 69.57 162.68 0.62 162.06 162.06 0.62 162.68 Considered Doubtful - Unsecured 34 A Enterprise Schedules forming part of the Balance Sheet Schedule ‘H’ [Item No.7(c), page 26] CASH AND BANK BALANCES As at 31.3.2006 Rupees in lakhs (1) (2) Cash on hand (including cheques on hand Rs. 1.03 lakhs) (2004-2005: Rs. 6.97 lakhs) Balances with Scheduled Banks (a) Current Accounts (b) Fixed Deposit Accounts (c) Unpaid Dividend Accounts 150.44 As at 31.3.2005 Rupees in lakhs 72.52 831.09 292.83 68.41 1,192.33 1,342.77 503.62 150.13 107.76 761.51 834.03 Schedule ‘I’ [Item No. 7(d), page 26] LOANS AND ADVANCES As at 31.3.2006 Rupees in lakhs As at 31.3.2005 Rupees in lakhs 250.00 2,279.49 136.84 3,201.66 (2) Loans Loan to Subsidiaries Loan to Landmark - Partnership Firm Other Loans (3) Other Loans and Advances recoverable in cash or in kind or for value to be received (4) Balances with Customs/Port Trust etc. (5) Other Receivables (6) Bills of Exchange (7) Advances on Capital Account (8) Advance payment of taxes - net of provision (9) Less : Provision for Doubtful Advances 1,086.50 1,766.46 135.67 2,988.63 377.10 40.31 49.10 114.20 48.94 577.90 7,397.84 155.83 7,242.01 Considered Good - Secured Considered Good - Unsecured Considered Doubtful - Unsecured 50.00 7,192.01 155.83 7,397.84 2,666.33 270.00 — 1,977.30 2,247.30 196.13 40.28 188.44 114.20 83.93 503.82 6,040.43 148.21 5,892.22 1,918.66 3,973.56 148.21 6,040.43 Rupees in lakhs (1) Security Deposits Deposits for premises - Subsidiaries Deposits for premises - Others Other Deposits 412.50 2,612.11 177.05 35 Fifty-Fourth Annual Report 2005-2006 Schedules forming part of the Balance Sheet Schedule ‘J’ [Item No. 8(a), page 26] LIABILITIES Rupees in lakhs (1) Acceptances (2) Sundry Creditors (Note 7, Page 39) Small Scale Industrial Undertakings Others (3) Subsidiary Company - Fiora Services Limited (4) Security Deposits Received (5) Investor Education and Protection Fund (Appropriate amount shall be transferred to “Investor Education and Protection Fund” if and when due - Note 8, Page 39) (a) Unpaid / Unclaimed Dividend (b) Unpaid / Unclaimed Matured Deposits (c) Unpaid Application Money received by the Company for allotment of Rights Issue and due for refund As at 31.3.2006 Rupees in lakhs 1,749.45 As at 31.3.2005 Rupees in lakhs 600.57 107.67 3,751.72 5,839.64 33.75 135.52 3,859.39 25.61 136.52 82.54 5,757.10 68.41 0.30 107.76 0.40 2.05 70.76 7,829.12 — 108.16 4,730.25 Schedule ‘K’ [Item No.8(b), page 26] PROVISIONS (1) (2) (3) (4) (5) (6) Interim Dividend Proposed Dividend Tax on Dividend Contingencies (Note 2(e) , Page 38) Retirement Benefits Redemption Premium of Debentures As at 31.3.2006 Rupees in lakhs — 937.81 131.53 205.00 59.76 1,283.84 2,617.94 As at 31.3.2005 Rupees in lakhs 787.07 — 110.38 130.00 48.02 — 1,075.47 Schedule ‘L’ [Item No. 10, page 26] MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) As at 31.3.2006 Rupees in lakhs — — — As at 31.3.2005 Rupees in lakhs 35.43 6.00 41.43 (1) (2) Store Launch Expenses Voluntary Retirement Expenses 36 A Enterprise Schedule forming part of the Balance Sheet and Profit and Loss Account Schedule ‘M’ SIGNIFICANT ACCOUNTING POLICIES 1.0 Basis of preparation of accounts The accounts have been prepared to comply in all material aspects with applicable accounting principles in India, the Accounting Standards issued by the Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956. 2.0 Fixed Assets and Depreciation 2.1 Fixed Assets are stated at cost less depreciation. Costs comprise of cost of acquisition and any attributable cost of bringing the asset to condition for its intended use. 2.2 Depreciation on tangible assets is provided in accordance with the provisions of Schedule XIV to the Companies Act, 1956 as under: (a) In respect of the assets of the Retail Business on “Straight Line” method. (b) In respect of all other assets on “Written Down Value” method. 2.3 Improvement to leasehold premises are depreciated over the period of lease remaining as at the date of their capitalisation. 2.4 Intangible Assets are amortised over their useful life not exceeding ten years. 3.0 Investments Long Term Investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of Long Term Investments. Current Investments are stated at lower of cost or fair value. 4.0 Inventories Inventories are valued as under : Raw materials and packing materials : at cost. Finished Products : at lower of cost or net realisable value. 5.0 Income 5.1 Sale of goods is recognised on delivery to customers and include amounts recovered towards sales tax. 5.2 Interest income is accounted on accrual basis. 5.3 Dividend income is accounted when right to receive payment is established. 6.0 Retirement Benefits 6.1 Contributions in respect of Provident Fund, Employees’ Pension Scheme and Superannuation are being charged to revenue as incurred. 6.2 In respect of certain employees, the Company has created gratuity fund. Contribution to gratuity fund is made on the basis of actuarial valuation. In respect of other employees, the Company has taken a Group Gratuity Policy from Life Insurance Corporation of India. Gratuity is provided on the basis of the above policy. 6.3 Provision for Leave Encashment benefit on retirement is made on actuarial valuation basis. 7.0 Foreign Currency Transactions Foreign Currency transactions are accounted at the rates prevailing on the date of transaction. Year end current assets and liabilities are translated at the exchange rate ruling on the date of the Balance Sheet. Exchange differences on settlement/conversion are adjusted to : (i) Cost of fixed assets, if the foreign currency transaction relates to fixed asset ; (ii) Profit and Loss Account, in other cases. (iii) Wherever forward contracts are entered into, the exchange differences are dealt with in the Profit and Loss Account over the period of the contracts. 8.0 Store Launch Expenses Various expenses for opening of new stores incurred up to 31st March, 2003 are amortised over a period of three years from opening of the respective stores. From 1st April, 2003, in accordance with the Accounting Standard on Intangible Assets (AS-26), such expenses for opening of new stores incurred during the year have been charged off to the profit and loss account. 9.0 Voluntary Retirement Expenses Voluntary Retirement Compensation paid is amortised over a period of five years. 10.0 Employee Stock Option Scheme (ESOS) In respect of Options granted under the Company’s Employee Stock Options Scheme (ESOS), in accordance with guidelines issued by SEBI , the accounting value of options is accounted as deferred employee compensation, which is amortised on a straight line basis over the vesting period. 11.0 Provisions and Contingent Liabilities The Company recognises a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. 12.0 Taxation 12.1 Current Tax: Provision for Income Tax is determined in accordance with the provisions of Income Tax Act, 1961. 12.2 Deferred Tax: Deferred tax is recognised on timing difference between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income available to realise such losses. 37 Fifty-Fourth Annual Report 2005-2006 Notes on the Balance Sheet and Profit and Loss Account 1. 2. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 193.04 lakhs (2004-2005: Rs.118.33 lakhs). (b) Uncalled Liability on Equity Shares partly paid: Rs. 10.31 lakhs (2004-2005 : Rs. Nil) Contingent Liabilities : (a) Sales tax, Excise and Customs demands against which the Company has filed appeals: Rs. 146.81 lakhs (2004-2005: Rs. 144.04 lakhs) - net of tax Rs.97.39 lakhs (2004-2005: Rs.91.33 lakhs). (b) Claims made against the Company not acknowledged as debts: Rs. 549.93 lakhs (2004-2005: Rs.525.74 lakhs) (c) Income-tax demands against which the Company has filed appeals: Rs. 656.32 lakhs (2004-2005: Rs. 507.39 lakhs). (d) Corporate Guarantee given on behalf of Subsidiary : Rs. 100,00.00 lakhs (2004-2005: Rs. 60,00.00 lakhs) (e) As a matter of abundant caution, a general provision for contingencies of Rs. 205.00 lakhs (2004-2005: Rs. 130.00 lakhs) has been made against items (a), (b) and (c) above, which are disputed by the Company. Managerial Remuneration : Managerial remuneration for Managing Director and Non- Whole time Directors 2005-2006 2004-2005 Rupees Rupees in lakhs in lakhs (a) Salaries ( including Company’s Contribution to Provident Fund and Superannuation Fund) 40.66 33.66 (b) Commission 87.50 60.00 (c) Perquisites 17.01 14.40 (d) Directors’ sitting fees 5.83 4.69 151.00 112.75 (a) 3. Note: The above figures do not include contribution to Gratuity Fund as separate figure not available for the Managing Director , the amortised cost of 5000 Employee Stock Options granted to the Managing Director and retirement benefits of Rs. 11.74 lakhs (2004-2005: Rs. 11.03 lakhs) paid to a former Managing Director. Computation of Net Profit in accordance with Section 309 (5) of the Companies Act, 1956 : 2005-2006 Rupees Rupees in lakhs in lakhs Profit before taxes as per Profit and Loss Account 3,429.17 Add : (i) Depreciation as per accounts 800.05 (ii) Managerial Remuneration 151.00 (iii) Provision for doubtful debts/advances 7.63 (iv) Provision for Contingencies 75.00 1,033.68 4,462.85 Less : (i) Depreciation as per Section 350 (ii) Capital Profit (ii) Pro- rata Premium on Redemption of Debentures * (iv) Pro-rata Amortisation of Rights Issue Expenses * Net Profit as per Section 309 (5) Commission: (a) Managing Director (b) Non-Wholetime directors- 1% of Net Profits Rs. 3,293.21 lakhs (2004-05: Rs. 2,054.40 lakhs) restricted to Rs. 32.50 lakhs (2004-2005 Rs.20.00 lakhs) 800.05 155.57 192.58 21.44 1,169.64 3,293.21 55.00 32.50 87.50 * Represents the pro-rata of the amount which has been debited to Securities Premium Account 2004-2005 Rupees in lakhs 2,456.00 454.18 112.75 0.66 — 567.59 3,023.59 454.18 515.01 — — 969.19 2,054.40 40.00 20.00 60.00 38 A Enterprise Notes on the Balance Sheet and Profit and Loss Account (Contd.) 