Home  »  Company  »  Trent Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Trent Ltd.

Mar 31, 2017

Note 1

Company information

Trent Limited (The Company ) is a public Limited Company domiciled in India and is incorporated under the provisions of the Indian Companies Act, 1913. Its shares are listed on two recognised stock exchanges in India. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai, 400001. The Company is engaged in retailing of apparels, footwear, accessories,toys,games etc. It operates through ‘Westside’ and ‘Landmark’ retail formats. Westside - Trent’s flagship format offers apparel, footwear and accessories for men, women and children,along with furnishings, decor and a range of home accessories. Operating with a predominantly exclusive brands model, Westside continues to demonstrate the ability to compete effectively in the market place. Landmark - a family entertainment format- offers a curated range of toys, front list books and sports merchandise.

Note 2

2.1 Basis of preparation

These separate financial statements are prepared on the accrual basis of accounting and in accordance with the Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules,2015 and referred under Section 133 of the Companies Act, 2013.

The financial statements were authorised for issue in accordance with a resolution passed by the Board of Directors on 26th May,2017.

For all periods up to and including the year ended 31st March 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (IGAAP). The financial statements for the year ended 31st March 2016 have been prepared in accordance with Ind AS to give comparative figures for the financial statements for the year ended 31st March 2017 being the first year for preparation of financial statements in accordance with Ind AS. All Notes should be read in conjuction with Note no 47, (Page 173-178) which explains about how the Company adopted Ind AS.

These separate financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value or amortised cost (refer accounting policy regarding financial instruments)

These seperate financial statements are presented in Indian rupees (INR) in Crores, which is also the Company’s functional currency. All values are rounded off to the nearest INR crore upto two decimals,except when otherwise indicated.

Note 3

Significant accounting judgements, estimates and assumptions

The preparation of the company’s standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognised in the year in which the estimates are revised and in any future year affected.

In the process of applying the Company’s accounting policies, management has made the following Judgements, estimates and assumptions which have significant effect on the amounts recognised in the financial statements:

Lease of properties and equipments not in legal form of lease: Significant judgement is required to apply lease accounting rules under Appendix C to Ind AS 17: determining whether an arrangement contains a Lease. In assessing the applicability to arrangement entered into by the Company, management has exercised judgement to evaluate the right to use the underlying assets, substance of transaction including legally enforced arrangement and other significant terms and conditions of the arrangement to conclude whether the arrangement meet the criteria under Appendix C to Ind AS 17 ‘Leases’.Consequently, the Company has segregated on an estimated basis the total franchisee fees paid in terms of the arrangement into the embedded lease component and the service fees component.

Escalation in lease rentals: For recognising the lease rentals on straight line basis, the escalation of lease rentals is considered to be in line with the expected general inflation level.

Provision for doubtful advances and trade receivables: The company is not significantly exposed to credit risk as most of the sales is in cash , credit cards or redeemable vouchers issued by others .Similarly advance to parties are made in normal course of business as per terms and condition of contract .Since the amount involved is not material, the Company does not calculate any credit loss for trade receivables and advances to parties as required under Ind AS 109 ‘Financial Instrument’ however, the company provides for doubtful advances and trade receivables based on its judgement about recoverability of amount.

Clubwest points: The company has considered nil breakage for the purpose of calculating defer revenue related to loyalty points.

Defined benefit plans

The cost and present obligation of Defined benefit gratuity plan and compensated absences are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to complexities involved in the valuation and its long term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are assumed at each reporting date. (Refer Note No 41, Page 162-165)

Fair value measurement of financial instruments

When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk , volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.

Taxes

Deferred tax, subject to the consideration of prudence, is recognised on temporary differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised to the extent that there is reasonable certainty that sufficient future tax income will be available against which such deferred tax assets can be realized.

Impairment of financial assets: The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Company’s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.

Discounting of deposit: The company has considered SBI Base rate of respective periods in which transaction had occurred for measuring deposit, being financial assets /Liabilities, at amortised cost.

Note 4

FINANCIAL LIABILITIES- OTHER CURRENT FINANCIAL LIABILITIES

(1) During the year 2010-11, the Company issued 450 Redeemable Non Convertible Debentures June 2010 Series 1 of Rs.10 lakhs each and 300 Redeemable Non Convertible Debentures June 2010 Series 2 of Rs.10 lakhs each on private placement basis. Series I Debentures will carry an interest @ 9.75% p.a and are redeemable at par on 30th June 2017 and series 2 Debentures are free of Interest and will be redeemed at premium of Rs.9.13 Lakhs on 30th June 2017.

(2) During the previous year, the Company issued 3000 Redeemable Non Convertible Debentures April 15 Series I of Rs.10 lakhs each on private placement basis. These Debentures carry a coupon rate of 8.98% p.a of interest and were redeemed at par on 20th Septemeber 2016.

(3) In accordance with Ind AS 109, these debentures are measured at amortised cost inclusive of issue expenses and redemption premium.

(4) Share Application Money received and due for refund represents the cheques issued but not encashed by the payees.

Note 5

Commitments and contingencies

(a) Operating lease commitments Company as lessee

The company has entered into certain arrangements in the form of operating lease to operate retail business. As per terms of the arrangements, the company has obligation of regular payment for use of property.Some of the arrangements include minimum lock in period clause for regular payment of lease rent or payments of similar nature. Certain arrangements also include renewal and escalation clause for the mutually agreed period between the parties.

The company has paid Rs.227.82 Crores (including embedded lease components of contractual arrangements) during the year (Previous year Rs.187.39 Crores) towards lease payment. Future minimum rentals payable under non-cancellable operating leases as at 31 March 2017 are, as follows:

Company as lessor

The company has entered into certain arrangements in the form of operating lease in respect of some of its properties. As per terms of the arrangements, the company has right to receive regular payment for use of property. Some of the arrangements include minimum lock in period clause for regular receipts of lease rent or receipts of similar nature. Certain arrangements also include renewal and escalation clause for the mutually agreed period between the parties.

(b) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.10.99 crores (2015-16: Rs.11.14 crores)(As at 01st April 2015: Rs.5.12 crores)

(c) Other Commitments

The Finance Act, 2007 introduced service tax on “Renting on Immovable Property” with effect from 01st June, 2007.The Company had entered into several agreements with Landlords and Mall owners prior to the introduction of service tax on rent. The Delhi High court through its judgement dated 19th April, 2009 had set aside the operation of service tax on rent as ultra vires. In the meanwhile, the Finance Act, 2010 has amended the Finance Act retrospectively with effect from 1st June,2007 levying service tax on “Renting of Immovable Property” This retrospective amendment and applicability on service tax on rent was challenged by Retailers Association of India of which the company is a member. The case is presently before the Supreme court pending final disposal.

