Tata Coffee Directors Report, Tata Coffee Reports by Directors

Tata Coffee

BSE: 532301|NSE: TATACOFFEE|ISIN: INE493A01027|SECTOR: Plantations - Tea & Coffee
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Directors Report Year End : Mar '15    « Mar 14
Dear Members,
 The Directors are pleased to submit their 72nd Report together with
 the Audited statement of accounts for the year ended 31st March, 2015.
 The Company''s financial performance, for the year ended 31st March,
 2015 is summarized below:
                                                         Rs in Crores
                                               2014-15       2013-14
 Revenue from Operations                        683.78        650.92
 Profit from Operations                         104.20        117.96
 Add: Other Income                               40.14         35.18
 Profit before Interest                         144.34        153.14
 Less: Interest                                   9.20          4.91
 Profit Before Exceptional Items and Taxes      135.14        148.23
 Add: Exceptional Income/(Expenses)               6.52             -
 Profit Before Tax                              141.66        148.23
 Provision for Tax                               40.10         41.66
 Profit After Tax                               101.56        106.57
 Less: Minority Interest                             -             -
 Profit After Tax net of Minority Interest      101.56        106.57
 Surplus brought forward from Previous Year     233.28        167.87
 Transfer on Merger of Alliance Coffee Limited    0.13             -
 Amount available for appropriation             334.97        274.44
 General Reserve No.I                           (11.00)       (11.00)
 General Reserve No.II                          (13.82)        (1.75)
 Reversal of Dividend Distribution Tax            2.38             -
 Transitional Impact of Depreciation             (0.16)            -
 Final (Proposed)                               (24.28)       (24.28)
 Tax on Dividend                                 (4.94)        (4.13)
 Balance carried forward                        283.15        233.28
                                               2014-15       2013-14
 Revenue from Operations                       1691.42       1677.17
 Profit from Operations                         289.72        263.63
 Add: Other Income                                8.92         12.04
 Profit before Interest                         298.64        275.67
 Less: Interest                                  39.45         36.93
 Profit Before Exceptional Items and Taxes      259.19        238.74
 Add: Exceptional Income/(Expenses)               6.52       (102.29)
 Profit Before Tax                              265.71        136.45
 Provision for Tax                               95.45         32.86
 Profit After Tax                               170.26        103.59
 Less: Minority Interest                         49.87         22.11
 Profit After Tax net of Minority Interest      120.39         81.48
 Surplus brought forward from Previous Year     260.03        219.71
 Transfer on Merger of Alliance Coffee Limited       -             -
 Amount available for appropriation             380.42        301.19
 General Reserve No.I                           (11.00)       (11.00)
 General Reserve No.II                          (13.82)        (1.75)
 Reversal of Dividend Distribution Tax            2.38             -
 Transitional Impact of Depreciation             (0.16)            -
 Final (Proposed)                               (24.28)       (24.28)
 Tax on Dividend                                 (4.94)        (4.13)
 Balance carried forward                        328.60        260.03
 Your Company''s turnover during the year under review was Rs.683.78 Crores
 as compared to Rs. 650.92 Crores in the previous year, registering an
 increase of 5 % over the previous year.
 The Consolidated turnover was Rs.1,691.42 Crores as compared to Rs.
 1,677.17 Crores in the previous year,.
 Profit from Operations before ''Other income and interest'' for the year
 ended 31st March, 2015, stood at Rs. 104.20 Crores as against Rs. 117.96
 Crores in the previous year. Profit before Tax for the year 2014-15 is
 Rs. 141.66 Crores vis-a-vis Rs. 148.23 Crores in the previous year. Profit
 after Tax in 2014-15 stood at Rs.101.56 Crores as against Rs. 106.57 Crores
 in the previous year.
 On a consolidated basis, the Profit from Operations before ''Other
 income and interest'' for the year ended 31st March, 2015, stood at Rs.
 289.72 Crores as against Rs. 263.63 Crores in the previous year. Profit
 before Tax for the year 2014-15 is Rs. 265.71 Crores vis-a-vis Rs. 136.45
 Crores in the previous year. Profit after Tax (net of minority
 interest) in 2014-15 stood at Rs.120.39 Crores as against Rs. 81.48 Crores
 in the previous year.