4. Major components of deferred tax assets and liabilities are: Deferred Tax Liability (a) Depreciation (b) Store Launch Expenses carried forward Less: Deferred Tax Assets Other Provisions Net Deferred Tax Liability 2005-2006 Rupees in lakhs 685.61 — 685.61 52.67 632.94 2005-2006 Rupees in lakhs 5. (i) Schedule 1 Item 4 (p) General Expenses include : (a) Auditors’ Remuneration Audit Fees Fees for Taxation matters Other Services Reimbursement of out-of-pocket expenses (b) Provision for doubtful debts/advances (net) 2004-2005 Rupees in lakhs 728.79 11.93 740.72 31.21 709.51 2004-2005 Rupees in lakhs 4.21 4.24 8.41 0.10 7.63 3.10 4.13 3.74 3.85 0.26 0.66 - (ii) Debenture Issue Expenses include : Auditors’ Remuneration - Other Services 6. 7. Loss on foreign exchange fluctuation (net) debited to the profit and loss account amounted to Rs. 3.17 lakhs (2004-2005 : Credited to the Profit and Loss Account : Rs. 2.20 lakhs). (a) The Company has identified the suppliers who are covered under the “Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993” The liability under the said Act on account of interest is . not ascertained as on 31st March, 2006. However, no claims have been received for interest from suppliers with reference to the above Act. (b) The names of small scale industries to whom the Company owes a sum which is outstanding for more than 30 days, as per the terms of the contracts, at the balance sheet date are as under: (i) M/s. Mariam. (ii) M/s. Bhagavathi Garments. (iii) M/s. Anupam Textiles (iv) M/s. Chamaria Knit wear Industry (v) M/s. Gemini Enterprises (vi) M/s. Godani Plast (vii) M/s. Index Corporation (viii) M/s. Krishna Weaving Factory (ix) M/s. Raj Fragrance (x) M/s. Interplast The above information and that given in schedule ‘J’ item 2, “Liabilities” regarding small scale undertakings has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. 8. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund. 39 Fifty-Fourth Annual Report 2005-2006 Notes on the Balance Sheet and Profit and Loss Account (Contd.) 9. Out of the Rights Issue proceeds of Rs. 118.10 crores, Rs. 56.14 crores have been spent towards objects of the issue and the balance unutilised amount is invested mainly in Mutual Funds. Loans and Advances in the nature of Loans Name of Company/Firm Balance as at Maximum Amount 31.03.2006 Outstanding during the year Rs. lakhs Rs. lakhs Subsidairy Subsidairy Subsidairy Subsidairy 302.50 6.50 777.50 1,766.46 1,177.50 6.50 777.50 1,766.46 10. In Accordance with the amendments to Clause 32 of Listing Agreement, Advances in the nature of Loan are as under a) Satnam Developers and Finance Private Limited Fiora Link Road Properties Private Limited Nahar Theatres Private Limited Landmark -Partnership Firm b) None of the loanees have made investment in the shares of the Company. Notes: 1) There is no repayment schedule in respect of loan to Landmark. 2) Loan to Landmark and Fiora Link Road Properties Private Limited are free of interest. 11. LICENSED/INSTALLED ANNUAL CAPACITIES AND PRODUCTION : Class of Goods Unit of Measure Licensed Capacity As at 31.3.2006 Apparels/ Household items etc. As at 31.3.2005 Installed Capacity As at 31.3.2006 As at 31.3.2005 Actual Production 31.3.2006 31.3.2005 Nos. in lakhs N.A N.A Nil Nil * 1.66 * 1.82 * Production represents goods manufactured by third parties. 12. SALES, PURCHASES, OPENING AND CLOSING STOCKS (1.4.2005 to 31.3.2006) Class of Goods Unit of Measure SALES PURCHASES OPENING STOCKS CLOSING STOCKS Rupees Rupees Rupees Rupees Quantity in lakhs Quantity in lakhs Quantity in lakhs Quantity in lakhs Apparels/ Household items etc. Others Total Notes : (i) Units in lakhs 168.88 33,809.22 (99.21) (22,717.25) 83.71 (76.12) 33,892.93 (22,793.37) 179.34 18,821.55 (117.06) (12,749.57) 53.96 (44.15) 18,875.51 (12,793.72) 30.45 3,624.42 (16.60) (2,152.24) 39.42 (30.45) 5,184.24 (3,624.42) 3,624.42 (2,152.24) 5,184.24 (3,624.42) Closing stock is after adjusting samples , free gifts, damaged goods and shortages. (ii) Figures in brackets are in respect of previous year. 13. RAW MATERIALS CONSUMED : Unit of Measure Fabrics TOTAL Lakh Metres 2005-2006 Quantity 2.229 Rupees in lakhs 234.25 234.25 2004-2005 Quantity 2.375 Rupees in lakhs 225.84 225.84 40 A Enterprise Notes on the Balance Sheet and Profit and Loss Account (Contd.) 14. VALUE OF IMPORTED AND INDIGENOUS MATERIALS CONSUMED : 2005-2006 Rupees % of Total in lakhs Consumption (a) RAW MATERIALS : (i) Imported (ii) Indigenous TOTAL (b) PACKING MATERIALS, CONSUMABLE STORES AND SPARES : Indigenous TOTAL — 234.25 234.25 — 100 100 2004-2005 Rupees % of Total in lakhs Consumption 12.36 213.48 225.84 5 95 100 230.01 230.01 100 100 156.44 156.44 100 100 15. VALUE OF IMPORTS ON C.I.F. BASIS : 2005-2006 Rupees in lakhs (a) (b) Finished Products (including in - transit) Capital Goods TOTAL 127.20 235.71 362.91 2004-2005 Rupees in lakhs 92.50 165.37 257.87 16. EXPENDITURE IN FOREIGN CURRENCY : 2005-2006 Rupees in lakhs (a) (b) (c) Travelling Expenses Consultancy Fees (Net of Tax deducted at source) Payments on other accounts TOTAL 18.59 147.27 0.45 166.31 2004-2005 Rupees in lakhs 36.64 86.95 1.88 125.47 17. EARNINGS IN FOREIGN CURRENCY : 2005-2006 Rupees in lakhs (a) (b) Sales of goods / services * Others TOTAL 1,048.71 — 1,048.71 2004-2005 Rupees in lakhs 787.18 21.47 808.65 * Represents sale of goods / services which are collected in Foreign Currency through International Credit Cards, as certified by the collecting bankers. 41 Fifty-Fourth Annual Report 2005-2006 Notes on the Balance Sheet and Profit and Loss Account (Contd.) 18 SEGMENTAL REPORTING : 2005-2006 Retailing Current Investment Unallocated Total Company Rs. in lakhs Rs. in lakhs Rs. in lakhs Rs. in lakhs A SEGMENT REVENUE 1. 2. External Revenue Intersegment Revenue 34,543.94 (23,326.72) — (—) 34,543.94 (23,326.72) 274.22 (298.45) — (—) 274.22 (298.45) 940.84 (984.53) — (—) 940.84 (984.53) 35,759.00 (24,609.70) — (—) 35,759.00 (24,609.70) TOTAL SEGMENT REVENUE B RESULTS 1. 2. 3. 4. 5. 6. C D E F G Segment Results Interest Expense Exceptional Items Provision for Taxation Short /(Excess) tax provision for prior years (Net) Net Profit 2,491.41 (1,423.04) — (—) — (—) — (—) — (—) 2,491.41 (1,423.04) 17,925.69 (15,484.27) 7,268.49 (4,217.87) 1,819.24 (1,618.35) 795.08 (447.01) 35.43 (101.37) — (—) 274.22 (298.45) — (—) — (—) — (—) — (—) 274.22 (298.45) 3,053.79 (7,202.20) — (—) — (—) — (—) — (—) — (—) 844.75 (734.54) 106.21 (0.03) 75.00 (—) 991.34 (531.16) — (18.92) (327.80) (184.43) 23,632.89 (5,567.98) 10,383.89 (2,323.24) — (—) 4.97 (7.17) — (—) 75.00 (—) 3,610.38 (2,456.03) 106.21 (0.03) 75.00 (—) 991.34 (531.16) — (18.92) 2,437.83 (1,905.92) 44,612.37 (28,254.45) 17,652.38 (6,541.11) 1,819.24 (1,618.35) 800.05 (454.18) 35.43 (101.37) 75.00 (—) SEGMENT ASSETS SEGMENT LIABILITIES CAPITAL EXPENDITURE DEPRECIATION AMORTISATION OF STORE LAUNCH EXPENSES NON CASH EXPENSES Provision for Contingencies H Notes: (1) Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the Company’s organisation structure as well as the differential risks and returns of these segments. (2) Segment Revenue, Results, Assets and Liabilities figures include the respective amounts identifiable to each of the segments. Other unallocable expenditure includes expenses incurred at corporate level, which relate to the Company as a whole. Unallocated assets mainly relates to Long Term Investments including Investments in Subsidiaries. (3) Figures in brackets are in respect of previous year. 42 A Enterprise Notes on the Balance Sheet and Profit and Loss Account (Contd.) 19. RELATED PARTY TRANSACTIONS : Related Parties are as certified by the Management. 19.1 Parties where control exists Trent Brands Limited - Subsidiary Company ( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2006) Fiora Services Limited - Subsidiary Company ( 25.67% Equity Share Capital is held by Trent Limited as at 31st March, 2006) ( 64.20% Equity Share Capital is held by Trent Brands Limited as at 31st March, 2006) Satnam Developers and Finance Private Limited - Subsidiary Company ( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2006) Nahar Theatres Private Limited - Subsidiary Company (w.e.f. 20th September, 2005) ( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2006) Fiora Link Road Properties Private Limited - Subsidiary Company (w.e.f. 26th August, 2005) ( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2006) Investment in Partnership Firm - Landmark (w.e.f. 31st August, 2005) ( 78% in share of profit is held by Trent Limited as at 31st March, 2006) 19.2 Other Related Parties with whom transactions have taken place during the year: Associates: 19.3 Directors of the Company Managing Director Mr. N.N. Tata Tata Sons Ltd. (Holds more than 20% of the Share Capital of the Company) Non Executive Directors { Mrs. S.N.Tata Mr. N.A. Soonawala Mr. B.S. Bhesania Mr. A.D. Cooper Mr. K.N. Suntook Mr. F.K. Kavarana Mr. Zubin Dubash - with effect from 27.10.2005 Details of remuneration to Directors is disclosed in Note No. 3 on Balance Sheet and Profit and Loss account. 2005-2006 Rupees in lakhs 19.4 Sales to and Other recoveries from related parties a) Subsidiaries b) Associates Purchase/other services from related parties a) Subsidiaries b) Associates Purchase of Fixed Assets from related parties Associates 43.49 21.50 517.59 245.90 — 2004-2005 Rupees in lakhs 6.82 47.71 312.96 216.81 22.00 19.5 19.6 43 Fifty-Fourth Annual Report 2005-2006 Notes on the Balance Sheet and Profit and Loss Account (Contd.) 2005-2006 Rupees in lakhs 19.7 Interest/Dividend received from related parties a) Subsidiaries b) Associates Interest/Dividend paid to related parties a) Subsidiaries b) Associates c) Directors Purchase of Preference Shares Associates Loan Given Subsidiaries Loan Repaid Subsidiaries Security deposit given during the year a) Subsidiaries b) Associates Security deposit receivable as on 31.03.2006 a) Subsidiaries b) Associates Equity Contribution in cash Subsidiaries Amount received in respect of Rights Issuse of Partly Covertible Debentures on Allotment a) Associates b) Directors Debentures Outstanding as on 31.3.2006 Directors Outstanding balance as on 31.3.2006 Payable by Company a) Subsidiaries b) Associates Guarantee Given during the year Subsidiary Guarantee Given as on 31.3.2006 Subsidiary ESOP granted during the year (No. of Options) Directors Loan Outstanding as on 31.3.2006 Subsidairies 250.10 34.81 9.60 173.13 1.52 — 3,457.96 875.00 162.50 30.00 412.50 30.00 9.00 2004-2005 Rupees in lakhs 204.18 — 8.80 158.70 1.44 200.00 270.00 — — — 250.00 — — 19.8 19.9 19.10 19.11 19.12 19.13 19.14 19.15 2596.98 59.67 0.13 — — — 19.16 19.17 12.88 42.44 4,000.00 10,000.00 5,000 2,852.96 25.61 42.14 6,000.00 6,000.00 — 270.00 19.18 19.19 19.20 19.21 44 A Enterprise Notes on the Balance Sheet and Profit and Loss Account (Contd.) 