The company has paid and/or adequately provided for service tax on rent upto the period 31st March,2017 under rent/lease agreements in which it had explicitly assumed the liability of service tax on rent.As per the directions of the Supreme court dated 14th October 2011 the company had deposited Rs.4.66 crores being 50% of the liability under such agreements. During the year 2015-16,residual service tax of Rs.3.34 crores has been deposited with the Service tax Department after adjusting amounts already paid by the developers/lessors.Pending the final Supreme Court Judgement interest/penalty if any as may be payable is not presently ascertainable or quantifiable. Export Obligation of Rs.3.45 Crores against EPCG Licence of Landmark Limited since merged with company w.e.f. 01-04-2013.

(d) Certain Key arrangements of the Company

The Company has agreements in respect of the following and the parties inter-se have certain rights and obligations,also covering certain affirmative and shareholding related provisions, commensurate with arrangements of this nature:

1. Association with Inditex Group for Zara & Massimo Dutti stores in India.

2. Joint venture with Tesco PLC UK,with respect to Trent Hypermarket Private Limited.

(e ) Contingent liabilities

(i) Contingent Liability in respect of Sales tax, Excise , Customs and other indirect tax matters: Rs.0.29 crores (2015-16: Rs.1.63 crores)(As at 01.04.2015 Rs.1.26 crores) - net of tax Rs.0.19 crores (2015-16: Rs.1.08 crores) (As at 01.04.2015 Rs.0.83 crores).

(ii) Contingent Liability in respect of Income-tax matters : Rs.8.88 crores (2015-16: Rs.13.43 crores) (As at 01.04.2015 Rs.2.07 crores).

(iii) Contingent Liability in respect of Claims filed against the Company Rs.7.26 crores (2015-16: Rs.7.04 crores) (As at 01.04.2015 Rs.6.81 crores).

(iv) Contingent Liability in respect of Provident Fund matter : Rs.1.15 crores (2015-16: Rs.1.11crores) (As at 01.04.2015 Rs.1.11 crores).

(v) Claims made against the Company not acknowledged as debts Rs.1.05 crores (2015-16 : Rs.0.95 crores) (As at 01.04.2015 Rs.1.74 crores).

(vi) Amount of outstanding corporate guarantee given on behalf of Trent hypermarket Pvt. Ltd (a joint venture of company) is Rs.43.83 crores (2015-16: Rs.117.22 Crores) (As at 01.04.2015 Rs.150.90 crores).

6 (a) Remuneration to Managing Director/ Executive Director: The company has paid/ provided for the remuneration of Mr. Philip Auld & Mr. P.Venkatesalu as per approved limits by the Central Government.

6 (b) Commission to the Non-Executive Directors - The Board of Directors have approved commission upto 1% of eligible profits for FY 2016-17 , computed as per the provisions of the Companies Act,201 3.

7 (a) General Expenses include :

7 (b) Corporate Social Responsibility Expenditure :

(i) Gross amount required to be spent by the company during the year is Rs.0.79 crores (2015-16: Rs.0.61 crores)

(ii) Amount spent during the year on:

7 (c) There are no Micro and Small Enterprises , to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2017. 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.

7 (d) There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2017 except Rs.0.07 crores (2015-16: 0.06 crores) (As at 01st April 2015. Rs.0.06 crores) which is held in abeyance due to legal cases pending.

7 (e) Entire proceeds of the issue of Commercial Paper and Non-Convertible Debentures (NCD) of Rs.334.70 crores in 2016-17 have been utilised towards objects of the issue.

7 (f) During the year the company has deposited SBN as below:

7 (g) Disclosure as required by Ind AS 36: Provision for Impairment

7 (g) Disclosure in terms of Schedule V of SEBI (Listing Obligations & Disclosures Requirements) Regulations, 2015 regarding loans & advances in the nature of loans to subsidiaries.

i) Details of loans and advances in the nature of loans

ii) Details of Investments made by the loanee in the shares of the parent Company and subsidiary company, when the company has made a loan or advance in the nature of loan are as under:

7 (h) Details on derivatives instruments and unhedged foreign currency exposures

(i) There are no forward exchange contract outstanding as at 31 st March,2017.

(ii) The unhedged foreign currency exposure as at 31st March 2017 is as under:

7 (i) SEGMENT REPORTING

The company’s board/board committee considers retailing as the main business of the entity and all other activities are incidental to the main business . Accordingly, there are no other separate reportable segments in terms of Ind AS 108 on “Operating Segment s” and thus no further disclosure are made.

(8) Related party transactions Parties where control exists

Fiora Business Support Services Limited(Formerly known as Westland Limited) - Subsidiary Company

(100% Equity Share capital is held by Trent Limited as at 31st March 2017)

(100% Preference Share Capital is held by Trent Limited as at 31st March 2017)

(99.99% Equity Share capital is held by Trent Limited as at 31st March 2016)

(65.36% Preference Share Capital is held by Trent Limited as at 31st March 2016)

Trent Brands Limited - Subsidiary Company.

(47.99% Equity Share Capital is held by Westland Limited as at 31st March, 2017)

(52.01% Equity Share Capital is held by Trent Limited as at 31st March 2017)

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

(100% Preference Share Capital is held by Trent Limited as at 31st March, 2016)

Fiora Services Limited - Subsidiary Company of Trent Brands Limited

(89.88% Equity Share Capital is held by Trent Brands Limited and 6.91% Equity Share Capital is held by Trent Limited as at 31st March, 2017)

Nahar Retail Trading Services Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2017)

Landmark E-Tail Limited - Subsidiary Company (Subsidiary of Trent Limited upto 11th June 2015)

Trent Global Holdings Limited-Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2017)

Fiora HyperMarket Limited-Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March , 2017)

(100% Preference Share Capital is held by Trent Limited as at 31st March, 2016)

Westland Publications Limited - Subsidiary Company of Westland Limited(incorporated on 30th March 2016)

(Subsidiary of Westland Limited till 22nd November 2016)

(99.99% Equity Share Capital is held by Westland Limited as at 31st March 2016)

Other Related Parties with whom transactions have taken place during the year:

Associates:

Tata Sons Limited (Investing Party)

(Holds more than 20% of the Share Capital of Trent Limited as on 31st March 2017)

Inditex Trent Retail India Private Limited (Inditex)

(49% Equity Share Capital is held by Trent Limited as at 31st March, 2017)

Massimo Dutti India Private Limited

(49% Equity Share Capital is held by Trent Limited as at 31st March,2017)

Joint Ventures

Trent Hypermarket Private Limited(Formerly known as Trent Hypermarket Limited)

(50% Equity Share Capital is held by Trent Limited as at 31st March 2017)

Virtuous Shopping Centres Limited-(Subsidiary Company of Trent Hypermarket Private Limited) Commonwealth Developers Limited-Subsidiary Company of Virtuous Shopping Centres Limited (During previous year,Virtuous Shopping Centres Limited has been merged with Trent Hypermarket Private Limited .The appointed date of merger is 1st February 2015 w.e.f 9th December 2015)

THPL Support Services Limited-(Subsidiary Company of Trent Hypermarket Private Limited w.e.f 28th March 2016)

(The name of Trent Retail Services Limited has changed to THPL Support Services Limited on 03rd January 2017)

Others:

Tata Consultancy Services Limited

Tata AIG General Insurance Company Limited

Tata AIA Life Insurance Company Limited

Infiniti Retail Limited

Tata Capital Limited

Tata Capital Forex Limited (Formerly TT Holdings & Services Ltd)

Tata Cleantech Capital Limited Tata Capital Housing Finance Limited

Tata Unistore Limited(Formerly Tata Industrial Services Limited)

Tata Autocomp Systems Limited Tata International Limited Tata South East Asia Limited Calsea Footwear Private Limited TATA Capital Financial Services Limited.