 Your Directors have recommended a Dividend of Rs. 1.30/- per share (face
 value of Rs. 1 per share) aggregating to Rs. 24.28 Crores for the year
 2014-15. The Dividend Tax amounts to Rs. 4.94 Crores. It is proposed to
 carry forward a sum of Rs. 11 Crores towards reserves.
 The paid up Equity Share Capital as on 31st March, 2015 was Rs. 18.67
 crores comprising of 18,67,70,370 Shares of Rs. 1 each. During the year,
 the Equity Shares of the Company was sub-divided from the face value of
 Rs. 10/- to Rs. 1/- per share after obtaining the consent from the members
 of the Company by way of E-voting/Postal Ballot.
 The Company has not issued shares with differential voting rights,
 employee stock options and sweat equity shares. The Company has paid
 Listing Fees for the Financial Year 2015-16 to each of the Stock
 The global production for the year 2014 is estimated at 142 million
 bags and the consumption at 149 million bags. As per International
 Coffee Organisation (ICO) estimates, the total consumption grew at the
 rate of 1.5% in the year 2014.
 The year under review witnessed uncertain weather conditions globally
 impacting the Arabica coffee crops. Brazil, the world''s largest coffee
 producer, faced a drought which impacted their coffee harvests.
 Similar weather concerns in other parts of the world resulted in a
 sharp increase in Arabica Coffee prices through the year 2014. The
 price of Arabica which remained in the range of 102 to 150 cents/lb in
 the New York terminal during the period January to December 2013,
 witnessed a steep jump to 212 cents/lb in April 2014 and 222 cents/lb
 in October 2014. With supply concerns easing Arabica retraced to 133
 cents/lb levels in March 2015.
 Regarding Robusta, Vietnam the world''s largest Robusta coffee producer
 recorded a bumper Robusta crop which got commercialised in late 2014.
 The price of Robusta, which remained flat in the range of US$
 1500-1800/MT in the London Terminal till Jan 2014, started hardening
 from February 2014 and touched US$ 2200/MT in March 2014. On the back
 of a decent Vietnam crop, the Robusta price traded, witnessed a
 correction and settled at US$ 1729/MT by end March 2015.
 A. Plantations:
 The Company has harvested a higher Robusta crop of 7,002 MT as against
 4,781 MT in the previous year. This has been the highest Robusta
 production in the last 5 years. While in the case of Arabica, being a
 biennial off year, production has been lower at 1,594 MT as against
 2,076 MT in the previous year. The Coffee harvesting operation has been
 completed as per schedule.
 The Company produced 6.170 Million Kgs of Made tea for the Financial
 Year 2014-15 as against 6.545 Million kgs in the previous year. The
 long drought followed by heavy rain and some pest attack had its impact
 on the tea production. During 2014-15, the Tea market witnessed an
 easier trend compared to 2013-14 mainly due to increased crop in
 Africa. This directly impacted South India Tea prices due to lower
 exports. South India auction prices dropped by around Rs. 15.00 per kg.
 The Company has achieved a higher pepper production of 1150 MT for the
 Financial Year 2014-15 as against 368 MT in the previous year. The
 Company has initiated various steps to further enhance the production
 base of pepper in the coming years.
 Curing Works:
 The Company''s Curing Works at Kushalnagar, cured a total of 10,266 MT
 Coffee during the current year as against 11,988 MT in the previous
 year, due to lower crop arrivals. In addition, 327 MT of Monsoon Coffee
 was processed as against 306 MT in the previous year.
 green Coffee Exports:
 During the year 2014-15, your Company exported 5,382 MT of coffee as
 against 5,238 MT in the previous year. Your Company continues to focus
 on growth, through Differentiated/Specialty coffees with volumes at
 2,120 MT at very healthy premiums.