20 EARNINGS PER SHARE (EPS) : (a) Weighted Average Number of shares outstanding during the year i) ii) For Basic Earnings Per Share For Diluted Earnings Per Share No. of shares for Basic EPS as per a(i) Add: Weighted average outsanding warrants/options deemed to be issued for no consideration No. of shares for Diluted Earnings Per Share (b) Net Profit/(loss) after Tax available for Equity Share Holders (Rupees in lakhs) (c) Earnings Per Share (Rs.) Face Value of Rs. 10/Basic Diluted * Restated for adjustment on account of Rights Issue 21 Previous year’s figures have been regrouped wherever necessary. 22 Balance Sheet Abstract and Company’s General Business Profile as required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached herewith. Signatures to Schedules ‘1’ to ‘4’ and ‘A’ to ‘M’ and Notes. As per our report attached. For N.M. RAIJI & CO., Chartered Accountants For and on behalf of the Board, S. N. TATA N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA Chairman 17.19 16.84 14.11* 14.11* 1,41,84,244 2,94,678 1,44,78,922 2,437.83 1,35,11,297 * — 1,35,11,297 * 1,905.92 1,41,84,244 1,35,11,297 * 2005-2006 2004-2005 M.N. THAKKAR Partner Mumbai, 30th June, 2006 Mrs. H.R. WADIA Company Secretary 28th June, 2006 } Directors Managing Director 45 Fifty-Fourth Annual Report 2005-2006 Balance Sheet Abstract and Company’s General Business Profile I. Registration Details: Registration No. State Code Balance Sheet Date II. Capital raised during the year (Amount in Rupees Thousands): Public Issue Rights Issue Bonus Issue Private Placement III. Position of mobilisation and deployment of funds (Amount in Rupees Thousands): Total Liabilities Total Assets Sources of Funds: Paid-up Capital Reserves and Surplus Secured Loans Unsecured Loans Application of Funds: Net Fixed Assets Investments Net Current Assets Net Deferred Tax Miscellaneous Expenditure Accumulated Losses Turnover* Total Expenditure Profit before Tax Profit after Tax Earnings per share (in Rupees) Basic Diluted Dividend Rate (%) V. : : : : : : : : : : : : : : : : : : 719578 2329662 367291 (-)63294 — Nil 3575900 3232983 342917 243783 17.19 16.84 65 144278 2551721 655024 2214 : : 3416531 3416531 : : : : Nil 13100 Nil Nil : : : : 8951 11 31.3.2006 IV. Performance of Company (Amount in Rupees Thousands): Generic Names of three principal products/services of the Company: Item Code No. (ITC CODE) 1. 2. 3. 62 07 62 08 62 09 : : : Product Description Menswear Ladieswear Childrenswear *Represents Income from Operations and other income 46 A Enterprise Cash Flow for the year ended 31st March, 2006 Rupees in lakhs A CASH FLOW FROM OPERATING ACTIVITIES Net Profit before Taxes and Exceptional Items Adjustments for : Depreciation Interest (net) Employee Stock Option (Profit)/Loss on Fixed Assets sold/discarded (Net) (Profit)/Loss on sale of Long Term Investments Dividend from Long Term Investments Share of profit from Landmark Excess provision no longer required written back Operating Profit Before Working Capital Changes Adjustments for : (Increase)/Decrease in Current Investments (Increase)/Decrease in Inventories (Increase)/Decrease in Trade and Other Receivables Increase/(Decrease) in Trade and Other Payables Cash generated from operations Direct Taxes Paid B Net Cash from Operating Activities CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets Purchase of Long Term Investments Sale of Long Term Investments Loans Given Share of Profit from Partnership - Landmark Interest received Dividend From Long Term Investments Net cash (used in)/from Investing Activities CASH FLOW FROM FINANCING ACTIVITIES Proceed from Rights Issue of Partly Convertible Debentures (Net of issue expenses) Unclaimed Share Application Money Repayment of Long Term and Other borrowings Interest Paid Dividend Paid Net cash used in Financing Activities NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) CASH AND CASH EQUIVALENTS AS AT 01.04.2005 CASH AND CASH EQUIVALENTS AS AT 31.03.2006 1.4.2005 to 31.3.2006 Rupees in lakhs 3,504.17 800.05 (63.68) 64.75 (86.64) (86.03) (385.63) (238.02) (0.35) 4.45 3,508.62 4,148.41 (1,573.45) (740.81) 2,795.97 4,630.12 8,138.74 (1,141.99) 6,996.75 (1,528.07) 158.90 (19,105.47) 3,059.50 (714.32) 238.02 317.14 387.41 (17,186.89) 1.4.2004 to 31.3.2005 Rupees in lakhs 2,456.00 454.19 (215.36) — (9.14) (495.64) (292.71) — — (558.66) 1,897.34 32.96 (1,365.63) 436.70 1,375.45 479.48 2,376.82 (336.76) 2,040.06 (1,563.56) 37.75 (3,425.00) 3,619.70 (220.72) — 164.53 290.93 (1,096.37) C 11,647.50 2.05 (3.84) (10.02) (936.81) 10,698.88 508.74 834.03 1,342.77 — — (2.01) (0.03) (811.91) (813.95) 129.74 704.29 834.03 Notes : i) All figures in brackets are outflows. ii) Of the above cash and cash equivalent balance the amount of Rs.71.20 lakhs (2004-05: Rs.68.84 lakhs) is not available for use by the Company as it is under dispute. iii) Previous year’s figures have been regrouped wherever necessary. As per our report attached. For N.M. RAIJI & CO., Chartered Accountants For and on behalf of the Board, S. N. TATA Chairman N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA M.N. THAKKAR Partner Mumbai, 30th June, 2006 MRS. H.R. WADIA Company Secretary 28th June, 2006 } Directors Managing Director 47 Fifty-Fourth Annual Report 2005-2006 PURSUANT TO SECTION 212 OF THE COMPANIES ACT, 1956, RELATING TO SUBSIDIARY COMPANIES BELOW : Trent Brands Limited Fiora Satnam Services Developers Limited and Finance Private Limited Nahar Theatres Private Limited Fiora Link Road Properties Private Limited 1. 2. 3. 4. 5. 6. The financial period of the Subsidiary 31st March, Company ended on 2006 Fully paid Shares of the Subsidiary Company held by the Company on the above date : (a) Number of Equity Shares 32,50,000 (b) Extent of holding 100 % The net aggregate of profit of the Subsidiary Company’s financial year, so far as they concern the members of the Company were : (a) Dealt with in the accounts of the Company for the year ended 31st March, 2006 (Rs. in lakhs) 195.00 (b) Not dealt with in the accounts of the Company for the year ended 31st March, 2006 (Rs. in lakhs) 318.56 The net aggregate of profits of the Subsidiary Company for the previous financial years, so far they concern the members of the Company were : (a) Dealt with in the accounts of the Company for the year ended Nil 31st March, 2006 (Rs. in lakhs) (b) Not dealt with in the accounts of the Company for the year ended 31st March, 2006 (Rs. in lakhs) 889.29 Changes in the interest of the Company between the end of the Subsidiary’s financial year and 31st March, 2006 : Number of Shares acquired Not applicable Material changes between the end of the Subsidiary’s financial year and 31st March, 2006 (Rs. in lakhs) : (i) Fixed Assets (net additions) Not applicable (ii) Investments made Not applicable (iii) Investments sold Not applicable (iv) Moneys lent by the Subsidiary Company Not applicable (v) Moneys borrowed by the Subsidiary Company other than for meeting Not current liabilities applicable 31st March, 31st March, 31st March, 31st March, 2006 2006 2006 2006 39,000 25.67% 50,000 100 % 1,996 100 % 50,000 100 % Nil 14.38 Nil 12.32 Nil (44.74) Nil (0.16) Nil Nil Nil Nil 106.52 1.80 218.06 Nil Not Not Not Not applicable applicable applicable applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable Not Not Not Not applicable applicable applicable applicable For and on behalf of the Board, S. N. TATA N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA Chairman MRS. H.R. WADIA Company Secretary Mumbai, 28th June, 2006 } Directors Managing Director 48 A Enterprise Auditors’ Report on the Consolidated Financial Statements to the Board of Directors of Trent Limited 1. We have audited the attached Consolidated Balance Sheet of TRENT LIMITED (“the Company”) and its subsidiaries, collectively referred to as “the Group” as at 31st March, 2006 , and also the Consolidated Profit and Loss Account and the Consolidated Cash Flow Statement for the year ended on that date annexed thereto. These Consolidated Financial Statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. We did not audit the financial statements of the subsidiary, M/s. Landmark (partnership firm), whose financial statements reflect the Group’s share of total net assets of Rs. 2,599.07 lakhs as at 31st March, 2006 and the Group’s share of total revenue of Rs. 5,701.12 lakhs and the net cash outflow amounting to Rs. 424.18 lakhs for the period from 1st September, 2005 to 31st March, 2006, as considered in the consolidated financial statements. These financial statements and other information of the subsidiary have been certified by the partners of the subsidiary and audited by a firm of Chartered Accountants, and our opinion, in so far as it relates to the amounts included in respect of the subsidiary is based solely on their audit report. 4. We report that the Consolidated Financial Statements have been prepared by the Company’s management in accordance with the requirements of Accounting Standard (AS) 21 - Consolidated Financial Statements and Accounting Standard (AS) 27 - Financial Reporting of Interest in Joint Ventures issued by The Institute of Chartered Accountants of India and on the basis of the separate audited/ certified financial statements of the Company and its subsidiaries included in the Consolidated Financial Statements. Based on the audit and on consideration of the reports of the other auditors on the separate financial and on the other financial information of the components; in our opinion and to the best of our information and according to the explanations given to us, the attached Consolidated Financial Statements read together with Notes thereon, give a true and fair view in conformity with the accounting principles generally accepted in India: (a) in the case of the Consolidated Balance Sheet, of the state of affairs of the Group as at 31st March 2006; (b) in the case of the Consolidated Profit and Loss Account, of the profit for the year ended on that date; and (c) in the case of the Consolidated Cash Flow Statement, of the cash flows for the year ended on that date. 2. 5. 