Tata Housing Development Co. Limited Tata Asset Management Limited

Drive India Enterprise Solutions Limited (ceased w.e.f. 01.09.2015)

Tata Business Support services Limited C-Edge Technologies Limited

Trent Gratuity Trust Account Tata Investment corporation Limited THPL Support services Limited Taj Air Limited Tata Sky Limited

Tata International WestAsia DMCC(w.e.f. 18.11.2014)

Ewart Investment Limited Jaguar Services Private Limited Lantern Trading and Investment Private Limited Lorimar Consultancy services Private Limited Key Managerial Personnel of the Company

Non Executive Directors Mr. N.N. Tata

Mr. A.D. Cooper (Retired as a Director w.e.f 23rd August 2015)

Mr. Z.S. Dubash Mr. B. Bhat Mr. S. Susman Mr. B.N. Vakil Mr. H.R. Bhat Ms.S.Singh

Mr. A Sen (Appointed w.e.f 27th May 2015)

Executive Director Mr. P. Venkatesalu-Executive Director(Finance) & CFO w.e.f 1st June 2015

Chief Executive Officer & Mr. Philip N. Auld Manager

(9) Employee Benefit Plans

(a) gratuity benefit (As per Actuarial valuation as on 31st March 2017) (Cont.)

Leaving service: Rates of leaving service at specimen ages are for 21- 44 years is 2% and for 45 years and above is 1%. Leaving service due to disability is included in the provision made for all causes of leaving service.

Nature of benefits: The gratuity benefits payable to the employees are based on the employee’s service and last drawn salary at the time of leaving. The employees do not contribute towards this plan and the full cost of providing these benefits are met by the Company.

Governance of the plan: The Company has setup an income tax approved irrevocable trust fund to finance the plan liability. The trustees of the trust fund are responsible for the overall governance of the plan.

Inherent risks: The plan is of a final salary defined benefit in nature which is sponsored by the Company and hence it underwrites all the risks pertaining to the plan. In particular, there is a risk for the Company that any adverse salary growth or demographic experience or inadequate returns on underlying plan assets can result in an increase in cost of providing these benefits to employees in future. Since the benefits are lump sum in nature the plan is not subject to any longevity risks. Funding arrangements and policy: The trustees of the plan have outsourced the investment management of the fund to an insurance company. The insurance company in turn manages these funds as per the mandate provided to them by the trustees and the asset allocation which is within the permissible limits prescribed in the insurance regulations. Due to the restrictions in the type of investments that can be held by the fund, it is not possible to explicitly follow an asset-liability matching strategy to manage risk actively. There is no compulsion on the part of the Company to fully pre fund the liability of the Plan. The Company’s philosophy is to fund the benefits based on its own liquidity and tax position as well as level of under funding of the plan.

Sensivity analysis:

Sensivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit oblgation by one percentage, keeping all other actuarial assumptions constant. The following table summarizes the impact in percentage terms on the reported defined benefit obligation at the end of the reporting period arising on account of an increase or decrease in the reported assumption by 50 basis points.

(I) Defined Benefit Plan

(c) Compensated Absence liability recognised as Expense for the year is Rs.2.78 Crores. (2015-16: Expense of Rs.1.16 Crores). The above is based on the acturial valuation report. The report considers assumptions with respect to discount rates, salary escalation, retirement age, mortality, rates of leaving service, leave availment pattern, disability and other relevant factors. The method used is Projected Unit Credit Method.

10. Earnings per share (EPS)

Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.

Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares) by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.

* During the year, the Company has split its equity shares having face value of Rs.10 each into equity shares having face value of Rs.1 each. Earning per share for past periods has been adjusted accordingly.

Note 11

Financial risk management objectives and policies

The Company’s financial risk management is an integral part of how to plan and execute its business strategies. The Company’s risk management policy is approved by the board/board’scommitee.

The Company’s principal financial liabilities, other than derivatives, comprise loans and borrowings, trade and other payables, and financial guarantee contracts. The main purpose of these financial liabilities is to finance the Company’s operations and to provide guarantees to support its operations in select instances. The Company’s principal financial assets include loans, trade and other receivables, and cash and cash equivalents that derive directly from its operations and Investment.

The Company is exposed to market risk, credit risk , liquidity risk etc. The Company’s senior management oversees the management of these risks. The Company’s senior management is overseen by the audit committee with respect to risks and facilitates appropriate financial risk governance framework for the Company. Financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist persons that have the appropriate skills, experience and supervision. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing key risks, which are summarised below.

Market risk: Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include loans and borrowings, deposits, investments and derivative financial instruments.

The Company manages market risk through a treasury department,which evaluate and exercises control over the entire process of market risk management.The treasury department recommends risk management objectives and policies ,which are approved by senior management and the Audit/ Investment committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currecy exposure, borrowing strategies, and ensuring compliance with market risk limit and policies.

The sensitivity analyses in the following sections relate to the position as at 31st March 2017.

Interest rate risk: Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Interest rate change does not affects significantly short term borrowing and current investment therefore the Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s long-term debt and Non current investment.

If interest rates were to change by 100 bps from March 31, 2017, changes in interest expense on long term borrowing would amount to approximately Rs.1.75 Crores.Further given the portfolio of investments in mutual funds etc. the Company is also exposed to interest rate risk with respect to returns realised. It is estimated that a 25bps change in 10 year Govt. bond yield would result in a Profit and Loss impact of approximately Rs.0.86 Crores .This estimate is based key assumption including with respect to seamless transition of rates across debt instrument in the market and also basis the duration of debt instruments in turn held by mutual funds that the Company has invested in.

Foreign currency risk: The Company’s is exposed to foreign currency risk through its purchases of merchandise /receipt of services from overseas parties in various foreign currencies.

The Company evaluates exchange rate exposure arising from foreign currecny transactions and the Company follows established risk mangment policies,including the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.

Foreign currency sensitivity: The following tables demonstrates the sensitivity to a 5% increase/decrease in foreign currencies exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities including nondesignated foreign currency derivatives and embedded derivatives. The Company’s exposure to foreign currency changes for all other currencies is not material.

