Professional Documents
Culture Documents
TRENT LIMITED
Our Company was incorporated on December 5, 1952 as Lakme Limited under the provisions of the Indian Companies Act, 1913. The name of our
Company was later changed to Trent Limited by way of a fresh certificate of incorporation dated June 15, 1999.
Registered Office: Bombay House, 24 Homi Mody Street, Mumbai - 400 001, Maharashtra, India.
Tel: + 91 22 6665 8282; Fax: + 91 22 2204 2081
Corporate Office: Trent House, G Block, Plot No. C-60, Bandra Kurla Complex, Bandra (East), Mumbai - 400 051, Maharashtra, India.
Tel: +91 22 6700 9000; Fax: +91 22 6700 8100
Contact Person: Mr. M.M. Surti, Company Secretary and Compliance Officer.
Email:investor.relations@trent-tata.com; Website: www.mywestside.com
JM Financial Consultants Private Limited Tata Capital Markets Limited* Link Intime India Private Limited
141 Maker Chambers III, Nariman Point, Mumbai One Forbes, Dr. V.B. Gandhi Marg, C-13, Pannalal Silk Mills Compound,
- 400021 Fort, Mumbai - 400 001 L.B.S. Marg, Bhandup West,
Tel: +91 22 3953 3030 Tel: +91 22 6745 9000 Mumbai - 400 078,
Fax: +91 22 2204 7185 Fax: +91 22 2261 8215 Maharashtra, India
Email: trent.rights@jmfinancial.in Email: investmentbanking@tatacapital.com Tel: +91 22 2596 0320
Investor Grievance Email: Investor Grievance ID: Fax: +91 22 2596 0329
grievance.ibd@jmfinancial.in investors.tcml@tatacapital.com Email: trent.rights@linkintime.co.in
Website: www.jmfinancial.in Contact Person: Mr. Abhishek Jain Website: www.linkintime.co.in
Contact Person: Ms. Lakshmi Lakshmanan Website: www.tatacapital.com Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INM000010361 SEBI Registration No.: INM000011302 SEBI Registration No.: INR 000004058
ISSUE PROGRAMME
ISSUE OPENS ON LAST DATE FOR REQUEST FOR SPLIT APPLICATION FORMS ISSUE CLOSES ON
August 6, 2010 August 13, 2010 August 20, 2010
* Tata Capital Markets Limited is an indirect subsidiary of Tata Sons Limited, which is the promoter of the Issuer. Tata Capital Markets Limited has signed the
due diligence certificate and accordingly has been disclosed as a Lead Manager. Further, in compliance with the proviso to regulation 21A(1) and explanation
(iii) to regulation 21A(1) of SEBI (Merchant Bankers) Regulations, 1992, read with Regulation 110 and Schedule XX of the SEBI ICDR Regulations, Tata Capital
Markets Limited would be involved only in the marketing of the Issue.
TABLE OF CONTENTS
OVERSEAS SHAREHOLDERS................................................................................................................. 1
NO OFFER IN THE UNITED STATES .................................................................................................... 1
PRESENTATION OF FINANCIAL DATA............................................................................................... 3
FORWARD-LOOKING STATEMENTS .................................................................................................. 4
ABBREVIATIONS AND TECHNICAL TERMS ..................................................................................... 5
RISK FACTORS......................................................................................................................................... 10
SUMMARY OF THE ISSUE..................................................................................................................... 22
GENERAL INFORMATION .................................................................................................................... 23
CAPITAL STRUCTURE........................................................................................................................... 29
OBJECTS OF THE ISSUE........................................................................................................................ 34
STATEMENT OF TAX BENEFITS......................................................................................................... 39
HISTORY AND CORPORATE STRUCTURE....................................................................................... 46
MANAGEMENT ........................................................................................................................................ 47
FINANCIAL INFORMATION ................................................................................................................. 52
ACCOUNTING RATIOS AND CAPITALIZATION STATEMENT ................................................. 126
FINANCIAL INDEBTEDNESS .............................................................................................................. 128
OUTSTANDING LITIGATION ............................................................................................................. 129
GOVERNMENT APPROVALS.............................................................................................................. 131
MATERIAL DEVELOPMENTS ............................................................................................................ 132
OTHER REGULATORY AND STATUTORY DISCLOSURES ........................................................ 135
TERMS OF THE ISSUE.......................................................................................................................... 146
RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES ................................... 172
STATUTORY AND OTHER INFORMATION .................................................................................... 173
DECLARATION ...................................................................................................................................... 174
OVERSEAS SHAREHOLDERS
The distribution of this Letter of Offer and the issue of CCPS on a rights basis to persons in certain
jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions.
Persons into whose possession this Letter of Offer may come are required to inform themselves about
and observe such restrictions. The Company is making this Issue of CCPS on a rights basis to the Equity
Shareholders of the Company and will dispatch the Abridged Letter of Offer and Composite Application
Form (“CAF”) to the Equity Shareholders who have an Indian address. Equity Shareholders in foreign
jurisdiction need to provide an Indian address, if not provided earlier, to receive this Letter of Offer. The
securities of the Company are only listed in India.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be
required for that purpose, except that the Draft Letter of Offer has been filed with SEBI for observations.
Accordingly, the CCPS may not be offered or sold, directly or indirectly, and this Letter of Offer may not
be distributed, in any jurisdiction, except in accordance with legal requirements applicable in such
jurisdiction. Receipt of this Letter of Offer will not constitute an offer in those jurisdictions in which it
would be illegal to make such an offer and, in those circumstances, this Letter of Offer must be treated as
sent for information only and should not be copied or redistributed. Accordingly, persons receiving a
copy of this Letter of Offer should not, in connection with the issue of the CCPS or with the Rights
Entitlements, distribute or send this Letter of Offer in or into the United States or any other jurisdiction
where to do so would or might contravene local securities laws or regulations. If this Letter of Offer is
received by any person in any such territory, or by their agent or nominee, they must not seek to
subscribe to the CCPS or the Rights Entitlements referred to in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder shall under any circumstances create
any implication that there has been no change in the Company’s affairs from the date hereof or that the
information contained herein is correct as at any time subsequent to this date.
The rights and the securities of the Company have not been and will not be registered under the United
States Securities Act of 1933, as amended (the “Securities Act”), or any U.S. state securities laws and
may not be offered, sold, resold or otherwise transferred within the United States of America or the
territories or possessions thereof (the “United States” or “U.S.”) or to, or for the account or benefit of,
“U.S. persons” (as defined in Regulation S under the Securities Act (“Regulation S”)), except in a
transaction exempt from the registration requirements of the Securities Act. The rights referred to in this
Letter of Offer are being offered in India, but not in the United States. The offering to which this Letter
of Offer relates is not, and under no circumstances is to be construed as, an offering of any CCPS or
rights for sale in the United States or as a solicitation therein of an offer to buy any of the said CCPS or
rights. Accordingly, the Letter of Offer and the enclosed CAF should not be forwarded to or transmitted
in or into the United States at any time.
Neither the Company nor any person acting on behalf of the Company, except from shareholders, will
accept subscriptions or renunciation from any person, or the agent of any person, who appears to be, or
who the Company or any person acting on behalf of the Company has reason to believe is, either a “U.S.
person” (as defined in Regulation S) or otherwise in the United States when the buy order is made.
Envelopes containing a CAF should not be postmarked in the United States or otherwise dispatched from
the United States or any other jurisdiction where it would be illegal to make an offer under the Letter of
Offer, and all persons subscribing for the CCPS and wishing to hold such CCPS in registered form must
provide an address for registration of the CCPS in India. The Company is making this issue of CCPS on
a rights basis to Equity Shareholders of the Company and the Letter of Offer and CAF will be dispatched
to Equity Shareholders who have an Indian address. Any person who acquires rights and the CCPS will
be deemed to have declared, represented, warranted and agreed, (i) that it is not and that at the time of
subscribing for the CCPS or the Rights Entitlements, it will not be, in the United States, (ii) it is not a “U.S.
person” (as defined in Regulation S), and does not have a registered address (and is not otherwise
located) in the United States, and (iii) is authorised to acquire the rights and the CCPS in compliance
with all applicable laws and regulations.
The Company, in consultation with the Lead Managers, reserves the right to treat as invalid any CAF
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which: (i) does not include the certification set out in the CAF to the effect that the subscriber is not a
“U.S. person” (as defined in Regulation S), and does not have a registered address (and is not otherwise
located) in the United States and is authorized to acquire the rights and the CCPS in compliance with all
applicable laws and regulations; (ii) appears to the Company or its agents to have been executed in or
dispatched from the United States; (iii) where a registered Indian address is not provided; (iv) where the
Company believes that CAF is incomplete or acceptance of such CAF may infringe applicable legal or
regulatory requirements; and the Company shall not be bound to allot or issue any CCPS or Rights
Entitlement in respect of any such CAF; or (v) where no regulatory permission is obtained to apply in the
Issue, when required in applying in the Issue.
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PRESENTATION OF FINANCIAL DATA
Financial Data
Unless stated otherwise, the financial data in this Letter of Offer is derived from the Company’s
consolidated and standalone financial statements which are set out in the section titled “Financial
Information” on page 52 of this Letter of Offer. The Company’s fiscal year commences on April 1 and
ends on March 31 of the following calendar year.
In this Letter of Offer, any discrepancies in any table between the total and the sums of the amounts
listed are due to rounding-off and, unless otherwise specified, all financial numbers in parentheses
represent negative figures.
The Company is an Indian listed company and prepares its financial statements in accordance with
Indian GAAP, which differs significantly in certain respects from IFRS and US GAAP. Neither the
information set forth in our financial statements nor the format in which it is presented should be viewed
as comparable to information prepared in accordance with US GAAP, IFRS or any accounting
principles other than principles specified in the Indian Accounting Standards. Any reliance by persons
not familiar with Indian accounting practices on the financial disclosures presented in this Letter of
Offer should accordingly be limited. We have not attempted to explain those differences or quantify
their impact on the financial data included herein, and we urge you to consult your own advisors
regarding such differences and their impact on our financial data.
All references to “India” contained in this Letter of Offer are to the Republic of India, all references to
the “US” or the “U.S.” or the “USA”, or the “United States” are to the United States of America, its
territories and possessions, and all references to “UK” or the “U.K.” are to the United Kingdom of
Great Britain and Northern Ireland, together with its territories and possessions.
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FORWARD-LOOKING STATEMENTS
We have included statements in this Letter of Offer which contain words or phrases such as “will”,
“may”, “believe”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “seek to”,
“future”, “objective”, “project”, “should” and similar expressions or variations of such expressions, that
are “forward-looking statements”.
All forward-looking statements are subject to risks, uncertainties and assumptions about us that could
cause actual results to differ materially from those contemplated by the relevant forward-looking
statement. Important factors that could cause actual results to differ materially from our expectations
include but are not limited to:
For a further discussion of factors that could cause our actual results to differ, please refer to the section
titled “Risk Factors” on page 10 of this Letter of Offer. By their nature, certain market risk disclosures
are only estimates and could be materially different from what actually occurs in the future. As a result,
actual future gains or losses could materially differ from those that have been estimated. Neither the
Company nor the Lead Managers nor any of their respective affiliates have any obligation to update or
otherwise revise any statements reflecting circumstances arising after the date hereof or to reflect the
occurrence of underlying events, even if the underlying assumptions do not come to fruition. In
accordance with SEBI requirements and requirements of the Stock Exchanges, the Company and Lead
Managers will ensure that investors in India are informed of material developments until the time of the
grant of listing and trading permission by the Stock Exchanges.
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ABBREVIATIONS AND TECHNICAL TERMS
In this Letter of Offer, all references to “Rupees”, “Rs.” or “INR” refer to Indian rupees, the official
currency of India; references to the singular also refer to the plural and reference to a gender also refers
to any other gender, wherever applicable, and the words “lakh” or “lac” mean “100 thousand” and the
word “million” means “10 lakh” and the word “crore” means “10 million” or “100 lakh” and the word
“billion” means “1,000 million” or “100 crore”.
Term Description
Act / Companies The Companies Act, 1956, as amended from time to time.
Act
Depositories Act The Depositories Act, 1996, as amended from time to time.
Depositories The SEBI (Depository and Participant) Regulations, 1996, as amended from time to
Regulations time.
Depository A depository registered with SEBI under the SEBI (Depository and Participant)
Regulations, 1996, as amended from time to time.
DP Depository Participant.
SEBI Securities and Exchange Board of India constituted under the SEBI Act, 1992.
SEBI Act, 1992 Securities and Exchange Board of India, 1992, as amended from time to time.
SEBI Regulations The Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009 issued by SEBI, as amended from time to time.
Takeover Code Securities and Exchange Board of India (Substantial Acquisition of Shares and
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Term Description
Takeovers) Regulations, 1997, as amended from time to time.
Term Description
Abridged Letter of The abridged letter of offer to be sent to the Equity Shareholders with respect to this
Offer Issue in accordance with SEBI Regulations.
Allotment Unless the context otherwise requires, the allotment of CCPS pursuant to the Issue.
Allottees Persons to whom CCPS of the Company are issued pursuant to the Issue.
Application The application (whether physical or electronic) used by an Investor to make a Bid
Supported by authorizing the SCSB to block the Bid Amount maintained with the SCSB.
Blocked Amount /
ASBA
Business Day Any day, other than a Saturday or a Sunday, on which commercial banks in Mumbai
are open for business.
CCPS Series A Series A cumulative compulsorily convertible preference shares of the Company
with a face value of Rs. 10 each.
CCPS Series B Series B cumulative compulsorily convertible preference shares of the Company
with a face value of Rs. 10 each.
Composite The form used by an Investor to make an application for allotment of CCPS in the
Application Form / Issue.
CAF
Consolidated In case of holding of CCPS in physical form, the Company would issue one
Certificate certificate for the CCPS allotted to one folio.
Designated Such branches of the SCSBs which shall collect application forms used by ASBA
Branches Investors and a list of which is available on http://www.sebi.gov.in.
Draft Letter of The draft letter of offer dated May 10, 2010 filed with SEBI for its comments.
Offer
Equity Shares Equity shares of our Company having a face value of Rs. 10 each.
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Term Description
Investor(s) The Equity Shareholders on the Record Date and the Renouncees.
Issue Price Rs. 550 per CCPS Series A and Rs. 550 per CCPS Series B.
Issue Proceeds The proceeds of this Issue that is available to our Company.
Letter of Offer This letter of offer filed with the Stock Exchanges after incorporating SEBI
comments on the Draft Letter of Offer dated May 10, 2010.
Renouncee(s) Any person(s) who has / have acquired Rights Entitlements from an eligible Equity
Shareholders.
Rights Entitlement The number of CCPS Series A and CCPS Series B that an eligible Equity
Shareholder is entitled to in proportion to his / her shareholding in the Company as
on the Record Date.
Self Certified A banker to the Issue registered with SEBI, which offers the facility of ASBA and a
Syndicate Bank(s) list of which is available on http://www.sebi.gov.in.
/ SCSB(s)
Stock Exchange(s) The BSE and the NSE, which are where the Equity Shares are listed and where the
CCPS are proposed to be listed.
7
Issuer and industry related terms
Term Description
Board / Board of The board of directors of the Company or a committee authorized to act on its behalf.
Directors /
Committee of
Directors
Corporate Office Trent House, G Block, Plot No. C-60, Bandra Kurla Complex, Bandra (East), Mumbai
- 400 051, Maharashtra, India.
Our Company / Trent Limited, a company incorporated under the Indian Companies Act, 1913 having
the Company / its Registered Office at Bombay House, 24 Homi Mody Street, Mumbai - 400 001,
Issuer / Trent Maharashtra, India.
Promoter Group Tata Investments Corporation Limited, Aftaab Investment Company Limited, Questar
Investments Limited (now Titan Industries Limited) and Fiora Services Limited.
Registered Office Bombay House, 24 Homi Mody Street, Mumbai 400 001, Maharashtra, India.
Subsidiaries Trent Hypermarket Limited, Landmark Limited, Trent Brands Limited, Fiora Services
Limited, Fiora Link Road Properties Limited, Nahar Theatres Private Limited,
Westland Limited, Landmark E-Tail Private Limited, Trent Global Holdings Limited,
Regent Management Private Limited and Optim Estates Private Limited.
Abbreviations
Term Description
8
Term Description
FEMA Foreign Exchange Management Act, 1999, and the subsequent amendments thereto.
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RISK FACTORS
An investment in our Company’s securities involves a high degree of risk and you should not invest any
funds in this Issue unless you can afford to take the risk of losing all or part of your investment. You
should carefully consider all the information in this Letter of Offer, including but not limited to the risks
and uncertainties described below, before making an investment in our Company’s securities. The
occurrence of any or a combination of the following events could have a material adverse effect on our
business, results of operations, financial condition and prospects and cause the market price of our
Company’s Equity Shares to fall significantly, and you may lose all or part of your investment.
Additionally, our business operations could also be affected by additional factors that are not presently
known to us or that we currently consider as immaterial to our operations. Unless specified or quantified
in the relevant risk factors below, our Company is not in a position to quantify the financial or other
implications of any of the risks described in this section. This Letter of Offer also contains forward-
looking statements that involve risks and uncertainties. Our actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain factors, including
considerations described below and in the section entitled “Forward-Looking Statements” on page 4.
1. Our inability to promptly identify and respond to changing customer preferences or evolving
trends may decrease the demand for our merchandise among our customers, which may adversely
affect our business.
We are in the business of retailing lifestyle products, apparels, books, music, groceries and other
merchandise. We sell our own branded products as well as products of various other brands through our
retail stores across India. We plan our product range based on forecasts of customer buying patterns and
trends. Any mismatch between our planning and actual customer demand may lead to excess inventory,
which may require us to mark down prices of the relevant products, thus lowering our margins in order to
clear such inventory, and may adversely impact our business.
Our success depends partly upon our ability to anticipate and respond to changes in customer preferences
in a timely manner. Further, the success of our own brand label depends on our ability to understand
trends, introduce new products and explore new business opportunities on a regular basis. Our inability
to identify and recognize international and domestic trends and customer preferences, obsolescence of
our merchandise or our failure to meet necessary customer requirements could adversely affect our
business.
2. Under our business model, we carry the inventory on our books prior to the actual sale of the
merchandise to end customers. Inventory levels in excess of customer demand may result in
inventory write-downs and have a material adverse effect on our results of operations and
financial condition.
Under our business model, for our primary retailing formats we carry the inventory on our books till the
sale of the merchandise to the end customer and do not pass the inventory risk to the manufacturer or
supplier. This business model requires us to maintain high inventory levels and is working capital
intensive. Inventory levels in excess of customer demand may result in inventory write-downs and have a
material adverse effect on our results of operations and financial condition.
3. One of the objects of the Issue is to inject funds into our loss-making subsidiary, Trent
Hypermarket Limited.
As a part of our growth strategy, we plan to expand the chain of Star Bazaar Hypermarket stores into
other cities. The Star Bazaar Hypermarket stores are managed by our subsidiary Trent Hypermarket
Limited. We would be investing the proceeds of this Issue in Trent Hypermarket Limited through debt
and/or equity securities and/or loans and/or any other instrument allowed under applicable law. There
can be no assurance that Trent Hypermarket Limited will generate profits in the future or that the
investments made towards additional stores will be profitable.
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4. There have been delays and variation in the utilization of proceeds of our last rights issue
According to the objects of the issue stated in the letter of offer dated April 30, 2007 in connection with
our previous rights issue, the proceeds of such rights issue were to be utilized for setting up new stores,
for the upgradation and expansion of existing stores and for meeting issue expenses. The Star Bazaar
business, which was a division of the Company at the time of the previous rights issue, was transferred to
Trent Hypermarket Limited (“THL”), a wholly-owned subsidiary of the Company, with effect from
August 1, 2008. Consequent to the above change in structure, the Company invested part of the issue
proceeds in THL. The Company also utilized part of the proceeds for investment in the joint venture of
the Company for opening Zara stores.
Also, there have been certain delays in the setting up of stores listed in the objects in such previous letter
of offer vis-à-vis the estimated implementation schedule. In some cases, the Company has identified and
opened new stores in other properties where the delivery of properties (as mentioned in the letter of offer
dated April 30, 2007) was delayed.
We cannot assure you that the objects of the proceeds of the present issue will be implemented in the
manner stated in this Letter of Offer or that the implementation of these objects will not be delayed.
THL is a wholly-owned subsidiary of Trent Limited and was incorporated on July 1, 2008. THL is
engaged in the retail business. The Company transferred its Star Bazaar business, as a going concern, to
THL with effect from August 1, 2008. As a result of such transfer, the Company’s financials as of and
for the periods ended March 31, 2010 and March 31, 2009 may not be comparable.
6. Our products include a range of lifestyle merchandise, apparel and leisure products, the demand
for which may be seasonal due to the occurrence of festivals, including Durga Puja, Diwali,
Christmas and Id, in the third quarter of our financial year. Any material decline in sales during
this period could have a material adverse effect on our profitability and financial condition.
Our business has historically recorded higher sales during the third quarter of our financial year due to
the occurrence of certain festivals, including Durga Puja, Diwali, Christmas and Id, during such period.
Our operating costs, such as employee costs, lease rentals, store-operating costs, distribution and logistics
costs, are mainly fixed. As a result of this, our operating profits are normally higher during this period.
However, consumer spending during such period is conditional upon a variety of factors, including
consumer preference and general economic conditions. Any material decline in sales during this period
could have a material adverse effect on our profitability and financial condition.
7. The success of our business is dependent on supply chain management. Inefficient supply chain
management by us or third parties may adversely affect our business and our results of
operations.
The success of our business is dependent on supply chain management. Ensuring availability of shelf
space for our products requires quick turnaround times and a high level of coordination with suppliers.
Food and other grocery items, which are perishable or have a limited shelf life, require efficient supply
chain management. We outsource to third parties the supply chain management of certain of our
perishable goods. Inefficient supply chain management by us or third parties may lead to the
unavailability or loss of merchandise and could adversely affect our business and our results of
operations.
8. We are dependent on our loyalty programmes for retention of our customers. Any shift in
spending patterns and shopping preferences of our customers may have an adverse impact on our
Company’s performance.
We have initiated several programmes across our stores with the aim of maintaining customer loyalty,
such as the “Clubwest Program” for our Westside chain of stores, the “Landmark” loyalty programme for
our Landmark chain of stores and “Clubcard” for customers at our Star Bazaar stores. Under these
programmes, points are credited for purchases made in our stores. Any shift in spending patterns and
shopping preferences of our customers may have an adverse impact on our Company’s performance.
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9. The success of our business depends on our ability to identify and acquire rights to quality retail
spaces. If we fail to lease or acquire targeted properties, this may adversely affect our business,
operations and profitability.
The success of our business depends on our ability to identify and acquired rights (mostly on a leasehold
basis) to quality retail spaces at appropriate terms and conditions. We compete with other large retailers
to obtain real estate properties. If we fail to lease or acquire targeted properties, we may face delays in
the execution of our expansion programme, which may result in cost overruns or otherwise adversely
affect our business, operations and profitability.
10. Most of the premises occupied by us for our stores are on leasehold basis. If we are unable to
execute or renew lease arrangements, this may have a material adverse effect on our business,
financial performance and profitability.
Apart from five stores which are situated on properties owned by us or our subsidiaries, our stores are
operated from premises which are acquired on a long-term leasehold or leave and license basis or on the
basis of other contractual agreements with third parties. For some of the stores from which we operate,
we have entered into agreements to lease the properties, but have not yet entered into lease deeds. If we
are unable to execute or renew lease arrangements, this may lead to time and cost overruns and may have
a material adverse effect on our business, financial performance and profitability.
11. Any adverse impact on the title or ownership rights or development rights of our landlords from
whose premises we operate may adversely affect the operation of our stores, offices or distribution
centres.
Most of the premises where we have our stores, offices and distribution centres are taken by us on long
term lease or leave and licence or on the basis of other contractual agreements with third parties. We may
continue to enter into such transactions with third parties. Any adverse impact on the title / ownership
rights / development rights of our landlords from whose premises we operate our stores may impede our
business, our operations and our profitability. Also, the sale by the incumbent landlord of their interest
in the said properties could in certain cases adversely impact our contractual rights. Additionally, some
of our lease agreements prescribe a lock-in period. These lock-in periods prevent us from moving our
stores in the event that there are events or circumstances that impede our profitability. Any such event
and such restrictive covenants in our lease agreements affect our ability to move the location of our
stores and may adversely affect our business, financial condition and results of operations.
12. Strategic alliances may result in additional risks and uncertainties in our business.
We have entered into several strategic arrangements, including a joint venture with Industria De Diseño
Textil, Sociedad Anónima (Inditex) to open Zara stores in India; a strategic alliance with Xander
Investment Management (Xander) with respect to retail real estate development; a franchise arrangement
with Benetton India Limited with regard to the operation of Sisley stores in India; a strategic association
(involving a franchise and wholesale supply arrangement) with Tesco PLC for our Star Bazaar
hypermarket business; and a shareholders’ arrangement with a private equity fund namely TVS Shriram
Growth Fund I for our Landmark business. We may face numerous risks and uncertainties in relation to
the above arrangements. In such arrangements (whether existing or proposed), we are subject to
additional risks and uncertainties in that we may depend upon and be subject to liabilities, losses or
damages, including to our reputation. In addition, conflicts or disagreements between us and our strategic
alliance counterparties may adversely impact our businesses.
Present and future acquisitions and strategic alliances may entail certain risks, including ineffective
integration of operations, the inability to maintain key pre-acquisition business relationships and to
integrate new relationships, the inability to retain key employees, increased operating costs, exposure to
unanticipated liabilities, risks of misconduct by employees not subject to our control, difficulties in
realising projected efficiencies, synergies and cost savings, and exposure to new or unknown liabilities.
If any of our alliance counterparties seek exit in full or in part or seek increased participation regarding
the prevailing arrangements, we may have to review and substantially change our strategy with respect to
the concerned business and any such change may adversely affect our business, financial condition and
results of operations. Any future investments, acquisitions or joint ventures may require the allocation of
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significant resources and/or result in significant unanticipated losses, costs or liabilities. In addition,
expansions, acquisitions, strategic alliances or joint ventures may require significant managerial
attention, which may be diverted from our other operations.
13. We may in the future face potential liabilities from lawsuits or claims by customers.
We face the risk of legal proceedings and claims being brought against us by our customers for any
defective product sold or any deficiency in our services to them. The total amount involved in the
customer claims outstanding as on June 30, 2010 against us was Rs.14.50 lakhs. Also, since we have a
large number of customers visiting our stores daily, we could face liabilities should our customers face
any loss or damage due to any unforeseen incident such as fire or an accident in these stores. This may
result in liabilities for our Company and/or financial claims made against our Company as well as loss of
business and reputation. We have taken public and product liability insurance policies, which may not
adequately cover all losses, damages or claims.
We are also required to comply with the provisions of the Standards of Weight and Measures Act, 1976
and the rules made thereunder, such as the Standards of Weights and Measures (Packaged Commodities)
Rules, 1977. Similarly, the Company is required to comply with the provisions of the Prevention of Food
Adulteration Act, 1954 and the rules made thereunder. These regulations prescribe certain standards with
regard to food products and packaging. We are required to meet these standards both for products that we
manufacture as well as for the products made by other manufacturers and sold by us. Failure by us or by
these manufacturers to meet prescribed standards may subject us to regulatory action and may adversely
affect our business and reputation.
14. If our competitors misappropriate our trademarks or other intellectual property rights, it could
have a material adverse effect on our business. Registration applications for some of our
trademarks are pending with the relevant trademark authorities. If we are unable to register such
trademarks, this may adversely affect our ability to protect such marks and the value of the marks
for our in-house brands.
Our success depends on our ability to protect and preserve our intellectual property, including our
trademarks and copyrights. We market our in-house products under our brands. We hold over 30
trademarks, which are registered in our name. We have also applied to register several other trademarks
with the relevant authorities, which applications are currently pending. Any delay or failure to register
these trademarks may adversely affect our ability to protect our in-house brands and may lead to a
dilution of such brands and lower their value. Further, if a competitor copies or otherwise gains access to
our database, we may not be able to compete effectively. The loss of, or our inability to enforce, our
intellectual property rights and other proprietary know-how may adversely affect our business. We may
need to bring legal claims to enforce or protect intellectual property rights. Any litigation, whether
successful or unsuccessful, could result in substantial costs and diversion of resources.
15. We rely on third parties for the supply and transportation of our merchandise from our
warehouses to our stores, which are subject to various uncertainties and risks. Any disruptions in
the supply or transportation of merchandise could materially and adversely affect our business,
financial condition and results of operations.
We rely completely on third parties to transport our merchandise from our warehouses to our stores. We
predominantly rely on road transportation for the delivery of our merchandise. Current transportation
facilities may not be adequate to support our existing and future operations. Further, disruptions of
transportation services due to weather-related problems, strikes, lock-outs, inadequacies in the road
infrastructure or other events could impair our ability to supply our merchandise to our stores. Any
disruptions in the supply or transportation of merchandise could materially and adversely affect our
business, financial condition and results of operations.
16. We rely on our information technology systems and any failure in our systems could adversely
impact our business.
We rely extensively on our information technology systems to provide connectivity across our business
functions through our software, hardware and connectivity systems. Any delay in the implementation of
13
such systems or any disruption in the functioning of existing systems could disrupt our ability to track,
record and analyze the merchandise that we sell and cause disruptions in operations, including, among
others, an inability to process the shipments of goods, process financial information or credit card
transactions, deliver products or engage in similar normal business activities. Any such delay or
disruption may have a material adverse effect on our business.
17. We face competition from existing retailers, online retailers and potential entrants, both domestic
and foreign, to the retail industry that may adversely affect our competitive position and our
profitability.
Loss of market share and increase in competition may adversely affect our profitability. We face
competition from other retailers. Further, we face competition from online retailers who market similar
products as us. With the opening of new malls, many new players are expected to enter organized
retailing and competition could increase. The entry strategy of the new entrants and growth strategy of
existing competitors may not be focussed on profitability in the short term. This could adversely affect
the profitability dynamics of the retail business. Some of our competitors may be able to compete more
effectively because of their access to significantly greater resources, which may lead to increased
competition. Such increase in competition may cause us to increase our marketing expenditure, reduce
prices of our products, thereby reducing margins. With increased competition, the demand for good store
locations may increase, impacting our cost of operation.
Additionally, we may face competition from international players if foreign participation in the retail sector is
further liberalized. Moreover, as the industry is highly fragmented, we also face competition from local
stores who may, for a variety of reasons, such as easier access to, as well as established personal
relationships with, the customers, be able to cater to local demands better than us. Our inability to
compete successfully in our industry would materially affect our business prospects and financial
condition.
18. We are dependent upon other entities for our manufacturing and distribution process.
The manufacturing process for our private labels is outsourced to our vendors. We are exposed to the risk
of our service providers and vendors failing to adhere to the standards set for them by us in respect of
quality and quantum of production and distribution which in turn could adversely affect our net sales and
revenues. In addition, certain of our service providers and vendors are retained on a non-exclusive basis
and may engage in other businesses that may even compete with ours. If our competitors provide better
incentives to our service providers and vendors, it may result in our service providers and vendors
promoting the products of our competitors instead of ours. Also, delays in delivery of merchandise by
our vendors and their financial instability could adversely impact the availability of merchandise in our
stores and have a material adverse effect on our business and financial condition.
19. Certain of our subsidiaries have incurred losses in the last three fiscal years.
As set forth below, some of our subsidiaries have incurred losses during the last three fiscal years (as per
their respective standalone financial statements). They may continue to incur losses in future periods,
which could have an adverse effect on our results of operations.
The details of the subsidiaries which have incurred losses in last three fiscal years are provided in the
following table:
(Rs. in lakh)
Sr. no. Name of Subsidiary Profit/(loss) after tax
For the year ended March 31,
2008 2009 2010
1. Trent Brands Limited 250.82 (81.03) (146.47)
14
4. Trent Global Holdings Limited N.A. (334.20 (6.67)
20. Contingent liabilities, if crystallized, could adversely affect the financial condition of our
Company since the provision made in the books of accounts of our Company may not be
adequate.
Our contingent liabilities based on standalone financial statements as on March 31, 2010 were as
follows:
(Rs. in lakh)
Sr. no. Nature of liability Amount
1. Claims made against the Company not acknowledged as debt 784.29
2. Sales tax, excise and custom demands against which the Company has 61.81
filed appeals
3. Income tax demands against which the Company has filed appeals 362.23
4. Corporate guarantee given on behalf of Subsidiary 1,500.00
5. General provision for contingencies* 205.00
*As a matter abundant caution, a general provision for contingencies of up to Rs. 205.00 lakh has been made till
March 31, 2010 against items 1, 2 and 3 above, which are disputed by the Company.
If any of these contingent liabilities materialise, fully or partly, the financial condition of our Company
could be materially and adversely affected. For more information regarding our contingent liabilities,
please refer to the section titled “Financial Information” on page 52 of this Letter of Offer.
21. Our operations are subject to various business risks and there may be inadequate insurance coverage
to cover our economic losses as well as certain other risks including those pertaining to claims by third
parties and litigation.
Our operations are subject to various risks and hazards which may adversely affect our profitability,
including natural calamities, failure or substandard performance of network equipment, third party
liability claims, labour disturbances, employee frauds, infrastructure failure and terrorist activities.
Though we have, in our opinion, taken adequate safeguards to protect our assets from various perceived
risks, it is possible that our insurance may not provide adequate coverage in certain circumstances. These
may include claims by third parties and litigation. Also, insurance policies are usually subject to certain
deductibles, exclusions and limits on coverage.
If our arrangements for insurance or indemnification are not adequate to cover claims, including those
exceeding policy aggregate limitations or exceeding the resources of the indemnifying party, we may be
required to make payments that may adversely affect our financial condition and results of operations.
22. We are dependent on our management team and key personnel and loss of any key team member
may adversely affect our business performance.
Our business is managed by a core management team that supervises the day-to-day operations, strategy
and growth of our business. If one or more members of our key management team are unable or
unwilling to continue in their present positions, such persons may be difficult to replace and our business,
15
prospects, financial condition and results of operations could be adversely affected.
23. Our business and results of operations could be adversely affected if we are unable to meet our
employees’ needs.
Our success in expanding our business will also depend, in part, on our ability to attract, retain and
motivate appropriately qualified people at various levels. If we fail to successfully manage our
employees’ needs, it could adversely affect our business prospects, financial condition and results of
operations.
24. If we are not able to obtain, renew or maintain the permits and approvals required to operate our
business, this may have a material adverse effect on our business.