3. For N.M.RAIJI & Co., Chartered Accountants M.N. THAKKAR Partner Membership No. 8873 Mumbai , 30th June, 2006 49 Fifty-Fourth Annual Report 2005-2006 Consolidated Balance Sheet as at 31st March, 2006 Schedule SOURCES OF FUNDS : 1. SHAREHOLDERS’ FUNDS : (a) Capital (b) Reserves and Surplus 2. 3. MINORITY INTEREST LOAN FUNDS : (a) Secured Loans (b) Unsecured Loans Deferred Tax Liability (Net) (Note No. 4, Page 60) TOTAL FUNDS EMPLOYED D 56 25,087.61 2,909.43 22,178.18 542.95 E F G H I 57 57 57 57 58 7,909.33 263.54 1,691.38 12,669.62 22,533.87 11,773.15 2,635.87 14,409.02 10. NET CURRENT ASSETS 11. MISCELLANEOUS EXPENDITURE L (to the extent not written off or adjusted) 12. TOTAL ASSETS (NET) (For Schedule ‘M’ and notes see pages 59 to 63) As per our report attached. For N. M. RAIJI & CO., Chartered Accountants M. N.THAKKAR Partner MRS. H.R.WADIA Company Secretary For and on behalf of the Board, S. N. TATA Chairman N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA 59 8,124.85 5.39 47,050.49 22,721.13 16,199.12 8,875.04 1,837.75 7,037.29 363.21 7,400.50 15,125.14 3,762.84 162.34 884.54 8,907.48 13,717.20 5,864.99 1,078.25 6,943.24 6,773.96 41.50 29,341.10 A B Page 54 54 to 55 Rupees in lakhs 1,442.78 26,986.04 28,428.82 168.29 C 55 6,800.00 11,018.84 17,818.84 4. 5. 634.54 47,050.49 — 5,736.38 5,736.38 713.00 29,341.10 Rupees in lakhs As at 31.03.2005 Rupees in lakhs 1,311.78 21,522.57 22,834.35 57.37 APPLICATION OF FUNDS : 6. FIXED ASSETS : (a) Gross Block (b) Less : Depreciation (c) Net Block (d) Capital Work-in-Progress 7. 8. INVESTMENTS CURRENT ASSETS, LOANS AND ADVANCES : (a) Inventories (b) Sundry Debtors (c) Cash and Bank Balances (d) Loans and Advances Less: CURRENT LIABILITIES AND PROVISIONS : (a) Liabilities (b) Provisions 9. J K 58 59 } Directors Mumbai, 30th June, 2006 28th June, 2006 Managing Director 50 A Enterprise Consolidated Profit and Loss Account for the year ended 31st March, 2006 Schedule INCOME : 1. INCOME FROM OPERATIONS 2. OTHER INCOME 3. TOTAL INCOME EXPENDITURE : 4. MANUFACTURING AND OTHER EXPENSES 5. DEPRECIATION 6. INTEREST (a) DEBENTURES (b) OTHERS TOTAL EXPENDITURE PROFIT BEFORE TAXES AND EXCEPTIONAL ITEMS EXCEPTIONAL ITEMS PROVISION FOR TAXATION CURRENT TAX FRINGE BENEFIT TAX DEFERRED TAX 2 3 Page 53 53 Rupees in lakhs 40,346.94 1,563.75 41,910.69 1 52 36,292.94 995.63 37,288.57 96.19 343.64 439.83 37,728.40 4 53 1,243.59 61.52 (78.46) 1,226.65 2,880.64 (0.10) 2,880.54 80.84 (13.29) 2,812.99 2,221.82 5,034.81 250.00 1,300.00 — 937.81 158.87 2,388.13 5,034.81 19.83 19.43 For and on behalf of the Board, S. N. TATA Chairman N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA 4,182.29 75.00 Rupees in lakhs Previous Year Rupees in lakhs 23,454.60 1,301.29 24,755.89 21,625.91 469.16 22,095.07 — 113.21 113.21 22,208.28 2,547.61 — 519.85 — 39.03 558.88 1,988.73 (18.59) 1,970.14 5.65 — 1,964.49 2,203.12 4,167.61 1,021.00 — 787.07 — 137.72 2,221.82 4,167.61 14.54* 14.54* 7. 8. 9. 10. 11. 12. 13. 14. PROFIT FOR THE YEAR AFTER TAXES SHORT TAX PROVISION FOR PRIOR YEARS (NET) NET PROFIT BEFORE MINORITY INTEREST LESS: MINORITY SHARE OF PROFIT / (LOSS) LESS: PRE ACQUISITION PROFIT / (LOSS) NET PROFIT AFTER MINORITY INTEREST BALANCE BROUGHT FORWARD FROM PREVIOUS YEAR PROFIT AVAILABLE FOR APPROPRIATION APPROPRIATIONS : (i) GENERAL RESERVE (ii) DEBENTURE REDEMPTION RESERVE (iii) INTERIM DIVIDEND (iv) PROPOSED DIVIDEND (v) TAX ON DIVIDEND (vi) BALANCE CARRIED TO BALANCE SHEET 15. Earnings Per Share (Rs.) (Note No. 12, page 63) Basic Diluted * Restated for adjustment on account of Rights Issue. (For Schedule ‘M’ and notes see pages 59 to 63) As per our report attached. For N. M. RAIJI & CO., Chartered Accountants M. N.THAKKAR Partner MRS. H.R.WADIA Company Secretary } Directors Mumbai, 30th June, 2006 28th June, 2006 Managing Director 51 Fifty-Fourth Annual Report 2005-2006 Schedule forming part of the Consolidated Profit and Loss Account Schedule ‘1’ (Item No. 4, page 51) MANUFACTURING AND OTHER EXPENSES Previous Year Rupees in lakhs 225.84 12,793.72 Rupees in lakhs 1. 2. 3. RAW MATERIALS CONSUMED PURCHASE OF FINISHED PRODUCTS PAYMENTS TO AND PROVISIONS FOR EMPLOYEES (a) Salaries, Wages, Bonus, etc. (refer Note ‘c’ of schedule B, page 55) (b) Contribution to Provident, Superannuation and Gratuity Funds (c) Workmen and Staff Welfare Expenses OPERATION AND OTHER EXPENSES (a) Processing Charges (b) Packing Materials Consumed (c) Power and Fuel (d) Repairs to Building (e) Repairs to Machinery (f ) Repairs Others (g) Rent (h) Rates and Taxes (i) Insurance (j) Advertisement and Sales Promotion (k) Travelling Expenses (l) Professional and Legal Charges (m) Printing and Stationery (n) Bank Charges (o) Postage, Telegrams and Telephones (p) General Expenses [Note 5(i), Page 60] (q) Retail Business Fees (r) Sales tax paid (s) Directors’ Fees (t) Commission to non whole-time Directors (u) Store Launch Expenses Amortised (v) Excise Duty FREIGHT AND FORWARDING CHARGES CHANGES IN FINISHED PRODUCTS Accretion to stocks deducted Rupees in lakhs 234.25 23,465.44 2,284.82 141.55 133.60 2,559.97 1,435.79 101.11 87.32 1,624.22 199.11 156.43 681.34 312.50 89.54 86.72 466.38 382.84 44.09 2,117.22 213.20 205.02 55.44 134.40 119.94 605.39 1,368.14 894.59 5.05 20.00 101.37 16.42 12,091.65 232.18 2,290.55 36,292.94 8,275.13 179.18 1,472.18 21,625.91 4. 185.66 289.00 1,075.86 576.00 91.14 118.43 701.24 375.40 64.37 3,044.66 259.40 337.58 86.26 229.75 180.92 802.59 1,907.46 1,672.76 6.15 32.50 54.52 — 5. 6. 52 A Enterprise Schedules forming part of the Consolidated Profit and Loss Account Schedule ‘2’ ( Item No. 1, page 51) INCOME FROM OPERATIONS Rupees in lakhs (1) Sales (2) Other Operating Income (a) Display and Sponsorship Income (b) Commission on sales (c) Discounts and Fees (d) Others (3) Income from Current Investments - Non trade (a) Dividend on Current Investments (b) Profit on sale of Current Investments (Net) (c) Profit on valuation of Current Investments (Net) Rupees in lakhs 39,561.96 Previous Year Rupees in lakhs 22,793.37 65.50 164.86 49.57 76.50 498.82 172.35 113.78 0.03 286.16 40,346.94 Schedule ‘3’( Item No.2, page 51) OTHER INCOME Rupees in lakhs Rent received Miscellaneous Income Liquidated Damages Interest on Loans and Advances - Gross [Tax deducted at source: Rs 42.97 lakhs (2004-2005: Rs 26.09 lakhs)] (5) Interest on Deposits with Banks - Gross [Tax deducted at source: Rs 4.60 lakhs ( 2004-2005: Rs 1.77 lakhs)] (6) Interest on Long Term Investments -Gross (7) Dividend on Long Term Investments -Gross (a) Trade (b) Others - Gross (8) Profit on Sale of Long Term Investments (Net) (9) Profit on Fixed Assets sold/discarded (Net) (10) Excess provision no longer required written back (1) (2) (3) (4) Rupees in lakhs 83.24 69.08 — 425.44 17.05 2.98 3.00 336.78 339.78 529.85 86.64 9.69 1,563.75 Schedule ‘4 ’ (Item No. 8, page 51) EXCEPTIONAL ITEMS Rupees in lakhs Provision for Contingencies (Note 2(d), Page No 60) 75.00 75.00 356.43 230.00 73.86 0.94 304.80 23,454.60 50.48 251.40 64.24 132.70 Previous Year Rupees in lakhs 49.33 66.35 25.00 322.99 5.66 2.97 3.00 329.83 332.83 479.10 9.14 7.92 1,301.29 Previous Year Rupees in lakhs — — 53 Fifty-Fourth Annual Report 2005-2006 Schedules forming part of the Consolidated Balance Sheet Schedule ‘A’ (Item No. 1(a), page 50) CAPITAL Rupees in lakhs AUTHORISED : 1,50,00,000 Equity Shares of Rs.10/- each 1,00,00,000 Unclasified Shares of Rs.10/- each ISSUED, SUBSCRIBED AND PAID UP : 1,44,27,811 Equity Shares of Rs. 10/- each fully paid-up [2004-2005 : 1,31,17,764 Equity Shares of Rs. 10/- each fully paid-up] 1,500.00 1,000.00 2,500.00 1,442.78 1,442.78 As at 31.3.2006 Rupees in lakhs As at 31.3.2005 Rupees in lakhs 1,500.00 1,000.00 2500.00 1,311.78 1,311.78 Notes : Of the above (a) 1,08,81,021 Equity Shares were allotted as fully paid Bonus Shares by capitalisation of Share Premium and Reserves. (b) 1,12,616 Equity Shares were allotted as fully paid pursuant to Schemes of Amalgamation without payment being received in cash. (c) During the year, 13,10,047 equity shares were alloted as fully paid up on conversion of partly convertible Debentures. (d) During the year, the Company has issued 13,10,047 warrants to the shareholders along with partly Convertible Debentures. The Warrant holder is entitled to apply for one equity share of Rs.10/- each at a premium of Rs. 640/each within 30 days after the expiry of 54 months from 7th July 2005, being the date of allotment. (e) During the year, the Company has granted 45,850 stock options under the Employee Stock Option Scheme. Stock Option outstanding as on 31st March 2006, are 44,900. Schedule ‘B’ (Item No. 1(b), page 50) RESERVES AND SURPLUS As at As at 31.3.2006 31.3.2005 Rupees Rupees Rupees in lakhs in lakhs in lakhs (1) SECURITIES PREMIUM ACCOUNT (a) Add: Premium on issue of Equity Shares 5,109.18 — (b) Less: Premium on redemption of Non-Convertible Debentures 1,283.85 — (c) Less: Write off of Debenture issue expenses 142.92 — 3,682.41 — (2) DEBENTURE REDEMPTION RESERVE Transferred from Profit and Loss Account 1,300.00 — (3) EMPLOYEE STOCK OPTIONS a) Employee Stock Options Outstanding Additions 396.72 — Lapsed 8.22 — Outstanding 388.50 — b) Less: Deferred Employee Compensation — Additions 396.72 — Amortised/Lapsed 72.97 — Balance 323.75 — Net Employee Stock Options 64.75 — (4) GENERAL RESERVE : (a) Balance as per last account 17,577.49 16,556.49 (b) Add : Transferred from Profit and Loss Account 250.00 1,021.00 17,827.49 17,577.49 (5) AMALGAMATION RESERVE : Arising out of Amalgamation 1,492.95 1,492.95 (6) CAPITAL RESERVE ON ACQUISITION OF SUBSIDIARY 230.31 230.31 (7) PROFIT AND LOSS ACCOUNT 2,388.13 2,221.82 26,986.04 21,522.57 54 A Enterprise Schedules forming part of the Consolidated Balance Sheet Schedule ‘B’ (Item No. 1(b), page 50) (contd.) Notes : Of the above (a) Premium on issue of Equity Shares represents issue of 13,10,047 Equity Shares during the year on conversion of Partly Convertible Debentures at a premium of Rs. 390/- per share. (b) The Expenditure incurred on Rights Issue and the provision for Premium on Redemption of Debentures have been debited to Securities Premium Account. (c) In respect of Options granted under the Company’s Employee Stock Options Scheme 2005 (ESOS), in accordance with guidelines issued by SEBI , the accounting value of options is accounted as deferred employee compensation, which is amortised