Trent

The Directors are pleased to present their Fifty-sixth Annual Report
 and the Audited Statement of Accounts for the year ended 31st March
 2008.
 
 FINANCIAL RESULTS
 
                                                   2007-08   2006-2007
                                                  [Rupees    [Rupees in
                                                 in Crores]   Crores]
 
 Total Income                                    546.43        472.42
 
 Profit before taxes and
 exceptional items                                37.32         40.99
 
 Less: Provision for
 taxation                                          4.74          9.41
 
 Profit for the year after tax                    32.58         31.58
 
 Add/Less: Excess/(Short)
 
 Tax Provision
 for prior years [Net]                             0.28          0.83
 
 Net Profit                                       32.86         32.41
 
 Balance brought forward
 from previous years                              14.71         13.46
 
 Balance available for
 appropriation                                    47.57         45.87
 
 -     Interim Dividend                                         11.03
 
 -     Proposed Dividend                          13.67           -    
 
 -     Tax on dividend                             1.57          1.88
 
 -     Transfer to Debenture
 
 Redemption Reserve                                5.00         15.00
 
 -     Transfer to
 
 General Reserve                                   3.30          3.25
 
 -     Profit carried
       forward                                    24.03         14.71
 
                                                  47.57         45.87
 
 DIVIDEND
 
 On 30th June 2008, the Board of Directors recommended a final dividend
 of Rs. 7/- per share on 1,95,32,896 equity shares (70%) (Previous year
 interim dividend - 70% on 1,57,60,737 equity shares) involving a
 distribution of Rs. 13.67 crores (previous year Rs. 11.03 crores). The
 total outflow will be Rs. 15.24 crores including the tax on dividend of
 Rs.1.57 crores.
 
 ISSUE OF EQUITY SHARES ON RIGHTS BASIS
 
 During the year under review, the Company allotted 31,48,264 equity
 shares of Rs 10/- each at a premium of Rs. 490/- each for an amount
 aggregating to Rs. 157.41 crores on Rights basis to the existing equity
 shareholders of the Company in the ratio of one fully paid equity share
 for every five equity shares held on the record date i.e. on 15th May
 2007. The shares have been listed on Bombay Stock Exchange Limited and
 National Stock Exchange of India Limited.
 
 ISSUE OF SECURITIES TO THE PROMOTERS OF THE COMPANY ON PREFERENTIAL
 ALLOTMENT BASIS
 
 In December 2006, the Company had issued and allotted equity shares and
 warrants on preferential allotment basis, to the main Promoter
 shareholders of the Company, Tata Sons Limited and Tata Investment
 Corporation Limited, in accordance with the provisions of Chapter XIII
 of the SEBI (Disclosure and Investor Protection) Guidelines, 2000 [SEBI
 (DIP) Guidelines].
 
 The said warrants were offered to the Promoters with an option to
 convert each warrant into equity share not earlier than 1st June 2007
 and not later than 31st March 2008. Consequent to the exercise of the
 option by the Promoters on 21st August 2007, the Company allotted
 3,75,000 equity shares of Rs. 10/- each to Tata Sons Limited and
 2,10,000 equity shares of Rs. 10/- each to Tata Investment Corporation
 Limited at a price of Rs. 743.65 per share, aggregating to Rs. 43.50
 crores.
 
 EMPLOYEES’ STOCK OPTIONS
 
 The Company had granted 45,850 stock options, under the Employees’
 Stock Option Scheme, to senior managers and selected officers of the
 Company. During the year under review, an additional 2,745 options were
 granted on account of the Rights Issue of the Company as per applicable
 SEBI Guidelines. Consequent to the exercise of the options, 38,895
 equity shares of Rs.  10/- each were allotted at par. The unexercised
 Options have expired/forfeited in terms of the Scheme and no Options
 were outstanding as on 31st March 2008. The entire cost of Rs. 3.13
 crores has been amortized as per SEBI Guidelines over the 24-month
 vesting period commencing 1st December 2005. The proportionate
 amortization cost for the year amounting to Rs. 0.94 crores has been
 debited to Profit & Loss Account.
 