 Plantation Trails:
 Plantation Trails, our hospitality business has performed exceedingly
 well in the year under review by recording its best performance since
 inception. Rework on the business model to optimize costs, enhanced
 customer centricity, and increased operational efficiencies have
 resulted in a significant business turnaround. Occupancies grew despite
 the increased competitive intensity in the marketplace. Plantation
 Trails has also been the recipient of several awards during the year
 including the prestigious recognition by Trip Advisor for the
 Certificate of Excellence- 2014 Winner.
 B. Instant Coffee Division:
 The year 2014-15 saw the Instant Coffee Division post record annual
 sales and production. The total sales volumes clocked were 7,677 MTs -
 a jump of 16% over the last Financial Year.  The production for the
 year stood at 7,975 MTs - an increase of 15% over last fiscal. In the
 first full year of increased capacity available, the division did
 remarkably well in utilizing it to the tune of 92%. The new Freeze
 Dried Coffee (FDC) unit ran to full capacity during the year.
 The increase in Instant Coffee sales volumes was posted despite strong
 headwinds in the market. The financial crisis in Russia - the largest
 market of soluble coffee globally - and the rapid weakening of global
 currencies posed strong challenges to our export oriented business. In
 addition, the overhang of excess capacities in Instant Coffee globally,
 continued to pressurize the trade margins. The geopolitical risks in
 some of our key markets like Ukraine and Middle East also weighed on
 the portfolio performance.
 Market expansion remains at the core of our strategy in the Instant
 Coffee Business. Our portfolio has been traditionally a Russia & CIS
 dominated one. This year just over half of our sales came from Russia
 and CIS vis-a-vis an 80% share a few years ago. As a conscious move
 towards de-risking our model, we added 32 new customers who contributed
 around 20% of our total volumes. Some of the countries where we placed
 our soluble coffees for the first time were China, Angola, Pakistan and
 In addition to our customer acquisitions, we also steadily continued
 our progress on product and packaging innovation.  Our new variants of
 coffee mixes and customized packaging solutions enhanced our standing
 as an institutional marketeer.
 We also marched ahead steadily on our commitment to quality excellence.
 Our Theni Unit received the prestigious BRC & IFS certifications
 allowing us to service top most manufacturers and retailers, especially
 in Europe. Additionally, Theni factory also received ISO 14001, Halal &
 Kosher certifications while our Toopran Unit has been certified for ISO
 14001 and 18000.
 C. Starbucks:
 Your Company continues to cater exclusively to the requirements of Tata
 Starbucks outlets in India from its state of art coffee roasting
 facility at Kushalnagar. The coffee beans used for this purpose are
 being supplied exclusively from the Company''s estates. Efforts are on
 to fully utilize the installed capacity of this roasting facility. In
 the past year we have added to our certification portfolio and are now
 FSSC 22000
 certified (Food Safety System Certification). This forms a part of our
 integrated management system which now includes ISO 9001:2008 (Quality
 Management System), ISO 22000:2005 (Food Safety Management System) and
 ISO 14001:2004 (Environment Management System)
 Quality Awards:
 Sustainability Awards:
 Tata Coffee has consistently been committed to environment protection
 and co-exists with nature at the coffee plantations. During the year
 under review, the Company won the prestigious Golden Peacock Award for
 excellence in Environment Management
 Sustained quality has been the main focus of the Company over the
 years. The R & G Unit at Kushalnagar has won the award for the most
 innovative design and the best Roaster Award in the India International
 Coffee Festival (IICF) held in 2014. The Balmany, Valparai, Sunticoppa,
 Mylemoney, Margolly, Ubban and Yemigoondi Estates of the Company have
 bagged Regional and Specialty awards for their Arabica and Robusta
 Our Theni and Toopran units have won the CII Environment Systems award
 for the year.
 Your company continues to actively participate in domestic and
 International forums to propagate and popularize the company''s coffee.
 During 2014-15, Rs. 2,266.46 Lakhs was incurred primarily on account of
 welfare, modernisation, up-gradation and other programmes undertaken in
 the various units of the Company.
 I. Eight O'' Clock Coffee Company (EOC):
 EOC''s total income during 2014-15 at Rs. 1,007.64 Crores, under Indian
 GAAP, was marginally lower than the previous year''s total income of Rs.
