The Directors are pleased to submit their fiftieth report together
with the audited statement of accounts for the year ended 31st March
1. Highlights - Consolidated Performance
Your Company''s consolidated total operating income for the year ended
31st March 2013, at Rs. 7,351 crores, was 11% higher than the previous
year reflecting strong performance in the branded tea and coffee
businesses in major markets and excellent performance of the plantation
and extraction businesses. Favourable translation impact also
contributed to the growth in operating income. In the branded tea
business we continue to be market leaders in India and Canada and among
the leading brands in other major markets.
Group Profit from operations for the year at Rs. 663 crores is 26%
higher than the previous year reflecting strong operating performance
in most key markets. Contributing to this performance were improved
profitability of branded coffee business, strong performance of the tea
business in markets like I ndia and Australia, and favourable impact of
cost interventions. The increase in Group Consolidated Net Profit for
the year at Rs. 373 crores is 5% higher as compared to the prior year
reflecting the improvement in performance offset by the impact of
We are delighted to report that our strategic partnerships with PepsiCo
and Starbucks have recorded rapid strides during the year.
NourishCo Beverages, the equal-stake joint venture between Tata Global
Beverages Limited and PepsiCo handles a portfolio of three products,
the premium water brand Himalayan, Tata Water Plus and Ta ta Gluco
Plus. The company is set to launch more innovations in enhanced and
Ta ta Starbucks Limited, the equal-stake joint venture between
Starbucks Coffee Company and Tata Global Beverages Limited has rapidly
scaled up and opened 12 Starbucks stores during 2012-13 in Mumbai and
Your Company will pursue a strategy of building on its strengths -
unique competencies, differentiated offerings, appealing brands and
significant scale in the three natural beverage categories of tea,
coffee and water to emerge as one of the largest, most admired and
successful natural beverage companies in the world.
2. Stand alone Financial Highlights
The Directors now present below the stand alone financial highlights
Rs. in Crores
Total Revenue 2,439 2,129
Profit before finance cost,
depreciation, exceptional items 351 326
and taxes Deduct:
Finance cost (32) (27)
Depreciation (16) (48) (12) (39)
Profit before exceptional
items and taxes 303 287
Exceptional items (net) 18 83
Profit before tax 321 370
Provision for tax (62) (67)
Profit after tax 259 303
Add: surplus brought forward
from previous year 486 367
Amount available for
appropriation 745 670
Proposed dividend (133) (133)
Dividend distribution tax (21) (21)
Transfer to general reserve (26) (30)
The Directors are pleased to recommend for the approval of the
shareholders a dividend of Rs. 2.15 per share on the paid-up equity
share capital of the Company with respect to the financial year 2012-13
which is the same dividend that was declared last year. The total outgo
on account of dividend, inclusive of taxes, for 2012-13 is Rs. 154
crores which represents a pay-out of 59% of the Company''s stand alone
profits against the payout of 51% in the previous year.
4. Review of Subsidiary and Associate Companies
(i) a. As required under the listing agreement with the stock exchanges
the audited consolidated financial statements of the Company
incorporating all its subsidiary and associate companies prepared in
accordance with applicable Accounting Standards are attached.
b. The Ministry of Corporate Affairs has by its notification dated 8th
February 2011 granted a general exemption to companies, as per which,
the provisions of Section 21 2 shall not apply in relation to
subsidiaries, subject to the fulfillment of certain conditions.
Accordingly the consolidated financial statements of the holding
company and all subsidiaries duly audited by its statutory auditors
have been presented and the individual accounts of each of the
subsidiary companies have not been attached.
c. Any shareholder may either ask for a copy or inspect at the
registered office a copy of the audited accounts of the subsidiary
companies (where required to be prepared).
(ii) Tata Coffee Limited, your Company''s subsidiary, recorded excellent
performance in 2012-13 registering growth in both top line and bottom
line. Tata Coffee''s income from operations for the year 2012-13 at Rs.
598 crores was 18% higher than the previous year. Profit before
exceptional items and taxes for the year ended 31 st March, 2013 was
Rs. 141 crores against Rs. 96 crores in the previous year, representing
an increase of 47% driven by excellent performance of the plantation
activities and the Instant coffee operations. Profit before Ta x at Rs.
131 crores grew 26% over the previous year. The Profit earned by Ta ta
Coffee in 2012-13 has been the highest in the history of the Company.