Our Company requires certain permits and approvals to operate its businesses and/or facilities, including
such permits required by the environmental regulatory authorities. Failure by our Company to renew,
maintain or obtain the required permits and approvals, and technology licenses in a timely manner or at
all may interrupt our Company’s operations and may have a material adverse effect on our Company’s
results of operations, financial condition and prospects.
25. We are involved in certain legal proceedings that, if decided against us, could have an adverse
effect on our reputation, business prospects and results of operations.
There are several litigations outstanding against our Company. The total amount involved in the legal
proceedings outstanding against us as on June 30, 2010 is Rs. 837.28 lakhs plus interest. In the event of
an adverse outcome in any of the material litigation against our Company, our business, reputation and
results of operations could be adversely affected. For details of outstanding material litigation pending
against our Company, please refer to the section titled “Outstanding Litigation” on page 129 of this
Letter of Offer.
26. We have not entered into any definitive agreements to use the proceeds of the Issue and may use a
part of the Net Proceeds towards general corporate purposes. Further, the use of proceeds to be
raised through this Issue is not subject to monitoring by any independent agency.
We intend to use the proceeds of the Issue for setting up new stores through our subsidiary Trent
Hypermarket Limited, for the redemption of debentures and for general corporate purposes. For further
details, see the section titled “Objects of the Issue” on page 34 of this Letter of Offer. We have not
entered into any definitive agreements to utilise the Net Proceeds. The purposes for which the Net
Proceeds are to be utilised have not been appraised by a bank or financial institution and are based on our
estimates. No independent body will be monitoring the use of proceeds. In addition, our capital
expenditure plans are subject to a number of variables, including possible cost overruns and changes in
management’s views of the desirability of current plans, among others. There can be no assurance that
we will be able to conclude definitive agreements on commercially acceptable terms. Furthermore, we
have not currently placed any orders in relation to our investment in Trent Hypermarket Limited sought
to be funded by the net proceeds of the Issue. As a result, our planned use of the proceeds of the Issue, or
the estimated costs relating to such expansion plans, may change. The store opening plans are dependent
upon various real estate developers, handing over possession of stores on time or obtaining statutory
approvals. This may lead to delay in the store opening plans and cause time and cost overruns. Any
failure to effectively implement our growth strategy could have significant adverse impact on our
business. We have experienced delays in obtaining possession of store sites on time in the past. Further,
we have not identified the general corporate purposes for which we intend to utilise a portion of the net
proceeds of the Issue.
27. Our business plans may need substantial capital and additional financing in the form of debt
and/or equity to meet our requirements.
Our proposed business plans are being funded through this Issue and by our internal cash accruals.
However, the actual amount and timing of future capital requirements may differ from estimates,
including but not limited to unforeseen delays or cost overruns, delays in handing over of properties,
unanticipated expenses, market developments or new opportunities in the industry. Our ability to raise
capital is also restricted due to foreign investment restrictions applicable to the retail industry. We may
16
also not be able to generate internal cash in our Company as estimated and may have to resort to alternate
sources of funds. Sources of additional financing may include commercial borrowings, vendor financing,
or issue of equity or debt instruments. If we decide to raise additional funds through the debt route, the
interest obligations would increase and we may be subject to additional covenants, which could limit our
ability to access cash flows from the operations. If we decide to raise additional funds through equity
route, your shareholding in our Company could get diluted.
28. Renunciation by any shareholder in favour of a non-resident will require prior approval of the
RBI and/or FIPB, subject to certain terms and conditions.
Renunciation of any Rights Entitlement by any Equity Shareholder in favour of a non-resident (other
than renunciation by a resident or FII in favour of an FII) will require prior approval of the RBI and/or
FIPB, subject to certain terms and conditions. There can be no certainty as to the conditions subject to
which the approval may be granted or whether the approval will be granted at all. For more details on the
restrictions applicable to non-residents please refer to the section titled “Terms of the Issue” beginning
on page 146 of this Letter of Offer.
External risks
29. Public places, such as malls in which our stores are located, could be targets for unforeseen acts
of violence (including terrorist acts and riots), which may adversely impact our business.
Any acts of violence (including terrorist acts and riots) in public places, such as malls in which our retail
stores are located, could cause damage to life and property, and also impact consumer sentiment and their
willingness to visit public places, which may adversely impact our business. The financial impact of the
aforesaid risk cannot be reasonably quantified.
30. We rely on various external partners on whom absolute control is not possible.
We rely upon a large number of suppliers to provide us with products and services. If products are not
obtained in a timely manner from suppliers or if the supply of such products is discontinued, our
business, financial condition and results of operations may be adversely affected.
31. Multiplicity of local taxes and levies, including octroi and sales tax, impact the growth of
organized retail and changes in these local taxes and levies may have a material adverse effect on
our business, financial condition and results of operations.
Each state in India has different local taxes and levies, including octroi and sales tax, which enhances the
complexity for organized retailers to operate in these states as well as adds to such retailers’ costs. The
incidence of levies on various products may lead to organized retailers functioning at a sub-optimal level,
adversely impacting their competitiveness against unorganized players. Changes in these local taxes and
levies may have a material adverse effect on our business, financial condition and results of operations.
New taxes imposed by State/Central Government and the implementation of Goods and Services Tax
(GST) and the uncertainty thereof may also materially increase the complexity of our operations and
adversely impact the profitability of our business.
32. Levy of service tax on rentals may have a material adverse effect on our business, financial
condition and results of operations.
The Central Government, in 2007, imposed a service tax on rentals received by landlords. This was
contested by certain retail companies as being unconstitutional. In April 2008, the Delhi High Court
delivered a judgement in favour of such retail companies. Thereafter, the Government of India
challenged such judgement and such appeal is currently pending with the Supreme Court of India. Also,
the GoI has made certain changes in the related income tax provisions in the recent budget for 2010-11.
The incidence of such service tax on rentals could materially impact the costs incurred by the Company
in taking on properties and may have a material adverse effect on our business, financial condition and
results of operations.
17
impact on the Indian economy may have a material impact on the consumer spend and thus on our
financial condition and results of operations. Retail companies lease properties from investors who, in
turn, borrow and invest in real estate. The yield available on the lease of properties is therefore dependent
on the interest rates in the economy. Any change in the banking policy regarding financing of real estate
or rates of interest could impact the availability of properties for retailing and thus have a material
adverse effect on our business.
34. If we are unable to attract and retain qualified personnel, our results of operations may be
adversely affected.
Companies in the retail sector compete with companies in other emerging service sectors, such as
telecommunications and information technology, to hire and retain quality personnel in addition to
competing against companies within the sector. Hence, availability of trained manpower poses a key risk
for the retail sector generally and to our business in particular. There will be further pressure on existing
retail companies as new entrants look for trained manpower at various levels. If we are unable to attract
and retain qualified personnel, our results of operations may be adversely affected.
36. We are subject to regulatory risks and changes in law which may adversely affect our business.
Our operations are subject to regulations framed by various regulatory authorities in India and other
jurisdictions, including regulations relating to foreign investment in India. Compliance with many of the
regulations applicable to us across jurisdictions, including any restrictions on investments and other
activities currently being carried out by our Company, involves a number of risks, particularly in areas
where applicable regulations may be subject to interpretation. If the interpretation of the regulators
and/or other competent authorities varies from our interpretation, we may be subject to penalties and our
business could be adversely affected.
We are also subject to changes in Indian laws, regulations and accounting principles. There can be no
assurance that these laws will not change in the future or that such changes or the interpretation or
enforcement of existing and future laws and rules by governmental and regulatory authorities will not
adversely affect our business and future financial performance.
Foreign investment in multi-brand retail in India is currently prohibited. Any change in the relevant
regulations may require us to take cognizance of the expected change in the competitive landscape,
revisit strategic alliance arrangements as appropriate under the applicable disposition and appropriately
change our strategy with respect to various retail formats.
37. Terrorist attacks or war or conflicts involving countries in which we operate or where our
customers are located could adversely affect the financial markets and adversely affect our
business.
Terrorist attacks and other acts of violence, war or conflicts, particularly those involving India, as well as
the U.S. and the EU, may adversely affect Indian and worldwide financial markets. Such acts may
negatively impact business sentiment, which could adversely affect our business and profitability. India
has from time to time experienced and continues to experience, social and civil unrest, terrorist attacks
and hostilities with neighbouring countries. Also, some of India’s neighbouring countries have
experienced, or are currently experiencing internal unrest. Such events could also create a perception that
investments in companies such as ours involve a higher degree of risk than investments in companies in
other countries. This, in turn, could have a material adverse effect on the market for securities in India,
including our Equity Shares. The consequences of any armed conflicts are unpredictable, and we may not
be able to foresee events that could have an adverse effect on our business.
18
38. We are subject to risks arising from interest rate fluctuations, which could adversely affect our
business, financial condition and results of operations.
Changes in interest rates could significantly affect our business, financial condition and results of
operations. If the interest rates for our existing or future borrowings increase significantly, our cost of
funds will increase. This may adversely impact our results of operations, planned capital expenditures
and cash flows. Although we may in the future enter into hedging arrangements against interest rate
risks, there can be no assurance that these arrangements will successfully protect us from losses due to
fluctuations in interest rates.
39. Natural calamities could have a negative impact on the Indian economy and on our business.
India, Bangladesh, Indonesia and other Asian countries have experienced natural calamities such as
earthquakes, floods, droughts and a tsunami in recent years. Some of these countries have also
experienced pandemics. Prolonged spells of abnormal rainfall and other natural calamities could have an
adverse impact on the economies in which we have operations, which could adversely affect our business
and the price of our CCPS and Equity Shares.
40. The market value of an investment in our CCPS may fluctuate due to the volatility of the Indian
securities markets.
The Stock Exchanges have, in the past, experienced substantial fluctuations in the prices of listed
securities. Such fluctuations and volatility could affect the market price and liquidity of the securities of
Indian companies, including our CCPS and Equity Shares. Moreover, there have been occasions when
secondary market operations have been interrupted and/or affected due to temporary exchange closures,
broker defaults, settlement delays and strikes by brokerage firm employees. In addition, the governing
bodies of the Stock Exchanges have from time to time imposed restrictions on trading in certain
securities, limitations on price movements and margin requirements. Furthermore, from time to time,
disputes have occurred between listed companies and stock exchanges and other regulatory bodies,
which in some cases may have had a negative effect on market sentiment.
SEBI received statutory powers in 1992 to assist it in carrying out its responsibility for improving
disclosure and other regulatory standards for the Indian securities markets. Subsequently, SEBI has
prescribed certain regulations and guidelines in relation to disclosure requirements, insider dealing and
other matters relevant to the Indian securities markets.
41. Changes in the economic policies of the Government of India or political instability may adversely
affect our business and financial condition.
The role of the Indian central and state governments in the Indian economy has remained significant over
the years. Since 1991, the Government has pursued policies of economic liberalisation, including
significantly relaxing restrictions on the private sector. There can be no assurance that these liberalisation
policies will continue in the future. The rate of economic liberalisation could change and specific laws
and policies affecting foreign investment, currency exchange rates and other matters affecting
investments in Indian companies could change as well. A significant change in India’s economic
liberalisation and deregulation policies could adversely affect business and economic conditions in India
generally and our business in particular.
The current Government is a coalition of several parties. The withdrawal of one or more of these parties
could result in political instability. Any political instability could delay the reform of the Indian economy,
which could materially adversely impact our business.
42. Currency exchange rate fluctuations may affect the value of the CCPS.
Fluctuations in the exchange rate between the Rupee and the U.S. dollar will affect the dollar equivalent of
the Rupee price of the Equity Shares on the Stock Exchanges, as well as the U.S. dollar value of the
proceeds a holder would receive upon the sale in India of any Equity Shares. Equity Shareholders may not
be able to convert Rupee proceeds into U.S. dollars or any other currency, and there is no guarantee of the
rate at which any such conversion will occur, if at all.
43. Our transition to IFRS reporting could have a material adverse effect on our reported results of
operations or financial condition.
19
The Ministry of Corporate Affairs, Government of India, through a press note dated January 22, 2010
(the “IFRS Convergence Note”), announced that public companies in India may be required to prepare
annual and interim financial statements under IFRS in accordance with the roadmap for the adoption of,
and convergence with, the IFRS. Pursuant to the IFRS Convergence Note, all companies which (i) are a
part of the Nifty 50 index of the NSE, (ii) of the Sensex 30 index of the BSE, or (iii) which have a net
worth in excess of Rs. 1,000 crore will be required to convert their opening balance sheets as at April 1,
2011 in compliance with the notified accounting standards which are convergent with IFRS. Further,
according to the IFRS Convergence Note, companies which have a net worth of over Rs. 500 crore but
less than Rs. 1,000 crore will be required to convert their opening balance sheets as at April 1, 2013 in
compliance with the notified accounting standards which are convergent with IFRS.
Our financial condition, results of operations, cash flows or changes in shareholders’ equity may appear
materially different under IFRS than under Indian GAAP or our adoption of IFRS may adversely affect
our reported results of operations or financial condition. This may have a material adverse effect on the
amount of income recognised during that period and in the corresponding (restated) period in the
comparative fiscal year/period.
In addition, in our transition to IFRS reporting, we may encounter difficulties in the ongoing process of
implementing and enhancing our management information systems. Moreover, our transition may be
hampered by increasing competition for the relatively small number of IFRS-experienced accounting
personnel available as more Indian companies begin to prepare IFRS financial statements.
45. Our shareholders bear the risk of fluctuation in the price of our shares.
It is impossible to predict whether the price of our CCPS and the Equity Shares arising upon conversion
of the CCPS will rise or fall. Trading prices of our CCPS will be influenced by, among other things, the
financial position of and the results of operations of our Company, as well as political, economic,
financial and other factors.
46. There is no assurance that the CCPS will be listed on the BSE and the NSE in a timely manner or
at all and any trading closures at the BSE and the NSE may adversely affect the trading price of
the CCPS.
In accordance with Indian law and practice, permission for listing of the CCPS will not be granted until
after the CCPS have been issued and allotted. Such permission will require that all other relevant
documents authorising the issue of the CCPS be submitted failing which there could be a delay or failure
to list the CCPS. Any failure or delay in obtaining the approval would restrict the Investor’s ability to
dispose of their CCPS.
Prominent notes:
1. The net worth of the Company as on March 31, 2010 was Rs. 64,050.51 lakh.
20
10, 2010, (the “Issue”). One CCPS Series A is convertible into one Equity Share of the Company
and one CCPS Series B is convertible into one Equity Share of the Company. The issue price for
the CCPS Series A is 55 times the face value of the CCPS Series A and the issue price for the
CCPS Series B is 55 times the face value of the CCPS Series B.
3. The aggregate amount of the related party transactions for the financial year 2009-10 is Rs.
28,432.41 lakhs. For details of transactions with our Group Companies and Subsidiaries, please
refer to the section titled “Financial Information-Related Party Transactions” on page 52 of this
Letter of Offer.
4. There is no financing arrangement whereby the promoter group, the directors of the Promoters, the
Directors and their relatives have financed the purchase by any other person of securities of the
Issuer other than in the normal course of business of the financing entity during the period of six
months immediately preceding the date of filing the Letter of Offer with SEBI.
21
SUMMARY OF THE ISSUE
The following is a summary of the Issue. This summary should be read in conjunction with, and is
qualified in its entirety by, more detailed information in the section tiled “Terms of the Issue” on page
146.
This issue of CCPS is being made by the Company as set forth below
CCPS offered by the One (1) CCPS Series A and one (1) CCPS Series B are each
Company convertible into 1 Equity Share.
Rights Entitlement 4 CCPS (comprising 2 CCPS Series A and 2 CCPS Series B) for every
9 Equity Shares held on the Record Date
Issue price Rs. 550 per CCPS Series A and Rs. 550 per CCPS Series B.
Conversion date(s) The CCPS Series A will be compulsorily and automatically converted
on September 1, 2011 and CCPS Series B will be compulsorily and
automatically converted on September 1, 2012.
Preference shares of the 70,000 redeemable preference shares of Rs. 1,000 each.
Company outstanding prior
to the Issue
Preference shares of the 70,000 redeemable preference shares of Rs. 1,000 each.
Company outstanding after
44,57,082 CCPS Series A with a face value of Rs. 10 each.
the Issue
44,57,082 CCPS Series B with a face value of Rs. 10 each.
Equity Shares outstanding 2,45,13,959 Equity Shares after the conversion of CCPS Series A.
after the conversion of
2,89,71,041 Equity Shares after the conversion of CCPS Series B.
CCPS
Terms of the Issue See “Terms of the Issue” on page 146 of this Letter of Offer.
Use of Issue Proceeds See “Objects of the Issue” on page 34 of this Letter of Offer.
22
GENERAL INFORMATION
Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on
April 26, 2010, the Company has been authorized to make the following offer to the existing Equity
Shareholders:
For further details please refer to the section titled “Terms of the Issue” on page 146 of this Letter of
Offer.
Bombay House,
24 Homi Mody Street,
Mumbai 400 001,
Maharashtra,
India.
Corporate Office
Trent House,
G Block,
Plot No. C-60,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051,
Maharashtra,
India.
Everest House,
100 Marine Drive,
Mumbai - 400 002
Maharashtra,
India.
The Equity Shares of our Company are listed on the BSE and the NSE.
23
Company Secretary and Compliance Officer
Mr. M. M. Surti
Company Secretary
Trent House,
G Block,
Plot No. C-60,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051,
Maharashtra,
India.
Investors may contact the Compliance Officer / Registrar to the Issue for any pre-Issue / post-Issue
related matters including inter alia non-receipt of Letter of Offer / Abridged Letter of Offer, CAF,
allotment advice, share certificate(s), refund order(s) etc.
24
Tel: +91 22 2596 0320
Fax: +91 22 2596 0329
Email: trent.rights@linkintime.co.in
Website: www.linkintime.co.in
Contact Person: Mr. Pravin Kasare
SEBI Registration No.: INR 000004058
Investor may contact the registrar to the issue/compliance officer in case of any pre-Issue/Post Issue
related problems.
Citibank, N.A.
Citigroup Centre
6th Floor, Bandra Kurla Complex,
Bandra (East)
Mumbai - 400 051
Tel: +91 22 4001 5757
Fax: +91 22 2653 5824
Email: s.girish@citi.com, anahita.shah@citi.com
The list of banks that have been notified by SEBI to act as SCSBs for the ASBA process are provided on
http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the CAF, please refer the
above mentioned SEBI link.
Trent Hypermarket Limited, Trent Brands Limited, Fiora Services Limited, Fiora Link Road Properties
Limited, Nahar Theatres Private Limited
25
Tel: +91 22 2287 0068
Fax: +91 22 2282 8646
Email: nmr@nmraiji.com
26
Fax: +230 208 8002
Email: BGuerel@deloitte-mu.com
The responsibilities and coordination roles for various activities in this Issue have been allocated
between the Lead Managers as follows:
27
* TCML is an indirect subsidiary of Tata Sons Limited, which is our Promoter. TCML has signed the due
diligence certificate and accordingly has been disclosed as a Lead Manager. Further, in compliance
with the proviso to regulation 21A(1) and explanation (iii) to regulation 21A(1) of SEBI (Merchant
Bankers) Regulations, 1992, read with Regulation 110 and Schedule XX of the SEBI ICDR Regulations,
TCML would be involved only in the marketing of the Issue.
Monitoring Agency
Since the Issue size does not exceed Rs. 500 crore, the appointment of a monitoring agency as per
Regulation 16 of the SEBI Regulations is not required. The Board of Directors of our Company will
monitor the use of the proceeds of this Issue.
Underwriting
The present Issue is not underwritten.
Impersonation
As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions
of subsection (1) of Section 68A of the Act which is reproduced below:
“Any person (a) who makes in a fictitious name an application to a company for acquiring, or
subscribing for, any shares therein, or otherwise induces a company to allot, or register any
transfer of shares therein to him, or (b) any other person in a fictitious name, shall be punishable
with imprisonment for a term which may extend to five years”
Appraisal Reports
None of the purposes for which the net proceeds are proposed to be utilised have been financially appraised
by any bank or financial institution.
For details of the principal terms of loans and assets charged as security, please see the section titled
“Financial Indebtedness” on page 128.
28
CAPITAL STRUCTURE
Total 56,00,00,000/-
Total 27,05,68,770/-
29
Aggregate nominal Aggregate value at Issue
value price
(in Rs.) (in Rs.)
up^
1. Tata Sons Limited (“TSL”) has confirmed that it intends to subscribe to the full extent of its
Rights Entitlement in the Issue. TSL reserves the right to apply for any or all of the Rights
Entitlement renounced by any of the Promoter Group companies. TSL (either through itself
and/or through its subsidiaries) also intends to subscribe to any unsubscribed portion of the Issue
such that 100% of the Issue is subscribed. As a result of this subscription and consequent
allotment, TSL and its subsidiaries may acquire CCPS over and above their Rights Entitlement,
which may result in an increase of TSL’s shareholding above its current shareholding and
including their Rights Entitlement of CCPS under the Issue and allotment of Equity Shares upon
conversion of the CCPS. This subscription and acquisition of additional CCPS by TSL through
this Issue, if any, and allotment of Equity Shares upon conversion of the CCPS will not result in a
change of control of the management of the Company and shall be exempt in terms of the proviso
to Regulation 3(1)(b)(ii) of the Takeover Code. As such, there is no intention other than meeting
the requirements indicated in the section on “Objects of the Issue” on page 34 of this Letter of
Offer, there is no other intention/purpose for this Issue, including no intention to de-list the
Company, even if, as a result of allotments to the Promoter in this Issue (including conversion of
the CCPS), TSL’s shareholding in the Company exceeds its current shareholding. The Promoter
shall subscribe to the above mentioned unsubscribed portion as per the relevant provisions of law.
Pursuant to this allotment to the Promoter of any unsubscribed portion, over and above its Rights
Entitlement, the Company and the Promoter undertake to comply with the Listing Agreement and
other applicable laws.
2. The Company is in compliance with Clause 40A of the Listing Agreement and is required to
maintain public shareholding of at least 25% of the total number of its listed Equity Shares.
3. No shares of the Company have been acquired by the Promoter or the promoter group in the year
immediately preceding the date of filing the Letter of Offer with the SEBI.
4. The shareholding pattern of the Company as on June 30, 2010 was as follows:
30
Category of shareholder No. of Total Total no. of Total Shares
share- no. of shares held shareholding as a pledged or
holders shares in demate- % of total no. of otherwise
rialized shares encumbered
form
As a % of As a % No. of As a
(A+B) of shares % of
(A+B+C) total
no. of
shares
(A) Shareholding of
Promoter and
Promoter Group
(1) Indian
(2) Foreign
(1) Institutions
(2) Non-institutions
Individuals - -
31
Category of shareholder No. of Total Total no. of Total Shares
share- no. of shares held shareholding as a pledged or
holders shares in demate- % of total no. of otherwise
rialized shares encumbered
form
5. The details of shareholding by the Promoter and the Promoter Group as of June 30, 2010 are as
follows:
Sr. Name of the Total shares held Shares pledged or otherwise encumbered
no. shareholder
Number As a % of Number % of total shares As a % of
grand total held grand total
(A)+(B)+(C) (A)+(B)+(C)
6. The details of shareholders holding more than one per cent of the share capital of the Issuer as of
June 30, 2010 are as follows:
Sr. Name of the shareholder No. of shares Shares as % of total no. of shares
no.
32
Sr. Name of the shareholder No. of shares Shares as % of total no. of shares
no.
7. No securities held by the Promoter and promoter group are locked in or have been pledged or
encumbered.
8. The Issue being a rights issue as per regulation 34(c) of SEBI Regulation, provisions of
promoters’ contribution and lock-in are not applicable.
9. The Issuer had granted 21,825 options under the employees’ stock option scheme to the
employees of the Company on June 17, 2009. The aggregate nominal value of the options was
Rs. 2,18,250 (21,825 options @ Rs. 10/- per option). The eligible employees have exercised their
options and the Issuer has since allotted 21,825 equity shares of the face value of Rs. 10 each on
June 22, 2010.
33
OBJECTS OF THE ISSUE
The details of the proceeds of the Issue are summarised in the table below:
(Rs. in lakh)
Particular Amount
Use of Proceeds
The following table summarises the intended use and deployment of the Net Proceeds:
(Rs. in lakh)
Activities Amount for the period
Total
estimated FY 2011 FY 2012 FY 2013
amount
The fund requirements set out in the table above are based on our current business plan. In view of the
dynamic and competitive environment of the industry in which we operate, we may revise our business
plan from time to time and consequently our capital requirements may also change. We may have to
revise our estimated costs, funding allocation and fund requirements owing to factors such as economic
and business conditions, increased competition, and other external factors which may not be within the
control of our management and may entail rescheduling and revising the planned expenditure and
funding requirement and increasing or decreasing the expenditure for a particular purpose from the
planned expenditure at the discretion of our management.
It is confirmed that the entire objects of the issue could be met through the issue proceeds alone. In case
of any increase in the actual utilisation of funds earmarked for the above objects, such additional funds
for a particular activity will be met by way of such means available to the Company, including from
34
internal accruals, additional equity and/or incremental debt. If the actual utilisation towards any of the
aforesaid objects is lower than what is stated above, such balance will be used for future growth
opportunities, including funding existing objects, if required, general corporate purposes and/or any other
project, activity or initiative the Company may undertake.
THL’s requirement of funds for setting up 23 new stores and the deployment schedule for such funds, are
as detailed below:
(Rs. in lakh)
Activity Amount for the period
6. Computers 1,627.38
35
Sr. no. Particular Total amount
Total 27,500.00
Neither the Promoter, the Directors, nor the promoter group entities have any interest in the leave and
license / lease agreements with property owners or in the proposed direct investment in leasehold /
freehold properties. We might procure equipments from group companies for setting up new stores in the
normal course of business for which payment might be made from issue proceeds.
Business of THL
THL is a wholly-owned subsidiary of Trent Limited and was incorporated on July 1, 2008. THL is
engaged in the retail business. The Star Bazaar Hypermarket business was transferred by the Company as
a going concern to THL with effect from August 1, 2008. The hypermarket model offers a large
assortment of products under one roof and the products offered include staples, food, perishables,
beverages, cleaning aids, health and beauty products, houseware, consumer durables and apparel. Star
Bazaar also retails a large range of fashionable in-house garments for men, women and children,
exclusively available at the store.
THL has entered into a franchise arrangement with Tesco Plc for the Star Bazaar business. It allows THL
access Tesco’s retail expertise and technical capabilities.
Board of Directors:
36
For the financial statements of THL for the 2009-10 financial year, please refer to the section titled
“Financial Information” on page 105.
The Company intends to utilize the Net Proceeds towards repayment of a sum of up to Rs. 12,283 lakh
out of the amount repayable on redemption of the outstanding debentures.
The details of the debentures proposed to be redeemed out of the Net Proceeds are provided in the table
below:
(Rs. in lakh)
Particular Total Repayable on Repayment 2010-11 Repayment 2011-12
The details of the debentures that are to be redeemed out of the Issue Proceeds are as provided below:
NCD-Oct.'08-II NCD-Oct.'09
Redemption date September 2, 2010 October 21, 2011
Face value Rs.10,00,000/- Rs.10,00,000/-
Coupon Nil Nil
Purpose for debenture issue For meeting the general corporate For meeting the general
requirements and for utilising for corporate requirements and for
normal business activities of the utilising for normal business
Company. activities of the Company.
Amount on redemption Rs.12,63,058/- (Rs.10,00,000/- Rs.11,93,556/- (Rs.10,00,000/-
towards face value and towards face value and
Rs.2,63,058/- towards premium Rs.1,93,556/- towards premium
on redemption). on redemption).
The details of the debenture holders as on July 9, 2010, intended to be repaid out of the Issue Proceeds,
are as provided below:
I. NCD-Oct.'08-II:
II. NCD-Oct.'09:
No proceeds of the Issue shall directly or indirectly go to either the Promoters, the Directors, or the
promoter group entities except as disclosed in this chapter.
37
(C) General Corporate Purposes
The Net Proceeds will be utilised towards the aforesaid items and for general corporate purposes.
General corporate purposes may include strategic initiatives and acquisitions, brand building exercises,
opening new stores, further investments and strengthening of our marketing capabilities, subject to
compliance with the necessary provisions of the Companies Act.
Our management, in response to the competitive and dynamic nature of the industry, will have the
discretion to revise its business plan from time to time and consequently our funding requirements and
deployment of funds may also change. This may also include rescheduling the proposed utilization of
Net Proceeds and increasing or decreasing the proposed expenditure for a particular object. In case of a
shortfall in the Net Proceeds, our management may also explore a range of options including utilizing
our internal accruals or seeking debt from future lenders. Our management expects that such alternate
arrangements would be available to fund any such shortfall. Our management, in accordance with the
policies of our Board, will have flexibility in utilizing the Net Proceeds for the purposes mentioned
above and earmarked for general corporate purposes.
The expenses of this Issue include, among others, management fees, selling commission, printing and
distribution expenses, legal fees, statutory advertisement expenses and listing fees. The estimated
expenses of the Issue are as follows:
Bridge Loan
We have not entered into any bridge loan facility that will be repaid from the Net Proceeds.
38
STATEMENT OF TAX BENEFITS
To
The Board of Directors
Trent Limited,
Bombay House,
24, Homi Mody Street,
Mumbai 400 001
Dear Sirs,
We hereby report that the enclosed annexure states the Direct Tax benefits available to TRENT
LIMITED (the “Company”) and its shareholders under the current tax laws presently in force in India.
Several of these benefits are dependent on the Company or its shareholders fulfilling the conditions
prescribed under the relevant tax laws. Hence, the ability of the Company or its shareholders to derive
the tax benefits is dependent upon fulfilling such conditions, which is based on business imperatives the
Company faces in the future, the Company may or may not choose to fulfill.
The benefits discussed in the enclosed are not exhaustive. This statement is only intended to provide
general information to the investors and is neither designed nor intended to be a substitute for
professional tax advice. In view of the individual nature of the tax consequences and the changing tax
laws, each investor is advised to consult their own tax consultant with respect to the specific tax
implications arising out of their participation in the issue.
This certificate is provided solely for the purpose of assisting the addressee Company in discharging its
responsibilities under the Securities and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009.
Y.N. Thakkar
Partner
Membership No. 33329
Place: Mumbai
Date: 1st July, 2010
39
BENEFITS UNDER THE INCOME TAX ACT, 1961
(Hereinafter referred to as the IT Act)
A. TO THE COMPANY
1 The Company is eligible to exemption under section 10(34) in respect of income by way of
dividend received from other Domestic Companies.
2 The Company is eligible to exemption under section 10(35) in respect of income by way of
dividend received from mutual fund specified under section 10(23D) and other specified
undertakings/companies.
3 In accordance with the provisions of section 10(38) of the IT Act, the long-term capital gains
arising on the transfer of securities being equity shares in Companies or units of equity oriented
funds and where such transaction is chargeable to Securities Transaction Tax (STT), shall be
exempt from income tax. However, income by way of long term capital gain of a company shall
be taken into account while computing book profit and income tax payable under Section 115JB
of the IT Act.
4 In respect of rental income of the company chargeable under the head Income from House
Property, a standard deduction of 30% of the annual value is available under section 24(a) of the
IT Act. Consequently depreciation, repairs and maintenance and other related expenditure
(except municipal taxes) in respect of such property will not be allowable as a deduction.
5 The Company will be entitled to claim depreciation allowance at the prescribed rates on tangible
and intangible assets under section 32 of the IT Act. The unabsorbed depreciation, if any, can be
adjusted against any other income and can be carried forward indefinitely for set-off against the
income of future years under Section 32(2) of IT Act.
6 Under section 35 of the IT Act and subject to the provisions specified therein, the Company
would be entitled to a weighted deduction of
• one and three fourth times of the payments made to a scientific research association or
• one and one fourth times of the payments to a Company to be used by it for scientific
research or to a research association which has as its object the undertaking of research in
social science or statistical research or to a university, college or other institution for
research in social science or statistical research.
7 The Company is eligible under section 35D of the IT Act to a deduction equal to one-fifth of
certain specified expenditure, including specified expenditure incurred in connection with the
issue for the extension of undertaking, for period of five successive years subject to the limits
provided and the conditions specified under the said section.
9 The Company will be entitled to claim expenditure incurred in respect of voluntary retirement
under Section 35DDA of the IT Act in five equal annual installments.
10 The Company is eligible to claim exemption in respect of tax on long term capital gains under
section 54EC of the IT Act if the amounts of capital gains are invested in certain specified
bonds / securities subject to the fulfillment of the conditions specified in the section. As per the
proviso to section 54EC (1), the investment in the specified bonds / securities should not exceed
Rs.50 lakhs during any financial year.
11 In case of loss under the head “Income from House Property”, it can be set-off against other
income under Section 71 and the excess loss after set-off can be carried forward for set-off
against income from house property of the next eight Assessment Years under Section 71B.
40
12 In case of loss under the head “Profit and Gains from Business or Profession”, it can be set-off
against other income under Section 71 and the excess loss after set-off can be carried forward
for set-off against business income of the next eight Assessment Years under Section 72.
13 As per the provision of Section 71, if there is a loss under the head “Capital Gains”, it cannot be
set-off with the income under any other head. Section 74 provides that the short term capital
loss can be set-off against both Short term and Long term capital gain. But Long term capital
loss cannot be set-off against short term capital gain. The unabsorbed short term and long term
capital loss can be carried forward for next eight assessment years and can be set off against the
respective capital gains in subsequent years.
14 The short-term capital gains accruing to the company, from the transfer of a short-term capital
asset, being securities equity shares in Companies or units of equity oriented funds and such
transaction is chargeable to STT shall be chargeable to tax as per the provisions of section 111A
of the IT Act @ 15% [plus applicable surcharge and education cess]. If the provisions of Section
111A are not applicable to the short term capital gains then the tax will be charged on such short
term capital gains at the applicable normal rates [plus applicable surcharge and education cess].
15 The long-term capital gains accruing to the company otherwise than as mentioned in 3 above,
shall be chargeable to tax in accordance with and subject to the provisions of section 112 of the
IT Act as follows :
• if long term capital gain is computed with indexation, @ 20% (plus applicable surcharge
and education cess)
• in the case of certain listed shares, securities and units, in a transaction not entered into in a
recognized stock exchange, if long term capital gain is computed without indexation, @
10% (plus applicable surcharge and education cess)
16 In terms of the provisions of Section 115JAA of the IT Act, the difference between the amount
of tax paid under Section 115JB by the company for any assessment year beginning on or after
1st April 2006 and the amount of tax payable as computed in accordance with other provisions
of the IT Act, will be available as credit for ten years succeeding the assessment year in which
such credit becomes allowable in accordance with the provisions of Section 115JAA.