 RETAILING OPERATIONS
 
 The retailing business of the Company witnessed a moderate growth in
 sales of 13% during the year under review, as compared to 31% in the
 previous year. Three Westside and two Star Bazaar stores were
 commissioned during the year, all performing broadly in line with the
 Company’s expectations.  At the end of the financial year, the Company
 was operating twenty-nine Westside and three Star Bazaar stores.
 
 With an objective of restructuring its business portfolio, the Company
 has proposed the sale of its hypermarket business (Star Bazaar) at book
 value to its wholly owned subsidiary. The Company has approached the
 shareholders for obtaining an approval for the proposed sale through a
 Postal Ballot process. Further, in order to capitalize on the growth
 opportunity in this space, the Company is exploring various
 alternatives including the possibility of tie-ups with other players in
 the hypermarket business, by way of franchise or other arrangements
 subject to prevailing regulations.
 
 TREASURY OPERATIONS
 
 Compared to the previous year, the Company’s treasury income increased
 by 66% to Rs. 30.06 crores. This was primarily on account of increase
 in income from mutual fund investments and the more favourable interest
 rate scenario from an investment perspective. The investment portfolio
 of the Company was augmented by the Rights and Preferential issues
 proceeds, pending their deployment for operations.
 
 SUBSIDIARIES
 
 Landmark Limited and its Subsidiaries
 
 Landmark Limited is engaged in the business of retailing of books,
 toys, stationery and music. In April 2008, Ms. Hemalatha Ramaiah, a
 former shareholder and CEO of Landmark Limited opted to exit from the
 Company and the residual shares held by her were acquired by Tata
 Investment Corporation Limited. The two nominees of Ms.  Hemalatha
 Ramaiah have since resigned from the Board of Landmark Limited.
 Consequent to her exit, Trent Limited along with its subsidiaries,
 associates and Tata Investment Corporation Limited holds 99.99% in the
 capital of Landmark Limited.
 
 At present, Landmark Limited has eighteen stores (including seven
 airport and hotel stores). The income from operations of Landmark
 Limited increased from Rs. 137 crores to Rs. 179 crores in 2007-08,
 hence registering an encouraging year to year growth of about 30%.
 
 During the year, two of the subsidiaries of Landmark Limited namely
 Westland Books Private Limited and Eastwest Books (Madras) Private
 Limited merged to form Westland Limited, pursuant to a Scheme of
 Amalgamation dated 4th March 2008 sanctioned by the Hon’ble Madras High
 Court which is effective from 1st April 2007. Westland Limited
 performed satisfactorily during the year.
 
 Trent Brands Limited
 
 Trent Brands Limited, a 100% subsidiary of the Company posted a net
 profit of Rs. 2.51 crores for the year under review. Trent Brands
 Limited has declared an interim dividend of Rs. 8/- per share (80%).
 
 Fiora Services Limited
 
 Fiora Services Limited continues to render various services to the
 Company in terms of sourcing activities, warehousing, distribution,
 clearing and forwarding. It posted a marginal profit of Rs. 1.2 lakhs
 for the year under review and did not declare any dividend for the year
 2007-2008.
 
 Other Subsidiaries
 
 The other 100% subsidiaries of Trent Limited viz.  Satnam Developers
 and Finance Private Limited, Nahar Theatres Private Limited and Fiora
 Link Road Properties Limited are all established to support the
 Company’s real estate needs.
 