on a straight line basis over the vesting period. Consequently salaries, wages, bonus etc includes Rs. 64.75 lakhs (2004-05 Rs. Nil) , being the amortisation of deferred employee compensation after adjusting for reversals on account of options lapsed. Schedule ‘C’ (Item No. 3, page 50) LOAN FUNDS Rupees in lakhs 1) SECURED LOANS : Non Convertible Debentures Others UNSECURED LOANS : a) Sales Tax loan from Government of Maharashtra b) Others c) Note:(a) During the year, the Company issued 13,10,047 partly Convertible Debentures of Rs. 900/- each. Of the above Convertible Debenture of the face value of Rs. 400/- has been converted into one Equity Share of Rs. 10/- each at a premium of Rs. 390/- per share on the date of allotment. The Non Convertible Debenture of face value of Rs. 500/- are redeemable at a premium of Rs. 98/- each on 7th July, 2010. (b) The Non Convertible Debentures are secured by way of charge on assets of the Company costing atleast 1.33 times of the value of the Debentures in favour of the Debenture Trustees. (c) Premium payable on redemption of Debentures amounting to Rs. 1,283.85 lakhs has been fully provided and debited to Securities Premium Account . d) e) Of the above secured loans, amount repayable within a year Rs. 150.88 lakhs (2004-05 : Rs. Nil). Of the above unsecured loans, amount repayable within a year Rs. 6005.34 lakhs (2004-05 : Rs. 3.74 lakhs). Share of Joint Venture - [Note 11 (c), Page 63] 6,550.24 249.76 6,800.00 2) 22.14 8,304.20 8,326.34 2,692.50 17,818.84 As at 31.3.2006 Rupees in lakhs As at 31.3.2005 Rupees in lakhs — — — 25.88 3,750.00 3,775.88 1,960.50 5,736.38 55 Fifty-Fourth Annual Report 2005-2006 Schedule forming part of the Consolidated Balance Sheet Schedule ‘D’(Item No. 6, page 50) FIXED ASSETS ASSETS GROSS BLOCK (AT COST) As at Additions/ Deductions/ 1.4.2005 Adjustments Adjustments Rupees in lakhs Goodwill Goodwill on Consolidation Freehold Land Leasehold Land Buildings — ( —) Rupees in lakhs 6.00 ( —) Rupees in lakhs — ( —) As at 31.3.2006 Rupees in lakhs 6.00 ( —) DEPRECIATION As at On Deductions/ 1.4.2005 Adjustments Rupees in lakhs — ( —) — ( —) — ( —) — ( —) 582.18 (491.75) 393.80 (313.08) 836.20 (561.70) 23.83 (25.69) 1.74 (0.52) Rupees in lakhs — ( —) — ( —) — ( —) — ( —) -54.23 (3.51) -42.91 (6.60) 3.21 (3.06) 17.88 (10.97) — ( —) -76.05 (24.14) For the year Rupees in lakhs — ( —) — ( —) — ( —) — ( —) 203.76 (93.94) 266.28 (87.32) 511.31 (277.56) 11.70 (9.11) 2.58 (1.22) As at 31.3.2006 Rupees in lakhs — ( —) NET BLOCK As at 31.3.2006 Rupees in lakhs 6.00 ( —) 901.69 11,484.98 ( —) (901.69) 427.92 (427.92) — ( —) 2,542.28 (2,461.01) — ( —) 8.13 ( —) 2,388.80 (87.40) 777.57 (533.00) 1,588.45 (779.82) 75.97 (21.07) 20.00 (0.97) — 12,386.67 ( —) (901.69) — ( —) — ( —) 427.92 (427.92) 8.13 ( —) — 12,386.67 ( —) (901.69) — ( —) — ( —) 427.92 (427.92) 8.13 ( —) 78.46 4,852.62 (6.13) (2,542.28) 15.58 2,807.72 (18.50) (2,045.73) 5.53 4,441.92 (5.63) (2,859.00) 37.76 (22.48) — ( —) 134.41 (96.20) 22.22 (2.22) 840.17 4,012.45 (582.18) (1,960.10) 702.99 2,104.73 (393.80) (1,651.93) 1,344.30 3,097.62 (836.20) (2,022.80) 17.65 (23.83) 4.32 (1.74) 116.76 (72.37) 17.90 (0.48) Plant and Machinery 2,045.73 (1,531.23) Furniture, Fixtures, Office and Other Equipment Vehicles Intangible Assets 2,859.00 (2,084.81) 96.20 (97.61) 2.22 (1.25) Total 8,875.04 16,349.90 (6,603.83) (2,323.95) 137.33 25,087.61 1,837.75 (52.74) (8,875.04) (1,392.74) 995.63 2,909.43 22,178.18 (469.16) (1,837.75) (7,037.29) 542.95 (363.21) 22,721.13 (7,400.50) Capital Work-in-Progress Total Notes : (1) (2) (3) (4) Figures in brackets are in respect of previous year. Included in Buildings is an amount of Rs. 1,050 (2004-2005: Rs.1,550) representing value of Shares in Co-operative Housing Societies/Condominium . No Depreciation has been provided on Leasehold Land Additions / Adjustments” to Gross Block includes the Written Down Value of the Fixed Assets of M/s. Landmark as on 31.8.2005 calculated as per the provisions of the Income Tax Act, 1961 . 56 A Enterprise Schedules forming part of the Consolidated Balance Sheet Schedule ‘E’(Item No.7 , page 50) INVESTMENTS As at 31.3.2006 Rupees in lakhs 13,575.99 2,623.13 16,199.12 As at 31.3.2005 Rupees in lakhs 13,167.02 1,958.12 15,125.14 (1) Investments (2) Share of Joint Venture -[Note 11 (c), Page 63] Schedule ‘F’(Item No.8(a), page 50) INVENTORIES As at 31.3.2006 Rupees in lakhs 104.43 25.54 7,757.28 22.08 7,909.33 As at 31.3.2005 Rupees in lakhs 58.62 36.02 3,624.42 43.78 3,762.84 Stocks (1) Raw Materials (2) Packing Materials (3) Finished Products (4) Stocks-in-Transit Schedule ‘G’(Item No.8 (b), page 50) SUNDRY DEBTORS (1) Debts outstanding for a period exceeding six months (2) Other Debts (3) Less : Provision for Doubtful Debts Considered Good - Unsecured Considered Doubtful - Unsecured As at 31.3.2006 Rupees in lakhs 112.08 163.93 276.01 12.47 263.54 263.54 12.47 276.01 As at 31.3.2005 Rupees in lakhs 105.23 69.57 174.80 12.46 162.34 162.34 12.46 174.80 Schedule ‘H’(Item No.8(c), page 50) CASH AND BANK BALANCES (1) Cash on hand (including cheques on hand Rs. 9.03 lakhs) (2004-2005: Rs. 6.97 lakhs) (2) Balances with Scheduled Banks (a) Current Accounts (b) Fixed Deposit Accounts (c) Unpaid Dividend Accounts As at 31.3.2006 Rupees in lakhs 163.57 1,066.61 325.57 68.41 1,460.59 1,624.16 67.22 1,691.38 As at 31.3.2005 Rupees in lakhs 72.94 538.98 150.12 107.76 796.86 869.80 14.74 884.54 (3) Share of Joint Venture -[Note 11 (c), Page 63] 57 Fifty-Fourth Annual Report 2005-2006 Schedules forming part of the Consolidated Balance Sheet Schedule ‘I’(Item No. 8(d), page 50) LOANS AND ADVANCES Rupees in lakhs (1) Security Deposits Deposits for Premises-Others Other Deposits (2) Loans Other Loans (3) Other Loans and Advances recoverable in cash or in kind or for value to be received (4) Balances with Customs/Port Trust etc. (5) Other Receivables (6) Bills of Exchange (7) Advances on Capital Account (8) Less : Provision for Doubtful Advances Considered Good - Secured Considered Good - Unsecured Considered Doubtful - Unsecured (9) Share of Joint Venture -[Note 11 (c), Page 63] 3,228.60 177.88 3,406.48 5,530.50 3,513.54 40.31 53.91 114.20 163.81 12,822.75 155.83 12,666.92 50.00 12,616.92 155.83 12,822.75 2.70 12,669.62 Schedule ‘J’ (Item No. 9 (a), page 50) LIABILITIES Rupees in lakhs (1) Acceptances (2) Sundry Creditors (Note 7, Page 61) Small Scale Industrial Undertakings Others (3) Security Deposits Received (4) Provision for Taxes -net of Advance Tax (5) Investor Education and Protection Fund (Appropriate amount shall be transferred to “Investor Education and Protection Fund” if and when due - Note 8, Page 61) (a) Unpaid / Unclaimed Dividend (b) Unpaid / Unclaimed Matured Deposits (c) Unpaid application Money received by the Company for allotment of Rights Issue and due for refund As at 31.3.2006 Rupees in lakhs As at 31.3.2005 Rupees in lakhs 2,280.44 137.09 2,417.53 5,908.86 302.30 40.27 188.45 114.20 83.92 9,055.53 148.20 8,907.33 1,918.64 6,988.69 148.20 9,055.53 0.15 8,907.48 As at 31.3.2006 Rupees in lakhs 1,749.44 As at 31.3.2005 Rupees in lakhs 600.57 107.68 3,928.60 82.54 8,876.87 8,959.41 135.52 857.91 4,036.28 136.52 971.38 68.41 0.30 2.05 70.76 11,773.04 0.11 11,773.15 107.76 0.40 — 108.16 5,852.91 12.08 5,864.99 (6) Share of Joint Venture -[Note 11 (c), Page 63] 58 A Enterprise Schedules forming part of the Consolidated Balance Sheet Schedule ‘K’(Item No.9 (b), page 50) PROVISIONS As at 31.3.2006 Rupees in lakhs — 937.81 131.53 205.00 77.69 1,283.84 2,635.87 Schedule ‘L’(Item No.11, page 50) MISCELLANEOUS EXPENDITURE (to the extent not written off or adjusted) As at 31.3.2006 Rupees in lakhs — — 5.32 5.32 0.07 5.39 As at 31.3.2005 Rupees in lakhs 35.43 6.00 — 41.43 0.07 41.50 As at 31.3.2005 Rupees in lakhs 787.07 — 110.38 130.00 50.80 — 1,078.25 (1) (2) (3) (4) (5) (6) Interim Dividend Proposed Dividend Tax on Dividend Contingencies (Note 2(d) , Page 60) Retirement Benefits Redemption Premium of Debentures (1) Store Launch Expenses (2) Voluntary Retirement Expenses (3) Others (3) Share of Joint Venture -[Note 11 (c), Page 63] Schedules forming part of the Consolidated Balance Sheet and Profit and Loss Account Schedule ‘M’ CONSOLIDATED SIGNIFICANT ACCOUNTING POLICIES 1.0 Basis of preparation of accounts 1.1 The consolidated financial statements have been prepared in accordance with the Accounting Standard 21 ( AS -21) “Consolidated Financial Statements” and Accounting Standard-27 (AS-27) “Financial Reporting of Interest in Joint Ventures” issued by the Institute of Chartered Accountants of India. The consolidated financial statements are prepared by consolidating its accounts with its subsidiaries, Trent Brands Limited, Fiora Services Limited, Satnam Developers and Finance Private Limited, Nahar Theatres Private Limited, Fiora Link Road Properties Private Limited,Landmark -Partnership Firm and Joint Venture - Satnam Realtors Private Limited, wherein Satnam Developers and Finance Private Limited (100% subsidiary ) holds 50% interest . Nahar Theatres Private Limited became a Subsidiary on and from 20th September, 2005 , Fiora Link Road Properties Private Limited on and from 26th August, 2005 and Landmark - a partnership firm became a Subsidiary on and from 31st August, 2005. The financial statements of these entities are prepared according to uniform accounting policies, except in case of Landmark - a partnership firm, where depreciation has been provided as per Income Tax Act. The impact of the above on consolidated profit cannot be ascertained. 