17 As per Section 115-O, the Company has to pay Dividend Distribution Tax (DDT) @ 15% (plus
applicable surcharge and education cess) on the dividend declared to the members. Subject to
the conditions specified in Section 115-O (1A), the company will be allowed to set-off the
dividend received from its subsidiary companies during the financial year against the dividend
distributed by it while computing the DDT.
I) RESIDENTS
1 Members will be entitled to exemption, under section 10(34) of the IT Act in respect of the
income by way of dividend received from the Company.
2 The long-term Capital gains accruing to the members of the Company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid, would be exempt from tax as per the provisions of Section 10(38).
3 The members are entitled to claim exemption in respect of tax on long term capital gains under
sections 54EC of the IT Act, if the amount of capital gains is invested in certain specified
bonds/securities subject to the fulfillment of the conditions specified in those sections. As per
the proviso to section 54EC (1), the investment in the specified bonds / securities should not
exceed Rs. 50 lakhs during any financial year.
41
4 Individuals or HUF members can avail exemption under in respect of tax on long term capital
gains section 54F by utilization of the sales consideration for purchase / construction of a
residential house within the specified time period and subject to the fulfillment of the conditions
specified therein.
5 As per the provision of Section 71, if there is a loss under the head “Capital Gains”, it cannot be
set-off with the income under any other head. Section 74 provides that the short term capital
loss can be set-off against both Short term and Long term capital gain. But Long term capital
loss cannot be set-off against short term capital gain. The unabsorbed short term and long term
capital loss can be carried forward for next eight assessment years and can be set off against the
respective capital gains in subsequent years.
6 The short-term Capital gains accruing to the members of the company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid would be chargeable to tax @ 15% [plus applicable surcharge and education cess] as per
the provisions of section 111A. If the provisions of Section 111A are not applicable to the short
term capital gains then the tax will be charged on such short term capital gains at the applicable
normal rates [plus applicable surcharge and education cess].
7 As per the provisions of section 112 of the IT Act, the long-term capital gains accruing to the
members of the company from the transfer of the shares of the company, otherwise than as
mentioned in point 2 above, shall be charged to tax
- @ 20% (plus applicable surcharge and education cess) after deducting from the sale proceeds
the indexed cost of acquisition or
- @ 10% (plus applicable surcharge and education cess) after deducting from the sale
proceeds the cost of acquisition without indexation.
II) NON-RESIDENTS
1 Non resident members will be entitled to exemption, under section 10(34) of the Income Tax
Act, 1961, in respect of the income by way of dividend received from the Company.
2 In accordance with Section 48, capital gains arising out of transfer of capital assets being shares
in the company shall be computed by converting the cost of acquisition, expenditure in
connection with such transfer and the full value of the consideration received or accruing as a
result of the transfer into the same foreign currency as was initially utilised in the purchase of
the shares and the capital gains computed in such foreign currency shall be reconverted into
Indian currency, such that the aforesaid manner of computation of capital gains shall be
applicable in respect of capital gains accruing/arising from every reinvestment thereafter in, and
sale of shares and debentures of, an Indian company including the Company.
3 The long-term Capital gains accruing to the members of the Company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid, would be exempt from tax as per the provisions of Section 10(38).
4 In accordance with section 112, the tax on capital gains on transfer of listed shares, where the
transaction is not chargeable to STT, held as long term capital assets will be at the rate of 20%
(plus applicable surcharge and education cess). However, based on the proviso to section 112, in
case of listed securities or units, such gains could be taxed at 10% (plus applicable surcharge
and education cess), without indexation benefit, since, as per the provisions of Section 48, a
non-resident will not be eligible for adopting the indexed cost of acquisition and the indexed
cost of improvement for the purpose of computation of long-term capital gain on sale of shares
and debentures.
42
5 The short-term Capital gains accruing to the members of the company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid would be chargeable to tax @ 15% [plus applicable surcharge and education cess] as per
the provisions of section 111A. If the provisions of Section 111A are not applicable to the short
term capital gains then the tax will be charged on such short term capital gains at the applicable
normal rates [plus applicable surcharge and education cess].
6 The members are entitled to claim exemption in respect of tax on long term capital gains under
sections 54EC of the IT Act, if the amount of capital gains is invested in certain specified
bonds/securities subject to the fulfillment of the conditions specified in those sections. As per
the proviso to section 54EC (1), the investment in the specified bonds / securities should not
exceed Rs. 50 lakhs during any financial year.
7 Individuals or HUF members can avail exemption under in respect of tax on long term capital
gains section 54F by utilization of the sales consideration for purchase / construction of a
residential house within the specified time period and subject to the fulfillment of the conditions
specified therein.
8 As per the provision of Section 71, if there is a loss under the head “Capital Gains”, it cannot be
set-off with the income under any other head. Section 74 provides that the short term capital
loss can be set-off against both Short term and Long term capital gain. But Long term capital
loss cannot be set-off against short term capital gain. The unabsorbed short term and long term
capital loss can be carried forward for next eight assessment years and can be set off against the
respective capital gains in subsequent years.
9 Under the provisions of section 90(2) of the IT Act, if the provisions of the Double Taxation
Avoidance Agreement [DTAA] between India and the country of residence of the non-resident
are more beneficial, then the provisions of the DTAA shall be applicable.
10 Non-Resident Indians (as defined in section 115C(e) of the IT Act), being shareholders of an
Indian Company, have the option of being governed by the provisions of Chapter XII-A of the
IT Act, which interalia entitles them to the following benefits in respect of income from shares
of an Indian Company acquired, purchased or subscribed to in convertible foreign exchange :
i) As per the provisions of section 115E of the IT Act, and subject to the conditions specified
therein, long-term capital gains arising on the transfer of Company’s shares, being a
specified asset as defined in Section 115C(f) of the IT Act, will be charged @ 10% (plus
applicable surcharge and education cess).
ii) In accordance with section 115F, subject to the conditions and to the extent specified
therein, long-term capital gains arising from transfer of shares of the company acquired out
of convertible foreign exchange, and on which STT is not payable, shall be exempt from
capital gains tax, if the net consideration is invested within six months of the date of
transfer in any specified new asset as defined in section 115C (f) or any savings certificates
referred to in section 10(4B) of the IT Act.
iii) As per the provisions of section 115G of the IT Act, Non-resident Indians are not obliged to
file a return of income under section 139(1) of the IT Act, if their only source of income is
income from investments or long term capital gains earned on transfer of such investments
or both, provided tax has been deducted at source from such income as per the provisions of
Chapter XVII-B of the IT Act.
43
iv) Under section 115H of the IT Act, where a Non-Resident Indian, in relation to any previous
year, becomes assessable as a resident in India in respect of the total income of any
subsequent year, he/she may furnish to the Assessing Officer a declaration in writing, along
with his/her return of income under section 139 of the IT Act for the assessment year for
which he/she is so assessable, to the effect that the provisions of the Chapter XII-A shall
continue to apply to him/her in relation to investment income derived from any foreign
exchange asset, being an asset of the nature referred to in sub-clauses (ii) to (v) of clause (f
) of section 115C, in which case, the provisions of Chapter XII-A shall continue to apply to
him/her in relation to such income for that assessment year until the transfer or conversion
(otherwise than by transfer) into money of such assets.
v) As per the provision of Section 115-I of the IT Act, when a Non Resident Indian, elects not
to be governed by the provision of Chapter XII-A of the IT Act, then his/her total income
shall be computed and charged in accordance with other provisions of the IT Act.
2 The long-term Capital gains accruing to the members of the Company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid, would be exempt from tax as per the provisions of Section 10(38).
3 Under section 115AD(1)(b)(iii) of the IT Act, Income by way of Long Term Capital Gain
arising from the transfer of securities (otherwise than as mentioned in 2 above) held in the
Company will be taxable @ 10% (plus applicable surcharge and education cess).
4 The short-term Capital gains accruing to the members of the company on sale of the Company’s
shares in a transaction entered into in a recognized stock exchange in India and on which STT is
paid would be chargeable to tax @ 15% [plus applicable surcharge and education cess] as per
the provisions of section 111A.
5 Under section 115AD(1)(b)(ii) of the IT Act, Income by way of Short Term Capital Gain arising
from the transfer of securities (otherwise than as mentioned in 4 above) held in the Company for
a period of less than 12 months will be taxable @ 30% (plus applicable surcharge and education
cess).
6 The foreign currency fluctuation protection and the benefits of indexation as provided in the
first and second provisos to section 48 of the IT Act are not available to Foreign Institutional
Investors.
7 The FIIs are entitled to claim exemption in respect of tax on long term capital gains under
sections 54EC of the IT Act, if the amount of capital gains is invested in certain specified
bonds/securities subject to the fulfillment of the conditions specified in those sections. As per
the proviso to section 54EC (1), the investment in the specified bonds / securities should not
exceed Rs. 50 lakhs during any financial year.
8 Under the provisions of section 90(2) of the IT Act, if the provisions of the Double Taxation
Avoidance Agreement [DTAA] between India and the country of residence of the FII are more
beneficial, then the provisions of the DTAA shall be applicable.
44
IV) PERSONS CARRYING ON BUSINESS OR PROFESSION IN SHARES AND
SECURITIES
In accordance with Section 36(1)(xv), STT paid in respect of taxable securities transaction
entered during the course of business will be available as deduction while computing the taxable
business income. The income arising on transfer of shares of the company will be treated as
business income and subjected to normal rate of tax as per the provisions of the IT Act.
V) MUTUAL FUNDS
In accordance with section 10(23D), any income of:
(i) a Mutual Fund registered under the Securities and Exchange Board of India Act 1992 or
regulations made there under;
(ii) such other Mutual Fund set up by a public sector bank or a public financial institution or
authorised by the Reserve Bank of India subject to such conditions as the Central Government
may, by notification in the Official Gazette, specify in this behalf,
will be exempt from income-tax.
There are no specific tax benefits applicable to retail industry in general and Trent Limited in particular.
45
HISTORY AND CORPORATE STRUCTURE
Our Company made a rights issue on April 30, 2007. The letter of offer for such issue is a material
document which is available for inspection. Please refer to the section titled “Statutory and Other
Information” on page 173 of this Letter of Offer.
46
MANAGEMENT
Under our Company’s Articles of Association, the number of directors of our Company cannot be less
than three or more than 12. At present the Company has six Directors.
Our Company’s Articles of Association provide that the board of directors of Tata Sons Limited (TSL),
our Promoter, has the right to nominate one Director (“Special Director”) to the Board. Mr. Farrokh K.
Kavarana, TSL’s nominee, is the current Special Director. A Director appointed as a Special Director
shall not be liable to retire by rotation or, subject to the provision of the Act, be removed from the office
except by Tata Sons Limited or its nominees or its successors. In addition, our Company’s Articles of
Association provide that its debenture holders have the right to nominate a Director (the “Debenture
Director”) if the trust deeds relating to debentures require the holders to nominate a Director. Currently
there is no Debenture Director on our Board.
47
Sr. Name, Director’s identification number Age Other directorships
no. (“DIN”), designation, term, qualification,
occupation and address
17. Consolidated Coffee Inc., USA
18. Eight O’Clock Coffee Company,
USA
19. Tata Tea (GB) Investments
Limited
20. Tata Indian Infrastructure Fund,
Mauritius
21. Tata Indian Debt Securities Fund,
Mauritius
22. New Star Indian Equity
(Mauritius)
23. Tata Realty Initiatives Fund 1,
Mauritius
24. Tata Capital Pte Limited,
Singapore
25. Tata Capital Advisors Pte Limited,
Singapore
26. Tata Capital Markets Pte Limited,
Singapore
27. Tata Capital PLC, UK
28. Tata India Sharia Fund, Mauritius
29. New Star Fund SICAV,
Luxemburg
48
Sr. Name, Director’s identification number Age Other directorships
no. (“DIN”), designation, term, qualification,
occupation and address
49
Sr. Name, Director’s identification number Age Other directorships
no. (“DIN”), designation, term, qualification,
occupation and address
13. Tata International Limited
Mr. Bakhtiar S. Bhesania is an independent non-executive director in the Company. He has a degree of
Doctor of Philosophy (Law) besides being an Advocate/Solicitor by profession and is a senior partner of
Messrs Mulla & Mulla and Craigie Blunt & Caroe, a renowned law firm in India. He has around 50 years
of varied experience in the field of law.
Mr. Aspy D. Cooper is an independent non-executive director of the Company. He has a Bachelors’
Degree in Commerce, and is a member of the Institute of Chartered Accountants of India by profession.
He has around 45 years of varied experience in field of financial and management consultancy.
Mr. Noel N. Tata is the Company’s Managing Director. He is a Graduate of Sussex University, U.K.
and IEP (INSEAD). He has worked for two years with Nestle, U.K., as a product manager. He has also
worked as a Senior General Manager with Tata Exports Limited (now Tata International Limited) for 13
years. Mr. Noel N. Tata possesses the necessary experience and expertise in the retail business.
Related Directors
None of the Directors are related to each other.
The remuneration paid/ payable to the Managing Director for the year 2009-10 is Rs.195.11 lakhs. The
remuneration payable in excess of maximum remuneration prescribed under section 198 of the
Companies Act, 1956 amounting to Rs.44.27 lakhs is subject to the approval of the Shareholders and the
50
Central Government. For details, please refer to section titled “Financial Information” on page 52 of this
Letter of Offer. This appointment may be terminated by either party by giving the other party one
month’s notice of termination or the Company paying one month’s remuneration in lieu thereof.
51
FINANCIAL INFORMATION
52
AUDITORS’ REPORT
1. We have audited the attached Balance Sheet of TRENT LIMITED, as at 31st March 2010, 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.
2. 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.
3. 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.
(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 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 2010, and taken on
record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010
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 2010;
(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.
Y.N. THAKKAR
Place: Mumbai Partner
Date : June 7, 2010 Membership No. 33329
53
TRENT LIMITED
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and
situation of fixed assets.
(b) 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.
(c) The Company has not disposed off substantial part of fixed assets during the year.
(ii) (a) The inventories have been physically verified by the management at reasonable intervals during the year.
(b) 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.
(c) 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.
(iii) (a) The Company has not granted any loans, secured or unsecured, during the year to companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, sub-
clause (b), (c) and (d) are not applicable.
(b) The Company has not taken any loans, secured or unsecured, during the year from companies, firms or other
parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, sub-
clause (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations given to us, 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 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, 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 2010 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 :
54
Particulars Financial year to which Forum where the Amount
the matter pertains dispute is pending (Rs. In lakhs)
Sales Tax 2000-01, 2002-03, 2003- Deputy Commissioner 17.98
04, 2006-07 (Appeals)
(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.
(xi) The Company has not defaulted in repayment of any dues to financial institutions, banks or debenture holders
during the year.
(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
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 various
facilities availed 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 term loans have been applied for purposes for which the loans were obtained by the Company.
(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 long-term
investment.
(xviii) As per the information and explanations given to us, the Company has not made during the year 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 or charge 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.
Y.N. THAKKAR
Place: Mumbai Partner
Date : June 7, 2010 Membership No. 33329
55
TRENT LIMITED
56
TRENT LIMITED
Profit And Loss Account for the year ended 31st March 2010
Schedule Page Rupees Rupees Previous
in lakhs in lakhs Year
Rupees
in lakhs
INCOME :
1. INCOME FROM OPERATIONS 2 59 58,748.10 51,460.91
2. OTHER INCOME 3 59 2,251.73 3,198.88
3. TOTAL INCOME 60,999.83 54,659.79
EXPENDITURE:
4. OPERATING AND OTHER EXPENSES 1 58 55,362.51 50,777.55
5. DEPRECIATION 1,185.09 923.34
56,547.60 51,700.89
6. INTEREST 4 59 604.82 131.30
7. TOTAL EXPENDITURE 57,152.42 51,832.19
PROFIT BEFORE TAXES AND EXCEPTIONAL ITEM 3,847.41 2,827.60
8. EXCEPTIONAL ITEM (Note 27, Page 79) 1,137.59 -
PROFIT BEFORE TAXES 4,985.00 2,827.60
9. PROVISION FOR TAXATION
CURRENT TAX 814.69 196.39
MAT CREDIT ENTITLEMENT (302.95) (126.30)
FRINGE BENEFIT TAX - 65.00
DEFERRED TAX 545.27 171.85
1,057.01 306.94
PROFIT FOR THE YEAR AFTER TAXES 3,927.99 2,520.66
10. EXCESS TAX PROVISION FOR PRIOR YEARS (NET) 94.04 154.89
NET PROFIT 4,022.03 2,675.55
11. BALANCE BROUGTH FORWARD FROM PREVIOUS YEARS 2,053.67 2,402.63
12. BALANCE TRANSFERRED ON AMALGAMATION 72.67 -
(refer note 26, page 79)
PROFIT AVAILABLE FOR APPROPRIATION 6,148.37 5,078.18
13. APPROPRIATIONS:
(i) GENERAL RESERVE 403.00 268.00
(ii) DEBENTURE REDEMPTION RESERVE 500.00 1,500.00
(iii) PROPOSED DIVIDEND – EQUITY SHARES 1,302.28 1,074.31
(iv) PROPOSED DIVIDEND – PREFERENCE SHARES 0.01 -
(v) TAX ON DIVIDEND 216.29 182.20
(vi) BALANCE CARRIED TO BALANCE SHEET 3,726.79 2,053.67
6,148.37 5,078.18
14. Earning Per share (Rs.) (Note 24, page 78)
Basic 20.53 13.70
Diluted 20.41 13.70
(For Schedule ‘L’ and notes see Pages 69 to 79)
As per our report attached. For and on behalf of the Board
For N. M. RAIJI & CO., F. K. KAVARANA Chairman
Chartered Accountants
B. S. BHESANIA
A. D. COOPER Director
ZUBIN DUBASH
Y.N. THAKKAR M. M. SURTI N. N. TATA Managing Director
Partner Company Secretary
Mumbai, 7th June 2010 Mumbai, 28th May 2010
57
TRENT LIMITED
As at
31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) RAW MATERIALS CONSUMED 177.26 209.36
(2) PURCHASE OF FINISHED PRODUCTS 28,581.93 28,099.70
(3) PAYMENTS TO AND PROVISIONS FOR
EMPLOYEES
(a) Salaries, Wages, Bonus, etc (Refer note Schedule 3,679.80 3,435.74
“B” Page 61)
(b) Contribution to Provident, Superannuation and 209.93 240.93
Gratuity Funds
(c ) Workmen and Staff Welfare Expenses 233.06 248.75
4,122.79 3,925.42
(4) OTHER EXPENSES
(a) Processing Charges 169.23 145.50
(b) Packing Materials Consumed 207.57 212.34
(c) Power and Fuel 2,190.47 2,008.75
(d ) Repairs to Building 1,476.55 1,069.94
(e) Repairs to Machinery 214.95 189.03
(f) Repairs others 457.36 303.75
(g) Rent 3,349.73 2,860.25
(h) Rates and Taxes 588.06 410.84
(i) Insurance 69.78 53.47
(j) Advertisement and Sales Promotion 4,474.41 4,539.20
(k) Travelling Expenses 294.24 238.41
(l) Professional and Legal Charges 539.22 457.75
(m) Printing and Stationery 106.81 75.71
(n) Bank Charges 345.71 301.32
(o) Postage, Telegrams and Telephones 286.59 271.96
(o) General Expenses (Refer Note 5 page 72) 2,289.98 1,904.87
(q) Retail Business Fees 3,393.36 2,970.05
(r) Sales tax paid 2,841.90 2,557.97
(s) Directors’ Fees 11.98 9.70
(t) Commission to Non Whole Time Directors 30.00 21.88
(u) Excess of Cost over Fair Value of Current 0.02 -
Investments
(v) Loss on Sale of Fixed Assets Sold/Discarded 82.91 179.41
(Net)
(w) Loss on Sale of Long Term Investments (Net) 142.72 -
23,563.55 20,782.10
(5) FREIGHT AND FORWARDING CHARGES 655.68 623.27
(6) CHANGES IN FINISHED PRODUCTS
Accretion to stocks deducted 1,738.70 2,862.30
55,362.51 50,777.55
58
TRENT LIMITED
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Interest on Loans and Advances- Gross 1,340.75 945.20
[Tax deducted at source: Rs.153.39 Lakhs
(2008-2009: Rs.211.49 Lakhs)
(2) Interest on Deposits with Banks- Gross 46.18 30.89
[Tax deducted at source: Rs.5.18 Lakhs
(2008-09: Rs.4.00 Lakhs)]
(3) Income from Current Investments – Non trade
(a) Dividend on Current Investments 344.43 1,058.10
(b) Profit on sale of current investment (net) 308.53 431.59
652.96 1,489.70
(4) Interest on Long Term Investments – Gross - 0.50
(5) Dividend on Long Term Investments – Gross
(a) Trade 1.50 3.00
(b) Subsidiaries - 2.23
(c) Others 159.41 268.81
160.91 274.04
(6) Profit on Sale of Long Term Investments (Net) - 408.60
(7) Excess provision no longer required written back 50.93 49.95
2,251.73 3,198.88
59
TRENT LIMITED
As at As at
Rupees 31.03.2010 31.03.2009
in lakhs Rupees Rupees
in lakhs in lakhs
AUTHORISED:
2,40,00,000 Equity Shares of Rs.10/- each 2,400.00 2,000.00
(2008-2009: 2,00,00,000 Equity Shares of
Rs.10/- each)
50,00,000 Unclassified Shares of Rs.10/- each 500.00 500.00
(2008-2009: 50,00,000 Unclassified Shares of
Rs.10/- each)
70,000 Preference Shares of Rs.1000/- each 700.00 -
(2008-2009: Nil)
3,600.00 2,500.00
ISSUED, SUBSCRIBED AND PAID UP:
2,00,35,052 Equity Shares of Rs.10/- each fully 2,003.51 1,953.29
paid-up (2008-2009: 1,95,32,896 Equity Shares
of Rs.10/- each fully paid-up)
70,000 0.1% Cumulative Redeemable 700.00 -
Preference Shares of Rs.1000/- each, fully paid-
up (2008-2009: Nil)
(Refer Note 26, Page 79) 2,703.51 1,953.29
Notes:
1. 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) 70,000 Cumulative Redeemable Preference Shares were allotted as fully paid pursuant to Scheme of Amalgamation
without payment being received in cash.
2. During the year 2005-2006, the Company had issued 13,10,047 warrants to the shareholders along with partly Convertible
Debentures of which 5,62,121 warrants are outstanding as on 31st March 2009. Each 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. During the current year, the Company has issued 5,02,156 Equity Shares of Rs.10/- each at
a premium of Rs. 640/- per share on the conversion of warrants. There are no warrants outstanding as at 31st March 2010.
3. The term of the 0.1% Cumulative Redeemable Preference Shares is of 20 years from 26th March 2010, being the date of
allotment, with an option to the Company to redeem the Preference Shares at any time after 36 months from the date of
allotment. The Board of Directors at their meeting held on 26th April 2010 have fixed 1st June 2013 as the date of redemption
of the Preference Shares.
4. During the year, the Company has granted 21,825 stock options under the Employee Stock Option Scheme. 21,825 stock
Options are outstanding as on 31st March 2010.
60
TRENT LIMITED
As at As at
Rupees 31.03.2010 31.03.2009
in lakhs Rupees Rupees
in lakhs in lakhs
(1) SECURITIES PREMIUM ACCOUNT:
Balance as per last account 31,995.25 33,321.32
Add: Premium on issue of Equity Shares on conversion of 3,213.80 -
warrants
Less: Premium on redemption of debentures (refer note 'b' 638.83 1,306.10
and 'c' of Schedule 'C')
Less: Write off of securities / warrant issue expenses (net 12.82 19.97
of deferred tax)
34,557.40 31,995.25
(2) DEBENTURE REDEMPTION RESERVE
(a) Balance as per last account 4,800.00 3,300.00
(b) Add : Transferred from Profit and Loss Account 500.00 1,500.00
5,300.00 4,800.00
(3) EMPLOYEE STOCK OPTIONS
a) Employee Stock Options Outstanding
Balance as per last account - -
Additions 107.44 -
Lapsed - -
Outstanding 107.44 -
b) Less: Deferred Employee Compensation
Balance as per last account - -
Additions 22.68 -
Amortised/Lapsed - -
Balance 22.68 -
Net Employee Stock Options 84.76 -
(4) GENERAL RESERVE :
(a) Balance as per last account 18,381.57 18,113.57
(b) Add : Transferred from Profit and Loss Account 403.00 268.00
(c) Less : Expenses on Amalgamation (Note 26, Page 79 ) 80.15 -
(d) Less : Deficit on Amalgamation (Note 26, Page 79 ) 1,026.37 -
17,678.05 18,381.57
(5) AMALGAMATION RESERVE :
Arising out of Amalgamation
Opening Balance 1,492.95 1,492.95
Less : Deficit on Amalgamation (Note 26, Page 79 ) 1,492.95 -
- 1,492.95
(6) PROFIT AND LOSS ACCOUNT 3,726.79 2,053.67
61,347.00 58,723.44
Note:
In respect of Options granted under the Company's Employee Stock Options Scheme 2009 (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.84.76 lakhs being the amortisation
of deferred employee compensation.
61
TRENT LIMITED
(a) During the year 2005-2006 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.The Premium payable on
redemption of Debentures amounting to Rs.1283.85 lakhs been fully provided and debited to Securities Premium
Account during 2005-06.These 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.
(b) During the year 2008-2009, the Company issued 500 Redeemable Non Convertible Debentures - Series I of Rs.
10.00 lakhs each and 500 Redeemable Non Convertible Debentures - Series II of Rs. 10.00 lakhs each on private
placement basis. These Debentures are free of interest and the Series I Debentures were redeemed at a premium of
Rs 1.33 lakh each on 1st October 2009 and the Series II Debentures are redeemable at a premium of Rs 2.63 lakh
each on 2nd September 2010. The Premium payable on redemption of these Debentures has been fully provided
and is debited to Securities Premium Account net of deferred tax. These Debentures are secured by way of charge
on immovable property of the Company in favour of the Debenture Trustees as stipulated in the Debenture Trust
deed.
(c) During the current year, the Company issued 500 Redeemable Non Convertible Debentures of Rs. 10.00 lakhs
each on private placement basis. These Debentures are free of interest and are redeemable at a premium of Rs.1.94
lakhs each on 21st October 2011.The Premium payable on redemption of these Debentures has been fully provided
and is debited to Securities Premium Account net of deferred tax.
(d) Of the above secured loans amount payable within one year Rs. 11550.24 lakhs (2008-09: Rs.5000 lakhs).
(e) Of the above unsecured loans, amount repayable within a year Rs. 8501.82 lakhs (2008-2009: Rs.3.42 lakhs).
62
TRENT LIMITED
Notes:
1) Figures in bracket are in respect of previous year.
2) Buildings include improvements to leasehold premises and an amount of Rs.1,050 (2008-2009: Rs.1,050) representing
value of Shares in Co-operative Housing Societies/Condominium.
3) Current year additions include Rs.9,089.78 lakhs of capital work-in-progress acquired consequent to the scheme of
amalgamation which has been capitalised during the year (includes borrowing cost Rs.2,408.51 lakhs). (Refer note 26,
Page 79).
63
TRENT LIMITED
Schedule ‘E’ (Item No.6, Page 56)
INVESTMENTS
Balance as on Purchase during the year Sold during the Year Balance as on
01.04.09 31.03.2010
No. of Rs. in No. of Rs. in No. of Rs. in No. of Rs. in
shares/units lakhs shares/units lakhs shares/units lakhs shares/units lakhs
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 50 0.45 - - - - 50 0.45
Limited
(Equity shares of Rs.900/- each )
Tata International Limited 1,000 2.00 - - - - 1,000 2.00
(Equity shares of Rs.1000/- each )
Tata Services Limited 45 0.45 - - - - 45 0.45
(Equity shares of Rs.1000/- each )
Retailers Association of India 10,000 1.00 - - - - 10,000 1.00
Total Trade Investment 3.90 3.90
64
TRENT LIMITED
Schedule ‘E’ (Item No.6, Page 56)
INVESTMENTS
Balance as on Purchase during the year Sold during the Year Balance as on
01.04.09 31.03.2010
No. of Rupees No. of Rupees No. of Rupees No. of Rupees
shares/units in lakhs shares/units in lakhs shares/units in lakhs shares/units in lakhs
ICICI Bank Ltd. (Quoted) - - - - - - - -
IDBI Ltd. (Quoted) 30,000 50.68 - - 11,133 18.81 18,867 31.87
Larsen & Toubro Ltd(Quoted) 3,000 59.79 - - 3,000 59.79 - -
(Equity shares of Rs. 2/- each ) -1500
bonus ratio 1:1
Maruti Suzuki India Ltd. (Quoted) 10,000 102.19 - - 10,000 102.19 - -
(Equity shares of Rs. 5/- each )
Oil & Natural Gas Corporation 8,000 91.41 - - 8,000 91.41 - -
Ltd.(Quoted)
Reliance Communication Ltd. (Quoted) 9,000 58.57 - - 9,000 58.57 - -
(Equity shares of Rs. 5/- each )
Reliance Industries Ltd. (Quoted) 3,200 86.42 5,624 92.53 3,200 86.42 5,624 92.53
Reliance Petroleum Ltd. (Quoted) 45,000 92.55 - - 45,000 92.55 - -
State Bank of India Ltd. (Quoted) 4,000 94.01 - - 4,000 94.01 - -
Sterlite Industries (India) Ltd. (Quoted) 3,500 36.33 - - 3,500 36.33 - -
(Equity shares of Rs. 2/- each )
Tata Investment Corporation Limited - - 25,700 83.53 - - 25,700 83.53
(Quoted)
Optim Estates Pvt Ltd -10% - - 10,00,000 100.00 - - 10,00,000 100.00
Redeemable pref. shares
Tata Sons Limited 20,000 200.00 - - - - 20,000 200.00
7% Cumulative Redeemable Preference
Shares of Rs. 1,000/- each
Tata Investment Corpn.ZCCB-Part A 12,850 38.55 - - 12,850 38.55 - -
(warrants of Rs.300/- each)
Tata Investment Corpn.ZCCB-Part B 12,850 44.98 - - 12,850 44.98 - -
(warrants of Rs.350/- each)
Tata Investment Corpn.ZCCB-Warrants 12,850 - - - - - 12,850 -
(warrants of Rs.0/- each)
Total Investment in Other 1,174.80 507.93
Companies
65
TRENT LIMITED
Schedule ‘E’ (Item No.6, Page 56)
INVESTMENTS
Balance as on Purchase during the year Sold during the Year Balance as on
01.04.09 31.03.2010
No. of Rupees No. of Rupees No. of Rupees No. of Rupees
shares/units in lakhs shares/units in lakhs shares/units in lakhs shares/units in lakhs
Current Investments
Other Investments at Cost (unquoted
and fully paid unless otherwise stated)
UTI Fixed Income Interval Fund Srs II - - 1,00,57,148 1,005.71 - - 1,00,57,148 1,005.71
Qrtly intvl plan V Inst. Divid
ICICI Pru Banking & PSU Debt Fund - - 1,00,41,308 1,005.51 - - 1,00,41,308 1,005.51
wkly Divid. rivst
Kotak Quarterly interval plan series 3 Div - - 1,00,40,777 1,004.08 - - 1,00,40,777 1,004.08
Kotak Quarterly interval plan series 7 - - 50,20,540 502.06 - - 50,20,540 502.06
Div.
Birla Sunlife interval income Fund-instl- - - 1,00,00,000 1,000.00 - - 1,00,00,000 1,000.00
qrtrly-Srs 2 Divid.
Birla Sunlife interval income Fund-instl- - - 1,00,00,000 1,000.00 - - 1,00,00,000 1,000.00
qrtrly-Srs 1 Divid.
Tata Fixed Income Portfolio Fund Scheme - - 50,00,000 500.00 - - 50,00,000 500.00
B3 Inst. Qtrly.
Birla Sunlife Savings Fund -Instt-prm. 1,50,83,877 2,505.28 1,68,64,340 2,842.91 3,19,48,217 5,348.19 - -
Growth
Birla Sunlife Savings Fund -Instt-. DWR - - 5,86,23,875 5,865.81 5,86,23,875 5,865.81 - -
Birla Sunlife Cash Plus-Instt- - - 4,75,46,272 6,842.51 4,75,46,272 6,842.51 - -
premiumGrowth
Birla Sunlife Floating rate Fund Long term - - 11,173,130 1,119.90 - - 1,11,73,130 1,119.90
INST. WDR.
DSP Blackrock Money Manager Fund 84,552 1,041.70 24,268 303.04 1,08,820 1,344.74 - -
Inst.. Growth (Units of Rs 1000/- each)
DSP Blackrock Liquidity Fund Inst. - - 23,647 303.01 23,647 303.01 - -
Growth (Units of Rs 1000/- each)
HDFC Liquid Fund-Premium Plan- - - 33,65,870 600.00 33,65,870 600.00 - -
Growth
HDFC Cash Management Fund- Treasury 88,60,535 1,700.00 1,50,32,759 2,926.21 2,38,93,294 4,626.21 - -
Advantage Plan - Growth
HDFC Cash Management Fund- Treasury - - 6,84,47,301 6,857.66 5,93,63,234 5,947.40 90,84,067 910.26
Advantage Plan - WDR
HDFC Cash Management Fund- Savings - - 4,50,86,355 8,475.84 4,50,86,355 8,475.84 - -
Plan - Growth
Kotak Flexi Debt Scheme - Inst.Growth 98,88,490 1,062.90 98,88,465 1,079.43 1,97,76,955 2,142.34 - -
Kotak Liquid Institutional Premium- - - 2,33,77,525 4,279.28 2,33,77,525 4,279.28 - -
Growth
Kotak Floater Long term wkly divid - - 3,94,30,344 3,973.61 3,74,00,621 3,769.05 20,29,722 204.54
ICICI prudential Inst. Liquid Plan Super 26,94,422 350.00 5,41,71,656 9,061.56 5,68,66,078 9,411.56 - -
inst. Growth (Units of Rs 100/- each)
ICICI prudential Inst. Liquid Plan Super - - 3,00,011 300.08 3,00,011 300.08 - -
inst. DDR
ICICI Pru. Flexible Income Plan Growth 94,29,799 1,534.64 2,06,97,804 3,413.35 3,01,27,603 4,947.99 - -
ICICI Pru. Flexible Income Plan WDR - - 4,79,35,732 5,053.02 4,79,35,732 5,053.02 - -
ICICI Pru. Flexible Income Plan WDR - - 45,45,867 4,792.16 35,08,565 3,698.66 10,37,302 1,093.50
(Units of Rs 100/- each)
Tata Liquid Super High Inv.Fund- 30,985 503.66 5,90,465 9,803.53 6,00,842 9,957.19 20,608 350.00
Appreciation (Units of Rs.1000/- each)
Tata Floater Fund- Growth 1,72,37,619 2,250.29 3,96,49,491 5,250.00 5,68,87,110 7,500.29 - -
Tata Floater Fund- WDR - - 6,86,77,192 6,923.92 6,09,80,042 6,147.86 76,97,150 776.06
UTI Liquid Cash Plan-Instt-Growth - - 5,92,732 8,757.90 5,92,732 8,757.90 - -
(Units of Rs.1000/- each)
UTI Treasury Advantage Fund -Instt- 1,70,173 2,000.00 2,41,901 2,883.31 4,12,074 4,883.31 - -
Growth (Units of Rs 1000/- each)
66
TRENT LIMITED
Schedule ‘E’ (Item No.6, Page 56)
INVESTMENTS
Balance as on Purchase during the year Sold during the Year Balance as on
01.04.09 31.03.2010
No. of Rupees No. of Rupees No. of Rupees No. of Rupees
shares/units in lakhs shares/units in lakhs shares/units in lakhs shares/units in lakhs
UTI Treasury Advantage Fund -Instt- - - 5,50,003 5,504.71 4,49,565 4,499.47 1,00,438 1,005.24
DWR (Units of Rs 1000/- each)
Total Current Investment 12,948.47 11,476.85
Total Investment 39,585.16 39,703.68
Note:
1. The Company has given an undertaking to the lenders of Landmark Limited restricting its rights of sale of shares of Landmark Limited.