 1,026.25 Crores. The reduction in top-line is due to lower bagged
 volumes in the first half of the year. However, in the second half, EOC
 volumes increased driven by its popular consumer programs and effective
 promotional listings.
 EOC''s total Income also includes royalty income from the single serve
 K- cups sold under a licensing agreement with Keurig. K-cup volumes
 increased significantly year on year due to growth in the single serve
 business and addition of four new EOC SKU''s. Overall profitability of
 EOC improved over the previous year.
 II. Consolidated Coffee Inc.:
 Consolidated Coffee Inc (CCI) is the holding company of EOC. The net
 profit ( including the profits of EOC), after taxes is
 at Rs. 99.91 Crores as compared to a loss of Rs. 3.90 Crores in the
 previous year.
 III. Alliance Coffee Limited:
 During the year under review, the Honorable High Court of Karnataka
 approved the Scheme of amalgamation of Alliance Coffee Ltd (ACL) - the
 Company''s wholly owned subsidiary with the Company with effect from 1st
 April, 2013; consequently the Assets and Liabilities of ACL stand
 vested with the Company from the effective date and ACL stands
 dissolved without undergoing the process of winding up and consequently
 ceased to be a Subsidiary of the Company.
 A Statement containing the salient features of the financial position
 of the subsidiary company in Form AOC. 1 is annexed as per Annexure A.
 The Company does not have any associate orjoint venture companies.  The
 policy for determining the criteria of material subsidiaries can be
 viewed at the company''s website at
 The details of loans and investments covered under the provisions of
 Section 186 of the Companies Act, 2013 are given in the notes to the
 Financial Statements forming part of Annual Report. The Company has not
 provided any guarantees during the Financial Year.
 The Company has not accepted any public deposits during the year under
 All Related Party Transactions that were entered into during the
 Financial Year were on an arm''s length basis, in the ordinary course of
 business and were in compliance with the applicable provisions of the
 Companies Act, 2013 and the Listing Agreement. There were no materially
 significant Related Party Transactions made by the Company during the
 year that required Shareholders'' approval under clause 49 of the
 Listing Agreement.
 All Related Party Transactions are placed before the Audit Committee
 for approval. Prior omnibus approval of the Audit Committee is obtained
 for the transactions which are repetitive in nature. A statement of all
 Related Party Transactions is placed before the Audit Committee for its
 review on a quarterly basis, specifying the nature, value terms and
 conditions of the transactions.
 The Company has adopted a Related Party Transactions Policy. The
 Policy, as approved by the Board, is uploaded on the Company''s website
 at the web link: related_party.pdf
 The details of the transactions with Related Parties are provided in
 the accompanying financial statements.
 RISK Management:
 The Company has adopted a Risk Management Policy in accordance with the
 provisions of the Act and Clause 49 of the Listing Agreement.  It
 establishes various levels of accountability and overview within the
 The Company has a Risk Management Committee which has been entrusted
 with the responsibility to assist the Board in (a) Approving the
 Company''s Risk Management framework (b) Overseeing that all the risks
 that the organization faces such as strategic, financial, liquidity,
 security, regulatory, legal, reputational and other risks have been
 identified and assessed to ensure that there is a sound risk management
 policy in place to address such concerns/risks. The Risk Management
 process covers risk identification, assessment, analysis and
 mitigation. Incorporating sustainability in the process also helps to
 align potential exposures with the risk appetite and highlights risks
 associated with chosen strategies.
 The Company''s internal audit systems are geared towards ensuring
 adequate internal controls commensurate with the size and needs of the
 business, with the objective of efficient conduct of operations through
 adherence to the Company''s policies, identifying areas of improvement,
 evaluating the reliability of Financial Statements, ensuring
 compliances with applicable laws and regulations and safeguarding of
 assets from unauthorized use.