Equity price risk: The Company has very limited equity investment other than investment in subsidiaries, Joint ventures’ and associates’ equity instrument therefore related exposure is not material for Company. Credit risk: Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities and from its financing activities, including deposits with banks , financial institutions and other parties, foreign exchange transactions and other financial instruments.

The Company is not exposed to significant concentrations of credit risk as policies are in place to cover retail sales where Collections are primarily made in cash or through credit card payments. The Company adopts prudent criteria in its investment policy, the main objectives of which are to reduce the credit risk associated with investment products and the counterparty risk associated with financial institutions. The Company considers the solvency, liquidity, asset quality and management prudence of the counter parties, as well as the performance potential of the counter parties in stressed conditions .In relation to credit risk arising from commercial transactions, impairment losses are recognized for trade receivables when objective evidence exists that the Company will be unable to recover all the outstanding amounts in accordance with the original contractual conditions of the receivables.

Liquidity risk: The Company’s treasury department is responsible for liquidity,funding as well settlement management.In addition,the related policies and processes are overseen by senior management. Management monitors the Company’s net liquidity position through rolling forecast on the basis of expected cash flows.

The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.

Excessive risk concentration

Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Company’s performance to developments affecting a particular industry or given set of counter parties.

In order to avoid excessive concentrations of risk, the Company’s policies and procedures include specific guidelines to focus on the maintenance of a reasonably diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.

Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital, convertible preference shares, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objectives of the Company’s capital management is to maximise the shareholder value while providing stable capital structure that facilitate considered risk taking and pursued of business growth.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and business opportunities. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, raise/ pay down debt or issue new shares. The Company monitors capital structure using a debt equity ratio, which is debt divided by equity. The Company’s policy is to keep the gearing ratio between 20% and 40%.

Note 12 - Standards issued but not yet effective

The standards issued, but not yet effective upto the date of issuance of the Group’s financial statements is disclosed below. The Group intends to adopt this standard when it becomes effective.

Ind AS 115 Revenue from Contracts with Customers

Ind AS 115 was issued in February 2015 and establishes a five-step model to account for revenue arising from contracts with customer. Under Ind AS 115 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The new revenue standard will supersede all current revenue recognition requirements under Ind AS. The Group is in the process of analysing the impact of the proposed standard. This standard will come into force from accounting period commencing on or after 1st April 2018. The Group will adopt the new standard on the required effective date.

Note 13

First time adoption of Indian Accounting Standards

The Company has prepared separate financial statements which comply with Ind AS applicable for the period ending as on 31st March 2016 for comparative purpose for the period ending 31st March 2017. In preparing these financial statements, the Company’s opening balance sheet has been prepared as at 1st April 2015, i.e the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its IGAAP financial statements, including the balance sheet as at 1st April 2015 and the financial statements for the year ended 31st March 2016.

Exemption availed under IND AS 101 ‘First time adoption of Indian Accounting Standards’

Investments in subsidiaries, associates & joint ventures: Company has availed the option to continue recording of Investments(in each of these cases) at cost as per Indian GAAP as on transition date amongst available options of fair valuation or cost as per Ind AS 27 ‘separate financial statement.

Business Combination: Company has availed the exemption available under Ind AS 101 for not restating the past business combinations at fair value.

Leases: Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease in substance or legal form .In accordance with Ind AS 17,this assessment should be carried out at the inception of the contract or arrangement. However, the Company has done the assessment of lease in contracts based on conditions in prevailing as at the date of transition as per transition provision of Ind AS 1 01 .

Reclassification of Lease hold buildling: Under the Previous IGAPP Leasehold land was covered under fixed assets. Under Ind AS lease hold land is treated as operating lease and Premium paid is considered as advance lease rental. Accordingly while transition from IGAAP to Ind AS Company has reclassified the unamortised portion of Leasehold land of Rs.50.24 Crores (net of amortisation) from fixed assets to other non-current assets as prepaid lease rentals which will be amortised as operating lease over the remaining period of the agreement. During the year ended March 16, under Ind AS, Company has reversed depreciation expenses of Rs.0.72 Cr which was earlier charged off as per IGAAP & recognised as lease rental of Rs.0.72 Cr as per Ind AS

Accounting of Investment in accordance with IND AS 109: The group has measured investments (other than investment in joint ventures,associates & subsidairies) at fair value in accordance with IND AS 109. Accordingly value of investment has been adjusted as follows while transition from IGAAP to Ind AS for 1st April 2015 .

The increase in retained earning at the time of transition is of Rs.10.29 crores and for financial year 2015-16 Increase in profit and loss is of Rs.16.36 crores.

Further the amount recognised in other comprehensive income at the time of transition is Rs.0.67 Cores and for the year ended on 31st Mar’ 16 amount debited for in other comprehesive income is Rs.0.39 Crores

Measurement of outstanding debentures at amortised cost: The outstanding debentures has been measured at amortised cost as per Ind AS 109. Accordingly redemption premium of Rs.11.91 Crores for the unexpired period as on 01st April 2015 provided under IGAAP has been reversed against retained earning. Due to valuation of debentures at amortised cost the long term borrowings as on 01st April 2015 has been increased by Rs.16.37 Crores .During the year ended 31st March 16, additional interest cost on amortisation of Rs.5.34 Crores has been recognised on measuring debentures at amortised cost.

Accounting for clubwest points: Under the IGAAP company was providing for variable cost attributable to unredeemed loyalty points where as under Ind AS Company is require to defere the revenue pertaining to unredeemed points. Consequently provision for Rs.5.65 Crores for accrued points on date of transition has been reversed and liability of Rs.9.54 Crores has been recognised for the revenue being deferred. The impact of both has been adjusted against retained earnings. For the year ended 31st March 2016, Company has reversed provision for accrued points of Rs.7.86 crores which has been adjusted against advertisement and sales promotion expenses. Further liability on account of deferred revenue amounting to Rs.8.86 crores has been recognised and adjusted against revenue from sale of goods.

Proposed Dividend: Under the IGAAP, Proposed dividend including dividend distribution tax (DDT),are recognised as liability in the period to which they relate, irrespective of when dividend is declared. Under Ind AS, Proposed dividend is recognised as a liability for the period in which it is declared by the company,usually when approved by shareholder in general meeting or paid. Therefore, the dividend liability (proposed dividend) including dividend distribution tax liability amounting to Rs.40 crores has been derecognised in retained earnings as on the date of transition.

Amortisation of Security deposit: Under Ind AS security deposit is measured at amorstised cost accordingly company has adjusted Rs.0.11 Crores against retained earnings on transtiton date. During the financial year 2015-16 the company has recognised net expense of Rs.0.04 Crores for measuring security deposit at amortised cost.

Employee Benefits: Under Ind AS, employee benefit expenses of Rs.0.11 crores (net of deferred tax) pertaining to remeasurement of acturial gains and losses has been transferred to other comprehensive income from profit and loss statement of 2015-16.