1.2 Other Significant Accounting Policies are set out in the Notes to Accounts under the schedule “Significant Accounting Policies” of Trent Limited, Trent Brands Limited, Fiora Services Limited, Satnam Developers and Finance Private Limited, Nahar Theatres Private Limited, Fiora Link Road Properties Limited and Landmark - Partnership Firm. 59 Fifty-Fourth Annual Report 2005-2006 Notes On the Consolidated Balance Sheet and Profit and Loss Account 1 (a) Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 632.27 lakhs (2004-2005: Rs.118.33 lakhs). Share of Joint Venture Rs. 451.85 Lakhs ( 2004-2005: Rs. 958.58 lakhs) (refer note no. 11(c) page 63) (b) Uncalled Liability on partly paid shares: Rs. 12.37 lakhs (2004-2005: Rs. Nil) Contingent Liabilities : (a) Sales tax, Excise and Customs demands against which the Company has filed appeals: Rs. 146.81 lakhs 2004-2005: Rs. 144.04 lakhs) - net of tax Rs. 97.39 lakhs( 2004-2005: Rs. 91.33 lakhs ). (b) Claims made against the Company not acknowledged as debts: Rs. 749.93 lakhs (2004-2005: Rs.525.74 lakhs) (c) Income-tax demands against which the Company has filed appeals: Rs. 687.98 lakhs (2004-2005: Rs.519.68 lakhs). (d) As a matter of abundant caution, a general provision for contingencies of Rs. 205.00 lakhs (2004-2005: Rs. 130.00 lakhs) has been made against items (a), (b) and (c) above, which are disputed by the Company. Managerial Remuneration : Managerial remuneration for Managing Director and Non- Whole time Directors 2005-06 Rupees in lakhs (a) Salaries (including Company’s contribution to Provident Fund and Superannuation Fund) (b) Commission (c) Perquisites (d) Directors’ sitting fees 40.66 87.50 17.01 6.15 151.32 2004-05 Rupees in lakhs 33.66 60.00 14.40 5.05 113.11 2 3 Note: The above figures do not include contribution to Gratuity Fund as separate figure not available for the Managing Director , the amortised cost of 5000 Employee Stock Options granted to the Managing Director and retirement benefits of Rs. 11.74 lakhs (2004-2005 : Rs. 11.03 lakhs) paid to a former Managing Director. 4 Major components of Deferred Tax Assets and Liabilities are: Deferred Tax Liability (a) Depreciation (b) Store Launch Expenses carried forward Deferred Tax Assets (a) Unabsorbed capital loss carried forward (b) Other Provisions Net Deferred Tax Liability 2005-2006 Rupees in lakhs 689.89 — 689.89 — 55.35 55.35 634.54 2005-2006 Rupees in lakhs 6.74 4.55 26.23 0.10 7.63 0.36 3.10 2004-2005 Rupees in lakhs 728.79 16.44 745.23 1.02 31.21 32.23 713.00 2004-2005 Rupees in lakhs 4.80 3.91 3.96 0.26 0.66 — — 5 (i) Schedule 1 Item 4 (p) General Expenses include : (a) Auditors’ Remuneration Audit Fees Fees for Taxation matters Other Services Reimbursement of out-of-pocket expenses (b) Provision for doubtful debts/advances (c) Bad debts written off (ii) Debenture Issue Expenses include : Auditors’ Remuneration - Other Services 60 A Enterprise Notes On the Consolidated Balance Sheet and Profit and Loss Account (Contd.) 6 7 Loss on foreign exchange fluctuation (net) debited to the profit and loss account amounted to Rs. 3.17 lakhs (2004-2005 : Credited to the Profit and Loss Account : Rs. 2.20 lakhs). The Company has identified the suppliers who are covered under the “Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993” The liability under the said Act on account of interest is . not ascertained as at 31st March, 2006. However , no claims have been received for interest from suppliers with reference to the above Act. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund. SEGMENTAL REPORTING : 2005-2006 Retailing Current UnalloTotal Investment cated Company Rs. in lakhs Rs. in lakhs Rs. in lakhs Rs. in lakhs A SEGMENT REVENUE 1 External Revenue 40,057.54 290.09 1,563.06 41,910.69 (23,326.72) (304.80) (1,124.37) (24,755.89) 2 Intersegment Revenue — — — — (—) (—) (—) (—) TOTAL SEGMENT REVENUE 40,057.54 290.09 1,563.06 41,910.69 (23,326.72) (304.80) (1,124.37) (24,755.89) B RESULTS 1 Segment Results 2,824.65 290.09 1,507.38 4,622.12 (1,482.88) (304.80) (873.14) (2,660.82) 2 Interest Expense — — 439.83 439.83 (—) (—) (113.21) (113.21) 3 Exceptional Items — — 75.00 75.00 (—) (—) (—) (—) 4 Provision for Taxation — 1,226.65 1,226.65 (—) (—) (558.88) (558.88) 5 Short tax provision for prior years (Net) — — 0.10 0.10 (—) (—) (18.59) (18.59) 6 Net Profit 2,824.65 290.09 (234.20) 2,880.54 (1,482.88) (304.80) (182.46) (1,970.14) C D E F G SEGMENT ASSETS SEGMENT LIABILITIES CAPITAL EXPENDITURE DEPRECIATION AMORTISATION OF STORE LAUNCH EXPENSES NON CASH EXPENSES Provision for Contingencies 33,149.02 (15,524.57) 10,591.29 (4,235.65) 16,529.58 (1,640.20) 990.66 (461.99) 54.52 (101.37) — (—) 3,548.18 (7,588.67) — (—) — (—) — (—) — (—) — (—) 24,762.31 (13,171.10) 22,439.40 (9,214.34) 0.05 (901.69) 4.97 (7.17) — (—) 75.00 (—) 61,459.51 (36,284.34) 33,030.69 (13,449.99) 16,529.63 (2,541.89) 995.63 (469.16) 54.52 (101.37) 75.00 (—) 8 9 H Notes: 1 Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the Company’s organisation structure as well as the differential risks and returns of these segments. 2 Segment Revenue, Results, Assets and Liabilities figures include the respective amounts identifiable to each of the segments. Other unallocable expenditure includes expenses incurred at corporate level, which relate to the Company as a whole. Unallocated assets mainly relates to Long Term Investments. 3 Figures in brackets are in respect of previous year. 61 Fifty-Fourth Annual Report 2005-2006 Notes on the Consolidated Balance Sheet and Profit and Loss Account (Contd.) 10 RELATED PARTY TRANSACTIONS : Related parties are as certified by the Management. 10.1 Related Parties with whom transactions have taken place during the year: Associates: Tata Sons Ltd. (Holds more than 20% of the Share Capital of the Company) Joint Venture Satnam Realtors Private Limited 10.2 Directors of the Company Managing Director Mr. N.N. Tata Mrs. S.N. Tata Mr. N.A. Soonawala Mr. B.S. Bhesania Non Executive Directors Mr. A.D. Cooper Mr. K.N. Suntook Mr. F.K. Kavarana Mr. Zubin Dubash - with effect from 27.10.2005 { Details of remuneration to Directors is disclosed in Note No. 3 on Balance Sheet and Profit and Loss account. 2005-2006 Rupees in lakhs 10.3 10.4 10.5 10.6 10.7 Sales to and Other recoveries from related parties Associates Purchase/other services from related parties Associates Purchase of Fixed Assets from related parties Associates Interest/Dividend received from related parties Associates Joint Venture Interest/Dividend paid to related parties Associates Joint Venture Directors Purchase of Preference Shares Associates Loan Taken Joint Venture Loan Repaid Joint Venture Loan Given Joint Venture Security Deposit Given Associates Security Deposit Receivable as on 31.03.2006 Associates Amount received in respect of Rights Issuse of Partly Covertible Debentures on Allotment Associates Directors Debentures Outstanding as on 31.3.2006 Directors Outstanding balance as on 31.03.2006 Receivable by Company Joint Venture Outstanding balance as on 31.03.2006 Payable by Company Associates Joint Venture ESOP granted during the year (No. of Options) Directors 21.50 245.90 — 34.81 329.04 173.13 0.30 1.52 — 40.00 40.00 1,464.00 30.00 30.00 2,596.98 59.67 0.13 5,385.00 42.44 3.89 5,000 2004-2005 Rupees in lakhs 47.71 216.81 22.00 — 124.57 158.70 — 1.44 200.00 — — 3,921.00 — — — — — 3,921.00 42.14 — — 10.8 10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16 10.17 10.18 62 A Enterprise Notes on the Consolidated Balance Sheet and Profit and Loss Account (Contd.) 11 The Subsidiaries and interest in Joint Venture considered in the consolidated Financial Statements are: Country of Proportionate (a) Particulars of Subsidiaries Origin ownership interest Trent Brands Limited India 100.00 % Fiora Services Limited India Held by Trent Limited 25.67 % Held by Trent Brands Limited (Subsidiary) 64.20 % Satnam Developers and Finance Private Limited India 100.00 % Nahar Theatres Private Limited India 100.00 % Fiora Link Road Properties Private Limited India 100.00 % (b) Investment in Partnership Firm - Landmark Held by Trent Limited Held by Subsidiaries of Trent Limited Interest in Joint Venture Satnam Realtors Private Limited Held by Satnam Developers and Finance Private Limited (Subsidiary) India India 78.00 % 0.95 % (c) India As at 31.3.2006 Rupees in lakhs 50.00 % As at 31.3.2005 Rupees in lakhs 1958.12 14.74 0.15 0.07 1960.50 12.08 958.58 2004-2005 1,35,11,297* 1,35,11,297* — 1,35,11,297* 1,964.49 14.54* 14.54* I II III Assets 1. Investments 2. Current Assets, Loans and Advances a) Cash and Bank b) Loans and Advances 3. Miscellaneous Expenditure (to the extent not written off ) Liabilities 1. Unsecured Loans 2. Current Liabilities Capital Commitments 2623.13 67.22 2.70 0.07 2692.50 0.11 451.85 2005-2006 12 EARNINGS PER SHARE (EPS) : (a) Weighted Average Number of shares outstanding during the year i) For Basic Earnings Per Share ii) For Diluted Earnings Per Share No. of shares for Basic EPS as per a(i) Add: Weighted average outstanding warrants/options deemed to be issued for no consideration No. of shares for Diluted Earnings Per Share (b) Net Profit/(loss) after Tax and Minority Interest available for Equity Share Holders (Rupees in lakhs) (c) Earnings Per Share (Rs.) Face Value of Rs. 10/Basic Diluted * Restated for adjustment on account of Rights Issue 13 Previous year’s figures have been regrouped wherever necessary. Signatures to Schedules ‘1’ to ‘4’ and ‘A’ to ‘M’ and Notes. As per our report attached. For N. M. RAIJI & CO., Chartered Accountants M. N.THAKKAR Partner MRS. H.R.WADIA Company Secretary 1,41,84,244 1,41,84,244 2,94,678 1,44,78,922 2,812.99 19.83 19.43 For and on behalf of the Board, S. N. TATA Chairman N.A. SOONAWALA B.S. BHESANIA A.D. COOPER K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH N. N. TATA } Directors Mumbai, 30th June, 2006 28th June, 2006 Managing Director 63 Fifty-Fourth Annual Report 2005-2006 Consolidated Cash Flow for the year ended 31st March, 2006 Rupees in lakhs A CASH FLOW FROM OPERATING ACTIVITIES Net Profit before Taxes and Exceptional Items Adjustments for : Depreciation Interest (net) Employee Stock Option (Profit)/Loss on Fixed Assets sold/discarded (Net) (Profit)/Loss on sale of Long Term Investments Dividend from Long Term Investments Liability no longer required written back Operating Profit Before Working Capital Changes Adjustments for : (Increase)/Decrease in Current Investments (Increase)/Decrease in Inventories (Increase)/Decrease in Trade and Other Receivables Increase/(Decrease) in Trade and Other Payables Cash generated from operations Direct Taxes Paid B Net Cash from Operating Activities CASH FLOW FROM INVESTING ACTIVITIES Purchase of Fixed Assets Sale of Fixed Assets Purchase of Long Term Investments Sale of Long Term Investments Loans Given Share of Profit from Partnership Interest received Dividend From Long Term Investments Net cash (used in)/from Investing Activities CASH FLOW FROM FINANCING ACTIVITIES Proceeds from Rights Issue of Partly Convertible Debentures (Net of issue expenses) Unclaimed