 On an application made by the Company under Section 212(8) of the
 Companies Act, 1956, the Central Government vide letter dated 30th May
 2008 has exempted the Company from attaching a copy of the Balance
 Sheet and the Profit and Loss Account and other documents of the
 subsidiary companies to be attached under Section 212(1) of the Act to
 the Annual Report of the Company.  Accordingly, the said documents are
 not being attached with the Balance Sheet of the Company.  A summarized
 statement of the financial performance of the subsidiary companies is
 contained in this Report. The Annual Accounts of the subsidiary
 companies are open for inspection by any member / investor and the
 Company will make available these documents / details upon request by
 any member of the Company or to any Investor of its subsidiary
 companies who may be interested in obtaining the same. Further, the
 Annual Accounts of the subsidiary companies will also be kept for
 inspection by any investor at the Registered Office of the Company and
 at the Head Office of the subsidiary company concerned.
 
 SOCIAL RESPONSIBILITY
 
 The Company is acutely aware of its social responsibility and its
 policy in this respect is directed towards child welfare on a national
 basis and more particularly in the cities where it operates.  A number
 of children organizations were financially assisted. The Company also
 extended its technical assistance and purchase of products to new NGOs
 and plans to further these activities in the future.
 
 The Company strictly adheres to a number of human rights principles
 against discrimination and child labour, which also apply to its
 suppliers.  Further, support has been given to environment protection
 organizations in the western region.
 
 PERSONNEL
 
 Information as per Section 217(2A) of the Companies Act, 1956, read
 with the Companies (Particulars of Employees) Rules, 1975 is annexed
 and forms an integral part of this Report.
 
 CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS REPORT
 
 Pursuant to Clause 49 of the Listing Agreement, the Management
 Discussion and Analysis, the Corporate Governance Report, together with
 the Auditors’ Certificate on compliance with the conditions of
 Corporate Governance as laid down, form part of this Annual Report.
 
 DIRECTORS
 
 Due to pre-occupation Mr. Zubin Dubash has resigned from the board as a
 Director of the Company w.e.f. 18th December 2007.
 
 The Board has recorded its appreciation of the contribution made by Mr.
 Zubin Dubash during his tenure with the Company as a Director.
 
 In accordance with the provisions of the Companies Act, 1956, and the
 Company’s Articles of Association, Mr. B.S. Bhesania and Mr. K.N.
 Suntook retire at the ensuing Annual General Meeting and are eligible
 for re-appointment.
 
 AUDITORS
 
 The Auditors of the Company, M/s. N. M. Raiji & Co., Chartered
 Accountants, retire at the ensuing Annual
 
 General Meeting and offer themselves for re-appointment.
 
 ENERGY, TECHNOLOGY & FOREIGN EXCHANGE
 
 Information relating to energy conservation is not applicable to the
 Company as per Section 217(1) (e) of the Companies Act, 1956.
 
 Foreign Exchange earnings and outgo are stated on page 47 on the
 Balance Sheet and Profit and Loss Accounts. The Company earned Rs.
 15.45 crores in foreign currency from retail sales through
 international credit cards.
 
 DIRECTORS’ RESPONSIBILITY STATEMENT
 
 Pursuant to Section 217(2AA) of the Companies Act, 1956, the Directors,
 based on the representations received from the Operating Management,
 confirm that: -
 
 i) in the preparation of the annual accounts, the applicable accounting
 standards have been followed and that there are no material departures
 therefrom;
 
 ii) they have, in the selection of the accounting policies, consulted
 the Statutory Auditors and have applied them consistently and made
 judgements and estimates that are reasonable and prudent so as to give
 a true and fair view of the state of affairs of the Company at the end
 of the financial year and of the profit of the Company for that period;
 
 iii) they have taken proper and sufficient care, to the best of their
 knowledge and ability, for the maintenance of adequate accounting
 records in accordance with the provisions of the Companies Act, 1956,
 for safeguarding the assets of the Company and for preventing and
 detecting fraud and other irregularities.
 
 iv) They have prepared the annual accounts on a going concern basis.
 
 ACKNOWLEDGEMENTS
 
 The Directors wish to place on record their appreciation of the support
 which the Company has received from its promoters, bankers, suppliers
 and customers and most importantly, its employees.
 
 
                                On behalf of the Board of Directors
 
                                F.K. Kavarana
                                Chairman
 
 Mumbai, 30th June 2008