Deferred Tax: Under Ind AS deferred tax is calculated on temporary differences between the carrying amount of an asset or liability and its tax base. On transition date, net increase in deferred tax liability is of Rs.5.38 crores and net decrease for year ended 31st March 2016 is of Rs.3.53 Crores.

Corporate Guarantee: As per Ind AS 32, the company has recognised a liability and investment of Rs.1.39 Crore as on transition date. During the year 2015-16 the company has recognised an income of Rs.0.26 Crores as a premium for the year.

All other adjustments are mainly related to classification of assets and liabilites in financial and non financial nature.

Note 14

Previous year’s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2016

1.1. Capital and other Commitments

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 11.14 crores (2014-2015 : Rs. 5.12 crores)

(b) Other Commitments

(i) The company has given undertakings to the lenders of its subsidiary, Westland Limited restricting its rights to sell the shares of Westland Limited held by it.

(ii) The Finance Act,2007 introduced service tax on "Renting on Immovable Property" with effect from 01st June, 2007.The Company had entered into several agreements with Landlords and Mall owners prior to the introduction of service tax on rent. The Delhi High court through its judgement dated 19th April, 2009 had set aside the operation of service tax on rent as ultra vires. In the meanwhile ,the Finance Act, 2010 has amended the Finance Act retrospectively with effect from 1st June,2007 levying service tax on "Renting of Immovable Property". This retrospective amendment and applicability on service tax on rent was challenged by Retailers Association of India of which the company is a member . The case is presently before the Supreme court pending final disposal.

The company has paid and/or adequately provided for service tax on rent upto the period 31st March,2016 under rent/lease agreements in which it had explicitly assumed the liability of service tax on rent. As per the directions of the Supreme court dated 14th October 2011 the company had deposited Rs. 4.66 crores being 50% of the liability under such agreements. During the year 2015-16, residual service tax of Rs. 3.34 crores has been deposited with the Service tax Department after adjusting amounts already paid by the developers/lessors. Pending the final Supreme Court Judgement interest/penalty if any as may be payable is not presently ascertainable or quantifiable.

(iii) Export Obligation of Rs. 3.45 Crores against EPCG Licence of Landmark Limited since merged with company w.e.f. 01-04-2013.

(c) Certain Key arrangements of the Company

The Company has agreements in respect of the following and the parties inter-se have certain rights and obligations,also covering certain affirmative and shareholding related provisions, commensurate with arrangements of this nature:

1 Joint venture with Inditex Group for Zara & Massimo Dutti stores in India.

2 Joint venture with Tesco PLC UK, with respect to Trent Hyper-market Private Limited.

3 Arrangement with Amazon Group with respect to Westland Limited.

1.2. Contingent Liabilities and Claims

(a) Contingent Liability in respect of Sales tax, Excise , Customs and other indirect tax matters: Rs. 1.63crores (2014-2015: Rs. 1.26 crores) - net of tax Rs. 1.08 crores (2014-2015 : Rs. 0.83 crores).

(b) Contingent Liability in respect of Income-tax matters : Rs. 13.43 crores (2014-2015 : Rs. 2.07 crores).

(c) Contingent Liability in respect of Claims fled against the Company Rs. 7.04 crores (2014-2015 : Rs. 6.81 crores)

(d) Contingent Liability in respect of Provident Fund matter : Rs. 1.11crores (2014-15: Rs. 1.11 Crores).

(e) Claims made against the Company not acknowledged as debts Rs. 0.95 crores (2014-2015 : Rs. 1.74 crores)

(f ) Corporate Guarantee given on behalf of a Subsidiar y/ Joint Venture(R efer note:4.18.17, Page 122) : Rs. 117.22 crores (2014-2015 : Rs. 150.9 crores)

1.3. (a) remuneration to Managing director/ executive director: During the year, Company has received approvals from the Central Government for the remuneration of Mr. Philip Auld & Mr. P.Venkatesalu. The company has paid/ provided for the full remuneration as per approved Limits.

(b) Commission to the non-executive directors - The Board of Directors have approved commission upto 1% of eligible Profits for FY 2015-16 , computed as per the provisions of the Companies Act,2013.

1.4 There are no Micro and Small Enterprises , to whom the Company owes dues, which are outstanding for more than 45 days as at 31st March, 2016. 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.

1.5 There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2016 except Rs. 0.06 crores (2014-2015 : Rs. 0.06 crores) which is held in abeyance due to legal cases pending.

1.6 Entire proceeds of the issue of Non-Convertible Debentures (NCD) of Rs. 300 crores in 2015-16 have been utilised towards objects of the issue.

1.7 The Company has taken credit for MAT which it is entitled on future taxable Profits.

1.8 (a) The future minimum lease payments under non-cancellable operating leases are as under :

1.9. 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".

1.10. RELATED PARTY TRANSACTIONS :

1.10.01 parties where control exists

Westland Limited - Subsidiary Company

(99.99% Equity Share capital is held by Trent Limited as at 31st March 2016)

(65.36% Preference Share Capital is held by Trent Limited as at 31st March 2016)

(96.64% Equity Share Capital is held by Trent Limited as at 31st March,2015)

(100% Preference Share Capital is held by Trent Limited as at 31st March,2015)

Trent Brands Limited - Subsidiary Company.

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

(100% Preference Share Capital is held by Trent Limited as at 31st March, 2016)

Fiora Services Limited - Subsidiary Company of Trent Brands Limited

(89.88% Equity Share Capital is held by Trent Brands Limited and 6.91% Equity Share

Capital is held by Trent Limited as at 31st March, 2016)

(89.88% Equity Share Capital is held by Trent Brands Limited as at 31st March 2015)

Nahar Retail Trading Services Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

Landmark E-Tail Limited - Subsidiary Company

(Subsidiary of Trent Limited upto 11th June 2015)

(Nil Equity Share Capital is held by Trent Limited as at 31st March, 2016)

(Nil Preference Share Capital is held by Trent Limited as at 31st March 2016)

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2015)

(100% Preference Share Capital is held by Trent Limited as at 31st March, 2015)

Trent Hypermarket Private Limited(Formerly known as Trent Hypermarket Limited)

-Subsidiary Company

(Subsidiary of Trent Limited upto 02nd June 2014,JV of Trent Limited w.e.f 03rd June 2014)

(50% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

Trent Global Holdings Limited-Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

Fiora Hyper Market Limited-Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March , 2016)

(100% Preference Share Capital is held by Trent Limited as at 31st March, 2016)

Duckbill Books & Publication Limited-Subsidiary company of Westland Limited

(Subsidiary of Westland limited upto 31st December 2014)

(Nil Equity Share Capital is held by Westland Limited as at 31st March,2015)

Virtuous Shopping Centres Limited-(Subsidiary Company of Trent Hypermarket Private Limited)

Commonwealth Developers Limited-Subsidiary Company of Virtuous Shopping Centres Limited

(Virtuous Shopping centres Limited is a subsidiary of Trent Hypermarket Private Limited.