Share application money Proceeds from Borrowings Repayment of Borrowings Interest Paid Dividend Paid Contribution from Minority towards capital in partnership Profit share of Minority in Partnership Net cash used in Financing Activities NET INCREASE IN CASH AND CASH EQUIVALENTS (A+B+C) CASH AND CASH EQUIVALENTS AS AT 01.04.2005 CASH AND CASH EQUIVALENTS ON CONSOLIDATION ADJUSTMENT CASH AND CASH EQUIVALENTS AS AT 31.03.2006 1.4.2005 to 31.3.2006 Rupees in lakhs 4,182.29 995.63 (5.65) 64.75 (86.64) (529.85) (339.78) (9.69) 88.77 4,271.06 4,218.94 (2,304.18) 490.08 2,814.51 5,219.35 9,490.41 (1,600.67) 7,889.74 (2,268.39) 158.90 (26,439.62) 11,114.47 (4,331.15) 0.08 415.30 341.56 (21,008.85) 1.4.2004 to 31.3.2005 Rupees in lakhs 2,547.61 469.16 (218.42) — (9.14) (479.10) (332.83) — (570.33) 1,977.28 (78.40) (1,365.63) 341.74 1,382.81 280.52 2,257.80 (354.82) 1,902.98 (1,585.41) 37.75 (7,044.66) 5,373.10 (3,871.72) — 280.77 331.05 (6,479.12) C 11,647.50 2.05 5,242.00 (2,009.93) (513.44) (964.15) 83.70 (73.34) 13,414.39 295.28 884.54 511.56 1,691.38 — — 5,689.84 — (175.50) (837.39) — — 4,676.95 100.81 783.66 0.07 884.54 Notes: i) All figures in brackets are outflows. ii) Of the above cash and cash equivalent balance, the amount of Rs.71.20 lakhs (2004-05: Rs.68.84 lakhs) is not available for use by the Company as it is under dispute. iii) Previous year’s figures have been regrouped wherever necessary. As per our report attached. For and on behalf of the Board, For N. M. RAIJI & CO., S. N. TATA Chairman Chartered Accountants N.A. SOONAWALA B.S. BHESANIA M. N.THAKKAR MRS. H.R.WADIA A.D. COOPER Directors Partner Company Secretary K.N. SUNTOOK F. K. KAVARANA ZUBIN DUBASH } Mumbai, 30th June, 2006 28th June, 2006 N. N. TATA Managing Director 64 A Enterprise Summarised Financial Statement of Subsidiaries Trent Brands Limited Fiora Services Limited Satnam Developers and Finance Private Limited Nahar Theatres Private Limited As at 31st March, 2006 Rupees in lakhs 20.96 173.33 971.79 Fiora Link Road Properties Private Limited As at 31st March, 2006 Rupees in lakhs 5.00 — 11.50 Capital Reserves and Surplus Total Assets Total Liabilities As at 31st March, 2006 Rupees in lakhs 325.00 1207.85 1,532.85 As at As at 31st March, 31st March, 2005 2006 Rupees Rupees in lakhs in lakhs 325.00 151.91 889.29 1,214.29 470.98 624.48 As at 31st March, 2005 Rupees in lakhs 151.91 414.95 570.33 As at As at 31st March, 31st March, 2006 2005 Rupees Rupees in lakhs in lakhs 5.00 1.00 14.13 8,541.63 1.81 4,022.81 1,532.85 1,214.29 For the year ended 31st March, 2006 Rupees in lakhs 624.48 570.33 For the year ended 31st March, 2005 Rupees in lakhs 329.18 80.20 24.34 8,541.63 4,022.81 For the year ended 31st March, 31st March, 2006 2005 Rupees in lakhs 329.21 19.32 7.00 Rupees in lakhs 126.51 3.84 1.60 31st March, 31st March, 2005 2006 Rupees in lakhs 226.20 202.57 1.78 Rupees in lakhs 431.99 83.48 27.51 971.79 11.50 For the year For the period ended ended 31st March, 24th August, 2006 2005 to 31st March, 2006 Rupees Rupees in lakhs in lakhs 97.53 (33.53) 11.20 0.16 (0.16) — Turnover * Profit before Tax Provision for Taxation Excess/ (Short) tax provision for prior years (Net) Net Profit/(Loss) Interim Dividend Percentage Amount 582.01 565.91 25.00 — 540.91 60 195.00 0.33 201.12 60 195.00 (0.10) 56.03 Nil Nil — 55.86 Nil Nil — 12.32 Nil Nil — 2.24 Nil Nil — (44.74) Nil Nil — (0.16) Nil Nil * represents income from operation and other income 65 Fifty-Fourth Annual Report 2005-2006 Details of Investment – Subsidiary TRENT BRANDS LIMITED Balance as at 1.4.2005 No.of. Shares/Units Long Term Investments : (at Cost less provision for diminution in value) Face Value of Rs 10 each,Unquoted and fully paid-up unless otherwise stated (a) In Subsidiary Company : Fiora Services Limited (Equity shares of Rs. 100/- each ) Total Investments in Subsidiary Company (b) In Partnership Firm Landmark - Capital Account * Landmark - Right In Partnership Total Investment in Partnership Firm (c) In Other Shares 3I Infotech Limited(Quoted) Alok Industries Limited(Quoted) Amara Raja Batteries Limited(Quoted) Andhra Pradesh Paper Mills Limited(Quoted) Andhra Sugars Limited(Quoted) Ansal Properties and Infrastructure Limited.(Quoted) Arvind Mills Limited(Quoted) Arvind Products Limited(Quoted) Balrampur Chini Mills Limited(Quoted) (Equity shares of Rs. 1/- each ) Bajaj Hindustan Limited(Quoted) (Equity shares of Rs. 1/- each ) Bharat Electronics Limited(Quoted) BHEL (Quoted) BPCL(Quoted) Century Textiles and Industries Limited(Quoted) Chambal Fertilisers and Chemicals Limited(Quoted) Cipla Limited(Quoted) (Equity shares of Rs. 2/- each ) Clutch Auto Limited(Quoted) CMC Limited(Quoted) Control Print (India) Limited(Quoted) Cosmo Films Limited(Quoted) D S Kulkarni Develpoers Limited(Quoted) Deepak Fertilizers and Petrochemicals Corpn Limited (Quoted) Dishman Pharmaceuticals and Chemicals Limited (Quoted) (Equity shares of Rs. 2/- each ) EMCO Limited(Quoted) Excel Crop Care Limited(Quoted) (Equity shares of Rs. 5/- each ) FCI Oen Connectors Limited(Quoted) Finolex Industries Limited(Quoted) Gammon India Limited(Quoted) (Equity shares of Rs. 2/- each ) GAIL (India) Limited(Quoted) Graphite India Limited(Quoted) Grasim Industries Limited(Quoted) Great Eastern Shipping Co. Limited(Quoted) Greenply Industries Limited(Quoted) (Equity shares of Rs. 5/- each ) Gujarat Ambuja Cement Limited(Quoted) (Equity shares of Rs. 2/- each ) HEG Limited(Quoted) Hexaware Technologies Limited(Quoted) (Equity shares of Rs. 2/- each ) Hindalco Industries Limited(Quoted) (Equity shares of Rs. 1/- each ) Hindalco Industries Limited (Quoted) (Equity shares of Rs. 1/- each Partly Paid 0.25 per share) Hindustan Lever Limited(Quoted) (Equity shares of Rs. 1/- each ) ICICI Bank Limited(Quoted) IDBI Limited(Quoted) IDFC Limited(Quoted) Indian Oil Corporation Limited(Quoted) Indian Pertochemicals Corporation Limited(Quoted) Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs 97,530 203.42 203.42 — — — — 97,530 203.42 203.42 4.00 99.25 4.00 99.25 103.25 — — — — — — — — — — 5,850 600 4,000 — 2,15,000 18,200 — 700 — — — — — — — — — — 11,000 13,950 750 — — — — — — — — — — — 11,200 11,500 — — — — — — — — — — 30.30 2.10 15.08 — 49.89 49.83 — 3.09 — — — — — — — — — — 19.50 16.89 4.83 — — — — — — — — — — — 50.10 21.42 32,000 65,000 26,447 33,500 15,000 20,000 35,000 2,20,000 30,000 10,000 — — — 23,000 — — 28,000 — 64,500 60,000 23,000 50,000 24,500 3,500 27,500 13,034 55,000 8,000 — — — 12,000 58,000 25,000 25,000 40,000 10,000 2,862 64,000 25,000 25,000 47,000 — — 40.38 47.77 38.46 38.85 25.50 40.40 48.84 40.99 49.88 21.11 — — — 71.43 — — 30.27 — 59.73 49.14 24.75 43.54 47.67 19.50 61.59 54.42 40.14 33.47 — — — 26.00 50.66 23.82 42.12 44.23 14.64 0.69 114.10 133.05 30.51 33.12 — — 32,000 — 17,447 — — 20,000 35,000 84,519 — 10,000 — 600 — 16,500 25,000 15,000 28,000 700 19,500 60,000 23,000 — — 1,000 — 13,034 55,000 4,000 4,000 — 750 — 20,000 — — 40,000 — — 42,000 10,000 25,000 — 2,000 4,000 40.38 — 25.37 — — 40.40 48.84 15.75 — 21.11 — 2.10 — 50.68 5.80 41.07 30.27 3.09 17.19 49.14 24.75 — — 5.57 — 54.42 40.14 16.73 7.09 — 4.83 — 17.47 — — 44.23 — — 74.48 48.53 30.51 — 8.95 7.45 — 65,000 9,000 33,500 15,000 — — 1,35,481 30,000 — 5,850 — 4,000 6,500 1,90,000 3,200 — — 45,000 — — 50,000 24,500 2,500 27,500 — — 4,000 7,000 13,950 — 12,000 38,000 25,000 25,000 — 10,000 2,862 22,000 15,000 — 47,000 9,200 7,500 — 47.77 13.09 38.85 25.50 — — 25.24 49.88 — 30.30 — 15.08 20.75 44.09 8.76 — — 42.53 — — 43.54 47.67 13.93 61.59 — — 16.73 12.41 16.89 — 26.00 33.19 23.82 42.12 — 14.64 0.69 39.63 84.52 — 33.12 41.15 13.97 66 A Enterprise Details of Investment – Subsidiary TRENT BRANDS LIMITED Balance as at 1.4.2005 No.of. Shares/Units Indian Seamless Steels and Alloys Limited(Quoted) — Indo Count Industries Limited(Quoted) — Infosys Technologies Limited(Quoted) 1,000 (Equity shares of Rs. 5/- each ) ITC. Limited(Quoted) — (Equity shares of Rs. 1/- each ) J K Paper Limited(Quoted) — Jupiter Bioscience Limited(Quoted) — Kamat Hotels (India) Limited(Quoted) — Larsen and Toubro Limited(Quoted) — (Equity shares of Rs. 2/- each ) Lupin Limited(Quoted) — M.T.N.L(Quoted) 31,050 Maharashtra Scooters Limited(Quoted) 14,650 Maral Overseas Limited(Quoted) — Mcnally Bharat Engineering Co. Limited(Quoted) — Nagarjuna Construction Co. Limited(Quoted) — (Equity shares of Rs. 2/- each ) NTPC Limited(Quoted) 65,100 Oil and Natural Gas Corporation Limited(Quoted) 7,600 Omax Autos Limited(Quoted) — Opto Circuits (India) Limited(Quoted) — Panacea Biotec Limited(Quoted) — (Equity shares of Rs. 1/- each ) Pioneer Embroideries Limited(Quoted) — Punjab National Bank Limited(Quoted) — Rain Calcing Limited(Quoted) — Rashtriya Chemicals and Fertilizers Limited(Quoted) — Reliance Capital Ventures Limited(Quoted) — (Issued 3,000 Shares in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Communication Ventures Limited(Quoted) — (Issued 3,000 Shares of Rs 5/- each in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Energy Ventures Limited(Quoted) — (Issued 3,000 Shares in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Reliance Industries Limited(Quoted) — Reliance Natural Resources Limited(Quoted) — (Issued 3,000 Shares of Rs 5/- each in lieu of 3,000 Shares held in RIL as per Scheme of Arrangement ) Sanghvi Movers Limited(Quoted) — Satnam Overseas Limited(Quoted) — Satyam Computer Services Limited(Quoted) — (Equity shares of Rs. 2/- each ) Sharon Bio-Medicine Limited(Quoted) — Shree Renuka Sugars Limited(Quoted) — Shreyas Shipping and Logistics Limited(Quoted) — Shringar Cinemas Limited(Quoted) — Siro Plast Limited(Quoted) — Simbhaoli Sugar Mills Limited(Quoted) — Southern Iron and Steel Co. Limited(Quoted) — Srei Infrastructure Finance Limited(Quoted) — State Bank of India Limited(Quoted) 17,850 Steel Authority of India Limited.(Quoted) — Sterlite Industries (India) Limited(Quoted) — (Equity shares of Rs. 5/- each ) Tamilnadu News Prints and Papers Limited(Quoted) — Tata Chemicals Limited(Quoted) 2,000 Tata Investment Corporation Limited(Quoted) 8,250 Tata Iron and Steel Company Limited(Quoted) 15,700 Tata Teleservices Limited(Quoted) 80,000 TVS Srichakra Limited(Quoted) — Ultra Tech Cememt Limited(Quoted) — Union Bank Of India(Quoted) — Varun Shipping Co. Limited(Quoted) — Viceroy Hotel Limited(Quoted) — Webel SL Energy System Limited(Quoted) — West Coast Paper Mills Limited(Quoted) — Williamson Tea Assam Limited(Quoted) — Xpro India Limited(Quoted) — Zuari Industries Limited(Quoted) — Total Investment in Other Co.