 Details of the internal controls system are given in the Management
 Discussion and Analysis Report, which forms part of the Directors''
 The Company is in compliance with all the conditions of Corporate
 Governance as stipulated in Clause 49 of the Listing Agreement entered
 into with the Stock Exchanges. The Compliance Report on Corporate
 Governance forms an integral part of this Report. The requisite
 certificate from the Auditors of the Company confirming compliance with
 the conditions of Corporate Governance is attached to the report on
 Corporate Governance.
 The Management Discussion and Analysis Report for the year under review
 as stipulated under clause 49 of the Listing Agreement with the Stock
 Exchanges, is presented in a separate section and forms a part of the
 Directors'' Report.
 Ms. Sunalini Menon, Mr. K. Venkataramanan, Mr. V. Leeladhar, Mr. Sanjiv
 Sarin and Mr. Siraj Azmat Chaudhry were appointed as Additional
 Directors of the Company and in terms of Article 101 of the Articles of
 Association of the Company read with Section 161 of the Companies Act,
 2013, they hold office upto the date of the ensuing Annual General
 Meeting. It is
 proposed to appoint Ms. Sunalini Menon, Mr. V. Leeladhar and Mr. Siraj
 Azmat Chaudhry as Independent Directors at the forthcoming Annual
 General Meeting in compliance with Section 149(6) of the Companies Act,
 2013 and revised Clause 49 of the Listing Agreement. The Company has
 received a notice from shareholder in terms of Section 160 of the Act
 signifying its intention to propose the appointment of Ms. Sunalini
 Menon, Mr. K. Venkataramanan, Mr. V. Leeladhar, Mr. Sanjiv Sarin and
 Mr.  Siraj Azmat Chaudhry as Directors in the forthcoming Annual
 General Meeting.
 Mr. K. Venkataramanan was appointed as Executive Director- Finance and
 Chief Financial Officer for a period of 3 years with effect from 25th
 October 2014. His term of appointment was approved by the members on
 13th January 2015 through E-voting/Postal Ballot.
 Mr. Sanjiv Sarin was appointed as Managing Director and Chief Executive
 Officer for a period of 3 years with effect from 25th April 2015. The
 necessary resolution for his appointment is being placed before the
 members for their consideration at the forthcoming Annual General
 Mr. Venu Srinivasan resigned as a Director from the Board with effect
 from 1st September, 2014. Mr. D.R. Kaarthikeyan demitted his office as
 a Director in accordance with the Group Guidelines with effect from 1st
 October, 2014.
 Mr. M. Deepak Kumar retired as Executive Director- Finance with effect
 from 24th October, 2014; Mr. Hameed Huq, retired as Managing Director
 with effect from 31st March, 2015.
 The Board wishes to place on record its appreciation for the invaluable
 services rendered by Mr. Venu Srinivasan, Mr. D.R. Kaarthikeyan, Mr. M
 Deepak Kumar and Mr. Hameed Huq during their tenure as Directors of the
 All the Independent Directors have given declarations that they meet
 the criteria of independence as laid down under Section 149(6) of the
 Act and Clause 49 of the Listing Agreement entered into with the Stock
 Exchanges. In the opinion of the Board, they fulfill the conditions of
 independence as specified in the Act and Rules made there under and are
 independent of the management.
 Governance Guidelines:
 The Company has adopted Governance Guidelines on Board Effectiveness.
 The Governance Guidelines cover aspects related to composition and role
 of the Board, Chairman and Directors, Board diversity, definition of
 independence, Director term, retirement age and Committees of the
 Board. It also covers aspects relating to nomination, appointment,
 induction and development of Directors, Director remuneration,
 Subsidiary oversight, Code of Conduct, Board Effectiveness Review and
 Mandates of Board Committees.
 Procedure for Nomination and Appointment of Directors:
 The Nomination and Remuneration Committee is responsible for developing
 competency requirements for the Board based on the industry and
 strategy of the Company. The Nomination and Remuneration Committee
 reviews and evaluates the resumes of potential candidates vis-a-vis the
 required competencies. The Nomination and Remuneration Committee also
 meets with potential candidates, prior to making recommendations of
 their nomination to the Board. At the time of appointment, specific
 requirements for the position, including expert knowledge expected, is
 communicated to the appointee.