Trent Hypermarket Private Limited was subsidiary of Trent Limited upto 2nd June 2014 and is a JV of Trent Limited w.e.f 3rd June 2014)

(During the year, Virtuous Shopping Centres Limited has been merged with Trent Hypermarket Private Limited. The appointed date of merger is 1st February 2015 w.e.f 9th December 2015)

Westland Publications Limited - Subsidiary Company of Westland Limited (incorporated on 30th March 2016)

(99.99% Equity Share Capital is held by Westland Limited as at 31st March 2016)

1.10.02 other related parties with whom transactions have taken place during the year: Associates:

Tata Sons Limited (Investing Party)

(Holds more than 20% of the Share Capital of Trent Limited as on 31st March 2016)

Joint ventures

Trent Hypermarket Private Limited(Formerly known as Trent Hypermarket Limited) (50% Equity Share Capital is held by Trent Limited as at 31st March 2016)

Inditex Trent Retail India Private Limited (Inditex)(49% Equity Share Capital is held by Trent Limited as at 31st March, 2016)

Massimo Dutti India Private Limited

(49% Equity Share Capital is held by Trent Limited as at 31st March,2016)

1.10.03 directors/Manager of the Company

Non Executive Directors Mr. N.N. Tata

Mr. A.D. Cooper

(Retired as a Director w.e.f. close of working hours on 23rd August 2015)

Mr. Z.S. Dubash

Mr. B. Bhat

Mr. S. Susman

Mr. B.N. Vakil

Mr. H.R. Bhat (appointed w.e.f. 01st April 2014)

Ms. S.Singh( appointed w.e.f. 03rd March 2015)

Mr. A Sen(Appointed w.e.f. 27th May 2015)

Executive Director Mr.Philip N Auld

(Managing Director w.e.f. 04th November 2014)

Mr. P. Venkatesalu-Executive Director(Finance) & CFO w.e.f. 1st June 2015

Chief Executive Officer & Manager Mr.Philip N. Auld(Manager as per

The Companies Act, 2013 upto 03rd November, 2014)

1.11. During the previous year, the company had adopted the revised useful life of Fixed Assets as per Schedule II of the Companies Act 2013.Accordingly the opening written down value of fixed assets for FY 2014-15 was depreciated over their balance revised useful life. In respect of fixed assets whose useful life had expired as on 01st April 2014,the opening WDV of Rs. 4.53 crores (net of deferred tax) had been adjusted to opening balance of retained earnings as on 01st April 2014.

1.12. As per the agreement entered with Tesco PLC, UK in respect of Trent Hypermarket Private Limited (THPL), a wholly owned subsidiary of Tesco PLC, UK (Tesco) during the previous year had purchased part of the equity shares held by the Company in THPL and had separately subscribed to additional equity shares of THPL. Following this investment the Company and Tesco each held 50% stake in THPL. Consequently, THPL is now a Joint Venture (JV) of the Company with Tesco.

1.13. Previous year''s figures have been regrouped / reclassified wherever necessary.


Mar 31, 2013

1.1 Capital and Other Commitments

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs. 18.89 crores (2011-2012 : Rs.20.98 crores)

(b) Other Commitments (As Certified by the Management)

(i) The company has given undertakings to the lenders of its subsidiaries, Landmark Limited and Westland Limited restricting its rights to sell the shares of Landmark Limited and Westland Limited held by it.

(ii) Certain Key arrangements of the Company

The Company has agreements in respect of the following and the parties inter-se have certain rights and obligations,also covering certain affirmative and shareholding related provisions, commensurate with arrangements of this nature:

- Joint venture with Inditex Group to open Zara stores in India

- Strategic Association with Tesco Plc in respect of the Star Bazaar hypermarket business involving interalia a franchise and wholesale supply arrangement

- Trent Hypermarket Limited''s Joint venture with a Xander Group fund for development of shopping centres in which Star Bazaar would be an anchor tenant.The said arrangement has since been terminated in April 2013.

- TVS private equity fund has an option to invest in a minority stake in Westland Limited a subsidiary of the Company .

1.2 Contingent Liabilities and Claims

(a) Contingent Liability in respect of Sales tax, Excise and Customs demands against which the Company has filed appeals Rs. 0.10 crores (201 1-2012: Rs.0.68 crores) - net of tax Rs. 0.07 crores (201 1-2012 : Rs.0.46 crores).

(b) Contingent Liability in respect of Income-tax demands against which the Company has filed appeals : Rs. 2.14 crores (2011-2012 :Rs. 2.11 crores).

(c) Claims made against the Company not acknowledged as debts (As certified by the management): Rs. 7.83 crores (2011-2012 : Rs.15.43 crores)

(d) Corporate Guarantee given on behalf of a Subsidiary: Rs. 162.52 crores (2011-2012 :Rs. 15.00 crores)

1.3 Commission to the Non-Executive Directors - The Board of Directors have approved commission of upto Rs. 1 Crore to Non-Executive Director''s for the year 2012-13 .The commission in excess of the maximum amount prescribed under Section 198 and Section 309 of the Companies Act 1956 amounting to Rs. 0.42 crores is subject to approval of the shareholders and the Central Government .

1.4 Gain on foreign exchange fluctuation (net) credited to the profit and loss account amounted to Rs.0.42 crores (2011-2012 : gain Rs.0.39 crores).

1.5 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, 2013. 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.

1.6 There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2013 except Rs. 0.05 crores (2011-2012 : Rs.0.05 crores) which is held in abeyance due to legal cases pending.

1.7 (i) Out of the proceeds of the issue of Cumulative Convertible Preference Shares (CCPS) of Rs. 489.66 crores in 2010-11, Rs.356.37 crores have been utilised towards objects of the issue and pending utilisation the balance amount is invested mainly in mutual funds and money market instruments.

(ii) Proceeds of the issue of equity shares to Qualified Institutional Buyers of Rs. 250 crores in year 2011-12 have been utilised towards objects of the issue .

(iii) Out of the proceeds of the issue of Equity shares to Promoters Group on preferential basis of Rs. 150 crores in the current year, Rs.8.60 crores have been utilised towards objects of the issue.

1.8 Provision for taxation is inclusive of the tax impact on account of the securities 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.

1.9 (a) The Company has entered into lease agreement for assets taken on operating lease which range between three years and six years. These are renewable by mutually agreeable terms. The future minimum lease payments under non-cancellable operating leases are as under :

1.10 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.

1.11 RELATED PARTY TRANSACTIONS :

Related parties are as certified by the management.

1.11.01 Parties where control exists

Trent Brands Limited - Subsidiary Company.

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Fiora Services Limited - Subsidiary Company.

