TITAN INDUSTRIES 23rd Annual Report 2006-2007 Twenty-third annual report 2006-07 BOARD OF DIRECTORS Shaktikanta Das (Chairman) Bhaskar Bhat (Managing Director) Farrokh Kavarana Ishaat Hussain N. N. Tata S. Ramasundaram T. S.Surendranath (upto 26.02.2007) Sunil Paliwal (from 26.02.2007) S.Susai T. K.Balaji C.G.KrishnadasNair A. C. Mukherji (upto 18.10.2006) Nihal Kaviratne (from 28.09.2006) Vinita Bali (from 18.10.2006) COMPANY SECRETARY Usha lyengar AUDITORS A. F. Ferguson & Co. (Chartered Accountants) BANKERS Canara Bank Bank of Baroda Hongkong Bank CONTENTS Standard Chartered Bank Oriental Bank of Commerce Notice. Union Bank of India Indian Bank Directors' Report 7 Management Discussion & Analysis 15 REGISTERED OFFICE Corporate Governance Report 22 3, SIPCOT Industrial Complex, Auditors' Report 38 Hosur635 126 Balance Sheet 42 Profit & Loss Account 43 SHARE DEPARTMENT Cash Flow Statement 44 TSR Darashaw LtdL Schedules & Notes to Accounts 45 (formerly Tata Share Registry Limited) Unit: Titan Industries Ltd., Interest in Subsidiaries 69 6-10, Haji Moosa Patrawala Industrial Estate, Consolidated Accounts 71 20, Dr. E Moses Road, Mahalaxmi, Mumbai400011 Financial Statistics 94 Titan Industries is a TATA Enterprise in association with Tamilnadu Industrial Development Corporation TITAN INDUSTRIES Titan Industries Limited Notice The Twenty-third Annual General Meeting of Titan Industries Limited will be held at the Registered Office of the Company, at 3 SIPCOT Industrial Complex, Hosur 635 126, on Friday, 27th July, 2007 at 3.30 p.m. to transact the following business: 1) To receive and adopt the Director's Report and Audited Profit and Loss Account for the year ended 31st March, 2007 and the Balance Sheet as at that date together with the report of the Auditors thereon. 2) To declare dividend on Equity Shares. 3) To approve the declaration and payment of interim dividend as final dividend on preference shares. 4) To appoint a Director in place of Mr. Ishaat Hussain who retires by rotation and is eligible for re-appointment. 5} To appoint a Director in place of Mr. F. K. Kavarana who retires by rotation and is eligible for re-appointment. 6) To appoint a Director in place of Mr. S. Susai who retires by rotation and is eligible for re-appointment. 7) To appoint a Director in the place of Mr. Nihal Kaviratne, CBE who was appointed as an Additional Director by the Board of Directors with effect from 28th September, 2006 and who holds office up to the date of this Annual General Meeting under Section 260 of the Companies Act, 1956 read with Article 117 of the Articles of Association of the Company, and who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956 from a shareholder proposing his candidature for the office of Director. 8) To appoint a Director in the place of Ms. Vinita Bali who was appointed as an Additional Director by the Board of Directors with effect from 18th October, 2006 and who holds office up to the date of this Annual General Meeting under Section 260 of the Companies Act, 1956 read with Article 117 of the Articles of Association of the Company, and who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956 from a shareholder proposing her candidature for the office of Director. 9) To appoint a Director in the place of Mr. Sunil Paliwal who was appointed as an Additional Director by the Board of Directors with effect from 26th February, 2007 and who holds office up to the date of this Annual General Meeting under Section 260 of the Companies Act, 1956 read with Article 117 of the Articles of Association of the Company, and who is eligible for appointment and in respect of whom the Company has received a notice in writing under Section 257 of the Companies Act, 1956 from a shareholder proposing his candidature for the office of Director. 10) To consider and if thought fit, to pass the following resolution as an Ordinary Resolution: "RESOLVED that pursuant to Sections 198, 269, 309, 311 and other applicable provisions, if any, of the Companies Act, 1956,read with Schedule XIII of the Act, approval be and is hereby accorded to the reappointment of Mr. Bhaskar Bhat as Managing Director of the Company fora period of five years from 1st April, 2007 to 31st March, 2012, upon the terms and conditions set out in the explanatory statement attached hereto and comprised in an Agreement, which Agreement is specifically approved and sanctioned with liberty to the Board of Directors to alter/vary, without further reference to the Shareholders, any of the terms and conditions of the said re-appointment and in such a manner as may be agreed to between the Board of Directors and Mr. Bhaskar Bhat. RESOLVED FURTHER that the Board of Directors be and are hereby authorised to take all such steps as may be necessary, proper and expedient to give effect to this Resolution." 