 Criteria for Determining Qualifications, Positive Attributes and
 Independence of a Director:
 The Nomination and Remuneration Committee has formulated the criteria
 for determining qualifications, positive attributes and independence of
 Directors in terms of Section 178(3) of the Act and Clause 49 of the
 Listing Agreement.
 In accordance with the above criteria, a Director will be considered as
 an ''Independent Director'' if he/she meets with the criteria for
 ''Independent Director'' as laid down in the Act and clause 49 of the
 Listing Agreement.
 A transparent Board nomination process is in place that encourages
 diversity of thought, experience, knowledge, perspective, age and
 gender. It is also ensured that the Board has an appropriate blend of
 functional and industry expertise. While recommending the appointment
 of a Director, the Nomination and Remuneration Committee considers the
 manner in which the function and domain expertise of the individual
 will contribute to the overall skill-domain mix of the Board.
 Positive Attributes:
 In addition to the duties as prescribed under the Act, the Directors of
 the Board of the Company are also expected to demonstrate high
 standards of ethical behavior, strong interpersonal and communication
 skills and soundness of judgment. Independent Directors are also
 expected to abide by the Code of Independent Directors as outlined in
 Schedule IV to the Act.
 Annual Evaluation of Board Performance and Performance of its
 Committees and of Directors:
 Pursuant to the provisions of the Act and clause 49 of the Listing
 Agreement, the Board has carried out an annual evaluation of its own
 performance, performance of the Directors as well as the evaluation of
 the working of its Committees.
 The Nomination and Remuneration Committee has defined the evaluation
 criteria and the performance evaluation process for the Board, its
 Committees and Directors.
 The Board''s functioning is evaluated on various aspects, including
 inter alia degree of fulfillment of key responsibilities, Board
 structure and composition, establishment and delineation of
 responsibilities to various Committees, effectiveness of Board
 processes, information and functioning.
 Directors were evaluated on aspects such as attendance, contribution at
 Board/Committee meetings and guidance/support to the management outside
 Board/Committee meetings.
 The Committees of the Board were assessed on the degree of fulfillment
 of key responsibilities, adequacy of Committee composition and
 effectiveness of meetings.
 The performance evaluation of the Independent Directors was carried out
 by the Board. The performance evaluation of the Chairman and the Non
 Independent Directors was carried out by the Independent Directors who
 also reviewed the performance of the Board, its Committees and the
 The Chairman of the Board provided feedback to the Directors on the
 significant highlights with respect to the evaluation process of the
 The Company has adopted a Remuneration Policy for the Directors, Key
 Managerial Personnel and other employees, pursuant to the provisions of
 the Companies Act, 2013 and Clause 49 of the Listing Agreement
 The Board has on the recommendation of the Nomination and Remuneration
 Committee framed a policy for Remuneration for Directors, Key
 Managerial Personnel and other employees which lay down criteria for
 selection and appointment of Board Members. The remuneration determined
 for Executive/Independent Directors is subject to the recommendation of
 the Nomination and Remuneration Committee and approval of the Board of
 Directors. The Non-Executive Directors are compensated by way of profit
 sharing commission and the criteria being their attendance and
 contribution at the Board/ Committee Meetings.
 It is affirmed that the remuneration paid to Directors, Key Managerial
 Personnel and all other employees is as per the Remuneration Policy of
 the Company.
 As a policy, the Executive Directors are not paid sitting fees; the
 Non-Executive Directors are entitled to sitting fees for the Board/
 Committee Meetings.
 A calendar of Board and Committee Meetings to be held during the year
 was circulated in advance to the Directors. Ten Board Meetings were
 convened and held during the year.
 The Board has constituted an Audit Committee with Mr. S.
 Santhanakrishnan as Chairman, Prof. Arun Monappa, Ms. Sunalini Menon
 and Mr. V Leeladhar as Members.
 The details of the composition of the Board and its Committees and of
 the Meetings held and attendance of the Directors at such Meetings are
 provided in the Corporate Governance Report.