2. The Company has given 29,00,000 (2008-2009 : 39,00,000) shares of Landmark Limited as security for the Non Convertible Debentures
issued by the company aggregating to Rs.6550.24 lakhs.
As at 31.03.2010 As at 31.03.2009
Rupees Rupees
in lakhs in lakhs
Stocks
(1) Raw Materials 165.35 80.48
(2) Packing Materials 63.43 37.28
(3) Finished Products (Note 26, page 79) 9,240.37 8,420.44
(4) Stocks-in-transit 152.57 39.72
(5) Stores & spares 26.61 19.58
9,648.33 8,597.50
As at 31.03.2010 As at 31.03.2009
Rupees Rupees
in lakhs In lakhs
(1) Debts outstanding for a period exceeding six 123.27 109.81
months
(2) Other Debts 222.31 326.98
345.58 436.79
(3) Less: Provision for Doubtful Debts 36.96 60.51
308.62 376.28
Considered Good – Unsecured 308.62 376.28
Considered Doubtful – Unsecured 36.96 60.51
345.58 436.79
67
TRENT LIMITED
Schedule forming part of the Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Cash on hand (including Cheques on hand 188.86 165.51
Rs.Nil) (2008-2009 : Rs. 10.50 lakhs)
(2) Balances with Scheduled Banks
(a) Current Accounts 407.68 715.83
(b) Fixed Deposit Accounts 249.90 332.59
(c) Unpaid Dividend/Interest Accounts 65.25 74.34
722.83 1,122.76
911.69 1,288.27
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Security Deposits
Deposits for premises - subsidiaries 412.50 412.50
Deposits for premises - others 5,087.13 5,138.48
Other Deposits 170.76 119.21
5670.39 5,670.19
(2) Loans
Loan to subsidiaries 14,060.00 15,396.47
Other loans 5,464.88 6,553.24
19,524.88 21,949.71
(3) Other Loans and Advances recoverable in cash or in 6,229.61 776.68
kind or for value to be received
(4) Balances with Customs/Port Trust etc. 95.84 90.49
(5) Receivables from subsidiary 278.09 277.95
(6) Other Receivables 443.08 648.18
(7) Bills of Exchange 114.20 114.20
(8) Advances on Capital Account 258.70 398.80
(9) Advance payment of taxes-net of provision 1,090.97 1,084.63
(10) MAT Credit Entitlement 741.54 126.30
34,447.30 31,136.71
(11) Less: Provision for Doubtful Advances 211.91 177.49
34,235.39 30,959.22
Considered Good – Secured - -
Considered Good – Unsecured 34,235.39 30,959.22
Considered Doubtful – Unsecured 211.91 177.49
34,447.30 31,136.71
68
TRENT LIMITED
Schedule forming part of the Balance Sheet
Schedule ‘J’ (Item No.8 (a), Page 56)
LIABILITIES
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Sundry Creditors- (Note 7 page 72) 10,073.24 8,776.41
(2) Subsidiaries 7.28 64.48
(3) Security Deposits Received 1,522.03 218.72
(4) Investor Education and Protection Fund
(Appropriate amount shall be transferred to "Investor
Education and Protection Fund" if and when due
(a) Unclaimed Dividend 63.29 72.91
(b) Unclaimed application money received by the 4.82 5.71
Company for allotment of Rights Issue and due for
refund
(c) Unclaimed Debenture Interest 1.95 1.43
70.06 80.05
11,672.61 9,139.66
69
TRENT LIMITED
Schedule forming part of the Balance Sheet and Profit and Loss Account
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, packing materials and stores and spares: 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
Defined Contribution Plans
6.1 a) Company’s contributions during the year towards Government administered Provident Fund, Family Pension
Fund, ESIC and Labour Welfare Fund are charged to the Profit and Loss Account as incurred.
b) Company’s contributions during the year towards Superannuation to the Superannuation Trust administered
by the Life Insurance Company are recognized in the Profit and Loss Account as incurred. (Refer Note No 21
(d), Page No. 76)
6.2 Defined Benefit Plans
a) Company’s Contribution towards Gratuity made under the Group Gratuity Schemes with Life Insurance
Companies are determined based on the amounts recommended by Life Insurance Companies as per actuarial
valuation. (Refer Note 21(a), Page No. 75)
b) In the case of certain employees, contribution towards Provident Fund is made to an approved trust
administered by the Company. The interest rate payable to the members of the trust shall not be lower than the
statutory rate of interest declared by the Central Government under the Employees Provident Fund and
Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company.
c) Provision for other retirement / post retirement benefits in the forms of pensions, medical benefits and long
term compensated absences (leave encashment) has been made on the basis of actuarial valuation.
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 Profit and Loss Account.
8.0 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.
9.0 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.
10.0 Taxation
10.1 Current Tax comprises of Provision for Income Tax, Fringe Benefits Tax and Wealth Tax is determined in
accordance with the provisions of Income Tax Act, 1961 and the Wealth Tax Act, 1957.
10.2 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.
11.0 Leases
Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the
lessor are recognised as operating leases. Lease rents under operating leases are recognised in the Profit and Loss
Account on straight line basis.
12.0 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in connection with the borrowing of funds and is
considered as revenue expenditure for the year in which it is incurred. Borrowing cost attributed to the
acquisition/improvement of qualifying capital assets and incurred till the commencement of commercial use of
the assets is capitalised as cost of the assets.
70
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account
1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 2402.78 lakhs
(2008-2009: Rs.513.80 lakhs).
2. Contingent Liabilities :
(a) Sales tax, Excise and Customs demands against which the Company has filed appeals Rs.61.81 lakhs (2008-2009:
Rs.56.20 lakhs) - net of tax Rs.41.28 lakhs (2008-2009: Rs.37.10 lakhs).
(b) Claims made against the Company not acknowledged as debts : Rs.784.29 lakhs (2008-2009 : Rs.657.59 lakhs)
(c) Income-tax demands against which the Company has filed appeals: Rs.362.23 lakhs (2008-2009:Rs. 219.98
lakhs).
(d) Corporate Guarantee given on behalf of Subsidiary: Rs.1500.00 lakhs (2008-2009 :Rs. Nil )
(e) As a matter of abundant caution, a general provision for contingencies of Rs. 205.00 lakhs (2008-2009: Rs.205.00
lakhs) has been made against items (a), (b) and (c) above, which are disputed by the Company.
3. Managerial Remuneration :
Managerial remuneration for Managing Director and Non- Whole time Directors
2009-10 2008-09
Rupees Rupees
in lakhs in lakhs
(a) Salaries (including Company's Contribution to Provident Fund and
Superannuation Fund) 74.88 70.30
(b) Commission 105.00 21.88
(c) Perquisites 45.23 39.12
(d) Directors' sitting fees 11.98 9.70
237.09 141.00
Note:
(a)The above figures do not include contribution to Gratuity Fund as separate figure is not available for the
Managing Director, the amortised cost of 10000 Employee Stock Options granted to Managing Director and
retirement benefits of Rs.14.40 lakhs (2008-2009: Rs.14.40 lakhs) paid to a former Managing Director.
(b) The remuneration to the Managing Director in excess of the maximum remuneration prescribed under Section
198 of the Companies Act 1956 amounting to Rs.44.57 lakhs is subject to the approval of the Shareholders and the
Central Government.
Computation of Net Profit in accordance with Section 309 (5) of the Companies Act, 1956 :
2009-10 2008-09
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
Profit before taxes as per Profit and Loss Account 4,985.00 2,827.60
Add:
(i) Depreciation as per accounts 1,185.09 923.34
(ii) Managerial Remuneration 237.09 141.00
(iii) Provision for doubtful debts/advances 10.86 60.59
1,433.04 1,124.93
6,418.04 3,952.53
Less:
(i) Depreciation as per Section 350 1,185.09 923.34
(ii) Capital Profit 1,303.39 840.19
(iii) Diminution in Value of Finished Goods Stock (Refer Note 26-
Page No 79) 918.77 -
3,407.25 1,763.53
Net Profit as per Section 309(5) 3,010.79 2,189.00
Commission:
(a) Managing Director 75.00 -
(b) Non-Wholetime Directors- 1% of Net Profit Rs.3010.79 lakhs
(2008-09: Rs.2,189.00 lakhs) restricted to Rs. 30.00 lakhs (2008-
2009 Rs.21.88 lakhs) 30.00 21.88
105.00 21.88
71
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
4. Major components of deferred tax assets and liabilities are:
2009-10 2008-09
Rupees Rupees
in lakhs in lakhs
Deferred Tax Liability
Depreciation 840.93 659.44
Less: Deferred Tax Assets
Retirement Benefits 209.99 177.15
Premium on Redemption of Debentures 342.17 421.87
Other Provisions 96.95 38.50
649.11 637.52
Net Deferred Tax Liability 191.82 21.92
2009-10 2008-09
Rupees Rupees
in lakhs in lakhs
5. (i) Schedule 1 Item 4 (p) General Expenses include:
(a) Auditors' Remuneration -
Audit Fees 8.27 6.07
Fees for Taxation matters 1.10 1.12
Other Services 11.88 6.51
Reimbursement of out-of-pocket expenses 0.68 1.19
(b) Provision/ Write Off for doubtful debts/advances (net) 45.82 60.59
(ii) Expenses on Amalgamation /Warrant Issue include auditors 0.88 -
remuneration -other services
6. Gain on foreign exchange fluctuation (net) credited to the profit and loss account amounted to Rs. 10.68 lakhs
(2008-2009 : Loss Rs. 11.11 lakhs).
7. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for
more than 45 days as at 31st March, 2010. This information as required to be disclosed under the Micro, Small
and Medium Enterprise Development Act, 2006 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 as at 31st
March, 2010 except Rs. 3.99 lakhs (2008-2009 : Rs.3.63 lakhs) which is held in abeyance due to legal cases
pending.
9. Right Issue (July 2007) proceeds of Rs. 157.41 crores have been fully utilised towards object of the issue.
10. Provision for taxation is inclusive of the tax impact on account of the securities / warrant issue expenses and
premium on redemption of debentures debited to the Securities Premium Account. The Company has taken credit
for MAT which it is entitled on future taxable profits.
11. (a) The company has entered into lease agreements for assets taken on operating lease which range between three
years & six years. These are renewable by mutually agreeable terms. The future minimum lease payments under
non-cancellable operating leases are as under :
2009-10 2008-09
Rupees Rupees
in lakhs in lakhs
(i) Not later than one year 2,548.16 1,739.06
(ii) Later than one year and not later than five years 3,866.09 3,580.22
(iii) Later than five years Nil Nil
(b) The company has entered into lease agreements for assets given on operating lease which range between three years
& five years. These are renewable by mutually agreeable terms. The future minimum lease payments under non-
cancellable operating leases are as under :
2009-10 2008-09
Rupees Rupees
in lakhs in lakhs
(i) Not later than one year 1,657.99 Nil
(ii) Later than one year and not later than five years 1,848.69 Nil
(iii) Later than five years Nil Nil
72
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
12. (a) In Accordance with the amendments to Clause 32 of Listing Agreement, advances in the nature of loan to
subsidiaries are as under
Name of Company Balance as Maximum Amount
at 31.3.2010 Outstanding during the
year
Rs. in lakhs Rs. in lakhs
Fiora Services Limited Subsidiary 100.00 100.00
Fiora Link Road Properties Subsidiary 3,202.50 3,202.50
Limited
Nahar Theatres Private Subsidiary 757.50 757.50
Limited
Landmark Limited Subsidiary - 4239.97
Trent Hypermarket Limited Subsidiary 10,000.00 10,000.00
(b) Details of Investments made by the loanees in the shares of the Company & subsidiaries are as under
Investor company Invested in Rs. lakhs
Fiora Link Road Properties
Limited Landmark Limited 3,206.23
Fiora Services Limited Landmark Limited 6.55
Fiora Services Limited Trent Limited 131.85
Notes:
1) Loan to Fiora Link Road Properties Limited (to the extent of Rs. 3202.50 lakhs) are free of interest.
2) All above loans are repayable on demand.
3) Investment by Fiora Services Limited in shares of Trent Limited are prior to it becoming the subsidiary of Trent
Limited and prior to grant of loan.
4) Investment by Fiora Services Limited in shares of Landmark Limited are prior to grant of loan.
13. LICENSED/INSTALLED ANNUAL CAPACITIES AND PRODUCTION :
Class of Goods Unit of Licensed Capacity Installed Capacity Actual Production
Measure
As at As at As at As at As at As at
31.3.2010 31.3.2009 31.3.2010 31.3.2009 31.3.2010 31.3.2009
Apparels Nos. in N.A N.A Nil Nil 1.30 1.03
lakhs
Others * *
* Production represents goods manufactured by third parties.
** Refer note 14 (i) below.
14. SALES, PURCHASES, OPENING AND CLOSING STOCKS (1.4.2009 to 31.3.2010)
SALES PURCHASES OPENING STOCK CLOSING STOCK
Class of Goods Rupees in Rupees in Rupees Rupees
lakhs lakhs in lakhs in lakhs
Apparels/Household items etc. 54,176.46 28,527.38 8,420.44 9,240.37
(49,548.49) (28,042.32) (7,711.02) (8,420.44)
Others 83.94 54.55
(88.08) (57.38)
Total 54,260.40 28,581.93 8,420.44 9,240.37
(49,636.57) (28,099.70) (7,711.02) (8,420.44)
Notes:
(i) Given the nature of the retailing operations of the Company and having dealt with a large variety of products it is not
practical to ascertain the quantitative information in respect of each products and hence the same is not furnished.
(ii) Closing stock is after adjusting samples, free gifts, damaged goods and shortages.
(iii) Figures in brackets are in respect of previous year.
73
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
* Represents sale of goods which are collected in Foreign Currency through International Credit Cards, as
certified by the collecting bankers.
20. SEGMENT REPORTING
The main business of the Company is retailing. All other activities of the Company are incidental to the main
business. Accordingly, there are no separate reportable segments in terms of the Accounting Standard 17 on
“Segment Reporting” issued by ICAI.
74
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
21 EMPLOYEE BENEFITS
(a) Defined benefit plans- Gratuity Defined Benefit Plans - Gratuity, Pension and Medical Benefits (As per
actuarial valuations as on 31st March 2010)
Rupees in Lakhs
GRATUITY (Fully funded) Pension and medical
LIC Administered Trust Company administered benefits (non funded)
As on 31st As on 31st As on 31st As on 31st As on 31st As on 31st
March 2010 March March March March March
2009 2010 2009 2010 2009
I Change in Obligation during the year
ended 31st March 2010
1 Present value of obligations as at 79.98 72.44 92.43 72.13 193.96 181.62
beginning of year
2 Present value of obligations transferred - (19.34) - - - -
3 Liability taken over from other trust - 2.78 - - - -
4 Liability extinguished - (4.81) - - - -
5 Interest cost 8.26 5.80 7.02 6.24 14.05 14.09
6 Current Service Cost 23.25 23.25 6.45 5.12 - -
7 Actuarial (gain)/ Loss on obligations (2.93) 8.72 (14.61) 8.94 (6.34) 14.52
8 Benefits Paid (11.93) (8.84) - - (16.71) (16.27)
9 Present value of Defined Benefit 96.63 79.99 91.29 92.43 184.97 193.96
Obligation at the end of the year
II Change in Assets during the Year
ended 31st March 2010
1 Plan assets at the beginning of the year 95.47 72.79 97.27 73.03 - -
2 Expected return on plan assets 7.16 8.27 7.30 5.79 - -
3 Contributions by Employer 5.55 23.25 - 17.00 16.71 16.27
4 Actual benefits paid (11.93) (8.84) - - (16.71) (16.27)
5 Actuarial Gains/ (Losses) 1.55 - (5.27) 1.45 - -
6 Plan Assets at the end of the year 97.80 95.47 99.29 97.27 - -
III Net Asset/(Liability) recognized in the
Balance Sheet as at 31st March 2010
1 Present Value of Defined Benefit 96.63 79.98 91.29 92.43 184.97 193.96
Obligation as at 31st March 2010
2 Fair value of plan assets as at 31st March 97.80 95.47 99.29 97.27 - NA
2010
3 Fund status (Surplus/(Deficit)) 1.17 15.49 8.00 4.84 (184.97) (193.96)
4 Net Assets / (Liability) as at 31st March 1.17 15.49 8.00 4.84 (184.97) (193.96)
2010
IV Expenses recognized in the statement
of Profit and Loss for the year
1 Current Service cost 23.25 23.25 6.45 5.12 - NA
2 Interest Cost 8.26 5.80 7.02 6.24 14.05 14.09
3 Expected return on plan assets (7.16) (8.27) (7.30) (5.79) - NA
4 Net Actuarial (Gains)/Losses (Net of (4.48) 8.72 (9.34) 7.49 (6.34) 14.52
opening Actuarial gain/(loss) adjustment)
5 Expenses recognized in statement of 19.87 29.50 (3.16) 13.06 7.71 28.61
Profit and Loss
V The major categories of plan assets as a
percentage of total plan
1 Government of India Securities N.A. N.A. N.A. 29% N.A. N.A.
2 Corporate Bonds N.A. N.A. N.A. 12% N.A. N.A.
3 Special Deposit Scheme N.A. N.A. N.A. 32% N.A. N.A.
4 Equity Shares of Listed Companies N.A. N.A. N.A. 0% N.A. N.A.
5 Property N.A. N.A. N.A. 0% N.A. N.A.
6 Insurer Managed Funds 100% 100% 100% N.A. N.A. N.A.
7 Others N.A. N.A. N.A. 27% N.A. N.A.
Total 100% 100% 100% 100% N.A. N.A.
VI Method of valuation Projected Unit Credit Method
VII Actuarial Assumptions
1 Discount Rate 7.70% 8.00% 7.70% 7.60% 7.70% 7.60%
2 Expected rate of return on plan assets 7.50% 9.15% 7.50% 7.50% N.A. N.A.
3 Mortality Table LIC (1994-96) ultimate N.A. N.A.
58 years/ 58 years/
4 Retirement Age 60 years 60 years 60 years 60 years N.A. N. A.
75
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
Notes:
1. During the year the Company has approved an arrangement with TATA AIG Life Insurance Company Limited, for
transferring the existing Self Managed Gratuity Trust w.e.f. 1st February 2010. Accordingly, all the funds of the Trust
have been transferred to the said insurance Company.
2. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority,
promotion and other relevant factors, such as supply and demand in the employment market.
(b) Defined Benefit Plans - Provident Fund Contribution to Trust administered by the Company
The Guidance issued by the Accounting Standard Board (ASB) on implementing AS-15, Employee benefits (revised
2005) states that provident fund set up by employers which requires interest short fall to be met by the employer, needs
to be treated as defined benefit plan. The Company's provident fund contribution to the Company administered trust
during the year is Rs.11.99 lacs. The fund does not have any existing deficit or interest shortfall. In regard to any future
obligation arising due to interest shortfall (i.e. government interest to be paid on provident fund scheme exceeds rate of
interest earned on investment) and pending the issuance of the Guidance Note from the Actuarial Society of India, the
Company’s actuary has expressed his inability to reliably measure the same.
(c) Leave Encashment (Long term compensated absences ) recognised as expense for the year is Rs 145.68 lacs (2008-09 :
Rs. 133.77 lakhs)
(d) Defined Contribution Plans 2009-2010 2008-2009
Company's Contributions to defined Contribution Plans recognised as expense for the
year as under:
1 Towards Superannuation Fund 14.99 16.12
2 Towards Government Administered Provident Fund / Family Pension Fund 120.51 116.27
3 Towards Employees State Insurance / Labour Welfare Fund 48.76 50.31
Note:
During the year the Company has approved an arrangement with TATA AIG Life Insurance Company Limited, for
transferring the existing Self Managed Superannuation Trust w.e.f. 1st February 2010. Accordingly, all the funds of the
Trust have been transferred to the said insurance Company.
22. RELATED PARTY TRANSACTIONS :
Related parties are as certified by the management
22.01 Parties where control exists
Trent Brands Limited - Subsidiary Company.
(100% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Fiora Services Limited - Subsidiary Company.
( 25.67% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
( 64.20% Equity Share Capital is held by Trent Brands Limited as at 31st March, 2010)
Nahar Theatres Private Limited - Subsidiary Company
( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Fiora Link Road Properties Limited - Subsidiary Company
( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Landmark Limited - Subsidiary Company
( 57.39% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
( 17.66% Equity Share Capital is held by wholly owned subsidiary companies as at 31st March, 2010)
Westland Limited - Subsidiary Company
( 96.64% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Regent Management Private Limited - Subsidiary Company
( 100% Equity Share Capital is held by Landmark Limited as at 31st March, 2010)
Landmark E-Tail Private Limited - Subsidiary Company
( 100% Equity Share Capital is held by Landmark Limited as at 31st March, 2010)
Trent Hypermarket Limited - Subsidiary Company.
( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Trent Global Holdings Limited-Subsidiary Company
( 100% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
22.02 Other 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 Ventures
Trexa ADMC Private Limited
( 50% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
Inditex Trent Retail India Private Limited
( 49% Equity Share Capital is held by Trent Limited as at 31st March, 2010)
76
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
22.03 Directors of the Company
Managing Director Mr. N. N. Tata
Mr. F. K. Kavarana
Mr. B. S. Bhesania
Non Executive Directors Mr. A. D. Cooper
Mr. K. N. Suntook
Mr. N. A. Soonawala (retired on 31.03.2010)
Details of remuneration to Directors is disclosed in Note no. 3 Page 71
2009-2010 2008-2009
Rupees Rupees
in lakhs in lakhs
22.04 Sales to and Other recoveries from related parties
a) Subsidiaries 550.74 432.11
b) Associates 5.63 1.75
c) Joint Venture 45.66 -
22.05 Purchase/other services from related parties
a) Subsidiaries 1,230.87 1,146.43
b) Associates 429.69 421.32
22.06 Purchases of Fixed Assets from related parties
a) Subsidiaries 36.61 -
22.07 Sale of Fixed Assets to related parties
a) Subsidiaries 11.55 -
22.08 Interest/Dividend received from related parties
a) Subsidiaries 770.40 359.56
b) Associates 14.00 497.29
22.09 Interest/Dividend paid to related parties
a) Subsidiaries 8.80 11.20
b) Associates 278.35 354.27
c) Directors 2.40 3.06
22.10 Purchase of Equity Shares of
Subsidiaries 300.00 -
22.11 Subscription to Share Capital
a) Subsidiaries 4,100.00 5,117.80
b) Joint Venture 3,192.70 -
22.12 Loan Given to
a) Subsidiaries 11.385.00 11,788.00
b) Associates - 6,400.00
22.13 Loan Repaid by
a) Subsidiaries 4,293.97 1,100.00
22.14 Security deposit given during the year
a) Associates - 77.00
22.15 Security deposit receivable as on 31.03.2010
a) Subsidiaries 412.50 412.50
b) Associates 45.00 545.00
22.16 Security deposit payable as on 31.03.2010
a) Subsidiaries 115.10 115.10
22.17 Guarantee given during the year
a) Subsidiaries 1,500.00 -
22.18 Guarantee given as on 31.3.2010
a) Subsidiaries 1,500.00 -
22.19 Loan outstanding as on 31.3.2010
a) Subsidiaries 14,060.00 15,396.47
b) Associates - 6,400.00
1
77
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
23. Interests in Joint Venture:
The Company's interests, as a venture, in jointly controlled entities are:
% of ownership
Country of interest as at % of ownership interest
Name
Incorporation 31st March as at 31st March 2009
2010
Trexa ADMC Private Limited India 50% 50%
Virtuous Trustees Private Limited India - 49%
Inditex Trent Retail India Private Limited India 49% -
For the year For the year
ended 31st ended 31st
March, 2010 March, 2009
Rupees Rupees
in lakhs in lakhs
I Income
24.01 -
1.Income From Operations 30.54 11.88
2.Other Income
II Expenditure
1.Expenses 230.55 146.91
2.Depreciation 4.00 0.96
III Assets:
1.Fixed Assets 866.33 3.75
2.Investments 0.41 115.38
3.Deferred tax Asset/(Liabilities) (0.03) 0.17
4.Current Assets Loans & Advances
- Cash and bank balances 2,548.17 4.67
- Loans and Advances 332.24 10.61
- Debtors 1.86 -
- Inventories 38.03 -
- Miscellaneous Expenditure 0.00 0.51
(to the extent not written off or adjusted)
IV Liabilities:
Current Liabilities 669.65 30.55
Provisions 4.83 4.01
Note:
The previous year ended 31.03.2009 includes the figures incorporated from the Unaudited financial statements of
Virtuous Trustees Private Limited for the year ended 31st March 09.
24. EARNINGS PER SHARE (EPS) :
2009-2010 2008-2009
(a) Weighted Average Number of shares outstanding during the year.
i) For Basic Earnings Per Share 1,95,89,303 1,95,32,896
ii) For Diluted Earnings Per Share 1,95,89,303 1,95,32,896
No of shares for Basic EPS as per a(i)
Add: Dilutive Potential Equity Shares in respect of outstanding 1,12,753 -
warrants/options
No of shares for Diluted Earnings Per Share 1,97,02,056 1,95,32,896
(b) Net Profit/(Loss) after Tax available for Equity Shareholders (Rupees 4,022.03 2,675.55
in lakhs)
(c) Less : Dividend to Preference Shareholders and applicable dividend 0.01 -
distribution tax there on
(d) Net Profit/(Loss) after Tax available for 4,022.02 2,675.55
Equity Share Holders (Rupees in lakhs)
(e) Earnings Per Share (Rs.) Face value of Rs.10/-
Basic 20.53 13.70
Diluted 20.41 13.70
78
TRENT LIMITED
Notes on the Balance Sheet and Profit and Loss Account (Contd.)
26. The scheme of Amalgamation of Satnam Developers and Finance Private Limited (SDPL) and Satnam Realtors
Private Limited (SRPL) with the company as approved by the Hon’ble High Court of Judicature at Bombay has
become effective on 12th March 2010 upon obtaining all sanctions and approvals as required under the scheme and
upon filing of certified true copies of the order with the Registrar of Companies, Maharashtra. The appointed date of
the scheme is 1st April 2009. SDPL was a 100% subsidiary of the Company engaged in the business of real estate
investment and development activities and SRPL was engaged in the business of construction and development
activities. SDPL held 50% of the shares in SRPL.
In terms of the scheme,
(a) All the assets and liabilities of SDPL and SRPL stand transferred to and vested in the company with effect from the
appointed date.
(b) Inter corporate loans, deposits and balances as between SDPL, SRPL and the Company stands cancelled.
(c) The book value of the shares held by the Company in SDPL, as appearing in the books of the Company, the book
value of shares held by SDPL in SRPL and the advance paid by SDPL towards acquisition of shares in SRPL, as
appearing in the books of SDPL, stands cancelled.
(d) The company on 26th March 2010 has issued 70,000 fully paid 0.1% Redeemable Preference Shares of Rs.1,000 each
to the equity shareholders of the erstwhile SRPL (except for shares held by SDPL) in the ratio of 14 Preference Shares
for every 1 Equity Share held.
(e) The scheme of amalgamation with SDPL is being accounted for under the pooling of interest method and with SRPL
is being accounted for under the Purchase Method as contained in AS14 “Accounting for amalgamation” issued by the
ICAI. The vested assets and liabilities of SDPL and SRPL have been recognized at their book values in the books of
the Company.
(f) The costs and expenses amounting to Rs. 120.02 lakhs (net of tax Rs.80.15 lakhs) incurred for implementation of the
scheme have been adjusted against the general reserve of the company.
(g) The deficit of Rs.2,519.32 lakhs arising due to the difference between the value of assets over the value of liabilities of
SDPL and SRPL and the face value of the preference shares issued by the company and after adjusting the diminution
in the value of Long term investments to the extent of Rs.186.09 lakhs and Finished goods inventory Rs. 918.77 lakhs
(net of tax - Rs.606.48 lakhs) as approved by the board has been adjusted first against the amalgamation reserve to the
extent of Rs.1,492.95 lakhs and the balance Rs.1,026.37 lakhs against the general reserve.
27. Exceptional item's represents profit on sale of minority stake of its subsidiary Landmark Limited to a Private Equity
Fund.
28. On 30th April 2010 the company has acquired 100% equity shares of Optim Estate Private Limited making it wholly
owned subsidiary of the Company.
29. As approved by the shareholders, the Company had transferred its Star Bazaar business, as a going concern, to its
100% subsidiary Trent Hypermarket limited, with effect from 1st August 2008.
30. 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 'L' and Notes.
As per our report attached. For and on behalf of the Board
For N. M. RAIJI & CO., F. K. KAVARANA Chairman
Chartered Accountants
B. S. BHESANIA
A. D. COOPER Director
ZUBIN DUBASH
Y.N. THAKKAR M. M. SURTI N. N. TATA Managing Director
Partner Company Secretary
Mumbai, 7th June 2010 Mumbai, 28th May 2010
79
TRENT LIMITED
I. Registration Details: :
CIN No. : L24240MH1952PLC008951
State Code : 11
Balance Sheet Date : 31.3.2010
80
TRENT LIMITED
CASH FLOW FOR THE YEAR ENDED 31st March 2010
1.4.2009 to 1.4.2008 to
31.03.2010 31.03.2009
Rupees in lakhs Rupees in Rupees
lakhs in lakhs
A CASH FLOW FROM OPERATING ACTIVITIES
Net Profit before Taxes and Exceptional Items 3847.42 2827.60
Adjustments for :
Depreciation 1,185.09 923.34
Provision for doubtful debts & bad debts written off 45.82 60.59
Interest (net) (782.10) (845.30)
Employee Stock Option 84.76 -
(Profit)/Loss on Fixed Assets sold/discarded (Net) 82.91 179.41
Profit on sale of current investment (165.81) (840.19)
Excess of Cost over Fair Value of Investments 0.02 -
Dividend from Investments (505.35) (1,332.14)
Rent Equilisation Reserve 40.31 36.16
Discount on Commercial Paper 225.45 -
Preliminary Expenses written off 0.13 -
Excess provisions / Liabilities no longer required
written back (275.93) (49.95)
(64.70) (1,868.08)
Operating Profit Before Working Capital Changes 3782.71 959.52
Adjustments for :
(Increase)/Decrease in Inventories (1,969.61) (2,738.90)
(Increase)/Decrease in Trade & Other Receivables (131.13) (2,019.17)
Increase/(Decrease) in Trade & Other Payables 1,573.77 660.95
(526.97) (4,097.12)
81
CASH AND CASH EQUIVALENTS AS AT
01.04.2009 1,288.27 1,335.10
Add : Cash and Cash Equivalents taken over on
Merger (Refer Note 26 on Page 79) 105.54 -
Less : Cash and cash equivalents transferred on sale of
business - (255.46)
CASH AND CASH EQUIVALENTS AS AT
31.03.2010 911.68 1288.27
Note:
i) All figures in brackets are outflows.
ii) Cash and Cash equivalents consist of cash on hand and balance with Banks.
iii) Of the above cash and cash equivalent balance the amount of Rs. Nil.
(2008-2009: Rs.85.63 lakhs) is not available for use by the company as it is under dispute.
iv) Previous year's figures have been regrouped wherever necessary.
As per our report attached. For and on behalf of the Board
82
AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS
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 2010,
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.
2. 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.
3. a) We did not audit the financial statements of the subsidiary Landmark Limited and its
subsidiaries namely Landmark E-Tail Private Limited and Regent Management Private
Limited. The consolidated financial statements of Landmark Limited and its subsidiaries
reflect total net assets of Rs. 8186.19 lakhs as at 31st March 2010 and total revenue of Rs.
22809.45 lakhs and the net cash inflow amounting to Rs. 31.38 lakhs for the year ended on
that date, as considered in the consolidated financial statements. These financial
statements and other information of the subsidiaries have been audited by other firms of
Chartered Accountants, and our opinion, in so far as it relates to the amounts included in
respect of the subsidiaries is based solely on their audit reports.
b) We did not audit the financial statements of the subsidiary Westland Limited, whose
financial statements reflect total net assets of Rs.1059.94 lakhs as at 31st March 2010 and
total revenue of Rs. 3600.3 lakhs and the net cash inflow amounting to Rs.24.05 lakhs for
the period ended on that date, as considered in the consolidated financial statements. These
financial statements and other information of the subsidiary have been audited by other
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.
c) We did not audit the financial statements of the foreign subsidiary Trent Global Holdings
Limited, whose financial statements reflect total net assets of Rs. 16.01 lakhs as at 31st
March 2010 and total revenue of Rs. Nil lakhs and the net cash outflow amounting to
Rs.44.59 lakhs for the period ended on that date, as considered in the consolidated
financial statements. These financial statements and other information of the subsidiary
have been audited by other auditor, duly qualified to act as auditor in the country of
incorporation of such subsidiary, 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. a) We did not audit the financial statements of the joint venture Trexa ADMC Private
Limited, whose financial statements reflect total net assets of Rs.41.03 lakhs as at 31st
March 2010 and total revenue of Rs.53.12 lakhs and the net cash inflow amounting to
Rs.27.81 lakhs for the year ended on that date, as considered in the consolidated financial
statements. These financial statements and other information of the joint venture have
been audited by other firm of Chartered Accountants, and our opinion, in so far as it
relates to the amounts included in respect of the joint ventures are based solely on their
audit reports.
b) We did not audit the financial statements of the joint venture Inditex Trent Retail India
Private Limited, whose financial statements reflect total net assets of Rs.6310.32 lakhs as
at 31st March 2010 and total revenue of Rs.57.13 lakhs and the net cash inflow amounting
to Rs.5163.33 lakhs for the year ended on that date, as considered in the consolidated
financial statements. These financial statements and other information of the joint venture
have been audited by other firm of Chartered Accountants, and our opinion, in so far as it
relates to the amounts included in respect of the joint ventures are based solely on their
audit reports.
