The Directors are pleased to submit their report together with the
audited results for the year ended March 31, 2012.
1. Financial Results
The financial results for the year ended on March 31, 2012, are as
Rs (Lacs) Rs (Lacs)
Income from Sales & Services
- Mineral Water 1372.70 1815.67
- Product Development Fees 450.00 300.00
Movement in Stocks 27.24 (68.98)
Other Income 362.15 319.69
Total Income 2212.09 2366.38
Profit / (Loss) before interest and
depreciation 29.63 (990.34)
Depreciation and Amortisation (148.03) (194.34)
Exceptional Items (45.41) - Profit before Tax (163.81) (1184.68)
Tax - -
Profit / (Loss) after Tax (163.81) (1184.68)
Profit / (Loss) brought forward from earlier
years (7575.79) (6391.11)
Profit / (Loss) carried forward (7739.60) (7575.79)
2. Operating Results Highlights
The year under review was the first full year of operations where
NourishCo Beverages Ltd. (NBL), the 50:50 Joint Venture set up by Tata
Global Beverages Limited (TGBL) and PepsiCo India Holdings Private
Limited (PIH), handled the entire sales, marketing and distribution
Of ''Himalayan'' through the PIH Go-To-Market (GTM) network. This enabled
a higher visibility and availability of ''Himalayan''.
The total volume of Himalayan sales for the year was 12 million litres
against 13 million litres in the previous year. The drop in volume is
attributable to the initial teething problems experienced during the
first half of the year by the PIH GTM. This shifting of the
distribution of the brand through a different GTM impacted the
immediate volume surge expected by this initiative. However the brand
stablised and showed momentum in the second half which augurs well for
the brand. Today Himalayan is widely distributed and available in 20
niche markets across the Country.
The sales revenue at Rs 1373 lacs during the year was lower than Rs
1816 lacs during the previous year as the realization during the year
was at a transfer price which was cost plus margins as mutually agreed
between the Parties.
In a highly inflationary environment, your Company was able to manage
the cost increase within 15% with material costs below the said
percentage increase. In addition, aggressive initiatives were
undertaken to reduce corporate costs more so with front end marketing/
sales activities transferred to NBL. This helped your Company to
significantly reduce losses from Rs 1185 lacs in the previous year to
Rs. 164 lacs in the year under review.
The strength of the Brand ''Himalayan'' was vindicated by NBL moving up
the price from Rs. 25 to Rs. 40 per litre with opportunity to increase
the price further to take on the mantle of leadership in the emerging
Natural Mineral Water category.
The improving price value equilibrium of the brand augurs well with the
brand margin and future investments behind the brand
This year also saw ''Himalayan'' featured in the Brand Equity''s Most
Trusted brand list of Cold beverages. ''Himalayan'' is the only Natural
Mineral Water Brand to make it to the top 20 Trusted Beverage list, two
years in running.
The high standard maintained by your Company was complimented in the
Health and Safety Audit by DIET Norseke Veritas (DNV) UK carried out
during the year.
Keeping the buzz and excitement alive, extension of Himalayan as a
brand is in an advanced stage of development and should delight the
consumers'' in near future.
The recent JV between Starbucks and TGBL would be opening up
significant volume opportunities for the brand in an exciting new
alternate channel not only in India but also in advanced markets in the
Your Company continued to work for TGBL on various new product
initiatives in different food formats and received Rs 450 lacs as
Product Development fees from TGBL against Rs 300 lacs received last
The credo of live natural resonating with a significant consumer base
around the world would open up opportunities in newer geographies in
the coming year.
3. Preferential Issue
As on date, TGBL holds 50.24% of the shares in the Company and is the
single largest shareholder of the Company. By virtue of this holding
the Company is a subsidiary of TGBL.
During the year under review, TGBL acquired 14,17,632 shares
constituting 4.17% of the Share Capital of the Company from Foresight
Holdings Private Limited and MrVinod Sethi, subsequently TGBL has
acquired the balance of 16,92,807 shares (4.98%) of their holdings. In
terms of this acquisition, Foresight Holdings Private Limited through
Mr Salim Govani and MrVinod Sethi have ceased to be the Promoters of
During the year, the Company utilized a sum of Rs 2.08 crores towards
the objects earmarked in the preferential issue of 2007. The unutilized
portion of the preferential issue as on March 31,2012 amounting to Rs
24.50 crores was placed as Inter Corporate Deposits.
In view of the accumulated losses, your Directors do not recommend any
dividend for the year.