11) To consider and, if thought fit, to pass with or without modification, the following resolution as a Special Resolution: "RESOLVED that M/s A. F. Ferguson & Co. be and hereby are re-appointed as Auditors of the Company, to hold office from the conclusion of this meeting until the conclusion of the next Annual General Meeting, to audit the Accounts of the Company for the financial year 2007-08, including audit of Cash Flow Statements, on a remuneration to be mutually agreed upon between the Company and the Statutory Auditors." Notes: a) The relative explanatory statement pursuant to Section 173 of the Companies Act, 1956, in respect of business under Item Nos. 7, 8, 9,10 & 11 above are annexed hereto. b) A MEMBER ENTITLED TO ATTEND AND VOTE IS ENTITLEDTO APPOINT A PROXYTO ATTEND AND VOTE INSTEAD OF HIMSELF AND THE PROXY NEED NOT BE A MEMBER. PROXIES IN ORDER TO BE EFFECTIVE, MUST BE RECEIVED BY THE COMPANY AT ITS REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE THE MEETING. A PROXY MAY NOT VOTE EXCEPT ON A POLL. c) Members are requested to inform the Company's Registrars and Share Transfer Agents viz., TSR Darashaw Ltd (formerly Tata Share Registry Ltd.), regarding changes, if any, in their registered addresses along with the PIN code number. II Twenty-third annual report 2006-07 d) The Register of Members and the Transfer Books of the Company will be closed from Friday, 13th July, 2007 up to Friday, 27th July, 2007, both days inclusive. e) Members may please note that pursuant to Section 205C of the Companies Act, 1956 all unclaimed/unpaid dividends up to the financial year ended 31st March, 2000, have been transferred to the Investor Education and Protection Fund, as required by statute. Members may please note that in view of the amendment to Section 205A of the Companies Act, 1956 and introduction of Section 205C by the Companies (Amendment) Act, 1999, the dividend remaining unpaid or unclaimed for a period of seven years from the date of transfer to Unpaid Dividend Account of the Company will be transferred to the Investor Education and Protection Fund set up by the Government of India and no payments shall be made in respect of any such claims. f) The dividend on equity shares as recommended by the Directors, if declared at the Annual General Meeting, will be paid within the statutory period of 30 days to those members whose name appear on the Register of Members of the Company as on 27th July, 2007. In respect of shares held in electronic form, dividend will be paid to the beneficial holders as per the beneficiary list as on 13th July, 2007, provided by the National Securities and Depository Limited and Central Depository Services (India) Limited. g) As per the provisions of the amended Companies Act, 1956, the facility for making nominations is available to the shareholders in respect of the equity shares held by them. Nomination forms can be obtained from the Company's Registrars and Share Transfer Agents, viz.TSR Darashaw Limited (formerly Tata Share Registry Ltd.) A specimen nomination form (Form 2B) is attached to this Annual Report for use by the Shareholders. h) The equity shares of the Company are listed at the following Stock Exchanges in India: Bombay Stock Exchange Ltd., 25, Phiroze Jeejeebhoy Towers, Dalai Street, Mumbai 400 001 The Madras Stock Exchange Ltd., (Regional Stock Exchange) Exchange Building, 11 Second Line Beach, P.O. Box No. 183, Chennai 600 001 National Stock Exchange of India Ltd., Exchange Plaza, Bandra-Kurla Complex, Bandra (East), Mumbai 400051 The Company has paid the annual listing fees to each of the above Stock Exchanges for the financial year 2007-08. i) Members are requested to intimate to the Company, queries, if any, regarding the accounts/notices at least 10 days before the Annual General Meeting to enable the management to keep the information ready at the meeting. The queries may be addressed to: The Company Secretary, Titan Industries Limited, Golden Enclave, Tower-A, Airport Road, Bangalore 560 017. Members are requested to bring their copies of Annual Reports to the Annual General Meeting. j) For the convenience of Members, the Company will provide a coach service from Bangalore on the day of the Meeting. The coaches will leave for Hosur at 1.30 p.m. from the following four locations: 1) Jayanagar - Southend Circle 2) Malleswaram/Rajajinagar - near ISKCON temple 3) Golden Palm Station, near BRV theatre 4) Airport Road, adjacent to Leela Palace Hotel By Order of the Board of Directors Registered Office: 3, SIPCOT Industrial Complex Hosur 635 126 ' • Usha lyengar 1st June, 2007 Company Secretary TITAN INDUSTRIES Titan Industries Limited Annexure to Notice As required by Section 173 of the Companies Act, 1956, the following explanatory statement sets out all material facts relating to the business mentioned under Item Nos.