 Based on the framework of Internal Financial Controls and compliance
 systems established and maintained by the Company, work performed by
 the Internal, Statutory, and Secretarial Auditors and the reviews
 performed by Management and the relevant Board Committees, including
 the Audit Committee, the Board is of the opinion that the Company''s
 Internal Financial Controls were adequate and effective during the
 Financial Year 2014-15.
 Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Companies
 Act, 2013, the Board of Directors, to the best of their knowledge and
 ability, confirm that:
 (i) In the preparation of the accounts for the Financial Year ended
 31st March, 2015, the applicable accounting standards have been
 followed and that there are no material departures;
 (ii) That the Directors have selected such accounting policies and
 applied them consistently and made judgments and estimates that were
 reasonable and prudent so as to give a true and fair view of the state
 of affairs of the Company as at the end of the Financial Year and of
 the profits of the Company for that period;
 (iii) That the Directors have taken proper and sufficient care to the
 best of their knowledge and ability for the maintenance of adequate
 accounting records in accordance with the provisions of the Companies
 Act, 2013 for safeguarding the assets of the Company and for preventing
 and detecting fraud and other irregularities;
 (iv) That they have prepared the accounts for the Financial Year ended
 31st March, 2015 on a ''going concern'' basis;
 (v) The Directors have laid down Internal Financial Controls for the
 Company which are adequate and are operating effectively;
 (vi) The Directors have devised proper systems to ensure compliance
 with the provisions of all applicable laws and such systems are
 adequate and are operating effectively.
 The Company''s focus on welfare and improving the quality of lives of
 its people continues as always. In order to improve the quality of
 living for our employees, we have been providing educational assistance
 to their children, creche and child care facilities, transport at
 subsidized rate to school going children, supply of provisions at cost
 through co-operative store branches located at each Unit/Estate.
 Corporate Social Responsibility Initiatives:
 Your Company is committed to ensuring that its growth is sustainable
 and significantly enhances the quality of life of the communities in
 which it operates. The Company has constituted a Corporate Social
 Responsibility Committee in compliance with Section 135 of the
 Companies Act, 2013 comprising of two Independent Directors and the
 Managing Director of the Company.
 The focus areas that have been chosen for serving the community are
 Education, Health, Hygiene and Nutrition, Gender Equality,
 Environmental Sustainability, Affirmative Action and Promotion of Rural
 The educational programmes include Swastha, DARE, and Merit
 Scholarships for students of Coorg and Anamallais, promoting education
 and support for children with visual disabilities and skill development
 for the underprivileged through sponsoring programmes.
 The Coorg Foundation - a Public Charitable Trust (Foundation)
 established by your Company continues to provide admirable support to
 various individuals and institutions in the field of education, health
 care and culture during the year. Swastha which was established by
 The Coorg Foundation in 1994 as a fully residential institution for
 differently abled, continues to extend its support to the needy
 children in Coorg and neighbouring areas through its centres in
 Suntikoppa and Pollibetta by imparting required education and training.
 They are trained in making stationery items, offset and screen
 printing, greeting cards and table mats. These products are procured by
 the public and Institutions in the Kodagu District. The sale proceeds
 of the same are utilized for meeting the day to day expenses of
 In pursuance of the objectives of the SWASTHA, the DARE (Developmental
 Activities for Rehabilitative Education) was set up in 1996 in the
 Anamallais to train differently abled children to be self reliant.
 Rural India Health Project Hospital (RIHP), Ammathi, which is supported
 by the Company, continues to serve the needy sections of the society.
 The Coorg Foundation provides grant to RIHP for treatment of patients
 belonging to the lower income group.
 In addition, the Company has continued its initiatives for the
 development and protection of the girl child by conducting regular
 camps for detection of nutrition deficiency in girl children and
 promotion of self employment opportunities for women in Theni;
 providing clean drinking water to the residents near the Toopran Unit
 and operating primary school at Anamallais.
 The Company has a Corporate Social Responsibility Policy and the same
 has been hosted in the website of the Company (;
 The above projects are in accordance with Schedule VII of the Act.  The
 Annual Report on CSR activities is annexed as Annexure B.