-Long Term Rs. Lakhs Purchased during the year Rs. Lakhs Sold during the year Rs. Lakhs Balance as at 31.3.2006 Rs. Lakhs — 40.22 — 36.09 46.61 — 36.79 — 23.70 49.62 — — 36.96 27.64 26.42 29.46 37.24 — 26.89 — 14.52 — 32.14 0.31 38.74 1.74 12.36 0.17 59.02 45.04 32.87 50.29 — 46.12 15.53 47.59 51.52 47.07 45.22 58.12 30.90 — 42.68 1.83 18.59 73.38 15.87 19.81 — 25.17 18.55 — 49.26 — — — — 2,224.50 No.of. Shares/Units — 84,000 — 1,15,071 19.60 — — — — — — — 49.62 19.68 — — — 48.99 44.68 — — — — — — — — — — — — — — — — — — — — — — — 86.45 — — — 1.83 18.59 49.21 15.87 — — — — — — — — — — 40,000 65,000 27,000 37,845 2,000 4,000 — — 80,000 33,000 7,500 — 1,000 25,000 10,000 10,000 38,000 7,500 30,000 75,000 3,000 13,000 3,000 8,000 3,000 8,000 71,000 4,000 54,960 5,000 22,525 25,000 65,000 34,000 1,70,000 72,500 — 50,000 7,000 45,000 — 4,125 7,000 — 40,736 10,000 20,000 1,06,000 5,000 24,000 10,565 10,000 75,000 44,000 No.of. Shares/Units 38.20 84,000 40.22 — — 1,000 51.56 12,000 — 27,000 10,402 2,000 1,000 — 14,650 80,000 — — 30,000 4,000 — 10,000 — 38,000 4,000 30,000 — — — — 5,000 — — 20,000 — — 5,000 — — 100 — — — 5,850 — 7,000 — — — — — 15,000 10,000 — 81,000 5,000 — 10,565 10,000 75,000 44,000 No.of. Shares/Units 38.20 — — 1,15,071 19.60 — 15.47 — 34.19 13.89 30.77 7.90 — 19.68 45.79 — — 22.58 25.62 — 18.69 — 39.39 16.59 10.15 — — — — 38.03 — — 18.41 — 28,000 65,000 — 27,443 — 3,000 31,050 — — 33,000 7,500 35,100 4,600 25,000 — 10,000 — 3,500 — 75,000 3,000 13,000 3,000 3,000 3,000 8,000 51,000 4,000 54,960 — 22,525 25,000 64,900 34,000 1,70,000 72,500 12,000 50,000 — 45,000 2,000 12,375 22,700 80,000 25,736 — 20,000 25,000 — 24,000 — — — — 46.61 34.19 50.68 30.77 31.61 — — 45.79 36.96 27.64 — 10.40 37.24 18.69 26.89 39.39 31.11 10.15 32.14 0.31 38.74 1.74 50.39 0.17 59.02 63.45 32.87 50.29 47.45 46.12 15.53 47.66 51.52 47.07 45.22 — 30.90 58.98 42.68 — 0.00 24.17 — 31.35 40.37 25.17 52.60 3.13 49.26 28.45 16.83 47.63 40.60 — 47.45 — — 0.07 — — — 28.33 — 58.98 — — — — — 11.55 40.37 — 34.05 3.13 — 28.45 16.83 47.63 40.60 617.55 67 Fifty-Fourth Annual Report 2005-2006 Details of Investment – Subsidiary TRENT BRANDS LIMITED Balance as at 1.4.2005 No.of. Shares/Units (d) In Mutual Funds Birla Floating Rate Fund Short Term Plan-Dividend DSP Merrill Lynch Balanced Fund-Dividend DSP Merrill Lynch Liquidity Fund-Growth DSP Merrill Lynch Short Term Fund-Growth FT India Monthly Income Plan A Dividend HDFC Cash Mgmt Fund-Savings Plan-Dividend HDFC Cash Mgmt Fund-Savings Plus Plan-Dividend HDFC Equity Fund-Dividend HDFC Prudence Fund-Dividend HDFC Top 200 Fund-Dividend HSBC Equity Fund-Dividend HSBC MIP-Savings Plan-Dividend Tata Floating Rate Fund Short Term Plan-Dividend Tata Liquid SHIP-Mthly Dividend (Units of Rs. 1000/- each ) Tata MIP Plus Fund-Dividend Templeton Floating Rate Fund Short Term Plan-Div Total investment in Mutual Fund Total Investments Aggregate book value of Investments Unquoted Quoted [ Market value Rs.2,713.56 Lakhs (2004-2005: Rs.736.04 Lakhs)] Total 10,21,962 20,49,535 102.23 205.03 2,021.96 2,842.93 10,320 37,698 1.05 3.78 10,32,282 20,87,233 103.28 208.81 — — — — 517.49 3,048.66 32,88,887 16,76,446 — — 8,85,058 — — 2,87,661 16,97,675 2,96,563 6,63,391 31,22,581 20,59,401 — 341.07 200.00 — — 100.00 — — 61.02 301.01 61.42 131.16 312.46 206.56 — 48,269 — 18,51,979 25,91,726 — 48,77,443 36,65,877 39,003 — 41,955 1,82,238 45,116 50,71,464 77,614 5.01 — 307.19 304.39 — 518.68 367.21 14.38 — 13.35 43.57 4.61 510.79 880.89 33,37,156 16,76,446 11,85,223 25,91,726 8,85,058 48,77,443 36,65,877 — 16,97,675 — — 31,67,697 71,30,865 70,394 346.08 200.00 196.59 304.39 100.00 518.68 367.21 — 301.01 — — 317.07 717.35 798.89 — — 6,66,756 — — — — 3,26,664 — 3,38,517 8,45,629 — — 7,220 — — 110.60 — — — — 75.40 — 74.76 174.73 — — 82.00 Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs 2,225.38 617.55 2,842.93 824.16 2,224.50 3,048.66 * Partners Trent Limited Hemalatha Ramaiah Trent Brands Limited Fiora Services Limited Fiora Link Road Properties Private Limited. Satnam Developers and Finance Private Limited. Satnam Realtors Private Limited. Share 78.00% 21.00% 0.80% 0.05% 0.05% 0.05% 0.05% The Partnership Firm Landmark has been converted in to Company Landmark Ltd under part IX of the Companies Act 1956 to carry on the business of Landmark Partnership Firm with effect from 01-04-2006. 68 A Enterprise Details of Investment – Subsidiary FIORA SERVICES LIMITED Balance as at 1.4.2005 No.of. Shares/Units Long Term Investments : (at Cost less provision for diminution in value) Face Value of Rs 10 each,Unquoted and fully paid-up unless otherwise stated (a) In Shares: Trent Limited (Quoted) Total Investment in Shares (b) In Partnership Firm Landmark - Capital Account * Landmark - Right In Partnership Total Investment in Partnership Firm Total Long Term Investments Current Investments (at lower of cost and fair value) Birla Floating Rate Fund-Short Term Plan-Growth HSBC Floating Rate Fund-Short Term-IP-Growth Tata Floating Rate Fund Short Term-Income-Bonus Total of Current Investments Total Investment Aggregate book value of Investments Unquoted Quoted [Market value Rs.1,449.08 lakhs (2004-05 Rs.853.86 lakhs)] Total 131.85 518.32 131.85 575.41 386.47 443.56 11,61,473 14,88,893 11,08,288 125.00 150.00 111.47 386.47 518.32 5,02,136 — — 50.64 — — — — — — 11,61,473 14,88,893 16,10,424 125.00 150.00 162.11 437.11 575.41 131.85 0.25 6.20 — — 0.25 6.20 6.45 138.30 1,59,943 131.85 131.85 — — — — 1,59,943 131.85 131.85 Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs * Partners Trent Limited Hemalatha Ramaiah Trent Brands Limited Fiora Services Limited Fiora Link Road Properties Private Limited. Satnam Developers and Finance Private Limited. Satnam Realtors Private Limited. Share 78.00% 21.00% 0.80% 0.05% 0.05% 0.05% 0.05% The Partnership Firm Landmark has been converted in to Company Landmark Ltd under part IX of the Companies Act 1956 to carry on the business of Landmark Partnership Firm with effect from 01-04-2006. 69 Fifty-Fourth Annual Report 2005-2006 Details of Investment – Subsidiary SATNAM DEVELOPERS AND FINANCE PRIVATE LIMITED. Balance as at 1.4.2005 No.of. Shares/Units Long Term Investments: Long Term Investments: [at cost less provision for dimunition in value] Other Investments : Investment in Partnership firm Land Mark - capital a/c * Land Mark - Right in partnership Total Other Investments Trade Investments: Satnam Realtors Private Limited [unquoted] [Equity shares of Rs.10/- each] Total Trade Investments Total Investments Aggregate book value of Investments Unquoted Quoted Total 0.50 — 0.50 6.95 — 6.95 0.50 0.50 0.50 6.95 5,000 0.50 — — — — 5,000 0.50 — — 0.25 6.20 — — — 0.25 6.20 6.45 Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs * Partners Trent Limited Hemalatha Ramaiah Trent Brands Limited Fiora Services Limited Fiora Link Road Properties Private Limited. Satnam Developers and Finance Private Limited. Satnam Realtors Private Limited. Share 78.00% 21.00% 0.80% 0.05% 0.05% 0.05% 0.05% The Partnership Firm Landmark has been converted in to Company Landmark Ltd under part IX of the Companies Act 1956 to carry on the business of Landmark Partnership Firm with effect from 01-04-2006. 70 A Enterprise Details of Investment – Subsidiary NAHAR THEATRES PRIVATE LIMITED Balance as at 1.4.2005 No.of. Shares/Units Long Term Investments: (at Cost less provision for diminution in value) Face Value of Rs 10/- each, Unquoted and fully paid-up unless otherwise stated Other Investments: In Mutual Funds: Templeton Floating Rate Income Fund Short Term Plan Dividend Reinvestment Templeton India Growth Fund - Growth Franklin India Blue Chip Fund - Growth FT India Life Stage Fund of Funds The 50S Plus Floating Rate Plan Franklin India Prima Plus - Dividend Reinvestment Franklin India Flexi Cap Fund - Dividend Reinvestment HDFC Capital Builder Fund - Dividend HDFC Balance Fund - Dividend HDFC- Prudence Fund - Dividend HDFC Floating Rate Income Fund Short Term Plan -Growth HDFC Floating Rate Income Fund Long Term Plan -Growth HDFC Core and Satellite Fund - Growth HDFC Top 200 Fund - Dividend HDFC Premier Multi - Cap Fund - Growth HDFC Equity Fund - Growth HDFC Floating Rate Income Fund Long Term Plan - Dividend Reinvestment HDFC Floating Rate Income Fund Short Term Plan - Dividend Reinvestment Total Investments Aggregate book value of Investments Unquoted Quoted Total 16,639 9,332 1,18,511 52,043 1,00,000 1,16,020 27,725 1,10,561 2,26,152 8,85,051 89,774 53,937 3,90,672 13,276 34,08,774 4,89,200 5.00 5.00 12.24 11.72 10.00 22.33 6.11 24.89 25.00 96.00 11.00 11.90 39.95 7.26 341.74 49.10 679.22 5,716 49,39,924 0.57 496.38 87,944 11.00 54,375 24,42,908 11.00 272.44 4,65,851 46.69 4,65,851 16,639 9,332 1,18,511 52,043 1,00,000 1,16,020 27,725 1,64,936 26,69,061 8,85,051 177,718 53,937 3,90,672 13,276 34,14,490 54,29,124 46.69 5.00 5.00 12.24 11.72 10.00 22.33 6.11 35.89 297.44 96.00 22.00 11.90 39.95 7.26 342.31 545.48 — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs 679.22 — 679.22 — — — 71 Fifty-Fourth Annual Report 2005-2006 Details of Investment – Subsidiary FIORA LINK ROAD PROPERTIES PRIVATE LIMITED Balance as at 1.4.2005 No.of. Shares/Units Long Term Investments: [at cost less provision for dimunition in value] Other Investments : Investment in Partnership firm Land Mark - capital a/c * Land Mark - Right in partnership Total Other Investments Aggregate book value of Investments Unquoted Quoted Total — — — — — — 0.25 6.20 — — — — 0.25 6.20 6.45 6.45 — 6.45 Rs. Lakhs Purchased during the year No.of. Shares/Units Rs. Lakhs Sold during the year No.of. Shares/Units Rs. Lakhs Balance as at 31.3.2006 No.of. Shares/Units Rs. Lakhs * Partners Trent Limited Hemalatha Ramaiah Trent Brands Limited Fiora Services Limited Fiora Link Road Properties Private Limited. Satnam Developers and Finance Private Limited. Satnam Realtors Private Limited. Share 78.00% 21.00% 0.80% 0.05% 0.05% 0.05% 0.05% The Partnership Firm Landmark has been converted in to Company Landmark Ltd under part IX of the Companies Act 1956 to carry on the business of Landmark Partnership Firm with effect from 01-04-2006. 72