(Nil Holding by Trent Limited as at 31st March, 2013)

(89.88% Equity Share Capital is held by Trent Brands Limited as at 31st March, 2013)

Nahar Retail Trading Services Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Fiora Link Road Properties Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Landmark Limited - Subsidiary Company

(85.94% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

(14.06% Equity Share Capital is held by Fiora Link Road Properties Limited as at 31st March, 2013)

Westland Limited - Subsidiary Company

(96.64% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Landmark E-Tail Private Limited - Subsidiary Company

(Subsidiary of Trent Limited uptill 07.08.2012. Subsidiary of Landmark Limited . w.e.f. 08.08.2012)

(100% Equity Share Capital is held by Landmark Limited as at 31st March, 2013)

Trent Hypermarket Limited - Subsidiary Company.

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Trent Global Holdings Limited-Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

TREXA ADMC Private Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

1.11.02 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

(Joint Venture of Trent Limited until 27.02.2013, subsidiary of Trent Ltd w.e.f 28th February, 2013)

(100% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Inditex Trent Retail India Private Limited

(49% Equity Share Capital is held by Trent Limited as at 31st March, 2013)

Virtuous Shopping Centres Limited

(66.66% Equity Share Capital is held by Trent Hypermarket Limited as at 31st March, 2013)

Commonwealth Developers Private Limited - Subsidiary Company of Virtuous Shopping Centers Limited w.e.f. 11th November, 2011

(100% Equity Share Capital is held by Virtuous Shopping Centres Limited as at 31st March, 2013)

1.11.03 Directors/Manager of the Company

Non Executive Directors Mr. F. K. Kavarana

Mr. A. D.Cooper

Mr. K. N. Suntook ( resigned on 17th April 2012)

Mr. N. N. Tata

Mr. Zubin Dubash

Mr. Bhaskar Bhat

Mr. S. Susman

Mr. B. N. Vakil (appointed w.e.f 25th June 2012)

Chief Executive Officer & Manager Mr. Philip N. Auld

1.12. The Board of Directors of the Company at its meeting held on 4th March 2013 has approved a Scheme of Amalgamation and Arrangement (''The Scheme'') between Landmark Limited (''Landmark''), Fiora Link Road Properties Limited (''Fiora'') and TREXA ADMC Private Limited (''Trexa'') with the Company. The Appointed Date for the merger shall be 1st April 2013. As Landmark, Fiora and Trexa are wholly owned subsidiaries of the Company, no shares of the Company will be issued and allotted pursuant to the proposed Scheme.

The Scheme is subject to the requisite approval of the members and/ or creditors as may be directed by the High Court of Judicature at Bombay and subject to all such requisite approvals from the relevant regulatory authorities and sanction of the High Court of Judicature at Bombay.

1.13. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2012

1.1. Capital and Other Commitments

(a) Capital Commitments

Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.20.98 Crores (2010-2011 : Rs.21.46 Crores)

(b) Other Commitments (As Certified by the Management)

(i) The company has given undertakings to the lenders of its subsidiaries, Landmark Limited and Westland Limited restricting its rights to sell the shares of Landmark Limited and Westland Limited held by it.

(ii) Corporate Guarantees to be given to the debenture trustees in respect of Non convertible Debentures of Rs.25 Crores issued by Trent Hypermarket Limited (wholly owned subsidiary).

(iii) Certain Key arrangements of the Company - The Company has agreements in respect of the following and the parties inter-se have certain rights and obligations,also covering certain affirmative and shareholding related provisions, commensurate with arrangements of this nature:

- Joint venture with Inditex Group to open Zara stores in India.

- Strategic Association with Tesco Plc in respect of the Star Bazaar hypermarket business involving interalia a franchise and wholesale supply arrangement.

- Trent Hypermarket Limited's Joint venture with a Xander Group fund for development of shopping centres in which Star Bazaar would be an anchor tenant.

- TVS private equity fund's investment in Landmark Limited.

1.2 Contingent Liabilities and Claims

(a) Contingent Liability in respect of Sales tax, Excise and Customs demands against which the Company has filed appeals Rs.0.68 Crores (2010-2011: Rs.0.77 Crores) - net of tax Rs.0.46 Crores (2010-2011 : Rs.0.51 Crores).

(b) Contingent Liability in respect of Income-tax demands against which the Company has filed appeals : Rs.2.11 Crores (2010-2011 : Rs.9.42 Crores).

(c) Claims made against the Company not acknowledged as debts (As certified by the management): Rs.15.43 Crores (2010-2011 : Rs.7.14 Crores)

(d) Corporate Guarantee given on behalf of Subsidiary: Rs.15.00 Crores (2010-2011 : Rs.15.00 Crores)

(e) Disclosure as required by AS 29 : Provision for Contingencies

1.3 Gain on foreign exchange fluctuation (net) credited to the profit and loss account amounted to Rs.0.39 Crores (2010-2011 : gain Rs.0.20 Crores).

1.4 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 2012. 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.

1.5 There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March 2012 except Rs.0.05 Crores (2010-2011: Rs.0.04 Crores) which is held in abeyance due to legal cases pending.

1.6 (i) Out of the proceeds of the issue of Cumulative Convertible Preference Shares (CCPS) of Rs.489.66 crores in 2010-11, Rs.327.58 Crores have been utilised towards objects of the issue and pending utilisation the balance amount is invested mainly in mutual funds and money market instruments

(ii) Out of the proceeds of the issue of equity shares to Qualified Institutional Buyers of Rs.250.00 Crores in the current year, Rs.5.77 Crores have been utilised towards objects of the issue and pending utilisation the balance amount is invested mainly in mutual funds and money market instruments

1.7 Provision for taxation is inclusive of the tax impact on account of the securities 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.

1.8. 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.

1.9. RELATED PARTY TRANSACTIONS:

Related parties are as certified by the management 4.17.01 Parties where control exists

Trent Brands Limited - Subsidiary Company.

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Fiora Services Limited - Subsidiary Company.

(Nil Holding by Trent Limited as at 31st March 2012)

(25.67% Equity Share Capital is held by Trent Limited as at 31st March 2011)

(89.88% Equity Share Capital is held by Trent Brands Limited as at 31st March 2012)

(64.20% Equity Share Capital is held by Trent Brands Limited as at 31st March 2011)

Nahar Retail Trading Services Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Fiora Link Road Properties Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Landmark Limited - Subsidiary Company

(57.39% Equity Share Capital is held by Trent Limited as at 31st March 2012)

(17.66% Equity Share Capital is held by wholly owned subsidiary companies as at 31st March 2012)

Westland Limited - Subsidiary Company

(96.64% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Trent Retail Services Limited - Subsidiary of Landmark Ltd uptill 09.06.2011

(Associate of Landmark Limited from 10.06.2011 to 13.07.2011)

(100% Equity Share Capital is held by Landmark Limited as at 31st March 2011)

Landmark E-Tail Private Limited - Subsidiary Company

(Subsidiary of Landmark uptill 13.07.2011. Subsidiary of Trent Ltd. w.e.f. 14.07.2011)

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

(100% Equity Share Capital is held by Landmark Limited as at 31st March 2011)

Trent Hypermarket Limited - Subsidiary Company.