83
5. 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.
6. Based on the audit and on consideration of the reports of the other auditors on the separate
financial statements and on the other financial information of the components and the accounts
as explained in paragraph 5 above; 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 2010;
(b) in the case of the Consolidated Profit and Loss Account, of the profit of the Group for the
year ended on that date; and
(c) in the case of the Consolidated Cash Flow Statement, of the cash flows of the Group for the
year ended on that date.
Y. N. THAKKAR
Place: Mumbai Partner
Date: 7th June 2010 Membership No. 33329
84
TRENT LIMITED
APPLICATION OF FUNDS:
5. FIXED ASSETS: D 92
(a) Gross Block 53,074.62 42,528.25
(b) Less: Depreciation 8,289.53 6,197.13
(c )Net Block 44,785.09 36,331.12
(d) Capital Work-in-Progress 3,297.45 1,386.92
48,082.54 37,718.04
6. INVESTMENTS E 93 18,104.71 24,208.80
7. DEFERRED TAX ASSET (NET) 157.95 98.28
8. CURRENT ASSETS, LOANS AND
ADVANCES:
(a) Inventories F 93 20,928.58 17,512.09
(b) Sundry Debtors G 93 1,552.24 1,333.07
(c )Cash and Bank Balances H 94 4,373.11 1,938.85
(d) Loans and Advances I 94 24,524.17 21,553.62
51,378.10 42,337.63
9. Less: CURRENT LIABILITIES AND
PROVISIONS :
(a) Liabilities J 95 23,900.66 18,395.71
(b) Provisions K 95 6,160.30 5,422.66
30,060.96 23,818.37
10. NET CURRENT ASSETS 21,317.14 18,519.26
11. MISCELLANEOUS EXPENDITURE L 95 - 0.56
(to the extent not written off or adjusted)
12. TOTAL ASSETS (NET) 87,662.34 80,544.94
85
TRENT LIMITED
Consolidated Profit And Loss Account for the year ended 31st March 2010
86
TRENT LIMITED
Previous Year
Rupees
Rupees Rupees in lakhs
in lakhs in lakhs
(1) RAW MATERIALS CONSUMED 548.62 419.62
(2) PURCHASE OF FINISHED PRODUCTS 69,140.32 52,014.31
(3) PAYMENTS TO AND PROVISIONS FOR
EMPLOYEES
(a) Salaries, Wages, Bonus, etc (Refer note 7,765.28 6,172.42
Schedule “B” Page 90)
(b) Contribution to Provident, Superannuation 472.82 399.27
and Gratuity Funds
(c ) Workmen and Staff Welfare Expenses 488.44 493.22
8,726.54 7,064.91
(4) OTHER EXPENSES
(a) Processing Charges 169.23 145.50
(b) Packing Materials Consumed 613.26 592.28
(c ) Power and Fuel 3,603.23 2,999.68
(d) Repairs to Building 2,259.32 1,651.38
(e) Repairs to Machinery 580.92 323.11
(f) Repairs others 685.95 499.43
(g) Rent 4,962.10 3,866.81
(h) Rates and Taxes 729.21 500.30
(i) Insurance 136.51 82.85
(j) Advertisement and Sales Promotion 5,847.76 5,430.00
(k) Travelling Expenses 646.43 499.92
(l) Professional and Legal Charges 858.03 910.62
(m) Printing and Stationery 206.28 150.60
(n) Bank Charges 694.55 535.47
(o) Postage, Telegrams and Telephones 589.00 509.61
(p) General Expenses (Note 5 (i) Page 97 ) 2,519.30 1,964.20
(q) Retail Business Fees 4,601.39 3,585.66
(r) Sales tax paid 5,339.14 4,016.29
(s) Directors’ Fees 14.01 11.48
(t) Commission to Non Whole time Directors 30.00 21.88
(u) Excess of cost over fair value of Current 0.63 -
Investments
(v) Loss on Sale of Fixed Assets Sold/ Discarded 173.10 225.61
(Net)
(w) Loss on Sale of Long Term Investments 164.90 -
(Net)
35,424.25 28,522.68
(5) FREIGHT AND FORWARDING CHARGES 675.86 642.37
(6) CHANGES IN FINISHED PRODUCTS
Accretion to stocks deducted 4,058.50 2,897.16
1,10,457.09 85,766.73
(7) Share of Joint Ventures- [Note 11 (b), Page, 100] 230.55 146.91
1,10,687.64 85,913.64
87
TRENT LIMITED
Schedule forming part of the Consolidated Profit and Loss Account
Schedule ‘2’ (Item No.1, page 86)
INCOME FROM OPERATIONS
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Sales 106,224.46 82,469.04
Less: Excise Duty 2.86 -
106,221.60 82,469.04
(2) Other Operating Income
(a) Display and Sponsorship Income 356.86 316.07
(b) Commission on sales 562.59 575.17
(c ) Discounts and Fees 1,267.09 464.72
(d) Rent received 1,510.37 115.61
(e) Others 2,124.25 1,147.98
5,821.16 2, 619.55
1,12,042.76 85,088.59
(3) Share of Joint ventures- [Note 11(b), Page 100] 3.31 -
1,12,046.07 85,088.59
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Miscellanous Income 18.63 15.25
(2) Interest on Loans and Advance – Gross 621.07 1,100.88
[Tax deducted at source : Rs.63.37 lakhs (2008-
2009: Rs.133.68 lakhs]
(3) Interest on Deposits with Banks- Gross 60.11 37.17
[Tax deducted at source : Rs.6.88 lakhs (2008-
2009: Rs.5.38 lakhs]
(4) Income from Current Investments – Non trade
(a) Dividend on Current Investments 351.77 1,058.46
(b) Profit on sale of Current Investments (Net) 311.51 478.60
663.28 1,537.06
(5) Interest on Long Term Investments – Gross - 0.50
(6) Dividend on Long Term Investments – Gross
(a) Trade 1.50 3.00
(b) Others- Gross 184.96 374.64
186.46 377.64
(7) Profit on Sale of Long Term Investments (Net) - 302.56
(8) Excess provision no longer required written back 134.35 49.95
1,683.90 3,421.00
(9) Share of Joint Ventures –[Note 11(b), Page 100] 30.54 11.88
1,714.44 3,432.89
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(a) Debentures 131.00 131.00
(b) Fixed Loans 519.22 196.12
(c ) Others 138.03 631.62
788.25 958.74
88
TRENT LIMITED
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
AUTHORISED:
2,40,00,000Equity Shares of Rs.10/- each
(2008-2009: 2,00,00,000 Equity Shares of Rs.10/-
each) 2,400.00 2,000.00
50,00,000 Unclassified Shares of Rs.10/- each
(2008-2009: 50,00,000 Unclassified Shares of
Rs.10/- each) 500.00 500.00
70,000 Preference Shares of Rs.1000/- each 700.00 -
(2008-2009: Nil)
3,600.00 2,500.00
ISSUED, SUBSCRIBED AND PAID-UP
2,00,35,052 Equity Shares of Rs.10/- each fully 2,003.51 1,953.29
paid –up [2008-2009: 1,95,32,896 Equity Shares
of Rs.10/- each fully paid up]
70,000 0.1% Cumulative Redeemable Preference 700.00 -
Shares of Rs.1000/- each, fully paid up
(2008-2009: Nil)
(Note ‘1c’)
2,703.51 1,953.29
Notes:
1. Of the above-
(a) 1,08,81,021 Equity Shares were allotted as fully paid Bonus Shares by capitalization 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 ) 70,000 Cumulative Redeemable Preference Shares were allotted as fully paid pursuant to Scheme of Amalgamation
without payment being received in cash.
2 During the year 2005-2006, the Company had issued 13,10,047 warrants to the shareholders along with partly
Convertible Debentures of which 5,62,121 warrants are outstanding as on 31st March 2009. Each 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. During the current year, the Company has issued 5,02,156
Equity Shares of Rs.10/- each at a premium of Rs. 640/- per share on the conversion of warrants. There are no
warrants outstanding as at 31st March 2010.
3 The term of the 0.1% Cumulative Redeemable Preference Shares is of twenty years from 26th March 2010, being the
date of allotment, with an option to the Company to redeem the Preference Shares at any time after 36 months from
the date of allotment. The Board of Directors at their meeting held on 26th April 2010 have fixed 1st June 2013 as the
date of redemption of the Preference Shares.
4 During the year, the Company has granted 21,825 stock options under the Employee Stock Option Scheme. 21,825
Stock Options are outstanding as on 31st March 2010.
89
TRENT LIMITED
Schedule forming part of the Consolidated Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) SECURITIES PREMIUM ACCOUNT
Balance as per last account 31,995.25 33,321.32
Add: Premium on issue of Equity shares on 3,213.80 -
conversion of Warrants
Less: Premium on redemption of Debentures 638.83 1,306.10
(Note ‘b’ and ‘c’ Schedule ‘C’)
Less: Write off of securities / warrant issue 12.82 19.97
expenses (net of deferred tax)
34,557.40 31,995.25
(2) DEBENTURE REDEMPTION RESERVE
(a) Balance as per last account 4,800.00 3,300.00
(b) Add: Transferred from Profit and Loss 500.00 1,500.00
Account
5,300.00 4,800.00
(3) EMPLOYEE STOCK OPTIONS
(a) Employee Stock Options Outstanding
Balance as per last account - -
Additions 107.44 -
90
TRENT LIMITED
Schedule forming part of the Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) SECURED LOANS:
a) Debentures
Non convertible Debentures (Note ‘a’) 6,550.24 6,550.24
Non Convertible Debentures- Series-I (Note ‘b’) - 5,000.00
Non Convertible Debentures- Series-II (Note ‘b’) 5,000.00 5,000.00
(b) From Banks
Term Loan (Note ‘d’) - 1,718.54
Cash Credit (Note ‘e’) 1,305.09 2,287.28
(c ) From Others
Loan under Hire Purchase Scheme - 0.25
12,855.33 20,556.31
(2) UNSECURED LOANS:
Sales tax loan from Government of Maharashtra 1.82 5.24
Non Convertible Debenturs-Oct-09-Series I (Note 5,000.00 -
‘c’)
Commercial Paper 5,000.00 -
Inter Corporate deposits 3,500.00 -
Others 18.35 -
13,520.17 5.24
26,375.50 20,561.55
Notes:
(a) During the year 2005-2006, 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. The Premium payable on redemption of
Debentures amounting to Rs.1,283.85 lakhs has been fully provided and debited to Securities Premium Account
during 2005-06.These 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.
(b) During the year 2008-2009, the Company issued 500 Redeemable Non Convertible Debentures - Series I of Rs. 10.00
lakh each and 500 Redeemable Non Convertible Debentures - Series II of Rs. 10.00 lakh each on private placement
basis. These Debentures are free of interest and the Series I Debentures were redeemed at a premium of Rs 1.33 lakhs
each on 1st October 2009 and the Series II Debentures are redeemable at a premium of Rs 2.63 lakhs each on 2nd
September 2010. The Premium payable on redemption of these Debentures has been fully provided and is debited to
Securities Premium Account net of deferred tax. These Debentures are secured by way of charge on immovable
property of the Company in favour of the Debenture Trustees as stipulated in the Debenture Trust deed.
(c ) During the current year, the Company issued 500 Redeemable Non Convertible Debentures of Rs. 10.00 lakhs each
on private placement basis. These Debentures are free of interest and are redeemable at a premium of Rs.1.94 lakhs
each on 21st October 2011.The Premium payable on redemption of these Debentures has been fully provided and is
debited to Securities Premium Account net of deferred tax.
(d) Term Loans from Banks are secured by first exclusive charge on the current assets and equitable mortgage on the
immovable property of Landmark Limited (Subsidiary).
(e) Cash credit from Banks is secured by first exclusive charge on the current assets of and equitable mortgage on the
immovable property of Landmark Limited (Subsidiary).
(f) Of the above secured loans, amount repayable within a year Rs. 11,550.24 lakhs (2008-2009 :5440.07 Lakhs)
(g) Of the above unsecured loans, amount repayable within a year Rs.8501.82 lakhs (2008-2009 : Rs.3.42 lakhs)
91
TRENT LIMITED
Total 42,523.45 18,750.47 8,229.15 53,044.77 6,196.04 116.05 2,204.49 8,284.48 44,760.29
(33,430.38) (9,707.88) (614.82) (42,523.45) (4,873.26) (270.01) (1,592.80) (6,196.07) (36,327.38)
Share of Joint
Ventures –
[Note 11 (b),
Page 100] 4.80 25.05 - 29.85 1.05 - 4.00 5.05 24.80
(1.26) (3.54) (-) (4.80) (0.10) (-) (0.96) (1.06) (3.75)
42,528.25 18,775.52 8,229.15 53,074.62 6,197.09 116.05 2,208.49 8,289.53 44,785.09
(33,431.65) (9,711.42) (614.82) (42,528.25) (4,873.37) (270.01) (1,593.77) (6,197.13) (36,331.12)
Capital Work-in-Progress 3,297.45
(1,386.92)
Total 48,082.54
(37,718.04)
Notes:
1) Figures in bracket are in respect of previous year.
2) Included in Buildings is an amount of Rs. 1,050 (2008-2009: Rs.1,050) representing value of Shares in Co-operative Housing Societies/Condominium.
3) Current year additions include Rs. 9,089.78 Lakhs of capital work-in-progress acquired consequent to the scheme of amalgamation which has been
capitalised during the year (includes borrowing cost Rs.2,408.51 Lakhs).(Note13 , Page 101)
92
TRENT LIMITED
Schedule forming part of the Consolidated Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Investments 18,104.30 19,545.25
(2) Share of Joint ventures- [Note 11(b), Page 100] 0.41 4,663.55
18,104.71 24,208.80
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
Stocks
(1) Raw Materials 212.08 106.29
(2) Packing Materials 125.42 110.34
(3) Finished Products (Note 13, Page 101) 20,373.87 17,234.15
(4) Stocks-in-Transit 152.57 39.72
(5) Stores & Spares 26.61 21.59
20,890.55 17,512.09
(6) Share of Joint Venture- [Note 11 (b), Page 100] 38.03 -
20,928.58 17,512.09
As at 31.03.2010 As at
Rupees 31.03.2009
in lakhs Rupees
In lakhs
(1) Debts outstanding for a period exceeding six months 227.69 265.16
(2) Other Debts 1,415.97 1,177.23
1,643.66 1,442.39
Less: Provision for Doubtful Debts 93.28 109.32
1,550.38 1,333.07
Considered Good – Unsecured 1,550.38 1,333.07
Considered Doubtful - Unsecured 93.28 109.32
1,643.66 1,442.39
(4) Share of Joint Ventures –[Note 11(b), Page 100] 1.86 -
1,552.24 1,333.07
93
TRENT LIMITED
Schedule forming part of the Consolidated Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Cash on hand (including cheques on hand Rs.Nil) 323.54 251.30
(2008-2009 : Rs.11.63 Lakhs)
(2) Balances with Scheduled Banks
(a) Current Accounts 1,083.53 1,200.53
(b) Fixed Deposit Accounts 352.62 366.01
(c )Unpaid Dividend / Interest Accounts 65.25 74.34
1,501.40 1,640.88
1,824.94 1,892.18
(3) Share of Joint Ventures-[Note 11(b), Page 100] 2,548.17 46.67
4,373.11 1,938.85
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Security Deposits
Deposits for Premises-Others 8,760.76 7,589.04
Other Deposits 749.39 134.52
9,510.15 7,723.56
(2) Loans 5,464.89 5,107.54
(3) Other Loans and Advances recoverable in cash or
in kind or for value to be received 6,925.58 6,732.24
(4) Balances with Customs/ Port Trust etc. 95.84 91.41
(5) Other Receivables 470.23 1,075.44
(6) Bills of Exchange 114.20 114.20
(7) Advances on Capital Account 765.62 433.88
(8) Advance payment of taxes- net of Advance Tax 315.79 257.03
(9) MAT Credit Entitlement 741.54 126.30
24,403.84 21,661.60
(10) Less: provision for Doubtful Advances 211.91 177.49
24,191.93 21,484.11
94
TRENT LIMITED
Schedule forming part of the Consolidated Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Sundry Creditors (Note 7, Page 97) 21,726.12 17,512.29
(2) Security Deposits Received 1,434.84 106.52
(3) Investor Education and Protection Fund
(Appropriate amount shall be transferred to
“Investor Education and Protection Fund” if and
when due
(a) Unclaimed dividend 63.29 72.91
(b) Unclaimed application money received by the
company for allotment of Rights Issue and due for
refund 4.82 5.72
(c ) Unclaimed Debenture Interest 1.95 1.43
70.06 80.06
23,231.02 17,698.87
(4) Share of Joint Ventures-[Note 11(b), Page 100] 669.64 696.84
23,900.66 18,395.71
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Proposed Dividend 1,302.29 1,074.31
(2) Tax on Dividend 216.29 182.20
(3) Contingencies (Note 2(d), Page 96) 205.00 205.00
(4) Retirement Benefits 788.50 658.49
(5) Redemption Premium of Debentures 3,566.92 3,262.49
(6) Rent Equilisation Reserve 76.47 36.16
6,155.47 5,418.65
(7) Share of Joint Ventures – [Note 11(b), Page 100] 4.83 4.01
6,160.30 5,422.66
As at As at
31.03.2010 31.03.2009
Rupees Rupees
Share of Joint Ventures- [Note 11 (b), Page 100] - 0.56
- 0.56
95
TRENT LIMITED
Schedule forming part of the Consolidated Balance Sheet and Profit and Loss Account
Schedule ‘M’
CONSOLIDATED SIGNIFICANT ACCOUNTING POLICIES
1 Basis of preparation of accounts
1.1 The consolidated financial statement 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 the
accounts of Trent Limited with its subsidiaries, Trent Brands Limited, Fiora Services
Limited, Nahar Theatres Private Limited, Fiora Link Road Properties Limited, Trent
Hypermarket Limited, Trent Global Holdings Limited, Landmark Limited, Westland Limited
, Regent Management Private Limited (Subsidiary of Landmark Limited), Landmark E-Tail
Private Limited (Subsidiary of Landmark Limited) and Joint Venture -Trexa ADMC Private
Limited, Inditex Trent Retail Private Limited.
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.2,966
lakhs (2008-2009: Rs.626.62 lakhs).
Share of Joint Venture Rs.225.15 lakhs ( 2008-2009: Rs. 29.82 lakhs)
2 Contingent Liabilities :
(a) Sales tax, Excise and Customs demands against which the Company has filed appeals: Rs.61.81 lakhs
(2008-2009: Rs. 56.20 lakhs) - net of tax Rs. 41.28 lakhs (2008-2009: Rs. 37.10 lakhs).
(b) Claims made against the Company not acknowledged as debts: Rs. 984.29 lakhs (2008-2009: Rs.857.59
lakhs)
(c ) Income-tax demands against which the Company has filed appeals: Rs.377.09 lakhs (2008-2009:
Rs.414.70 lakhs).
(d) As a matter of abundant caution, a general provision for contingencies of Rs.205.00 lakhs (2008-2009: Rs.
205.00 lakhs) has been made against items (a), (b) and (c) above, which are disputed by the company
96
TRENT LIMITED
Notes on the Consolidated Balance Sheet and Profit and Loss Account Contd..
2009-10 2008-09
Rupees Rupees
5(i) Schedule 1 Item 4 (p) General Expenses include : in lakhs in lakhs
(a) Auditors' Remuneration -
Audit Fees 23.05 20.02
Fees for Taxation matters 4.02 3.32
Other Services 16.97 12.54
Reimbursement of out-of-pocket expenses 1.31 1.19
(b) Provision for doubtful debts/ advances (net) 45.82 90.93
(ii) Debenture/Share issue expenses include :
Auditors' Remuneration - Other Services 0.88 -
6 Gain on foreign exchange fluctuation (net) credited to the profit and loss account amounted to Rs.84.88
lakhs (2008-2009: Loss Rs. 26.69 lakhs) including share of Joint Ventures Rs. 17.23 lakhs (2008-09: Rs.
Nil lakhs)
7 There is no Micro and Small Enterprises to whom the Company owes dues, which are outstanding for
more than 45 days as at 31st March 2010. This information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties
have been identified on the basis of the information available with the Company.
8 There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at
31st March 2010 except Rs.3.99 lakhs (2008-2009: Rs.3.63 lakhs) which is held in abeyance due to legal
cases pending.
97
TRENT LIMITED
Notes on the Consolidated Balance Sheet and Profit and Loss Account(Contd.)
9. SEGMENT REPORTING:
2009-2010
Retailing Others Unallocated Total
Company
Rs. in lakhs Rs. in lakhs Rs. in lakhs Rs. in lakhs
A SEGMENT REVENUE
1. External Revenue 110,033.63 2,244.35 1,482.54 113,760.52
(83,155.93) (2,047.73) (3,317.82) (88,521.48)
2. Intersegment Revenue - 1,403.48 - 1,403.48
- (1,530.02) (-) (1,530.02)
3. Total Revenue 110,033.63 3,647.83 1,482.54 115,164.00
(83,155.93) (3,577.75) (3,317.82) (90,051.50)
4. Less: Intersegment Revenue - 1,403.48 - 1,403.48
- (1,530.02) (-) (1,530.02)
NET SEGMENT REVENUE 110,033.63 2,244.35 1,482.54 113,760.52
(83,155.93) (2,047.73) (3,317.82) (88,521.48)
B RESULTS
1. Segment Results (253.28) (109.95) 1,227.61 864.38
(1,799.23) (322.84) (3,136.14) (1,014.07)
2. Interest Expense - - 788.25 788.25
(-) (-) (958.74) (958.74)
3. Exceptional Items (Income)/ Expense - - (836.71) (836.71)
(-) (-) (-) -
4. Provision for Taxation - - 844.95 844.95
(-) (-) (185.04) (185.04)
5. Excess tax provision for prior years (Net) - - (78.15) (78.15)
(-) (-) (151.63) (151.63)
6. Net Profit (253.28) (109.95) 509.27 146.04
(1,799.23) (322.84) (2,143.99) (21.92)
C SEGMENT ASSETS 71,307.29 2,165.44 44,092.60 117,565.33
(60,269.07) (2,829.44) (41,264.80) (104,363.31)
D SEGMENT LIABILITIES 22,520.69 1,375.32 32,816.15 56,712.17
(15,927.62) (1,797.58) (26,734.80) (44,460.00)
E CAPITAL EXPENDITURE 17,561.75 37.20 3,087.15 20,686.10
(8,426.08) (175.47) (124.45) (8,726.00)
F DEPRECIATION 2,183.25 21.93 3.31 2,208.49
(1,566.32) (23.55) (3.90) (1,593.77)
G NON CASH EXPENSES
Employee Stock Options Scheme 84.76 - - 84.76
(-) (-) (-) (-)
Notes:
(1) In respect of standalone accounts of the Company, disclosure of segment - wise information is not applicable
as retailing is the main business of the Company. The Company, its subsidiaries and its jointly controlled
entities are primarily engaged in the business of retailing and services related to retailing except one
subsidiary which is engaged in the business of distribution and one jointly controlled entity engaged in the
business of consultancy services. Segment “Others” primarily includes distribution business and consultancy
services.
(2) Segment-wise Revenue, Results and Capital Employed figures include the respective amounts identifiable to
each of the Segments. Other unallocable income, expenses and unallocated assets mainly relate to
investments of surplus funds.
(3) Figures in brackets are in respect of previous year.
(4) Previous year's figures have been regrouped wherever necessary.
98
TRENT LIMITED
Notes On the Consolidated Balance Sheet And Profit And Loss Account (Contd)
99
TRENT LIMITED
Notes On the Consolidated Balance Sheet And Profit And Loss Account (Contd)
11. The Subsidiaries and interest in Joint Ventures considered in Consolidated Financial Statements are:
(a) Particulars of Subsidiaries Country of Proportionate
Origin Ownership interest
as on 31-3-2010 as on 31-3-2009
1 Trent Brands Limited India 100.00% 100.00%
2 Fiora Sevices Limited India
Held by Trent Limited 25.67% 25.67%
Held by Trent Brands Limited (Subsidiary) 64.20% 64.20%
3 Satnam Developers & Finance Private Limited
(Refer Note no 13 Page No. 101) India - 100.00%
4 Nahar Theatres Private Limited India 100.00% 100.00%
5 Fiora Link Road Properties Limited India 100.00% 100.00%
6 Landmark Limited
Held by Trent Limited India 57.39% 77.41%
Held by Subsidiaries of Trent Limited India 17.66% 22.54%
7 Westland Limited
Held by Trent Limited (previous year Landmark
Limited) India 96.64% 96.64%
8 Regent Management Private Limited
Held by Landmark Limited (Subsidiary) India 100.00% 100.00%
9 Landmark E-Tail Private Limited
Held by Landmark Limited (Subsidiary) India 100.00% 100.00%
10 Trent Hypermarket Limited
Held by Trent Limited India 100.00% 100.00%
11 Trent Global Holdings Limited
Held by Trent Limited Mauritius 100.00% 100.00%
(b) Interest in Joint Venture
1 Satnam Realtors Private Limited (Refer note no India - 50.00%
13 Page no 101 )
2 Trexa ADMC Private Limited India 50.00% 50.00%
3 Virtuous Trustees Private Limited India - 49.00%
4 Inditex Trent Retail Pvt Limited India 49.00% -
As at As at
31.03.2010 31.03.2009
(Rupees (Rupees
In lakhs) In lakhs)
I Income
1 Income from operations 24.01 -
2 Other income 30.54 11.88
II Expenditure
1 Expenses 230.55 146.91
2 Depreciation 4.00 0.96
III Assets
1 Fixed Assets 866.33 3.75
2 Investments 0.41 4,663.55
3 Deferred tax Asset / (Liabilities) (0.03) 0.17
4 Current Assts, Loans & Advances
- Cash and bank balances 2,548.17 46.67
- Loans and Advances 332.24 69.51
- Debtors 1.86 -
- Inventories 38.03 -
- Miscellaneous Expenditure - 0.56
IV Liabilities
1 Unsecured Loans - 4,012.43
2 Current Liabilities 669.65 670.76
3 Provisions 4.83
V Capital Commitments 225.15 29.83
100
TRENT LIMITED
Notes On the Consolidated Balance Sheet And Profit And Loss Account (Contd)
101
TRENT LIMITED
Notes On the Consolidated Balance Sheet And Profit And Loss Account (Contd)
16 As approved by the shareholders, the Company had transferred its Star Bazaar business, as a going concern, to
its 100% subsidiary Trent Hypermarket limited, with effect from 1st August 2008.
102
TRENT LIMITED
CONSOLIDATED CASH FLOW FOR THE YEAR ENDED 31ST MARCH 2010
1.4.2009 to 1.4.2008 to
31.3.2010 31.3.2009
103
C CASH FLOW FROM FINANCING
ACTIVITIES
Issue of securities 24,349.41 10,000.00
Redemption of Securities (Including Premium) (5,663.35)
Issue expenses on securities (19.38) (73.98)
Unclaimed Securities application money (0.89) (5.08)
Long Term & Other borrowings 8,198.55 904.49
Repayment of Long Term & Other borrowings (2,719.57) (13,113.47)
Interest Paid (2,116.85) (1,304.48)
Dividend Paid (1,257.33) (1,638.76)
Net Cash from Financing Activities 20,770.59 (5,231.28)
D EFFECT OF EXCHANGE FLUCTATION
ON TRANSLATION RESERVE 2.56 32.13
NET INCREASE IN CASH AND CASH
EQUIVALENT (A+B+C) 2,392.69 53.09
CASH AND CASH EQUIVALENTS AS AT
01.04.2009 1,938.85 1,885.76
Add: Cash and Cash Equivalents taken over on
Merger 42.00 -
Less: Cash balance eliminated on sale of
subsidiary (0.43) -
CASH AND CASH EQUIVALENTS AS AT
31.03.2010 4,373.11 1,938.85
Notes:
(i) All figures in brackets are outflows.
(ii) Cash and Cash equivalents consist of cash on hand and balance with banks.
(iii) Of the above cash and cash equivalent balance the amount of Rs. Nil.
(2008-09: Rs.85.63 lakhs ) is not available for use by the company as it is under dispute.
(iv) 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., F. K. KAVARANA Chairman
Chartered Accountants
B. S. BHESANIA
A. D. COOPER Director
ZUBIN DUBASH
Y.N. THAKKAR M. M. SURTI N. N. TATA Managing Director
Partner Company Secretary
Mumbai, 7th June 2010 Mumbai, 28th May 2010
104
AUDITORS’ REPORT
1. We have audited the attached Balance Sheet of TRENT HYPERMARKET LIMITED as at 31st March 2010 and
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.
2. 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.
3. 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.
(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 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 2010 and taken on
record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2010
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 2010;
(b) in the case of the Profit and Loss Account, of the loss 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.
Y.N. THAKKAR
Place: Mumbai Partner
Date: 7th June 2010 Membership No. 33329
105
TRENT HYPERMARKET LIMITED
(i) (a) The Company has maintained proper records showing full particulars, including quantitative
details and situation of fixed assets
(b) 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.
(c) The Company has not disposed off substantial part of fixed assets during the year.
(ii) (a) The inventories have been physically verified by the management at reasonable intervals
during the year.
(b) 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.
(c) 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.
(iii) (a) The Company has not granted any loans, secured or unsecured, during the year to companies,
firms or other parties covered in the register maintained under section 301 of the Companies
Act, 1956. Accordingly, sub-clause (b), (c) and (d) are not applicable
(b) The Company has not taken any loans, secured or unsecured, during the year from
companies, firms or other parties covered in the register maintained under section 301 of the
Companies Act, 1956. Accordingly, sub-clause (f) and (g) are not applicable.
(iv) In our opinion and according to the information and explanations given to us, 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 entered into the register in
pursuance of section 301 of the Companies Act, 1956.
(vi) The Company has not accepted any deposits from the public to which the provisions of
sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the
Companies (Acceptance of Deposits) Rules, 1975 apply.
(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, 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 2010 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, there are no 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.
(x) The Company has not completed five years from the date of its registration. Hence clause
4(x) of CARO is not applicable.
(xi) The Company has not taken any loans from any banks or financial institutions and has not
issued any debentures.
106
(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 investments of the Company, proper records have been
maintained of the 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 not given any
guarantee for loans taken by others from banks or financial institutions
(xvi) The Company has applied term loans for the purposes for which they were obtained
(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 long-term investment
(xviii) 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) During the year the Company has not issued any debentures.
(xx) The Company has not raised any money by public issue during the year
(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.