 The Company has zero tolerance for sexual harassment at workplace and
 has adopted a Policy on Prevention, Prohibition and Redressal of Sexual
 Harassment at workplace in line with the provisions of the Sexual
 Harassment of Women at Workplace (Prevention, Prohibition and
 Redressal) Act, 2013 and the Rules there under. The policy aims to
 provide protection to employees at the workplace and prevent and
 redress complaints of sexual harassment and for matters connected or
 incidental thereto, with the objective of providing a safe working
 environment, where employees feel secure. The Company has also
 constituted an Internal Complaints Committee, known as the Prevention
 of Sexual Harassment (POSH) Committee, to inquire into complaints of
 sexual harassment and recommend appropriate action.
 During the Financial Year 2014-15, the Company received one complaint
 on sexual harassment, which has been disposed off and appropriate
 action taken. No complaints were pending.
 The Company has adopted a Whistle Blower Policy to provide a formal
 mechanism to the Directors and employees to report their concerns about
 unethical behavior, actual or suspected fraud or violation of the
 Company''s Code of Conduct or ethics policy. The Policy provides for
 adequate safeguards against victimization of employees who avail of the
 mechanism and also provides for direct access to the Chairman of the
 Audit Committee. It is affirmed that no personnel of the Company has
 been denied access to the Audit Committee.  The Whistle Blower Policy
 has been posted on the website of the Company
 significant and material orders passed by the regulators OR COURTS:
 There are no significant or material orders which were passed by the
 Regulators or Courts or Tribunals which impact the going concern status
 and the Company''s Operations in future.
 In compliance with provisions of Section 203 of the Companies Act,
 2013, during the Financial Year 2014-15, The Managing Director and CEO,
 Executive Director Finance and CFO, Executive Director- ICD Operations
 and the Company Secretary have been nominated as Key Managerial
 M/s. SNB Associates, Statutory Auditors of the Company hold office till
 the conclusion of the ensuing Annual General Meeting.  They have
 confirmed their eligibility to the effect that their appointment, if
 made, would be within the prescribed limit under the Act, and they are
 eligible for appointment.
 Pursuant to Section 148 of the Companies Act, 2013 read with Companies
 (Cost Records and Audit) Rules, 2014 as amended from time to time, your
 Company has appointed M/s Rao, Murthy & Associates, Cost Accountants to
 carry out Audit of Cost Records for the Financial Year 2015-16. As
 required under the Companies Act, 2013, a resolution seeking members
 approval for the remuneration payable to the Cost Auditor forms part of
 the notice convening the Annual General Meeting.
 Pursuant to the provisions of Section 204 of the Companies Act, 2013
 and the rules made there under, the Company had appointed Mr. Sudhir V.
 Hulyalkar, Company Secretary in Practice (CP No. 6137) to undertake the
 Secretarial Audit of the Company for the year ended 31st March, 2015.
 The Secretarial Audit Report is annexed as Annexure C.
 The Auditors'' Report and the Secretarial Audit Report for the Financial
 Year ended 31st March, 2015 do not contain any qualification,
 reservation, adverse remark or disclaimer.
 Foreign Exchange Earnings AND OUTGO:
 The statement pursuant to Section 134 (3) (m) of the Companies Act,
 2013 read with Rule 8(3) of the Companies (Accounts) Rules 2014 is
 annexed as Annexure D.
 Statement containing information as required under Section 197(12) of
 the Companies Act, 2013, read with Rule 5 of the Companies (Appointment
 and Remuneration of Managerial Personnel) rules, 2014, is annexed as
 Annexure E.
 In terms of the first proviso to Section 136 of the Act, the Reports
 and Accounts are being sent to the shareholders excluding the
 information required under Rule 5(2) and (3) of the Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any
 shareholder interested in obtaining the same may write to the Company
 Secretary at the Registered Office of the Company.
 Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of
 the Companies (Management and Administration) Rules, 2014, the extract
 of the Annual Return in Form MGT-9 is annexed herewith as Annexure F.
 Place: Bengaluru 
 Dated: 15th May, 2015
                                               On behalf of the Board
                                                       R. HARISH BHAT 
Source : Dion Global Solutions Limited
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