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Trent Global Holdings Limited - Subsidiary Company

(100% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Optim Estates Private Limited (w.e.f. 30th April 2010)

(Merged with Trent Hyper Market Limited - Effective date 20th September 2010)

1.10. 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 2012)

Inditex Trent Retail India Private Limited

(49% Equity Share Capital is held by Trent Limited as at 31st March 2012)

Virtuous Shopping Centers Limited

(66.66% Equity Share Capital is held by Trent Hypermarket Limited as at 31.03.2012)

Commonwealth Developers Private Limited - Subsidiary Company of Virtuous Shopping Centers Limited w.e.f. 11.11.2011

(100% Equity Share Capital is held by Virtuous Shopping Centers Limited as at 31st March 2012)

4.17.03 Directors/Manager of the Company

Managing Director Non Executive Directors

Mr. N. N. Tata (resigned on 11th August 2010)

Mr. F. K. Kavarana

Mr. B. S. Bhesania (retired on 18th August 2010)

Mr. A. D. Cooper

Mr. K. N. Suntook

Mr. N. N. Tata (w.e.f. 12th August, 2010 till 18th August 2010)

Appointed as an Additional Director and Vice Chairman

w.e.f. 19th August 2010

Mr. Zubin Dubash (w.e.f. 26th April 2010) Mr. Bhaskar Bhat (w.e.f. 27th September 2010) Mr. S. Susman (w.e.f. 11th May 2011)

Chief Executive Officer & Manager Mr. Philip N. Auld (w.e.f. 1st May 2011)

1.11. On 30th April 2010 the Company acquired 100% Equity Shares and Preference Shares of Optim Estate Private Limited making it a wholly owned subsidiary of the company. The Scheme of Amalgamation of Optim Estates Private Limited with Trent Hypermarket Limited (100 % subsidiary of the Company) as approved by the Hon'able High Court of judicature at Bombay is effective 20th September 2010. The appointed date of the Scheme is 1st April 2009. In terms of the Scheme, in 2010-11, Trent Hypermarket Limited has issued the Company 1,50,000 Equity Shares of Rs.10 each and 10,00,000 10% p.a. Redeemable Preference Shares of Rs.10 each in consideration against its holdings in Optim Estates Private Limited.

1.12. The Revised Schedule VI has become effective from 1st April 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.2145.55 lakhs (2009-2010 : Rs.2402.78 lakhs)

2. (a) Contingent Liability in respect of Sales tax, Excise and Customs demands against which the Company has filed appeals Rs.76.52 lakhs (2009-2010: Rs.61.81 lakhs) - net of tax Rs.51.10 lakhs (2009-2010 : Rs.41.28 lakhs).

(b) Contingent Liability in respect of Income-tax demands against which the Company has filed appeals : Rs.942.10 lakhs (2009-2010 :Rs. 362.23 lakhs).

(c) Claims made against the Company not acknowledged as debts : Rs.714.42 lakhs (2009-2010 : Rs.784.29 lakhs)

(d) Corporate Guarantee given on behalf of Subsidiary: Rs.1500.00 Lakhs (2009-2010 :Rs. 1500.00 Lakhs)

(e) As a matter of abundant caution, a cumulative provision for contingencies of Rs.205.00 lakhs has been made against items (a), (b) and (c) above, which are disputed by the Company.

3. Gain on foreign exchange fluctuation (net) credited to the profit and loss account amounted to Rs. 19.82 Lakhs (2009-2010 : Rs.10.68 lakhs).

4. 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, 2011. 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.

5. There are no amounts due and outstanding to be credited to Investor Education and Protection Fund as at 31st March, 2011 except Rs.4.48 lakhs (2009-2010 : Rs.3.99 lakhs) which is held in abeyance due to legal cases pending.

6. Out of the proceeds of the issue of Cumulative Convertible Preference Shares (CCPS) of Rs. 489.66 crores, Rs.168.25 crores have been utilised towards objects of the issue and pending utilisation the balance amount is invested mainly in mutual funds and money market instruments

7. 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.

8. (a) The company has entered into lease agreement for assets taken on operating lease which range between three years & six years . This are renewable by mutually agreeable terms. The future minimum lease payments under non-cancellable operating leases are as under :

(b) The company has entered into lease agreement for assets given on operating lease which range between three years & five years . This are renewable by mutually agreeable terms. The future minimum lease payments under non-cancellable operating leases are as under :

9. 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.

(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 administered trust The Trust had received a letter dated 17/05/2010 from the Regional Commissioner of Provident Fund, Mumbai withdrawing the relaxations granted to the establishment vide Order No. MH/ 13493 / PF / Exm. 17/ AST/1393 with effect from 01/04/2010 and instructing the establishment ot transfer the past accumulations of its employees to the Regional PF Commissioner, Mumbai. Accordingly, the Board of Directors of Trent Ltd has passed resolution as on 28/05/2010 for the surrender of Trust and the Trust has taken steps to transfer the past accumulations of its employees to the Regional PF Commissioner, Mumbai.

(c) Leave Encashment (Long term compensated absences ) recognised as income for the year is Rs 67.33 Lakhs (2009-10 : Expense of Rs. 145.67 Lakhs)

10 Previous years figures have been regrouped wherever necessary.


Mar 31, 2010

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. 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).

4. 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.

5. 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.

6. Right Issue (July 2007) proceeds of Rs. 157.41 crores have been fully utilised towards object of the issue.

7. 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.

8. 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.

(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 Companys 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 Companys 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)

9. 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 31!t 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)

10. 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)

11. Directors of the Company

Managing Director Mr. N.N.Tata

Non Executive Directors I Mr. F.K. Kavarana

Mr.B.S.Bhesania Mr.A.D.Cooper Mr.K.N.Suntook Mr. N. A. Soonawala (retired on 31.03.2010)

12 Previous years figures have been regrouped whenever necessary.

13 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 Honble Highcourt 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.1000 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 ASM "Accounting for amalgamation" issued by the ICAl.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.2519.32 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.1492.95 lakhs and the balance Rs.1026.37 lakhs against the general reserve.

14. Exceptional items represents profit on sale of minority stake of its subsidiary Landmark Limited to a Private Equity Fund.

15. On 30th April 2010 the company has acquired 100% equity shares of Optim Estate Private Limited making it wholly owned subsidiary of the company.

16. As approved by the shareholders, the Company had transferred its Star Bazaar businesses a going concern, to its 100% subsidiary Trent Hypermarket limited, with effect from 1 st August 2008.

17. Balance Sheet Abstract and Companys General Business Profile as required in terms of Part IV of Schedule VI of the Companies Act, 1956 is attached herewith.

Find IFSC