Y.N. THAKKAR
Place: Mumbai Partner
Date: 7th June 2010 Membership No. 33329
107
TRENT HYPER MARKET LIMITED
As at
31.03.2009
Rupees Rupees Rupees
Schedule Page in lakhs in lakhs in lakhs
SOURCES OF FUNDS :
1. SHAREHOLDERS’ FUNDS:
(a) Share Capital A 112 5,105.00 5,105.00
(b) Reserves and Surplus - -
5,105.00 5,105.00
2. LOAN FUNDS:
Unsecured Loans B 112 10,000.00
10,000.00 2,500.00
3. TOTAL FUNDS EMPLOYED 15,105.00 7,605.00
APPLICATION OF FUNDS:
4. FIXED ASSETS:
(a) Gross Block C 113 6,229.43 4,176.47
(b) Less: Depreciation 681.01 216.17
(c )Net Block 5,548.42 3,960.30
(d) Capital Work-in-Progress 455.29 1.31
6,003.71 3,961.61
5. INVESTMENTS D 114 1,500.00 -
108
TRENT HYPER MARKET LIMITED
Profit And Loss Account for the year ended 31st March 2010
Previous
Year
Rupees Rupees Rupees
Schedule Page in lakhs in lakhs in lakhs
INCOME :
1. INCOME FROM OPERATIONS 2 111 28,951.66 12,398.11
109
TRENT HYPER MARKET LIMITED
As at
31.03.2009
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) RAW MATERIALS CONSUMED 371.37 210.26
(2) PURCHASE OF FINISHED PRODUCTS 22,865.98 9,595.72
(3) PAYMENTS TO AND PROVISIONS FOR
EMPLOYEES
(a) Salaries, Wages, Bonus, etc 1,887.06 704.55
(b) Contribution to Provident, Superannuation and
Gratuity Funds 121.17 36.44
(c ) Workmen and Staff Welfare Expenses 78.49 68.50
2,086.72 809.50
(4) OPERATION AND OTHER EXPENSES
(a) Packing Materials Consumed 252.27 170.86
(b) Power and Fuel 886.02 438.82
(c ) Repairs to Building 368.82 165.08
(d) Repairs to Machinery 339.09 91.78
(e) Repairs others 64.32 16.71
(f) Rent 735.24 378.70
(g) Rates and Taxes 95.76 56.39
(h) Insurance 23.38 7.89
(i) Advertisement and Sales Promotion 890.49 447.80
(j) Travelling Expenses 91.26 36.52
(k) Professional and Legal Charges 98.86 34.59
(l) Printing and Stationery 33.82 14.55
(m) Bank Charges 162.05 69.71
(n) Postage, Telegrams and Telephones 118.91 50.18
(o) General Expenses (Refer Note 4 page 117) 814.38 314.55
(p) Retail Business Fees 294.29 84.39
(q) Sales tax paid 1,579.14 665.70
(r) Directors’ Fees 1.20 0.40
(s) Provision for Doubtful Debts - 18.62
(t) Loss on Sale of Fixed Assets Sold/ Discarded
(Net) 3.76 0.34
(u) Share issue Expenses Written off - 42.99
(v) Preliminary Expenses Written off - 0.74
6,853.06 3,107.31
(5) FREIGHT AND FORWARDING CHARGES 193.65 160.57
(6) CHANGES IN FINISHED PRODUCTS
Decretion/ (Accretion) to stocks (1,273.88) (34.86)
31,096.90 13,848.49
110
TRENT HYPER MARKET LIMITED
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Sales 27,523.41 11,885.83
Less: Excise Duty 2.86 -
27,520.55 11,885.83
(2) Other Operating Income
(a) Display and Sponsorship Income 227.92 86.01
(b) Commission on sales 79.88 27.89
(c ) Discounts and Fees 444.73 237.47
(d) Rent received 190.45 128.81
(e) Others 488.13 32.10
1431.11 512.28
28,951.66 12,398.11
Previous Year
Rupees Rupees Rupees
in lakhs in lakhs in lakhs
(1) Interest on Loans and Advances- Gross 0.97 0.65
[Tax deducted at source: NIL
(2008-2009-NIL)]
(2) Interest on Deposits with Banks- Gross 9.88 5.72
[Tax deducted at source: Rs. 1.32 Lakhs,
(2008-09: Rs 1.29 Lakhs)]
(3) Profit on sale of current investment (net) 7.33 -
18.18 6.37
111
TRENT HYPER MARKET LIMITED
As at As at
Rupees 31.03.2010 31.03.2009
in lakhs Rupees Rupees
in lakhs in lakhs
AUTHORISED:
600,00,000 Equity Shares of Rs.10/- each 6,000.00
6,000.00 6000.00
ISSUED, SUBSCRIBED AND PAID UP:
510,50,000 Equity Shares of Rs.10/- each fully 5,105.00 5105.00
paid-up
{The above shares are held by Trent Limited,
the holding Company}
5,105.00 5105.00
112
TRENT HYPERMARKET LIMITED
Buildings 560.41 258.17 6.09 812.49 40.42 0.24 73.87 114.05 698.44
(560.41) - (560.41) - - (40.42) (40.42) (519.99)
Plant and
Machinery 2,222.27 1,116.60 20.76 3,318.11 73.31 1.24 128.28 200.35 3,117.76
(2,222.61) (0.34) (2,222.27) - - (73.31) (73.31) (2,148.96)
Furniture,
Fixtures,
Office and
other
Equipment 1,358.94 819.38 79.48 2,098.84 101.19 10.88 276.31 366.62 1,732.22
(1,358.94) - (1,358.94) - - (101.19) (101.19) (1,257.75)
Vehicles 34.85 - 34.85 0.00 1.25 2.64 1.39 - 0.00
(34.85) - (34.85) - - (1.25) (1.25) (33.60)
Total 4,176.47 2,194.15 141.18 6,229.44 216.17 15.00 479.85 681.02 5,548.42
(4,176.81) (0.34) (4,176.47) - - (216.17) (216.17) (3,960.30)
Capital Work-in-Progress 455.29
(1.31)
Total 6,003.71
(3,961.61)
113
TRENT HYPERMARKET LIMITED
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
Stocks
(1) Raw Materials 46.73 25.81
(2) Packing Materials 61.99 75.08
(3) Finished Products 3,150.98 1,877.10
3,259.70 1,977.99
114
TRENT HYPERMARKET LIMITED
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Cash on hand 81.20 45.84
(2) Balances with Scheduled Banks
(a) Current Accounts 390.85 224.28
(b) Fixed Deposit Accounts 22.13 10.00
412.98 234.28
494.18 280.12
115
TRENT HYPERMARKET LIMITED
Schedule forming part of the Balance Sheet
As at As at
31.03.2010 31.03.2009
Rupees Rupees
in lakhs in lakhs
(1) Sundry Creditors- Note 5 (page 117) 3,449.02 1,483.34
(2) Holding Company 57.72 96.10
(3) Security Deposits Received 27.91 2.90
3,534.65 1,582.34
117
TRENT HYPERMARKET LIMITED
Notes on the Balance Sheet and Profit and Loss Account (contd)
6 The company has entered into lease agreements for assets taken on operating lease which range between
three years & six years. This are renewable by mutually agreed terms
The future minimum lease payments under non-cancellable operating leases are as under :
2009-10 2008-09
Rupees Rupees
In lakhs In lakhs
(i) Not later than one year 647.58 438.88
(ii) Later than one year and not later than five years 997.40 224.90
(iii) Later than five years Nil Nil
7 SALES, PURCHASES, OPENING AND CLOSING STOCKS (1.4.2009 to 31.3.2010)
Sales Inventory Purchases Opening Stock Closing Stock
Acquired on
Purchase
Of Business
Quantity Rupees Rupees Quantity Rupees in Quantity Rupees Quantity Rupees
Unit in in lakhs In lakhs Unit in lakhs Unit in In lakhs Unit In In lakhs
Class of Goods lakhs lakhs lakhs lakhs
Staple&
Vegetables 210.31 8,313.35 - 220.38 7,657.91 6.54 304.24 6.59 359.18
Apparels/ 19,210.06 - 15,208.07 1,572.86 2,791.80
Household items/
etc
118
TRENT HYPERMARKET LIMITED
Notes on the Balance Sheet and Profit and Loss Account (contd)
Rupees Rupees
In lakhs In lakhs
Travelling Expenses 2.93 1.09
TOTAL 2.93 1.09
12 Earnings in Foreign Currency
2009-10 2008-09
Rupees Rupees
In lakhs In lakhs
119
TRENT HYPERMARKET LIMITED
NOTES ON THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT (CONTD)
15 EMPLOYEE BENEFITS
(a) Defined benefit plans- Gratuity
GRATUITY (Fully funded)
LIC Administered Trust
2009-10 2008-09
Rs in lakhs Rs in lakhs
I Change in Obligation during the year
1 Present value of obligations as at beginning of year 18.51 0.00
2 Present value of obligations taken over 0.00 19.34
3 Present Value of transferred to other trust (4.50) 0.00
4 Liability taken over from other trust 0.00 0.82
5 Interest cost 2.89 0.00
6 Current Service Cost 22.05 9.86
7 Actuarial (gain)/ Loss on obligations (9.80) (11.51)
8 Benefits Paid 0.00 0.00
Present value of Defined Benefit Obligation at the end of the year 29.15 18.51
II Change in Assets during the Year ended
1 Plan assets at the beginning of the year 20.50 0.00
2 Assets taken over 0.00 19.34
3 Expected return on plan assets 1.54 0.85
4 Contributions by Employer 4.15 0.00
5 Contributions by Employer (Reversal of premium) 0.00 0.31
6 Actual benefits paid 0.00 0.00
7 Actuarial Gains/ (Losses) 0.38 0.00
8 Plan Assets at the end of the year 26.57 20.50
III Net Asset/(Liability) recognized in the Balance Sheet
1 Present Value of Defined Benefit Obligation 29.15 18.51
2 Fair value of plan assets 26.57 20.50
3 Fund status Surplus/(Deficit) (2.59) 1.99
4 Net Assets / (Liability) (2.59) 1.99
IV Expenses recognized in the statement of Profit & Loss for the year
ended
1 Current Service cost 22.05 9.86
2 Interest Cost 2.89 0.00
3 Expected return on plan assets (1.54) (0.85)
4 Net Actuarial (Gains)/Losses (10.18) (11.51)
5 Expenses recognized in statement of Profit & Loss 13.23 (2.50)
V The major categories of plan assets as a percentage of total plan
Insurer Managed Funds 100% 100%
VI Method of valuation Projected Unit Credit Method
VII Actuarial Assumptions
1 Discount Rate 7.70% 8.00%
2 Expected rate of return on plan assets 7.50% 9.15%
3 Mortality Table LIC (1994-96)
4 Retirement Age 58 Years / 60 Years
The above disclosure is based on the actuarial valuation report. The estimates of future salary increases,
considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors,
such as supply and demand in the employment market.
(b) Defined Contribution plans 2009-10 2008-09
Company Contributions during the year under Contribution Plans recognised
in the Profit and Loss Account :
1 Superannuation Fund 1.13 -
2 Government administered Provident Fund / Family Pension Fund 72.54 25.32
3 Employees State Insurance / Labour Welfare Fund 33.10 13.63
Total 106.77 38.95
(c ) Leave Encashment (Long Term Compensated Absences) recognised as expense for the year is Rs. 32.05 lakhs
(2008-09 Rs 18.73 Lakhs)
120
TRENT HYPERMARKET LIMITED
NOTES ON THE BALANCE SHEET AND PROFIT AND LOSS ACCOUNT (CONTD)
121
TRENT HYPERMARKET LIMITED
Notes On The Balance Sheet And Profit And Loss Account (Contd)
(a) Weighted Average Number of shares outstanding during the year 51,050,000 51,050,000
(b) Net Profit/ (Loss) after Tax available for Equity Share Holders (Rupees in (2,913.72) (1,768.82)
lakhs)
(c ) Earnings Per Share (Rs.) Face value of Rs.10/- ( Not Annualised) Basic & (5.71) (3.46)
Diluted
18 Loan repayable to Trent Limited -Holding Company – Rs.10,000 Lakhs
Maximum outstanding during the year Rs. 10,000 Lakhs
19 There are no amounts due & outstanding to be credited to investor education & protection fund.
20 The company was incorporated on 1st July 2008 and the previous year was for the period from 1st July 2008
till 31st March 2009.Hence,the figures of previous year are not comparable. Previous year figures
have been regrouped wherever necessary
21 Balance Sheet Abstract and Company's General Business Profile as required in terms of Part IV of Schedule VI
Companies Act, 1956 is attached herewith.
Signatures to Schedules '1' to '3' and 'A' to 'L' and Notes.
As per our report attached For and on behalf of the Board
For N. M. RAIJI & CO., Mr. N. N. Tata- Managing Director
Chartered Accountants
Mr. A. D. Cooper Director
Y.N. THAKKAR H. R. Wadia Mr. P. Venkatesalu Director
Partner COMPANY SECRETARY
Mumbai, 7th June, 2010 Mumbai, 27th May 2010
122
TRENT HYPERMARKET LIMITED
I. Registration Details: :
CIN No. : U51900MH2008PLC184184
State Code : 11
Balance Sheet Date : 31.3.2010
123
TRENT HYPERMARKET LIMITED
CASH FLOW FOR THE YEAR ENDED 31ST March 2010
124
CASH AND CASH EQUIVALENTS AS AT 280.12 -
01.04.2009
CASH & CASH EQUIVALENT ACQUIRED ON - (255.46)
PURCHASE OF BUSINESS
125
ACCOUNTING RATIOS AND CAPITALIZATION STATEMENT
The following table presents certain accounting and other ratios derived from Company’s audited
standalone financial statements as at March 31, 2010 included in the chapter titled “Financial
Information” on page 52 of this Letter of Offer.
EPS (basic)(Rs.): Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)
Weighted Average Number of Equity Shares outstanding during the period
EPS (diluted) (Rs.): Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)
Weighted Average Number of Equity Shares outstanding during the period for diluted
EPS
Return on net worth (%) Net profit attributable to Equity Shareholders (excluding extraordinary items, if any)
Net Worth applicable to equity share holders at the end of the year (excluding
revaluation reserves)
NAV per Equity Share Net worth attributable to equity shareholders at the end of the year (excluding
(Rs.) revaluation reserves)
Number of Equity Shares outstanding at the end of the year
The EPS calculation as above is in accordance with AS-20 issued by Institute of Chartered Accountants
Of India.
As adjusted after
Actual
conversion of CCPS**
Loan funds:
126
As at March 31, 2010
As adjusted after
Actual
conversion of CCPS**
Shareholders’ funds:
1. Subsequent to March 31, 2010, the Company has issued 21,825 Equity Shares of the face value of
Rs. 10/- each at par upon exercise of employee stock options. The same has not been taken into
consideration for the above calculation.
127
FINANCIAL INDEBTEDNESS
Our Company’s secured and unsecured borrowings on a standalone basis as on March 31, 2010 were as
follows:
A. Non-Convertible Debentures
(Amounts are shown in Rs. in lakh)
Instrument and issue Loan amount as
Sr. Rate of
date on March 31, Redemption terms
no. Interest
2010
B. Others
(Amounts are shown in Rs. in lakh)
Amount
Sr. outstanding as Rate of
Instrument Lender Repayment terms
no. on March 31, interest
2010
128
OUTSTANDING LITIGATION
Except as described below, there are no outstanding litigations including, suits, criminal or civil
prosecutions and taxation related proceedings against the Company and its Subsidiaries that would have
a material adverse effect on our business. Further, there are no defaults, non-payment of statutory dues
including, institutional/ bank dues and dues payable to holders of any debentures, bonds and fixed
deposits that would have a material adverse effect on our business other than unclaimed liabilities against
the Company and its Subsidiaries as of the date of this Letter of Offer.
Further, except as disclosed below the Company and its Subsidiaries is not involved in any criminal
litigation or litigation involving moral turpitude.
Set forth below are details of the outstanding or pending litigations against the Company and its
Subsidiaries and details of proceedings filed by the Company.
Our Company (erstwhile Lakme Limited) acquired Miaami Pharma and Chemicals Pvt. Ltd. (“Miaami”)
in 1990. However, prior to the acquisition of Miaami, there was a dispute pending between Miaami and
Plethico Pharmaceuticals Ltd. (“Plethico”) regarding commissions receivable by Plethico for the sale
and marketing of intravenous fluids manufactured by Miaami. Two arbitration proceedings were held at
Indore. In the first, an award was passed in favour of Plethico for Rs. 58 lakh. In January 1997, Plethico
claimed an additional amount of Rs. 302.30 lakh as sales commission together with interest for the
period from 1988 to December 1992. In the second arbitration, the arbitrators by majority passed an
award in favour of Plethico for the entire claim for commission of Rs. 302 lakh with interest. The
Company filed applications under the Old Arbitration Act and the Arbitration & Conciliation Act, 1996
before the Additional District Judge, Indore.
The first award under the Arbitration Act was upheld by IVth Add. District Judge, Indore in Arbitration
Case No.1/1999 by order dated December 24, 2005. Against this an appeal was filed under Section 37 of
The Indian Arbitration Act, 1940 before the High Court of Madhya Pradesh, Indore Bench being M.A.
No. 1540/2006. This appeal is currently pending.
The second award was subject matter of Arbitration Case No.7-B/1999 in which the award was upheld
with a modification relating to the grant of interest. This order has been challenged by both the parties to
the matter. M.A. No. 2009/2004 was filed by Lakme Limited while M.A. No. 2284/2005 was filed by the
other party.
There is a conditional order of stay on payment of Rs. 50 lakh and furnishing of security. The conditions
of the order have been complied with. These appeals are currently pending in High Court of Madhya
Pradesh, Indore Bench.
In the 1999-00 assessment year, Trent Brands Limited (“TBL”) sold certain trademarks and considered
the profit on the sale as a capital gain exempt from tax. In the assessment order, the assessing officer
considered the profit from sale of trademarks as business income and raised a demand of Rs. 3,815 lakh.
In appeals ITA no. 2147/DL/2003 and ITA no. 3185/DL/2008, filed by the Company with Delhi Income
Tax Tribunal, the Income Tax Appellate Tribunal (“ITAT”) upheld the Company’s contention that the
profit on the sale of trademarks was a capital gain and is exempt from tax. Against this decision of ITAT,
the department has filed appeals ITA no. 417, 437 and 459 of 2010 before the Hon’ble Delhi High Court
and such appeals are currently pending, admission.
129
b) Optim Estates Private Limited
The Company completed the acquisition of a 100% shareholding in Optim Estates Private Limited
(“OEPL”) on April 30, 2010 pursuant to definitive agreements executed between the parties.
OEPL holds 5/13th undivided interest in a plot of land situated in Andheri, Mumbai. The balance 8/13th
share is held by Harsh Kaushal Corporation. In October 2007, a third party has filed a suit (no. 3192 of
2007) against Harsh Kaushal Corporation and others claiming to have entered into an agreement for sale
with the erstwhile owners for purchasing plots of land, which also included OEPL’s said undivided
share, and alleging to have remitted Rs.125 lakh and agreed to pay the balance amount of Rs.70 lakh
upon conveyance. A Notice of Motion (no. 4373 of 2007) was also filed by the third party. The Bombay
High Court did not grant any interim/ad interim reliefs sought by the third party in the Notice of Motion.
The Bombay High Court disposed off the Notice of Motion and the suit is currently pending.
130
GOVERNMENT APPROVALS
We have received the necessary consents, licenses, permissions and approvals from GoI and various
governmental agencies required for our present business.
The Company has applied for certain regulatory and government approvals. The details of the same
have been provided below:
1. Registration under Bombay Shops and Establishments Act, 1948 for the Fashion Yatra store situated
at 22-28, Treasure Bazaar, 1ST Floor, Nanded-Latur Road, Vasami, Nanded – 431 606, Maharashtra;
2. Registration under Karnataka Shops and Commercial Establishments Act, 1961 for the Westside
store situated at City Centre, K.S Rao Road, Hampankatta, Mangalore 575001, Karnataka; and
3. Registration under Uttar Pradesh Shops and Establishments Act, 1962 for the Westside store situated
at 16/113, M. G. Road, Corner Plot of Bada Chauraha, Kanpur – 208 001.
131
MATERIAL DEVELOPMENTS
Recent Developments
In accordance with circular no.F.2/5/SE/76 dated February 5, 1977 issued by the Ministry of Finance,
Government of India, as amended through its circular dated March 8, 1977 and in accordance with
sub-item (B) of item X of Part E of the SEBI Regulations, the information required to be disclosed for
the period between the last date of the financial statements provided to the shareholders of the
Company and the date preceding one month from the date of this Letter of Offer is provided below:
1. Working results of the Company on a stand-alone basis for the period from April 1, 2010 to May
31, 2010:
(Rs. in lakh)
Sr. no. Particular Amount
4. PBDIT 1,336.91
2. Material changes and commitments, if any, affecting the financial position of the Company
a. The authorized share capital of the Company was increased from Rs. 3,600 lakh to Rs. 5,600
lakh on April 16, 2010 as approved by the shareholders through a postal ballot.
b. On June 22, 2010, 21,825 Equity Shares of Rs. 10 each were issued up on exercise of
Employee Stock options at par.
c. Private placement of 1,000 listed secured non-convertible debentures of Rs. 10,00,000 each
on April 15, 2010.
g. The non-convertible debentures amounting to Rs. 6550.24 lakhs, issued under the rights issue
of the Company in 2005, were redeemed on July 7, 2010.
a. The week end prices of the Equity Shares of the Company for last four weeks on the BSE and
132
NSE are provided in the table below:
(Amounts in Rs.)
Week ended on Closing price (in Rs.)
BSE* NSE**
b. The highest and lowest prices of the Equity Shares of the Company on the BSE and NSE for
last four weeks are provided in the table below:
(Amounts in Rs.)
Stock Exchange High Date of high Low Date of low
c. The highest and lowest prices of the Equity Shares of the Company on the BSE and NSE for
the last three years are provided in the table below:
d. The highest and lowest prices of the Equity Shares of the Company on the BSE and NSE for
the last six months are provided in the table below:
133
February 17,
2010- March 16,
2010 903 756 904.7 759
4. The Company has filed its audited financial results for the year ended March 31, 2010 with the
Stock Exchanges in accordance with the requirements under the Listing Agreement.
5. Optim Estates Private Limited became a wholly-owned subsidiary of the Company on April 30,
2010.
134
OTHER REGULATORY AND STATUTORY DISCLOSURES
Pursuant to the resolution passed by the Board of Directors of the Company at its meeting held on April 26,
2010, it has been decided to make the rights offer of the securities to the Equity Shareholders of the
Company with a right to renounce. The Committee of the Board has on May 10, 2010 decided that the Issue
would be of CCPS to the equity shareholders on a Rights basis.
Prohibition by SEBI
Neither the Company, the Directors, the Promoter, the promoter group nor the persons in control of the
Company has been prohibited from accessing or operating in the capital markets or have been restrained
from buying, selling or dealing in securities under any order or direction passed by SEBI. Further, neither
the Promoters, Directors or persons in control of the Issuer was or also is a promoter, director or person in
control of any other company which is debarred from accessing the capital market under any order or
directions made by SEBI.
Further, neither the Promoter, the Company, the promoter group nor the group companies has been declared
as willful defaulters by RBI / Government authorities.
Certain Directors of the Company are associated as directors in other companies which are in securities
market. The details of the same are give below:
TCL is registered as a portfolio manager with SEBI and Mr. Farrokh K. Kavarana is a director on
the board of Tata Capital Limited.
135
5. Outstanding fees payable to SEBI by the entity, if any Nil
The registrations obtained by the TSL on various segments in the securities market are listed
below:
(i) Trading Member of National Stock Exchange of India Limited on Currency Derivates
Segment-INE231288730;
(ii) Trading Member of National Stock Exchange of India Limited on Futures and Options
Segment-INF231288730;
(iii) Clearing Member of National Stock Exchange of India Limited on Futures and
Options- INF231288730;
(iv) Trading and Clearing Member of National Stock Exchange of India Limited on Capital
Market Segment- INB231288730;
(vii) Trading and Clearing Member of Bombay Stock Exchange Limited on Capital Market
Segment- INB010664150;
(viii) Trading Member of Bombay Stock Exchange Limited on Futures and Options-
INF011207954; and
(ix) Clearing Member of Bombay Stock Exchange Limited on Futures and Options-
INF011207954.
TAML is registered as a portfolio manager and Mr. Farrokh K. Kavarana is a director on the
board of TAML.
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renewal
4. Penalty imposed by SEBI (penalty includes A fine of Rs. 2 lakh has been paid to SEBI for
deficiency/warning letter, adjudication disclosure of portfolio statement to unitholders not
proceedings, suspension/cancellation / being in the exact format as prescribed by SEBI
prohibitory orders) (in 2001)
2. Mr. A. D. Cooper
TAML is registered as a portfolio manager and Mr. A. D. Cooper is a director on the board of
TAML.
4. Penalty imposed by SEBI (penalty includes A fine of Rs 2 lakh has been paid to SEBI for
deficiency/warning letter, adjudication disclosure of portfolio statement to unitholders
proceedings, suspension/cancellation / not being in the exact format as prescribed by
prohibitory orders) SEBI (in 2001)
Our Promoter, the members of the Group Companies and relatives of the Promoter have confirmed that
they have not been identified as willful defaulters by the RBI or any other governmental authority.
The Company confirms that it has complied with the following during the financial year immediately
preceding the date of the Letter of Offer:
(i) provisions of the Listing Agreement with respect to reporting and compliance under Clauses 35, 40A,
41 and 49;
(ii) provisions of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, with
respect to reporting in terms of Regulation 8 (3) pertaining to disclosure of changes in shareholding
and Regulation 8A pertaining to disclosure of pledged shares; and
(iii) provisions of the SEBI (Prohibition of Insider Trading) Regulations, 1992, with respect to reporting
in terms of Regulation 13.
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Declaration for filing the shareholding pattern with the Stock Exchanges
The Company confirms that it shall make an additional disclosure along with the shareholding pattern to
be filed with the stock exchanges, disclosing the number and percentage of Series A Cumulative
Compulsorily Convertible Preference Shares and Series B Cumulative Compulsorily Convertible
Preference Shares (CCPS –Series A and B) held by the Promoter and Promoter Group, (separately
indicating CCPS –Series A and B allotted over and above their entitlement) and the number and
percentage of enhanced share capital which Promoter and Promoter Group would be entitled to upon
conversion of the CCPS –Series A and B into shares and the aggregate shareholding as a result of such
conversion.
The Company is an existing company registered under the Companies Act and its Equity Shares are listed
on the BSE and the NSE. The Company is eligible to make this rights issue in terms of Chapter IV of the
SEBI Regulations.
The Company is in compliance with the provisions specified in Clause 1 of Part E of Schedule VIII of
the SEBI Regulations.
(a) The Company has been filing periodic reports, statements and information in compliance with the
listing agreement for the last three years.
(b) The reports, statements and information referred to in sub-clause (a) above are available on the
website of NSE and BSE.
(c) The Company has an investor grievance-handling mechanism which includes meeting of the
Shareholders Grievance Committee at frequent intervals, appropriate delegation of power by the board of
directors of the issuer as regards share transfer and clearly laid down systems and procedures for timely
and satisfactory redressal of investor grievances.
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ISSUE;
2. ON THE BASIS OF SUCH EXAMINATION AND THE DISCUSSIONS WITH THE
COMPANY, ITS DIRECTORS AND OTHER OFFICERS, OTHER AGENCIES,
INDEPENDENT VERIFICATION OF THE STATEMENTS CONCERNING THE
OBJECTS OF THE ISSUE, PRICE JUSTIFICATION AND THE CONTENTS OF THE
DOCUMENTS OTHER PAPERS FURNISHED BY THE COMPANY. WE CONFIRM
THAT:
C. THE DISCLOSURES MADE IN THE DRAFT LETTER OF OFFER ARE TRUE, FAIR
AND ADEQUATE TO ENABLE THE INVESTORS TO MAKE A WELL-INFORMED
DECISION AS TO INVESTMENT IN THE PROPOSED ISSUE AND SUCH
DISCLOSURES ARE IN ACCORDANCE WITH THE REQUIREMENTS OF THE
SEBI (ISSUE OF CAPITAL AND DISCLOSURE REQUIREMENTS) REGULATIONS,
2009, COMPANIES ACT, 1956 AND OTHER APPLICABLE LEGAL
REQUIREMENTS.
139
8. WE CERTIFY THAT THE PROPOSED ACTIVITIES OF THE ISSUER FOR WHICH THE
FUNDS ARE BEING RAISED IN THE PRESENT ISSUE FALL WITHIN THE ‘MAIN
OBJECTS’ LISTED IN THE OBJECT CLAUSE OF THE MEMORANDUM OF
ASSOCIATION OR OTHER CHARTER OF THE ISSUER AND THAT THE ACTIVITIES
WHICH HAVE BEEN CARRIED OUT UNTIL NOW ARE VALID IN TERMS OF THE
OBJECT CLAUSE OF ITS MEMORANDUM OF ASSOCIATION;
10. WE CERTIFY THAT A DISCLOSURE HAS BEEN MADE IN THE DRAFT LETTER OF
OFFER THAT THE INVESTORS SHALL BE GIVEN AN OPTION TO GET THE SHARES
IN DEMAT OR PHYSICAL MODE;
12. WE CERTIFY THAT THE FOLLOWING DISCLOSURES HAVE BEEN MADE IN THE
DRAFT LETTER OF OFFER:
14. WE ENCLOSE A NOTE EXPLAINING HOW THE PROCESS OF DUE DILIGENCE HAS
BEEN EXERCISED BY US IN VIEW OF THE NATURE OF CURRENT BUSINESS
BACKGROUND OR THE ISSUER, SITUATION AT WHICH THE PROPOSED BUSINESS
STANDS, THE RISK FACTORS, PROMOTER EXPERIENCE, ETC.
THE FILING OF THIS DRAFT LETTER OF OFFER DOES NOT, HOWEVER, ABSOLVE
THE COMPANY FROM ANY LIABILITIES UNDER SECTION 63 OR SECTION 68 OF THE
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COMPANIES ACT OR FROM THE REQUIREMENT OF OBTAINING SUCH STATUTORY
OR OTHER CLEARANCES AS MAY BE REQUIRED FOR THE PURPOSE OF THE
PROPOSED ISSUE. SEBI FURTHER RESERVES THE RIGHT TO TAKE UP, AT ANY POINT
OF TIME, WITH THE LEAD MANAGERS ANY IRREGULARITIES OR LAPSES IN THIS
DRAFT LETTER OF OFFER.
TCML is an indirect subsidiary of Tata Sons Limited, which is our Promoter. TCML has signed the due
diligence certificate and accordingly has been disclosed as a Lead Manager. Further, in compliance with
the proviso to regulation 21A(1) and explanation (iii) to regulation 21A(1) of SEBI (Merchant Bankers)
Regulations, 1992, read with Regulation 110 and Schedule XX of the SEBI ICDR Regulations, TCML
would be involved only in the marketing of the Issue.
Caution
The Company and the Lead Managers accept no responsibility for statements made otherwise than in this
Letter of Offer or in any advertisement or other material issued by the Company or at the instance of the
Company and that anyone placing reliance on any other source of information would be doing so at his
own risk.
Investors who invest in the issue will be deemed to have been represented by the company and Lead
Managers and their respective directors, officers, agents, affiliates and representatives that they are
eligible under all applicable laws, rules, regulations, guidelines and approvals to acquire the CCPS of the
Company, and are relying on independent advice / evaluation as to their ability and quantum of
investment in this Issue.
The Lead Managers and the Company shall make all information available to the Equity Shareholders
and no selective or additional information would be available for a section of the Equity Shareholders in
any manner whatsoever including at presentations, in research or sales reports etc. after filing of the Draft
Letter of Offer with SEBI.
This Letter of Offer has been prepared under the provisions of Indian laws and the applicable rules and
regulations thereunder. Any disputes arising out of this Issue will be subject to the jurisdiction of the
appropriate court(s) in Mumbai, India only.
Selling restrictions
The distribution of this Letter of Offer and the issue of CCPS on a rights basis to persons in certain
jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions.
Persons into whose possession this Letter of Offer may come are required to inform themselves about and
observe such restrictions. The Company is making this Issue of CCPS on a rights basis to the
Shareholders of the Company and will dispatch the Letter of Offer and CAFs to Shareholders who have
provided an Indian address.
No action has been or will be taken to permit this Issue in any jurisdiction where action would be
required for that purpose, except that the Draft Letter of Offer has been filed with SEBI. Accordingly, the
CCPS may not be offered or sold, directly or indirectly, and this Letter of Offer may not be distributed in
any jurisdiction, except in accordance with legal requirements applicable in such jurisdiction. Receipt of
this Letter of Offer will not constitute an offer in those jurisdictions in which it would be illegal to make
such an offer and, those circumstances, this Letter of Offer must be treated as sent for information only
and should not be copied or redistributed. Accordingly, persons receiving a copy of this Letter of Offer
should not, in connection with the issue of the CCPS or the rights entitlements, distribute or send the same
in or into the United States or any other jurisdiction where to do so would or might contravene local
securities laws or regulations. If this Letter of Offer is received by any person in any such territory, or by
their agent or nominee, they must not seek to subscribe to the CCPS or the rights entitlements referred to
in this Letter of Offer.
Neither the delivery of this Letter of Offer nor any sale hereunder, shall under any circumstances create
any implication that there has been no change in the Company’s affairs from the date hereof or that the
information contained herein is correct as of any time subsequent to this date.
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United States restrictions
NEITHER THE RIGHTS ENTITLEMENTS NOR THE SECURITIES THAT MAY BE PURCHASED
PURSUANT HERETO HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD, RESOLD OR OTHERWISE TRANSFERRED WITHIN THE
UNITED STATES OF AMERICA OR THE TERRITORIES OR POSSESSIONS THEREOF (THE
“UNITED STATES” OR THE “U.S.”) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, “US
PERSONS” (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT (“REGULATION
S”)), EXCEPT IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. THE RIGHTS REFERRED TO IN THIS LETTER OF OFFER ARE BEING
OFFERED IN INDIA, BUT NOT IN THE UNITED STATES. THE OFFERING TO WHICH THIS
LETTER OF OFFER RELATES IS NOT, AND UNDER NO CIRCUMSTANCES IS TO BE
CONSTRUED AS, AN OFFERING OF ANY SHARES OR RIGHTS FOR SALE IN THE UNITED
STATES OR AS A SOLICITATION THEREIN OF AN OFFER TO BUY ANY OF THE SAID
SHARES OR RIGHTS. ACCORDINGLY, THIS LETTER OF OFFER SHOULD NOT BE
FORWARDED TO OR TRANSMITTED IN OR INTO THE UNITED STATES AT ANY TIME.
NEITHER THE COMPANY NOR ANY PERSON ACTING ON BEHALF OF THE COMPANY WILL
ACCEPT SUBSCRIPTIONS OR RENUNCIATIONS FROM ANY PERSON, OR THE AGENT OF
ANY PERSON, WHO APPEARS TO BE, OR WHO THE COMPANY OR ANY PERSON ACTING
ON BEHALF OF THE COMPANY HAS REASON TO BELIEVE IS, EITHER A “U.S. PERSON” (AS
DEFINED IN REGULATION S) OR OTHERWISE IN THE UNITED STATES. ANY PERSON
SUBSCRIBING TO THE CCPS OFFERED HEREBY WILL BE DEEMED TO REPRESENT THAT
SUCH PERSON IS NOT A U.S. PERSON (AS DEFINED IN REGULATION S) OR OTHERWISE IN
THE UNITED STATES AND HAS NOT VIOLATED ANY U.S. SECURITIES LAWS IN
CONNECTION WITH THE EXERCISE.
The designated stock exchange for the purposes of this Issue will be the BSE.
(i) warrant, certify or endorse the correctness or completeness of any of the contents of this Letter
of Offer ; or
(ii) warrant that this Company's securities will be listed or will continue to be listed on the
Exchange; or
(iii) take any responsibility for the financial or other soundness of this Company, its Promoters, its
management or any scheme or project of this Company;
and it should not for any reason be deemed or construed that this Letter of Offer has been cleared or
approved by the Exchange. Every person who desires to apply for or otherwise acquires any securities of
this Company may do so pursuant to independent inquiry, investigation and analysis and shall not have
any claim against the Exchange whatsoever by reason of any loss which may be suffered by such person
consequent to or in connection with such subscription/acquisition whether by reason of anything stated
or omitted to be stated herein or for any other reason whatsoever.
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listed. The Exchange has scrutinised this letter of offer for its limited internal purpose of deciding on the
matter of granting the aforesaid permission to this Issuer. It is to be distinctly understood that the
aforesaid permission given by NSE should not in any way be deemed or construed that the letter of offer
has been cleared or approved by NSE; nor does it in any manner warrant, certify or endorse the
correctness or completeness of any of the contents of this letter of offer; nor does it warrant that this
Issuer's securities will be listed or will continue to be listed on the Exchange; nor does it take any
responsibility for the financial or other soundness of this Issuer, its promoters, its management or any
scheme or project of this Issuer.
Every person who desires to apply for or otherwise acquire any securities of this Issuer may do so
pursuant to independent inquiry, investigation and analysis and shall not have any claim against the
Exchange whatsoever by reason of any loss which may be suffered by such person consequent to or in
connection with such subscription /acquisition whether by reason of anything stated or omitted to be
stated herein or any other reason whatsoever.
Filing
The Draft Letter of Offer was filed with SEBI, Plot No. C 4-A, ‘G’ Block, Bandra Kurla Complex,
Bandra (East), Mumbai 400 051, India for its observations. This Letter of Offer has been filed with the
Designated Stock Exchange as per the provisions of the Companies Act.
The expenses of the Issue payable by the Company include selling commission, reimbursement and fees
payable to the Lead Managers, Auditors, legal advisor, Registrar to the Issue, printing and distribution
expenses, publicity, listing fees, stamp duty and other expenses and will be met out of the Issue Proceeds.