5. Corporate Governance
Your Company has consistently adopted high standards of Corporate
Governance and is committed to and firmly believes in practicing good
A note on Corporate Governance as also the certificate from Company''s
Auditors confirming compliance of Corporate Governance norms, together
with Management Discussion and Analysis are included in the Annual
6. Directors Responsibility Statement
Pursuant to the requirement of Section 217 (2AA) of the Companies Act,
1956 (the Act) and based on the representations received from the
operating management, your Directors hereby confirm that:-
i) in the preparation of the annual accounts for 2011-12, the
applicable accounting standards have been followed and there are no
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 / loss of the Company for the
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 Act, for safeguarding
the assets of the Company and for preventing and detecting fraud and
iv) they have prepared the annual accounts on a going concern basis.
The Board of Directors (Board), in accordance with the recommendation
with the Remuneration Committee, vide a Circular Resolution approved
the increase in the remuneration of Mr Pradeep Poddar, Managing
Director of the Company, subject to the approval of the Members at the
21st Annual General Meeting. This has resulted in a change in his
salary from the current slab of Rs 230,000/- to Rs 400,000/- to the new
slab of Rs 400,000/- to Rs 600,000/-.
Also, in terms of the recommendation of the Remuneration Committee, the
Board vide the Circular Resolution reappointed Mr Poddar as the
Managing Director, subject to the approval of the Members at the 21st
Annual General Meeting for a period of five years with effect from
August 22, 2012.
Mr P T Siganporia and Mr Ajoy K Misra retire by rotation at the
forthcoming Annual General Meeting and being eligible, offer themselves
Brief particulars and expertise of these Directors as also their other
Directorships and committee membership are annexed to the Notice of the
Annual General Meeting.
All these Directors have filed Form DD-A with the Company as required
under the Companies (Disqualification of Directors under Section
274(1)(g) of the Companies Act, 1956) Rules, 2003.
Mr Salim Govani, the representative of Foresight Holdings Private
Limited and an erstwhile Promoter of the Company resigned from the
Board with effect from May 3, 2012.
Mr Vinod Sethi, an erstwhile Promoter of the Company and a Member of
the Audit Committee resigned from the Board with effect from May 3,
Mr Joseph Kodianthara resigned as the Director of the Company and the
consequential resignation as the Member of the Audit Committee and
Remuneration Committee with effect from May 3, 2012.
Mr Pradeep Mallick resigned as the Director of the Company and the
consequential resignation as the Member of Audit Committee and Chairman
of the Share Transfer cum Investors'' Grievance Committee, Remuneration
Committee and Ethics & Compliance Committee with effect from May 11,
Your Directors wish to place on record their deep appreciation of the
valuable services rendered by Mr Salim Govani, Mr Vinod Sethi, Mr
Joseph Kodianthara and Mr Pradeep Mallick to the Board and the Company
during their tenure of office as its Directors.
The Members are requested to appoint Auditors and fix their
remuneration. M/s SNB Associates, the retiring Auditors have furnished
certificate of their eligibility for reappointment as required under
Pursuant to the notification on ''The Companies (Cost Accounting
Records) Rules, 2011 by the Ministry of Corporate Affairs, the Company
appointed M/s Deodhar & Co, Cost Accountants to file the Annual Cost
Also, as per the requirement of the Central Government and pursuant to
Section 233B of the Act, M/s Deodhar and Associates, Cost Accountants
have been appointed subject to the terms of the Cost Order No.
52/26/CAB/2010 dated 24-1-2012 for the Packaged Food Products as the
Cost Auditor of the Company for the financial year 2012-2013.
9. Particulars of Employees
Information as required under Section 217(2A) of the Act read with the
Companies (Particulars of Employees) Rules, 1975, as amended, are given
in the Annexure forming part of this report.
However, having regard to the provisions of Section 219(1 )(b)(iv) of
the said Act, the Annual Report excluding the aforesaid information is
being sent to all the Members of the Company and others entitled
thereto. Any Member interested in obtaining such particulars may write
to the Company Secretary at the Corporate Office of the Company.
10. Particulars of Conservation of Energy, Technology Absorption and
Foreign Exchange Earnings and Outgo
The statement pursuant to Section 217(1)(e) of the Act read with the
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed to this report.
All properties and insurable assets of the Company, including Building,
Plant & Machinery and Stocks are adequately insured, wherever
necessary, and to the extent required.
12. Concluding Remarks
Your Directors wish to convey their appreciation to all employees of
the Company for their enormous personal efforts as well as their
collective contribution to the Company''s performance over the years and
particularly in 2011-12. Your Directors would also like to thank the
various Government Institutions, Departments and Organisations,
Company''s banks, distributors, suppliers, transporters and other
stakeholders for their unstinting support.
On behalf of the Board of Directors
P T Siganporia
June 26, 2012