The Company has made adequate arrangements for the redressal of investor complaints. Well-arranged
correspondence systems have been developed for letters of a routine nature. The share transfer and
dematerialisation for the Company is being handled by the Company and the registrar. The Company
estimates that the average time required for the redressal of routine investor complaints, including from
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its shareholders, is 15 days from the date of receipt of the complaint.
Status of complaints
(a) Total number of complaints received during the last financial year (fiscal 2010): 19.
(b) Status of complaints as on March 31, 2010: Out of 19 complaints received during fiscal 2009,
18 complaints were resolved and 1 complaint was outstanding.
(c) Number of complaints received between April 1, 2010 and the date of filing of this Letter of
Offer: 7.
(d) Status of complaints received between April 1, 2010 and the date of filing of this Letter of
Offer: Out of 7 complaints received, 6 complaints were resolved and 1 complaint is outstanding.
(e) Time normally taken for disposal of various types of investor grievances: 15 days.
The Company’s Investor grievances arising out of the Issue will be handled by Link Intime India Private
Limited who is the Registrar to the Issue. The Registrar will have a separate team of personnel handling
only post-Issue correspondence.
The agreement between the Company and the Registrar will provide for retention of records with the
Registrar for a period of one year from the last date of dispatch of Allotment Advice/ share certificate /
refund orders to enable the investors to approach the Registrar for redressal of their grievances.
All grievances relating to the Issue may be addressed to the Registrar to the Issue giving full details such
as folio number, name and address, contact telephone/cell numbers, email id of the first Investor, number
and type of shares applied for, CAF serial number, amount paid on application and the name of the bank
and the branch where the application was deposited, along with a photocopy of the acknowledgement
slip. In case of renunciation, the same details of the Renouncee should be furnished.
The average time taken by the Registrar for attending to routine grievances will be seven days from the
date of receipt. In case of non-routine grievances where verification at other agencies is involved, it
would be the endeavour of the Registrar to attend to them as expeditiously as possible. The Company
undertakes to resolve the Investor grievances in a time bound manner.
Investors may contact the Compliance Officer in case of any pre-Issue / post-Issue related
problems such as non-receipt of allotment advice / share certificates / demat credit / refund orders
etc. His address is as follows:
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Mr. M. M. Surti
Company Secretary
Trent House,
G Block,
Plot No. C-60,
Bandra Kurla Complex,
Bandra (East),
Mumbai - 400 051
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TERMS OF THE ISSUE
The CCPS proposed to be issued on a rights basis are subject to the terms and conditions contained in
this Letter of Offer, Abridged Letter of Offer, the enclosed Composite Application Form (“CAFs”), the
Memorandum and Articles of Association of the Company, the provisions of the Act, regulations issued
by SEBI, guidelines, notifications and regulations for issue of capital and for listing of securities issued
by Government of India, the Reserve Bank of India and/or other statutory authorities and bodies from
time to time, terms and conditions as stipulated in the allotment advice or security certificate and rules as
may be applicable and introduced from time to time.
This Issue is being made pursuant to a resolution passed by the Board of Directors of the Company under
Section 81(1) of the Companies Act at its meeting held on April 26, 2010 and the meeting of the
Committee of Directors held on May 10, 2010. The terms of the Issue have been authorized by the Board
of Directors of the Company at its meeting held on June 14, 2010. Further, the Letter of Offer has been
adopted by the Committee of Directors of the Company on July 20, 2010.
The CCPS are being offered for subscription for cash to those existing Equity Shareholders of the
Company whose names appear as beneficial owners as per the list to be furnished by the depositories in
respect of the Equity Shares held in dematerialised form and on the register of members of the Company
in respect of the Equity Shares held in physical form at the close of business hours on the Record Date,
i.e., July 10, 2010.
Rights Entitlement
As your name appears as beneficial owner in respect of Equity Shares held in the electronic form or
appears in the register of members as an Equity Shareholder of the Company as on the Record Date, you
are entitled to the number CCPS as set out in Part A of the enclosed CAFs.
The eligible Equity Shareholders are entitled to 4 CCPS (comprising 2 CCPS Series A and 2 CCPS
Series B) for every 9 Equity Shares held on the Record Date.
Face Value
Issue Price
Each CCPS Series A shall be offered at a face value of Rs. 10 each for cash at a price of Rs. 550 each
(including a premium of Rs. 540 each) and each CCPS Series B shall be offered at a face value of Rs. 10
each for cash at a price of Rs. 550 each (including a premium of Rs. 540 each). The Issue Price has been
arrived in consultation between the Company and the Lead Managers. An equity shareholder should
apply for such Equity Shareholder’s entitlement of both the CCPS Series A and Series B together.
Entitlement Ratio
The CCPS are being offered on a rights basis to the existing Equity Shareholders of the Company in the
ratio of 4 CCPS (comprising 2 CCPS Series A and 2 CCPS Series B) for every 9 Equity Shares held on
the record date, July 10, 2010. It is clarified that in order to subscribe to the Issue, an Equity Shareholder
should apply for such Equity Shareholder’s entitlement of both the CCPS Series A and the CCPS Series
B.
Fractional Entitlement
For the CCPS being offered on a rights basis under this Issue, if the shareholding of any of the Equity
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Shareholders is less than 9 Equity Shares or not in the multiple of 9, the fractional entitlement of such
holders shall be ignored. Shareholders whose fractional entitlements are being ignored would be given
preference in allotment of one additional CCPS Series A and one additional CCPS Series B each if they
apply for additional CCPS.
Those Equity Shareholders holding less than 9 Equity Shares and therefore entitled to zero CCPS under
this Issue shall be dispatched a CAF with zero entitlement. Such Equity Shareholders are entitled to
apply for additional CCPS (consisting of an equal number of CCPS Series A and CCPS Series B).
However, they cannot renounce the same in favour of third parties. CAF with zero entitlement will be
non-negotiable/non-renounceable.
For e.g., if an Equity Shareholder holds 6 Equity Shares, he will be entitled to nil CCPS comprising of
nil CCPS Series A and nil CCPS Series B on a rights basis. He will be given a preference for allotment
of 2 additional CCPS consisting of 1 CCPS Series A and 1 CCPS Series B if he applies for the same.
Ranking
The CCPS being issued shall be subject to the provisions of our Memorandum of Association and
Articles of Association. The Equity Shares arising out of the conversion of the CCPS shall rank pari
passu, in all respects including voting and dividend, with our existing Equity Shares.
Terms of Payment
All Equity Shareholders applying for the CCPS shall be required to pay an amount of Rs. 550 for CCPS
Series A and Rs. 550 for CCPS Series B upon application.
Conversion
One CCPS Series A of face value of Rs. 10 each issued at a premium of Rs. 540 each will be
compulsorily and automatically converted into one fully paid-up Equity Share of Rs. 10 each on
September 1, 2011 without any application or any further act on the part of the holder of the CCPS Series
A.
One CCPS Series B of face value of Rs. 10 each issued at a premium of Rs. 540 each will be
compulsorily and automatically converted into one fully paid-up Equity Share of Rs. 10 each on
September 1, 2012 without any application or any further act on the part of the holder of the CCPS Series
B.
If the Company (a) makes an issue of its Equity Shares by way of a bonus issue (by capitalisation of its
profits or reserves), (b) makes a rights issue of Equity Shares, (c) sub-divides the outstanding Equity
Shares or (d) consolidate its outstanding Equity Shares, then the number of Equity Shares to be issued
upon conversion shall be appropriately adjusted so that the holder of CCPS, shall be entitled to receive
the number of Equity Shares and/or other securities of the Company which such holder would have held
or have been entitled to receive after the happening of any of the events described above had such CCPS
been converted immediately prior to the happening of such event (or if the Company has fixed a record
date for the determination of shareholders entitled to receive such Equity Shares or other securities by
way of a bonus or a rights issue or Equity Shares to be issued upon any such sub-division or
consolidation, then immediately prior to such record date).
The Company shall not issue any fractional certificates to CCPS holders on conversion of CCPS to
equity shares of the Company and instead all such fractional entitlements to which the CCPS holders
would be entitled to on allotment of the equity shares of the Company will be consolidated and the
Company will issue and allot Equity Shares in lieu thereof to a person authorized by the Company with
the express understanding that such person will hold such Ordinary Shares in trust for those entitled to
the fractional entitlements and sell the same in the market within 15 days from date of allotment at the
best available price and pay to the Company, the sale proceeds thereof, which the Company will
distribute proportionately to those persons who are entitled to their fractional entitlements.
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Dividend
The CCPS Series A and CCPS Series B shall each carry a dividend of 0.1% and 0.1% per annum. The
payment of dividends on CCPS will be paid after the same has been approved in the General Meeting of
the Company. The period for which a dividend will be payable on CCPS will be calculated from the date
of allotment of CCPS up to the date on which the CCPS are converted into fully paid-up Equity Shares.
The dividend shall be paid within 30 days.
The payment of dividend at the coupon rate on CCPS shall be made to those holders of CCPS whose
names appear as beneficial owners in accordance with the list to be furnished by the depositories in
respect of the shares held in the electronic form and on the Register of Members of the Company in
respect of the CCPS held in physical form, at the close of business hours on the Record Date. The Record
Date for this purpose will be fixed in consultation with the Designated Stock Exchanges. The payment of
dividend at the coupon rate will be made by cheque payable at par at such places where the applications
are initially accepted. In other places, the Company has reserved the right to adopt any other suitable
mode of payment.
As per the current provisions of the Income Tax Act, 1961, the CCPS holder is not liable to pay tax on
the dividend received from the Company, however the Company is liable to pay a dividend distribution
tax in accordance with the current provisions of Income Tax Act.
Taxation
Upon conversion of CCPS into Equity Shares, the difference between the conversion price and the
closing market price of equity shares on the date of conversion of the CCPS would be treated as long
term capital gain / loss as the case may be.
Subsequently, if and when equity shares allotted on conversion of CCPS are sold / transferred, the cost of
acquisition for such equity shares will be closing market price on the date of conversion of the CCPS,
based on which capital gain/loss would be computed on sale / transfer as the case may be.
The CCPS shall confer on the holders thereof, the right to a fixed preferential dividend at a rate as
may be determined by the Board at the time of the issue, on the capital for the time being paid up or
credited as and from time to time paid up thereon.
The CCPS shall rank for capital and dividend (including all dividends undeclared upto the
commencement of winding up) and for repayment of capital in a winding up, pari passu inter se and
in priority to the Equity Shares of the Company but shall not confer any further or other right to
participate either in profits or assets and that preferential rights shall automatically cease on
conversion of these shares into Equity Shares.
The rights and terms attached to the CCPS, including conversion into Equity Shares thereof, shall be
148
determined by the Board at the time of the issue and as and when converted, such Equity Shares
shall rank pari passu with the then existing Equity Shares of the Company in all respects.
The holders of CCPS shall have the right to receive all notices of general meetings of the Company
but shall not confer on the holders thereof the right to vote at any meetings of the Company save to
the extent and in the manner provided in the Companies Act, 1956, or any re-enactment thereof.
The rights and terms attached to the CCPS may be modified or dealt with by the Directors in accordance
with the provisions of the AoA of the Company.
Joint Holders
Where two or more persons are registered as the holders of any CCPS, they shall be deemed to hold the
same as joint tenants with the benefit of survivorship subject to the provisions contained in the Articles.
Nomination
In terms of Section 109A of the Act, nomination facility is available for the CCPS.
The Investor can nominate any person by filing the relevant details in CAF in the space provided for this
purpose.
In case of CCPS holders who are individuals, a sole CCPS holder or the first named CCPS holder, along
with other joint CCPS holders, if any, may nominate any person(s) who, in the event of the death of the
sole holder or all the joint-holders, as the case may be, shall become entitled to the CCPS. A person,
being a nominee, becoming entitled to the CCPS by reason of the death of the original CCPS holder(s),
shall be entitled to the same advantages to which he would be entitled if he were the registered holder of
the CCPS. Where the nominee is a minor, the CCPS holder(s) may also make a nomination to appoint, in
the prescribed manner, any person to become entitled to the CCPS, in the event of death of the said
holder, during the minority of the nominee. A nomination shall stand rescinded upon the sale of the
CCPS by the person nominating. A transferee will be entitled to make a fresh nomination in the manner
prescribed. When the CCPS is held by two or more persons, the nominee shall become entitled to receive
the amount only on the demise of all the holders. Fresh nominations can be made only in the prescribed
form available on request with the registrar of the Company, TSR Darashaw Limited.
Only one nomination would be applicable for one folio. Hence, in case the Equity Shareholder(s) has
already registered the nomination with the Company, no further nomination needs to be made for CCPS
that may be allotted in this Issue under the same folio.
In case the allotment of CCPS is in dematerialised form, there is no need to make a separate
nomination for the CCPS to be allotted in this Issue. Nominations registered with respective
Depositary Participant (“DP”) of the applicant would prevail. Any applicant desirous of changing
the existing nomination is requested to inform its respective DP.
Notices
All notices to the CCPS holders required to be given by the Company shall be published in one English
national daily with wide circulation, one Hindi national daily with wide circulation and one regional
language daily newspaper with wide circulation and/or, will be sent by ordinary post / registered post /
speed post to the registered holders of the CCPS from time to time.
Listing and Trading of CCPS Proposed to Be Issued and the Equity Shares Arising Upon
Conversion of the CCPS
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The Company’s existing Equity Shares are currently traded on the BSE and the NSE under the ISIN
INE849A01012.
The CCPS proposed to be issued on a rights basis shall be listed and admitted for trading on the BSE and
the NSE for which the Company will make an application to NSDL and CDSL for allotment of ISIN.
The CCPS allotted pursuant to this Issue will be listed as soon as practicable in accordance with the
SEBI Regulations. The Company has received in-principal approval from the BSE through letter no.
DCS/PREF/JA/IP-RT/88/10-11 dated May 24, 2010 and from NSE through letter no. NSE/LIST/138410-
X, dated May 24, 2010.
The Equity Shares which will be allotted upon conversion of CCPS shall be listed for trading on the BSE
and the NSE under the existing ISIN for fully paid Equity Shares of the Company. The Equity Shares
allotted pursuant to the conversion will be listed as soon as practicable in accordance with the SEBI
Regulations.
The distribution of the Letter of Offer and the issue of CCPS on a rights basis to persons in certain
jurisdictions outside India may be restricted by legal requirements prevailing in those jurisdictions.
The Company is making this issue of CCPS on a rights basis only to the Equity Shareholders of the
Company who have an address in India.
Minimum Subscription
If the Company does not receive the minimum subscription of 90% of the Issue, the Company shall
forthwith refund the entire subscription amount received within 15 days from the Issue Closing Date. If
such money is not repaid within eight days from the day the Company becomes liable to repay it, (i.e. 15
days after the Issue Closing Date or the date of the refusal by the Stock Exchange(s), whichever is
earlier) the Company and every Director of the Company who is an officer in default shall, on and from
expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under
sub-section (2) and (2A) of Section 73 of the Companies Act.
Tata Sons Limited (“TSL”) has confirmed that it intends to subscribe to the full extent of its Rights
Entitlement in the Issue. TSL reserves the right to apply for any or all of the Rights Entitlement
renounced by any of the Promoter Group companies. TSL (either through itself and/or through its
subsidiaries) also intends to subscribe to any unsubscribed portion of the Issue such that 100% of the
Issue is subscribed. As a result of this subscription and consequent allotment, TSL and its subsidiaries
may acquire CCPS over and above their Rights Entitlement, which may result in an increase of TSL’s
shareholding above its current shareholding and including their Rights Entitlement of CCPS under the
Issue and allotment of Equity Shares upon conversion of the CCPS. This subscription and acquisition of
additional CCPS by TSL through this Issue, if any, and allotment of Equity Shares upon conversion of
the CCPS will not result in a change of control of the management of the Company and shall be exempt
in terms of the proviso to Regulation 3(1)(b)(ii) of the Takeover Code. As such, there is no intention
other than meeting the requirements indicated in the section on “Objects of the Issue” on page 34 of this
Letter of Offer, there is no other intention/purpose for this Issue, including no intention to de-list the
Company, even if, as a result of allotments to the Promoter in this Issue (including conversion of the
CCPS), TSL’s shareholding in the Company exceeds its current shareholding. The Promoter shall
subscribe to the above mentioned unsubscribed portion as per the relevant provisions of law. Pursuant to
this allotment to the Promoter of any unsubscribed portion, over and above its Rights Entitlement, the
Company and the Promoter undertake to comply with the Listing Agreement and other applicable laws.
For further details please refer to section titled “Terms of the Issue - Basis of Allotment” beginning on
page 146 of this Letter of Offer.
The CAF for the CCPS will be printed in black ink for all Equity Shareholders. In case the original CAF
is not received by the applicant or is misplaced by the applicant/investor, the applicant may request the
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Registrar to the Issue, for issue of a duplicate CAF, by furnishing the registered folio number, DP ID
Number, Client ID Number and their full name and address. In case the signature of the Equity
Shareholder(s) does not match with the specimen registered with the Company, the application is liable
to be rejected.
The CAF clearly indicates the number of CCPS that the Equity Shareholder is entitled to.
If the Equity Shareholder applies for an investment in the CCPS, then he/she can:
• Apply for his entitlement of CCPS in part, consisting of an equal number of CCPS Series A and
CCPS Series B;
• Apply for his entitlement of CCPS in part consisting of an equal number of CCPS Series A and
CCPS Series B and renounce the remainder of the CCPS to the same person, i.e., renouncing of
CCPS Series A to ‘X’ and CCPS Series B to ‘Y’ would not be permissible;
• Apply for his entitlement in full and apply for additional CCPS consisting of an equal number of
CCPS Series A and CCPS Series B;
Additional CCPS
You are eligible to apply for additional CCPS (consisting of an equal number of CCPS Series A and
CCPS Series B) over and above the number of CCPS (as the case may be) you are entitled to, provided
that you have applied for all the CCPS offered without renouncing them in full or in part in favour of any
other person(s). Applications for additional CCPS shall be considered and allotment shall be made at the
sole discretion of the Board, in consultation with the Designated Stock Exchange and in the manner
prescribed under the section titled “Terms of the Issue - Basis of Allotment” on page 146 of this Letter of
Offer.
Application for additional CCPS of only one particular series, i.e., ‘A’ or ‘B’ or in non-equal number is
not permissible.
If you desire to apply for additional CCPS, please indicate your requirement in the place provided for
additional shares in Part A of the CAF. The renouncees applying for all CCPS renounced in their favour
may also apply for additional CCPS consisting of an equal number of CCPS Series A and CCPS Series
B.
Where the number of additional CCPS applied for exceeds the number available for allotment, the
allotment would be made on a fair and equitable basis in consultation with the Designated Stock
Exchange.
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Non-residents including FIIs cannot apply for additional CCPS unless accompanied by applicable
regulatory approvals from FIPB and/or RBI.
Renunciation
This Issue includes a right exercisable by you to renounce the CCPS offered to you either in full or in
part in favour of any other person or persons. Your attention is drawn to the fact that the Company shall
not make an allotment of and/or register CCPS in favour of more than three persons (including joint
holders); partnership firm(s) or their nominee(s); minors; HUFs; or any society or trust (unless it is
registered under the Societies Registration Act, 1860 or the Indian Trust Act, 1882 or any other
applicable law relating to societies or trusts and is authorized under its constitution or by-laws to hold
CCPS, as the case may be).
Any renunciation from non-resident Equity Shareholder(s) (other than FIIs) to resident Indian(s) and
from resident Indians to non-residents (other than FIIs) is subject to the renouncer(s)/ renouncee(s)
obtaining the approval of the RBI under the FEMA and such permissions should be attached to the CAF.
Applications not accompanied by the aforesaid approvals are liable to be rejected.
By virtue of the Circular No. 14 dated September 16, 2003 issued by the RBI, Overseas Corporate
Bodies (“OCBs”) have been derecognized as an eligible class of investors and the RBI has subsequently
issued the Foreign Exchange Management (Withdrawal of General Permission to Overseas Corporate
Bodies (OCBs)) Regulations, 2003. Accordingly, the existing Equity Shareholders of the Company who
do not wish to subscribe to the CCPS being offered but wish to renounce the same in favour of
Renouncee shall not renounce the same (whether for consideration or otherwise) in favour of OCB(s).
Part ‘A’ of the CAF must not be used by any person(s) other than those in whose favour this offer has
been made. If used, this will render the application invalid. Submission of the enclosed CAF to the
Banker to the Issue at its collecting branches specified on the reverse of the CAF with the form of
renunciation (Part ‘B’ of the CAF) duly filled in shall be conclusive evidence for the Company of the
person(s) applying for CCPS in Part ‘C’ of the CAF to receive allotment of such CCPS. The Renouncees
applying for all the CCPS renounced in their favour may also apply for additional CCPS. Part ‘A’ of the
CAF must not be used by the Renouncee(s) as this will render the application invalid. Renouncee(s) will
have no further right to renounce any CCPS in favour of any other person.
Please note that any renunciation of CCPS shall include the renunciation of the CCPS Series A and
CCPS Series B collectively and that investors are not allowed to renounce one series without
renouncing the other series.
To renounce all the CCPS offered to an Equity Shareholder in favour of one renouncee
If you wish to renounce the offer indicated in Part ‘A’, in whole, please complete Part ‘B’ of the CAF. In
case of joint holding, all joint holders must sign Part ‘B’ of the CAF. The person in whose favour
renunciation has been made should complete and sign Part ‘C’ of the CAF. In case of joint renouncees,
all joint renouncees must sign this part of the CAF.
If you wish to either accept this offer in part and renounce the balance or renounce the entire offer under
this Issue in favour of two or more renouncees, the CAF must be first split into requisite number of
forms.
Please indicate your requirement of split forms in the space provided for this purpose in Part ‘D’ of the
CAF and return the entire CAF to the Registrar to the Issue so as to reach them at the latest by the close
of business hours on the last date of receiving requests for split forms. On receipt of the required number
of split forms from the Registrar, the procedure as mentioned above shall have to be followed.
In case the signature of the Equity Shareholder(s), who has renounced the CCPS, does not agree with the
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specimen registered with the Company, the application is liable to be rejected.
Renouncee(s)
The person(s) in whose favour the CCPS are renounced should fill in and sign Part ‘C’ of the Application
Form and submit the entire Application Form to the Bankers to the Issue on or before the Issue Closing
Date along with the application money in full.
If you wish to apply for CCPS jointly with any other person(s), not more than three, who is/are not
already a joint holder with you, it shall amount to renunciation and the procedure as stated above for
renunciation shall have to be followed. Even a change in the sequence of the name of joint holders shall
amount to renunciation and the procedure, as stated above shall have to be followed.
However, this right of renunciation is subject to the express condition that the Board of Directors of the
Company shall be entitled in its absolute discretion to reject the request for allotment from the
renouncee(s) without assigning any reason thereof.
• Part ‘A’ of the CAF must not be used by any person(s) other than the Equity Shareholder to whom
this Letter of Offer has been addressed. If used, this will render the application invalid.
• Request for split form should be made for a minimum of 2 CCPS. Split form would be in such
manner that same number of CCPS Series A and Series B are there in the split form.
• Request by the applicant for the split application form should reach the Company on or before
August 13, 2010.
• Only the Equity Shareholder to whom the Letter of Offer has been addressed shall be entitled to
renounce and to apply for split application forms. Forms once split cannot be split further.
• Split form(s) will be sent to the applicant(s) by post at the applicant’s risk.
The summary of options available to the Equity Shareholder is presented below. You may exercise any
of the following options with regard to the CCPS offered, using the enclosed CAFs:
1. Accept whole or part of your Fill in and sign Part A (all joint holders must sign)
Rights Entitlement without
renouncing the balance.
2. Accept your Rights Entitlement Fill in and sign Part A including Block III relating to
in full and apply for additional the acceptance of entitlement and Block IV relating
CCPS to additional CCPS (all joint holders must sign)
3. Renounce your Rights Fill in and sign Part B (all joint holders must sign)
Entitlement in full to one indicating the number of CCPS renounced and hand
person (joint Renouncees are it over to the Renouncee. The Renouncee must fill in
considered as one person). and sign Part C (all joint Renouncees must sign)
4. Accept a part of your Rights Fill in and sign Part D (all joint holders must sign)
Entitlement and renounce the requesting for Split Application Form (“SAFs”).
balance to one or more Send the CAF to the Registrar to the Issue so as to
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Sr. Option available Action required
no.
Renouncee(s) reach them on or before the last date for receiving
requests for SAFs. Splitting will be permitted only
OR
once.
Renounce your Rights
On receipt of the SAF take action as indicated
Entitlement to all the CCPS
below.
offered to you to more than one
Renouncee For the CCPS you wish to accept, if any, fill in and
sign Part A.
For the CCPS you wish to renounce, fill in and sign
Part B indicating the number of CCPS renounced and
hand it over to the Renouncee. Each of the
Renouncee should fill in and sign Part C for the
CCPS accepted by them.
5. Introduce a joint holder or This will be treated as a renunciation. Fill in and sign
change the sequence of joint Part B and the Renouncee must fill in and sign Part
holders C.
In case the original CAF is not received, or is misplaced by the applicant, the Registrar to the Issue will
issue a duplicate CAF on the request of the applicant who should furnish the registered folio number/DP
and Client ID number and his/ her full name and address to the Registrar to the Issue. Please note that the
request for duplicate CAF should reach the Registrar to the Issue within 11 days, i.e., August 17, 2010
from the Issue Opening Date. Please note that those who are making the application in the duplicate form
should not utilize the original CAF for any purpose including renunciation, even if it is received/found
subsequently. If the applicant violates any of these requirements, he/she shall face the risk of rejection of
both the applications.
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the
duplicate CAF may make an application to subscribe to the Issue on plain paper, along with Demand
Draft, net of bank and postal charges payable at Mumbai which should be drawn on ‘Trent Limited-
Rights Issue-2010 ’ for residents and ‘Trent Limited-Rights Issue-2010-NR’ for non-residents and send
the same by registered post directly to the Registrar to the Issue.
The envelope should be superscribed “Trent Limited Rights Issue-2010” and should be postmarked in
India. The application on plain paper, duly signed by the applicants including joint holders, in the same
order as per specimen recorded with the Company, must reach the office of the Registrar to the Issue
before the Issue Closing Date and should contain the following particulars:
• Number of additional CCPS applied for (comprising of an equal number of CCPS Series A and
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CCPS Series B), if any
• Total amount paid at the rate of Rs. 550 per CCPS Series A and Rs. 550 per CCPS Series B
• Particulars of cheque/draft
• Savings/Current Account Number and name and address of the bank where the Equity Shareholder
will be depositing the refund order
• Except for applications on behalf of the Central or State Government and the officials appointed by
the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of
the total value of the CCPS applied for pursuant to the Issue
• Representation that the Equity Shareholder is not resident in the United States at the time of making
the application.
• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the
records of the Company
Please note that those who are making the application otherwise than on original CAF shall not be
entitled to renounce their rights and should not utilize the original CAF for any purpose including
renunciation even if it is received subsequently. If the applicant violates any of these requirements,
he/she shall face the risk of rejection of both the applications. The Company shall refund such
application amount to the applicant without any interest thereon.
The last date for submission of the duly filled in CAF is August 20, 2010. The Issue will be kept open for
a minimum of 15 (fifteen) days and the Board or any committee thereof will have the right to extend the
said date for such period as it may determine from time to time but not exceeding 30 (thirty) days from
the Issue Opening Date.
If the CAF together with the amount payable is not received by the Banker to the Issue/Registrar to the
Issue on or before the close of banking hours on the aforesaid last date or such date as may be extended
by the Board/ Committee of Directors, the offer contained in the Letter of Offer shall be deemed to have
been declined and the Board/Committee of Directors shall be at liberty to dispose off the CCPS hereby
offered, as provided under the section titled “Terms of the Issue - Basis of Allotment” on page 146 of
this Letter of Offer.
INVESTORS MAY PLEASE NOTE THAT THE CCPS OF THE COMPANY CAN BE TRADED
ON THE STOCK EXCHANGES ONLY IN DEMATERIALISED FORM.
Basis of Allotment
Subject to the provisions contained in this Letter of Offer, the Articles of Association of the Company
and the approval of the Designated Stock Exchange, the Board will proceed to allot the CCPS in the
following order of priority:
(a) Full allotment to those Equity Shareholders who have applied for their rights entitlement either in
full or in part and also to the renouncee(s) who has/have applied for CCPS renounced in their favour,
in full or in part.
(b) For CCPS being offered on a rights basis under this Issue, if the shareholding of any of the Equity
Shareholders is less than 9 Equity Shares or is not in the multiple of 9, the fractional entitlement of
such holders shall be ignored. Shareholders whose fractional entitlements are being ignored would
be considered for allotment of one additional CCPS Series A and one additional CCPS Series B each
if they apply for additional CCPS. Allotment under this head shall be considered if there are any
unsubscribed CCPS after allotment under (a) above. If number of CCPS required for allotment under
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this head are more than number of shares available after allotment under (a) above, the allotment
would be made on a fair and equitable basis in consultation with the Designated Stock Exchange.
(c) Allotment to the Equity Shareholders who having applied for all the CCPS offered to them as part of
the Issue and have also applied for additional CCPS (consisting of an equal number of CCPS Series
A and CCPS Series B). The allotment of such additional CCPS will be made as far as possible on an
equitable basis having due regard to the number of Equity Shares held by them on the Record Date,
provided there is an under-subscribed portion after making full allotment in (a) and (b) above. The
allotment of such CCPS will be at the sole discretion of the Board/Committee of Directors in
consultation with the Designated Stock Exchange, as a part of the Issue and will not be preferential
allotment.
(d) Allotment to renouncees who having applied for all the CCPS renounced in their favour, have
applied for additional CCPS provided there is surplus available after making full allotment under (a),
(b) and (c) above. The allotment of such CCPS will be at the sole discretion of the Board/Committee
of Directors in consultation with the Designated Stock Exchange, as a part of the Issue and not
preferential allotment.
(e) Allotment to any other person as the Board may in its absolute discretion deem fit provided there is
surplus available after making full allotment under (a), (b), (c) and (d) above.
(f) After taking into account allotment to be made under (a) and (b) above, if there is any unsubscribed
portion, the same shall be deemed to be ‘unsubscribed’ for the purpose of regulation 3(1)(b) of the
Takeover Code which would be available for allocation under (c), (d) and (e) above.
In accordance with the current regulations, the following restrictions are applicable for investment by
FIIs:
The issue of Equity Shares upon conversion of CCPS to a single FII should not exceed 10% of the post-
issue paid-up capital of the Company. In respect of an FII acquiring the Equity Shares on behalf of its
sub-accounts the investment on behalf of each sub-account shall not exceed 5% of the total paid-up
capital of the Company. In accordance with foreign investment limits applicable to the Company, the
total FII investment cannot exceed 24% of the total paid-up capital of the Company.
The Company will issue and dispatch allotment advice / share certificates / demat credit and/or letters of
regret along with refund orders or credit the allotted securities to the respective beneficiary accounts, if
any, within a period of 15 (fifteen) days from the Issue Closing Date. If such money is not repaid within
eight days from the day the Company becomes liable to repay it (i.e. fifteen days after the Issue Closing
Date or the date of the refusal by the Stock Exchange(s), whichever is earlier), the Company and every
Director of the Company who is an officer in default shall, on and from expiry of eight days, be jointly
and severally liable pay the money with interest as prescribed under Sub Sections (2) and (2A) of Section
73 of the Companies Act, 1956.
Applicants residing at those centers where clearing houses are managed by the RBI, will get refunds
through the NECS (National Electronic Clearing Service) only, except where applicants are otherwise
disclosed as applicable/eligible to get refunds through direct credit and real time gross settlement
(“RTGS”) provided the MICR details are recorded with the Depositories or our Company.
In case of those applicants who have opted to receive their Rights Entitlement in dematerialised form
using electronic credit under the depository system, an advice regarding their credit of the CCPS shall be
given separately. Applicants to whom refunds are made through electronic transfer of funds will be sent a
letter through ordinary post intimating them about the mode of credit of refund within a period of
15(fifteen) days from the Issue Closing Date.
In case of those applicants who have opted to receive their Rights Entitlement in physical form, the
Company will issue the corresponding share certificates under Section 113 of the Companies Act or
other applicable provisions, if any.
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Any letter of allotment/refund order exceeding Rs. 1,500 would be sent by registered post/speed post to
the sole/first applicant’s registered address. Refund orders for a value of up to Rs. 1,500 would be sent
under certificate of posting. Such refund orders would be payable at par at all places where the
applications were originally accepted. The same would be marked ‘Account Payee only’ and would be
drawn in favour of the sole/first applicant. Adequate funds would be made available to the Registrar to
the Issue for this purpose.
Payment of Refund
Mode of Making Refunds
The payment of refund, if any, would be done through various modes in the following order of
preference:
1. NECS - Payment of refund would be done through NECS for applicants having an account at any of
the 68 centre where such facility has been made available. This mode of payment of refunds would
be subject to availability of complete bank account details including the MICR code as appearing on
a cheque leaf, from the Depositories. The payment of refunds is mandatory for applicants having a
bank account at any centre where NECS facility has been made available by the RBI (subject to
availability of all information for crediting the refund through NECS), except where the Investor,
being eligible, opts to receive refund through National Electronic Fund Transfer (“NEFT”), direct
credit or RTGS.NEFT (National Electronic Fund Transfer) - Payment of refund shall be undertaken
through NEFT wherever the applicant’s bank has been assigned the Indian Financial System Code
(IFSC), which can be linked to a Magnetic Ink Character Recognition (MICR), if any, available to
that particular bank branch. IFSC Code will be obtained from the website of RBI as on a date
immediately prior to the date of payment of refund, duly mapped with MICR numbers. Wherever the
applicants have registered their nine digit MICR number and their bank account number while
opening and operating the demat account, the same will be duly mapped with the IFSC Code of that
particular bank branch and the payment of refund will be made to the applicants through this
method. The Company in consultation with Lead Managers may decide to use NEFT as a mode of
making refunds.
2. Direct Credit - Applicants having bank accounts with the existing bankers of the Company shall be
eligible to receive refunds through direct credit. Charges, if any, levied by the relevant bank(s) for
the same would be borne by the Company.
3. RTGS - Applicants having a bank account at any of the 68 centres and whose refund amount
exceeds Rs. 1 million, have the option to receive refund through RTGS. Such eligible applicants
who indicate their preference to receive refund through RTGS are required to provide the IFSC code
in the CAF. In the event the same is not provided, refund shall be made through ECS. Charges, if
any, levied by the Refund Bank(s) for the same would be borne by the Company. Charges, if any,
levied by the applicant’s bank receiving the credit would be borne by the applicant.
4. For all other applicants, including those who have not updated their bank particulars with the MICR
code, the refund orders will be dispatched under certificate of posting for value up to Rs. 1,500 and
through Speed Post/ Registered Post for refund orders of Rs. 1,500 and above. Such refunds will be
made by cheques, pay orders or demand drafts drawn in favour of the sole/first applicant and
payable at par.
5. Credit of refunds to Investors in any other electronic manner permissible under the banking laws,
which are in force and is permitted by the SEBI from time to time.
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Allotment advice/share certificates / demat credit or letters of regret will be dispatched to the registered
address of the first named applicant or respective beneficiary accounts will be credited within 15 days,,
from the Issue Closing Date. In case the Company issues allotment advice, the relative share certificates
will be dispatched within one month from the date of allotment. Allottees are requested to preserve such
allotment advice (if any) to be exchanged later for share certificates.
Applicants to the CCPS of the Company issued through this Issue shall be allotted the securities in
dematerialised (electronic) form at the option of the applicant. The Company has an agreement with
National Securities Depository Limited (NSDL) and Central Depository Services (India) Limited
(CDSL) which enables the Investors to hold and trade in securities in a dematerialised form, instead of
holding the securities in the form of physical certificates.
In this Issue, the allottees who have opted for CCPS in dematerialised form will receive their CCPS in
the form of an electronic credit to their beneficiary account as given in the CAF, after verification with a
depository participant. Investor will have to give the relevant particulars for this purpose in the
appropriate place in the CAF. Allotment advice, refund order (if any) would be sent directly to the
Investor by the Registrar to the Issue but the Investor’s depository participant will provide to him the
confirmation of the credit of such CCPS to the Investor’s depository account. Applications, which do not
accurately contain this information, will be given the securities in physical form. No separate
applications for securities in physical and/or dematerialised form should be made. If such applications
are made, the application for physical securities will be treated as multiple applications and is liable to be
rejected. In case of partial allotment, allotment will be done in demat option for the CCPS sought in
demat and balance, if any, will be allotted in physical CCPS.
The CCPS of the Company will be listed on the BSE and the NSE and can be traded on the stock
exchanges only in dematerialised form.
Procedure for availing the facility for allotment of CCPS in this Issue in the electronic form is as under:
• Open a beneficiary account with any depository participant (care should be taken that the beneficiary
account should carry the name of the holder in the same manner as is exhibited in the records of the
Company. In the case of joint holding, the beneficiary account should be opened carrying the names
of the holders in the same order as with the Company). In case of Investors having various folios in
the Company with different joint holders, the Investors will have to open separate accounts for such
holdings. Those Equity Shareholders who have already opened such Beneficiary Account (s) need
not adhere to this step.
• For equity shareholders already holding Equity Shares of the Company in dematerialised form as on
the Record Date, the beneficial account number shall be printed on the CAF. For those who open
accounts later or those who change their accounts and wish to receive their Equity Shares pursuant
to this Offer by way of credit to such account, the necessary details of their beneficiary account
should be filled in the space provided in the CAF. It may be noted that the allotment of securities
arising out of this Issue may be made in dematerialised form even if the original Equity Shares of the
Company are not dematerialised. Nonetheless, it should be ensured that the Depository Account is in
the name(s) of the Equity Shareholders and the names are in the same order as in the records of the
Company.
Responsibility for correctness of information (including applicant’s age and other details) filled in the
CAF vis-à-vis such information with the applicant’s depository participant, would rest with the applicant.
Applicants should ensure that the names of the applicants and the order in which they appear in CAF
should be the same as registered with the applicant’s depository participant.
If incomplete/incorrect beneficiary account details are given in the CAF the applicant will receive CCPS
in physical form.
The CCPS pursuant to this Offer allotted to Investors opting for dematerialised form, would be directly
credited to the beneficiary account as given in the CAF after verification. Allotment advice, refund order
(if any) would be sent directly to the applicant by the Registrar to the Issue but the applicant’s depository
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participant will provide to him the confirmation of the credit of such CCPS to the applicant’s depository
account.
Renouncees will also have to provide the necessary details about their beneficiary account for allotment
of the CCPS in this Issue. In case these details are incomplete or incorrect, the application is liable to be
rejected.
Utilisation of Proceeds
Subscription received against this Issue will be kept in separate bank account(s) and the Company would
not have access to such funds unless it has received minimum subscription of 90%, of the Issue and the
necessary approvals of the Stock Exchanges, to use the amount of subscription.
Procedure for Application through the Applications Supported by Blocked Amount (“ASBA”)
Process
This section is for the information of the ASBA Investors proposing to subscribe to the Issue
through the ASBA process. The Company and the Lead Managers are not liable for any
amendments or modifications or changes in applicable laws or regulations, which may occur after
the date of this Letter of Offer. Equity Shareholders who are eligible to apply under the ASBA
process are advised to make their independent investigations and to ensure that the CAF is
correctly filled up.
The list of banks that have been notified by SEBI to act as SCSB for the ASBA process is provided on
http://www.sebi.gov.in. For details on designated branches of SCSBs collecting the CAF, please refer to
such link.
Equity Shareholders who are eligible to apply under the ASBA process
The option of applying for CCPS in the Issue through the ASBA process is only available to Equity
Shareholders of the Company on the Record Date who:
• hold the Equity Shares in dematerialised form as on the Record Date and have applied towards
his/her Rights Entitlements or additional CCPS in the Issue in dematerialised form;
• are applying through blocking of funds in a bank account with one of the SCSBs.
CAF
The Registrar will dispatch the CAF to all Equity Shareholders as per their Rights Entitlement on the
Record Date for the Issue. Those Equity Shareholders who wish to apply through the ASBA payment
mechanism are required to select such mechanism in Part A of the CAF and to provide necessary details.
Application in electronic mode will only be available with such SCSB who provides such facility. The
Equity Shareholder shall submit the CAF to the SCSB for authorising such SCSB to block an amount
equivalent to the amount payable on the application in the said bank account maintained with the same
SCSB.
You may accept the Issue and apply for the CCPS either in full or in part, by filling Part A of the
respective CAFs sent by the Registrar, selecting the ASBA process option in Part A of the CAF and
submit the same to the SCSB before the close of the banking hours on or before the Issue Closing Date
or such extended time as may be specified by the Board of Directors of the Company in this regard.
Mode of Payment
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An Equity Shareholder applying under the ASBA process agrees to block the entire amount payable on
application with the submission of the CAF, by authorizing the SCSB to block an amount, equivalent to
the amount payable on application, in a bank account maintained with the SCSB.
After verifying that sufficient funds are available in the bank account provided in the CAF, the SCSB
shall block an amount equivalent to the amount payable on application mentioned in the CAF until it
receives instructions from the Registrar. Upon receipt of intimation from the Registrar, the SCSBs shall
transfer such amount as per Registrar’s instruction allocable to the Equity Shareholders applying under
the ASBA process from bank account with the SCSB mentioned by the Equity Shareholder in the CAF.
This amount will be transferred in terms of the SEBI Regulations, into the separate bank account
maintained by the Company. The balance amount remaining after the finalisation of the basis of
allotment shall be either unblocked by the SCSBs or refunded to the investors by the Registrar on the
basis of the instructions issued in this regard by the Registrar to the Issue and the Lead Managers to the
respective SCSB.
The Equity Shareholders applying under the ASBA process would be required to block the entire
amount payable on their application at the time of the submission of the CAF.
The SCSB may reject the application at the time of acceptance of CAF if the bank account with the
SCSB details of which have been provided by the Equity Shareholder in the CAF does not have
sufficient funds equivalent to the amount payable on application mentioned in the CAF. Subsequent to
the acceptance of the application by the SCSB, the Company would have a right to reject the application
only on technical grounds.
Options Available to the Equity Shareholders Applying under the ASBA process
The summary of options available to the Equity Shareholders are presented below. You may exercise
any of the following options with regard to the CCPS, using the respective CAFs received from
Registrar:
1. Accept whole or part of your Rights Fill in and sign Part A of the CAF (all joint
Entitlement without renouncing the balance. holders must sign)
2 Accept your Rights Entitlement in full and Fill in and sign Part A of the CAF including
apply for additional CCPS Block III relating to the acceptance of
entitlement and Block IV relating to
additional CCPS (all joint holders must sign)
An Equity Shareholder applying under the ASBA process will need to select the ASBA option
process in the CAF and provide required necessary details. However, in cases where this option is
not selected, but the CAF is tendered to the SCSB with the relevant details required under the
ASBA process option and SCSB blocks the requisite amount, then that CAF would be treated as if
the Equity Shareholder has selected to apply through the ASBA process option.
Additional CCPS
You are eligible to apply for additional CCPS (consisting of an equal number of CCPS Series A and
CCPS Series B) over and above the number of CCPS that you are entitled too, provided that (i) you
have applied for all the CCPS (as the case may be) offered without renouncing them in full or in part in
favour of any other person(s). Applications for additional CCPS shall be considered and allotment shall
be made at the sole discretion of the Board, in consultation with the Designated Stock Exchange and in
the manner prescribed under “Terms of the Issue - Basis of Allotment” on page 146 of this Letter of
Offer.
If you desire to apply for additional CCPS please indicate your requirement in the place provided for
additional CCPS in Part A of the CAF.
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Non-residents including FIIs cannot apply for additional CCPS unless accompanied by applicable
regulatory approvals from FIPB and/or RBI.
An Equity Shareholder who has neither received the original CAF nor is in a position to obtain the
duplicate CAF and who is applying under the ASBA process may make an application to subscribe to the
Issue on plain paper, and the Equity Shareholders should send the same by registered post directly to
SCSB.
The envelope should be superscribed “Trent Right Issue-2010” and should be postmarked in India. The
application on plain paper, duly signed by the Investors including joint holders, in the same order as per
specimen recorded with the Company, must reach the office of the Registrar to the Issue before the Issue
Closing Date and should contain the following particulars:
• Total amount to be blocked at the rate of Rs. 550 per CCPS Series A and Rs. 550 per CCPS Series
B;
• Except for applications on behalf of the Central or State Government and the officials appointed by
the courts, PAN number of the Investor and for each Investor in case of joint names, irrespective of
the total value of the CCPS applied for pursuant to the Issue; and
• Signature of Equity Shareholders to appear in the same sequence and order as they appear in the
records of the Company.
EQUITY SHAREHOLDERS UNDER THE ASBA PROCESS MAY PLEASE NOTE THAT THE
CCPS OF THE COMPANY UNDER THE ASBA PROCESS CAN BE ALLOTTED ONLY IN
DEMATERIALISED FORM AND TO THE SAME DEPOSITORY ACCOUNT IN WHICH THE
EQUITY SHARES ARE BEING HELD ON RECORD DATE.
General instructions for Equity Shareholders applying under the ASBA process
(a) Please read the instructions printed on the respective CAF carefully.
(b) Application should be made on the printed CAF/Plain Paper Application only and should be
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completed in all respects. The CAF/Plain Paper Application found incomplete with regard to
any of the particulars required to be given therein, and/or which are not completed in conformity
with the terms of this Letter of Offer are liable to be rejected. The CAF/Plain Paper Application
must be filled in English.
(c) The CAF/Plain Paper Application in the ASBA process should be submitted at a Designated
Branch of the SCSB and whose bank account details are provided in the CAF/Plain Paper
Application and not to the Bankers to the Issue/Collecting Banks (assuming that such Collecting
Bank is not a SCSB), to the Company or Registrar or Lead Managers to the Issue.
(d) All applicants, and in the case of application in joint names, each of the joint applicants, should
mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the
amount of the application. Except for applications on behalf of the Central or State Government
and the officials appointed by the courts, CAFs/Plain Paper Application without PAN will be
considered incomplete and are liable to be rejected.
(e) All payments will be made by blocking the amount in the bank account maintained with the
SCSB. Cash payment is not acceptable. In case payment is affected in contravention of this, the
application may be deemed invalid and the application money will be refunded and no interest
will be paid thereon.
(f) Signatures should be either in English or Hindi or in any other language specified in the Eighth
Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb
impression must be attested by a Notary Public or a Special Executive Magistrate under his/her
official seal. The Equity Shareholders must sign the CAF/Plain Paper Application as per the
specimen signature recorded with the Company/or Depositories.
(g) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same
order and as per the specimen signature(s) recorded with the Company. In case of joint
applicants, reference, if any, will be made in the first applicant’s name and all communication
will be addressed to the first applicant.
(h) All communication in connection with application for the CCPS, including any change in
address of the Equity Shareholders should be addressed to the Registrar to the Issue prior to the
date of allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder,
folio numbers and CAF number.
(i) Only the person or persons to whom the CCPS have been offered and not renouncee(s) shall be
eligible to participate under the ASBA process.
Do’s:
a. Ensure that the ASBA process option is selected in part A of the CAF and necessary details are filled
in.
b. Ensure that you submit your application in physical mode only. Electronic mode is only available
with certain SCSBs and not all SCSBs and you should ensure that your SCSB offers such facility to
you.
c. Ensure that the details about your Depository Participant and beneficiary account are correct and the
beneficiary account is activated as CCPS will be allotted in the dematerialised form only.
d. Ensure that the CAFs are submitted at the SCSBs and details of the correct bank account have been
provided in the CAF.
e. Ensure that there are sufficient funds (equal to {number of CCPS as the case may be applied for} X
{Issue Price of CCPS, as the case may be}) available in the bank account maintained with the SCSB
mentioned in the CAF before submitting the CAF to the respective Designated Branch of the SCSB.
f. Ensure that you have authorised the SCSB for blocking funds equivalent to the total amount payable
on application mentioned in the CAF, in the bank account maintained with the respective SCSB, of
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which details are provided in the CAF and have signed the same.
g. Ensure that you receive an acknowledgement from the SCSB for your submission of the CAF in
physical form.
h. Except for applications on behalf of the Central or State Government and the officials appointed by
the courts, each applicant should mention their PAN allotted under the I. T. Act.
i. Ensure that the name(s) given in the CAF is exactly the same as the name(s) in which the beneficiary
account is held with the Depository Participant. In case the CAF is submitted in joint names, ensure
that the beneficiary account is also held in same joint names and such names are in the same
sequence in which they appear in the CAF.
j. Ensure that the demographic details are updated, true and correct, in all respects.
Don’ts:
a. Do not apply on duplicate CAF after you have submitted a CAF to a Designated Branch of the
SCSB.
b. Do not pay the amount payable on application in cash, by money order or by postal order.
c. Do not send your physical CAFs to the Lead Managers to Issue / Registrar / Collecting Banks
(assuming that such Collecting Bank is not a SCSB) / to a branch of the SCSB which is not a
Designated Branch of the SCSB / Company; instead submit the same to a Designated Branch of the
SCSB only.
d. Do not submit the GIR number instead of the PAN as the application is liable to be rejected on this
ground.
e. Do not instruct your respective banks to release the funds blocked under the ASBA process.
In addition to the grounds listed under “Grounds for Technical Rejection” on page 165, applications
under the ABSA Process are liable to be rejected on the following grounds:
a) If the Applicant does not apply for his Rights Entitlement of the CCPS Series A as well as the
CCPS Series B;
c) Applications by Non-residents and FIIs for additional CCPS without applicable regulatory
approvals from FIPB and/or RBI, if any.
d) DP ID and Client ID mentioned in CAF not matching with the DP ID and Client ID records
available with the Registrar.
e) Sending CAF to a Lead Managers / Registrar / Collecting Bank (assuming that such Collecting
Bank is not a SCSB) / to a branch of a SCSB which is not a Designated Branch of the SCSB /
Company.
g) Insufficient funds are available with the SCSB for blocking the amount.
h) Funds in the bank account with the SCSB whose details are mentioned in the CAF having been
frozen pursuant to regulatory orders.
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Depository account and bank details for Equity Shareholders applying under the ASBA process
Equity Shareholders applying under the ASBA process should note that on the basis of name of
these Equity Shareholders, Depository Participant’s name and identification number and
beneficiary account number provided by them in the CAF, the Registrar to the Issue will obtain
from the Depository demographic details of these Equity Shareholders such as address, bank
account details for printing on refund orders and occupation (“Demographic Details”). Hence,
Equity Shareholders applying under the ASBA process should carefully fill in their Depository
Account details in the CAF.
These Demographic Details would be used for all correspondence with such Equity Shareholders
including mailing of the letters intimating unblock of bank account of the respective Equity Shareholder.
The Demographic Details given by Equity Shareholders in the CAF would not be used for any other
purposes by the Registrar. Hence, Equity Shareholders are advised to update their Demographic Details
as provided to their Depository Participants.
By signing the CAFs, the Equity Shareholders applying under the ASBA process would be deemed to
have authorised the Depositories to provide, upon request, to the Registrar to the Issue, the required
Demographic Details as available on its records.
Letters intimating allotment and unblocking or refund (if any) would be mailed at the address of
the Equity Shareholder applying under the ASBA process as per the Demographic Details received
from the Depositories. Refunds, if any, will be made directly to the bank account in the SCSB and
which details are provided in the CAF and not the bank account linked to the DP ID. Equity
Shareholders applying under the ASBA process may note that delivery of letters intimating
unblocking of bank account may get delayed if the same once sent to the address obtained from the
Depositories are returned undelivered. In such an event, the address and other details given by the
Equity Shareholder in the CAF would be used only to ensure dispatch of letters intimating
unblocking of bank account.
Note that any such delay shall be at the sole risk of the Equity Shareholders applying under the
ASBA process and none of the Company, the SCSBs or the Lead Managers shall be liable to
compensate the Equity Shareholder applying under the ASBA process for any losses caused due to
any such delay or liable to pay any interest for such delay.
In case no corresponding record is available with the Depositories that matches three parameters, namely,
names of the Equity Shareholders (including the order of names of joint holders), the DP ID and the
beneficiary account number, then such applications are liable to be rejected.
b) Application should be made on the printed CAF, provided by the Company except as mentioned
under the head Application on plain paper and should be completed in all respects. The CAF found
incomplete with regard to any of the particulars required to be given therein, and/or which are not
completed in conformity with the terms of this Letter of Offer are liable to be rejected and the
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money paid, if any, in respect thereof will be refunded without interest and after deduction of bank
commission and other charges, if any. The CAF must be filled in English and the names of all the
applicants, details of occupation, address, father’s/ husband’s name must be filled in block letters.
c) The CAF together with cheque/demand draft should be sent to the Bankers to the Issue/Collecting
Banks or to the Registrar to the Issue and not to the Company or Lead Manager to the Issue.
Applicants residing at places other than cities where the branches of the Bankers to the Issue have
been authorised by the Company for collecting applications, will have to make payment by Demand
Draft payable at Mumbai of an amount net of bank and postal charges and send their application
forms to the Registrar to the Issue by REGISTERED POST. If any portion of the CAF is/are
detached or separated, such application is liable to be rejected.
d) All applicants, and in the case of application in joint names, each of the joint applicants, should
mention his/her PAN number allotted under the Income-Tax Act, 1961, irrespective of the amount of
the application. Except for applications on behalf of the Central or State Government and the
officials appointed by the courts, CAFs/Plain Paper Application without PAN will be considered
incomplete and are liable to be rejected.
e) Applicants are advised that it is mandatory to provide information as to their savings/current account
number and the name of the Bank with whom such account is held in the CAF to enable the
Registrar to the Issue to print the said details in the refund orders, if any, after the names of the
payees. Application not containing such details is liable to be rejected.
f) All payment should be made by cheque/DD only. Application through the ASBA process as
mentioned above is acceptable. Cash payment is not acceptable. In case payment is effected in
contravention of this, the application may be deemed invalid and the application money will be
refunded and no interest will be paid thereon.
g) Signatures should be either in English or Hindi or in any other language specified in the Eighth
Schedule to the Constitution of India. Signatures other than in English or Hindi and thumb
impression must be attested by a Notary Public or a Special Executive Magistrate under his/her
official seal. The Equity Shareholders must sign the CAF as per the specimen signature recorded
with the Company/or Depositories.
i) In case of joint holders, all joint holders must sign the relevant part of the CAF in the same order and
as per the specimen signature(s) recorded with the Company. Further, in case of joint applicants who
are renouncees, the number of applicants should not exceed three. In case of joint applicants,
reference, if any, will be made in the first applicant’s name and all communication will be addressed
to the first applicant.
j) All communication in connection with application for the CCPS, including any change in address of
the Equity Shareholders should be addressed to the Registrar to the Issue prior to the date of
allotment in this Issue quoting the name of the first/sole applicant Equity Shareholder, folio numbers
and CAF number. Please note that any intimation for change of address of Equity Shareholders, after
the date of allotment, should be sent to the Registrar and Transfer Agents of the Company, in the
case of CCPS held in physical form and to the respective depository participant, in case of CCPS
held in dematerialised form.
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l) Only the person or persons to whom CCPS have been offered and not renouncee(s) shall be entitled
to obtain split forms.
m) Applicants must write their CAF number at the back of the cheque/demand draft.
n) Only one mode of payment per application should be used. The payment must be by cheque/demand
draft drawn on any of the banks, including a co-operative bank, which is situated at and is a member
or a sub member of the Bankers Clearing House located at the centre indicated on the reverse of the
CAF where the application is to be submitted.
o) A separate cheque/draft must accompany each CAF. Outstation cheques/demand drafts or post-dated
cheques and postal/money orders will not be accepted and applications accompanied by such
cheques/ demand drafts/money orders or postal orders will be rejected. The Registrar will not accept
payment against application if made in cash. (For payment against application in cash please refer
point (f) above)
p) No receipt will be issued for application money received. The Bankers to the Issue/Collecting Bank/
Registrar will acknowledge receipt of the same by stamping and returning the acknowledgment slip
at the bottom of the CAF.
Applicants are advised to note that applications are liable to be rejected on technical grounds, including
the following:
If the Applicant does not apply for his Rights Entitlement of the CCPS Series A as well as the CCPS
Series B, together in equal proportion or applies for particular series or applies in disproportionate
ratio;
Amount paid does not tally with the amount payable for;
Except for CAFs on behalf of the Central or State Government and the officials appointed by the
courts, PAN number not given for application of any value;
In case of Application under power of attorney or by limited companies, corporate, trust, etc.,
relevant documents are not submitted;
If the signature of the existing shareholder on the Application Form does not match with the records
available with the Company and/or the Depositories and in case of renouncees if the signature does
not match with the records available with their depositories;
If the Applicant desires to have shares in electronic form, but the Application Form does not have
the Applicant’s depository account details;
Application Forms are not submitted by the Applicants within the time prescribed as per the
Application Form and the Letter of Offer;
Applications by OCBs unless accompanied by specific approval from RBI permitting the OCBs to
participate in the Issue.
In case no corresponding record is available with the Depositories that matches three parameters,
namely, names of the Applicants (including the order of names of joint holders), the Depositary
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Participant’s identity (DP ID) and the beneficiary’s identity;
Applications which have evidence of being executed in/dispatched from the US;
Applications by Non-residents or FIIs for additional CCPS without applicable regulatory approvals
from FIPB and/or RBI, if any.
CAFs where the Company believes that CAF is incomplete or acceptance of such CAF may infringe
applicable legal or regulatory requirements;
Applications by renouncees who are persons not competent to contract under the Indian Contract
Act, 1872, including minors;
Multiple Applications including cases where an Investor submits CAFs along with a plain paper
application;
Duplicate Applications;
All cheques/drafts accompanying the CAFs should be crossed ‘A/c Payee only’ and drawn in favour
of ‘Trent Limited – Rights Issue - 2010’.
Applicants residing at places other than places where the bank collection centres have been opened
by the Company for collecting applications, are requested to send their applications together with
Demand Draft for the full application amount, net of bank and postal charges crossed ‘A/c Payee
only’ and drawn in favour of ‘Trent Limited – Rights Issue - 2010’ payable at Mumbai directly to
the Registrar to the Issue by registered post so as to reach them on or before the Issue Closing Date.
The Company or the Registrar to the Issue will not be responsible for postal delays or loss of
applications in transit, if any.
Payment by non-residents must be made by demand draft payable at Mumbai / cheque payable drawn on
a bank account maintained at Mumbai or funds remitted from abroad in any of the following ways:
By Rupee drafts purchased from abroad and payable at Mumbai or funds remitted from abroad
(submitted along with Foreign Inward Remittance Certificate); or
By Rupee draft purchased by debit to NRE/ FCNR Account maintained elsewhere in India and
payable in Mumbai; or FIIs registered with SEBI must remit funds from special non-resident rupee
deposit account.
Non-resident investors applying with repatriation benefits should draw cheques/drafts in favour of
‘Trent Limited – Rights Issue – 2010 - NR’ payable at Mumbai and must be crossed ‘account payee
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only’ for the full application amount
Applicants may note that where payment is made by drafts purchased from NRE/ FCNR/ NRO accounts
as the case may be, an Account Debit Certificate from the bank issuing the draft confirming that the draft
has been issued by debiting the NRE/ FCNR/ NRO account should be enclosed with the CAF. Otherwise
the application shall be considered incomplete and is liable to be rejected.
New demat account shall be opened for holders who have had a change in status from resident Indian to
NRI.
Notes:
In case where repatriation benefit is available, interest, dividend, sales proceeds derived from the
investment in CCPS can be remitted outside India, subject to tax, as applicable according to IT Act.
In case CCPS are allotted on non-repatriation basis, the dividend and sale proceeds of the CCPS
cannot be remitted outside India.
The CAF duly completed together with the amount payable on application must be deposited with
the Collecting Bank indicated on the reverse of the CAFs before the close of banking hours on or
before the Issue Closing Date. A separate cheque or bank draft must accompany each CAF.
In case of an application received from non-residents, allotment, refunds and other distribution, if
any, will be made in accordance with the guidelines/ rules prescribed by RBI as applicable at the
time of making such allotment, remittance and subject to necessary approvals.
Impersonation
As a matter of abundant caution, attention of the Investors is specifically drawn to the provisions
of sub-section (1) of section 68A of the Companies Act which is reproduced below:
“Any person who makes in a fictitious name an application to a Company for acquiring, or
subscribing for, any shares therein, or otherwise induces a Company to allot, or register any transfer
of shares therein to him, or any other person in a fictitious name, shall be punishable with
imprisonment for a term which may extend to five years”.
Dematerialised dealing
The Company has entered into agreements dated November 2, 1999 with NSDL and CDSL, and its
CCPS will bear the ISIN which will be separate from its ISIN of its Equity Shares.
Investment by FIIs
In accordance with the current regulations, the following restrictions are applicable for investment by
FIIs under the portfolio investment scheme:
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The allotment of Equity Shares upon conversion of CCPS to a single FII should not exceed 10% of the
post-issue paid-up capital of the Company. In respect of an FII acquiring the Equity Shares on behalf of
its sub-accounts the investment on behalf of each sub-account shall not exceed 5% of the total paid-up
capital of the Company. In accordance with foreign investment limits applicable to the Company, the
total FII investment cannot exceed 24% of the total paid-up capital of the Company.
Investment by NRIs
Investments by NRIs are governed by the Portfolio Investment Scheme under Regulation 5(3) of the
Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India)
Regulations, 2000.
A separate application can be made in respect of each scheme of an Indian mutual fund registered with
the SEBI and such applications shall not be treated as multiple applications. The applications made by
asset management companies or custodians of a mutual fund should clearly indicate the name of the
concerned scheme for which the application is being made.
Payment by Stockinvest
In terms of RBI Circular DBOD No. FSC BC 42/24.47.00/2003-04 dated November 5, 2003, the
Stockinvest Scheme has been withdrawn. Hence, payment through Stockinvest would not be accepted in
this Issue
No acknowledgment will be issued for the application moneys received by the Company. However, the
Bankers to the Issue/Registrar to the Issue receiving the CAF will acknowledge its receipt by stamping
and returning the acknowledgment slip at the bottom of each CAF.
The Board reserves its full, unqualified and absolute right to accept or reject any application, in full or in
part, and in either case without assigning any reason thereto.
In case an application is rejected in full, the whole of the application money received will be refunded.
Wherever an application is rejected in part, the balance of application money, if any, after adjusting any
money due on CCPS allotted, will be refunded to the applicant within a period of 15 days from the Issue
Closing Date. If such money is not repaid within eight days from the day the Company becomes liable to
repay it, the Company and every Director of the Company who is an officer in default shall, on and from
expiry of eight days, be jointly and severally liable to repay the money with interest as prescribed under
Section 73 of the Companies Act.
For further instruction, please read the Composite Application Form (CAF) carefully.
(i) The funds received against this Issue will be transferred to a separate bank account.
(ii) Details of all moneys utilised out of the Issue shall be disclosed under an appropriate separate head
in the balance sheet of the Company indicating the purpose for which such moneys has been utilised;
(iii) Details of all such unutilised moneys out of the Issue, if any, shall be disclosed under an appropriate
separate head in the balance sheet of the Company indicating the form in which such unutilised
moneys have been invested; and
(iv) The funds received against this Issue will be kept in a separate bank account and the Company will
not have any access to such funds unless it satisfies the Designated Stock Exchange with suitable
documentary evidence that the minimum subscription of 90% of the Issue has been received by the
Company.
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Underwriting
Issue Schedule
Issue Opening Date: August 6, 2010
Last date for receiving requests for SAFs: August 13, 2010
Issue Closing Date: August 20, 2010
The Board may however decide to extend the issue period as it may determine from time to time but not
exceeding 30 days from the Issue Opening Date.
1. The complaints received in respect of the Issue shall be attended to by the Company expeditiously
and satisfactorily.
2. All steps for completion of the necessary formalities for listing and commencement of trading at all
stock exchanges where the securities are to be listed will be taken within seven working days of
finalization of basis of allotment.
3. The funds required for dispatch of refund orders/allotment letters/certificates by registered post shall
be made available to the Registrar to the Issue.
4. The certificates of the securities/refund orders to the non-resident Indians shall be dispatched within
the specified time.
5. Save as otherwise disclosed in this Letter of Offer, no further issue of securities affecting equity
capital of the Company shall be made till the securities issued/offered through the Issue are listed or
till the application moneys are refunded on account of non-listing, under-subscription etc.
6. The Company undertakes that where refunds are made through electronic transfer of funds, a
suitable communication shall be sent to the Investor within 15 days of the Issue Closing Date, giving
details of the banks where refunds shall be credited along with amount and expected date of
electronic credit of refund.
7. Adequate arrangements shall be made to collect all ASBA applications and to consider them similar
to non-ASBA applications while finalising the basis of allotment.
8. The Company accepts full responsibility for the accuracy of information given in this Letter of Offer
and confirms that to best of its knowledge and belief, there are no other facts the omission of which
makes any statement made in this Letter of Offer misleading and further confirms that it has made
all reasonable enquiries to ascertain such facts.
9. All information shall be made available by the Lead Manager and the Issuer to the investors at large
and no selective or additional information would be available for a section of the investors in any
manner whatsoever including at road shows, presentations, in research or sales reports etc.
10. We shall comply with such disclosure and accounting norms specified by SEBI from time to time.
Important
Please read this Letter of Offer carefully before taking any action. The instructions contained in the
accompanying Composite Application Form (CAF) are an integral part of the conditions of this
Letter of Offer and must be carefully followed; otherwise the application is liable to be rejected.
All enquiries in connection with this Letter of Offer or accompanying CAF and requests for Split
Application Forms must be addressed (quoting the Registered Folio Number/DP and Client ID
number, the CAF number and the name of the first Equity Shareholder as mentioned on the CAF and
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superscribed ‘Trent Limited Rights Issue-2010’ on the envelope and postmarked in India) to the
Registrar to the Issue at the following address:
It is to be specifically noted that this Issue of CCPS is subject to the section entitled ‘Risk Factors’
beginning on page 10 of this Letter of Offer.
It is to be specifically noted that this Issue of Equity Shares is subject to the risks as detailed in the
section titled “Risk Factors” on page 10 of this Letter of Offer.
The Issue will remain open for a minimum 15 days. However, the Board will have the right to
extend the Issue period as it may determine from time to time but not exceeding 30 days from the
Issue Opening Date.
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RESTRICTIONS ON FOREIGN OWNERSHIP OF INDIAN SECURITIES
Currently, foreign direct investment (“FDI”) in the retail trading sector (except single brand product
retailing) is prohibited. However, a registered FII is permitted to purchase the shares of an Indian
company under the portfolio investment scheme under FEMA so long as the total holding by each FII or
sub account of an FII does not exceed 10% of the total paid up equity capital of an Indian company and
the aggregate holding of all FIIs and sub accounts of FIIs does not exceed 24% of the paid up equity
capital of the Company. In respect of an FII acquiring the Equity Shares on behalf of its sub-accounts the
investment on behalf of each sub-account shall not exceed 5% of the total paid-up capital of the
Company.
As per the provisions of Foreign Exchange Management Act (Transfer or Issue of a Security by a Person
Resident Outside India) Regulations, 2000, Indian companies which are listed on recognised stock
exchanges are allowed to issue shares on a rights basis to non-resident shareholders at a price as
determined by the Company. For more details please refer to the sections titled “Terms of the Issue-
Investments by FII” and “Terms of the Issue-Investments by NRIs” on page 146 of this Letter of Offer.
For details of restrictions on renunciation of a right to and from a non-resident please refer to the section
titled “Terms of the Issue - Renunciation” on page 146 of this Letter of Offer.
As per the existing policy of the Government of India, OCBs cannot participate in this Issue.
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STATUTORY AND OTHER INFORMATION
Option to subscribe
Other than the present Issue, and except as disclosed in the section “Terms of the Issue” on page 146 of
this Letter of Offer, the Company has not given any person any option to subscribe to the CCPS of the
Company.
The Investors shall have an option either to receive the security certificates or to hold the securities in
dematerialised form with a depository.
The following contracts (not being contracts entered in to in the ordinary course of business carried on by
the Company or entered into more than two years before the date of this Letter of Offer) which are or
may be deemed material have been entered or are to be entered into by the Company. These contracts, as
well as the other documents for inspection referred to hereunder, may be inspected at the Registered
Office of the Company situated at Bombay House, 24 Homi Mody Street, Mumbai 400 001,
Maharashtra, India from 9.30 a.m. to 6.30 p.m., on working days, from the date of this Letter of Offer
until the Issue Closing Date.
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DECLARATION
No statement made in this Letter of Offer contravenes any of the provisions of the Companies Act and
the rules made there under. All the legal requirements connected with the Issue as also the guidelines,
instructions etc. issued by SEBI, Government and any other competent authority in this behalf, have been
duly complied with. We further certify that all the disclosures in this Letter of Offer are true and correct.
Place: Mumbai
Date: July 20, 2010
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