The Directors ofTa ta Coffee Limited have recommended a final dividend
of Rs. 7.50 per share which was in addition to an interim dividend of
Rs. 5 per share thus resulting in a total dividend of Rs. 12.50 per
share for the year 2012-13 against Rs. 11 per share in the previous
The instant coffee operations of Tata Coffee demonstrated sustenance of
process centric approach with effective operational discipline. The
prime focus was on consistent quality, customer centric initiatives a
nd work force development. The division achieved record capacity
utilisation across all product variants. The Instant coffee units of
Tata Coffee are certified by FSSAI (Food safety standards authority of
India), ISO 9001 and 22000:2005, Kosher (Toopran), Halal and SA - 8000
(Theni). The Theni unit won the certificate of appreciation from
Ministry of Commerce and Industry, Govt. of India for highest growth in
exports amongst the manufacturing units (TN and Pondicherry) for the
In a key partnership milestone between Starbucks Coffee Company and Ta
ta Coffee Limited, a roasting and packaging plant was inaugurated in
Kushalnagar in Coorg, Karnataka in February 2013. This world-class
facility enables roasting and packaging of green coffee beans for
Starbucks stores in India.
(iii) Eight O''clock Coffee Company, USA, (EOC) a subsidiary ofTa ta
Coffee, had a very good year recording significant increase in
operating profits aided by lower coffee prices, prudent cost management
and improved efficiencies. The business launched Eight''O Clock K-cups
under a trademark licensing agreement with Keurig, which has been well
received by consumers and are achieving distribution gains.
Consequently Ta ta Coffee also reported a significant improvement in
its consolidated performance.
(iv) Our B2B operations in USA, Tata Tea Extractions Inc, the Company''s
wholly-owned subsidiary, which supplies customer specific products in
the beverage industry reported higher operating earnings of Rs. 10
crores in 2012-13 compared with Rs. 6 crores in the previous year. Net
earnings after tax increased to Rs. 12 crores in 2012-13 against Rs. 9
crores in the previous year. The increase in earnings was driven by
favorable product mix, better price realisation and lower input cost.
(v) Mount Everest Mineral Water Ltd. (MEMW), the Company''s subsidiary,
recorded higher revenue from operations in 2012-13 at Rs 22 crores
against Rs. 19 crores in the prior year driven by higher volumes in the
premium Himalayan brand and better realisations. In a highly
inflationary environment, MEMW embarked on several initiatives aiming
at cost optimisation resulting in reporting a profit of Rs. 0.54 crores
against a loss of Rs 1.64 crores in 2011-12. As earlier reported, your
Company acquired an additional 4.98% equity in MEMW during the year
under review thus taking its holding in MEMW to 50.07%. MEMW is also
focusing on export opportunities including enhanced distribution
through its joint venture partners.
(vi) The consolidated Operating Income ofTa ta Global Beverages Group
Limited, UK which substantially reflects the financial performance of
the Tetley business and other international brands for the year 2012-13
was Rs. 3,440 crores, an increase of 7% over the prior year. Profit
before exceptional items and taxes at Rs. 246 crores registered a 7%
increase over 2011-12. Profit before and after tax at Rs. 263 crores
and Rs. 225 crores respectively were also higher than the previous
year. The increase in profitability is attributable to cost savings
initiatives and improved performance in some markets and currency
(vii) Estate Management Services Pvt. Limited, Sri Lanka (EMSPL), in
which your Company owns 49% of the shares, is the holding company of
Watawala Plantations Ltd. (WPL). EMSPL is one of the largest producers
of tea and palm oil in Sri Lanka and amongst the most efficiently run
in that country. Its marketing company, Watawala Tea Ceylon Ltd. (WTC)
owns three key brands - Zesta, Watawala Kahata, and Ran Tea
which together command over 30% market share of the branded tea market
in Sri Lanka. Sri Lankan tea has good acceptance in several countries
including Russia, South East Asia, Australia and the Middle East. The
EMSPL group achieved record turnover and earnings during 2012-13 aided
by one of the highest ever performance of WPL as well as consistent
growth of WTC.
(viii) The turnover of Amalgamated Plantations Private Limited (APPL),
in which the company owns a 49.66% stake, was Rs. 512 crores which was
higher than in the previous year attributed to increased sales volume
and better realisations. Profit after tax at Rs. 24 crores was
significantly higher than prior year''s profit of Rs. 11 crores largely
due to better realisations.
APPL''s growing focus on being ''environmentally aware'' resulted in
converting its Hathikuli tea estate into an organic estate. This was
appreciated by Sanctuary Asia Magazine at an award function held on
30th November 2012, at the National Centre for Performing Arts (NCPA),
Mumbai. APPL was awarded the ''Wind under the Wings''in recognition of
its inspiring contribution towards environment. APPL''s Hathikuli Tea
Estate is now the largest Certified Organic integrated Farm in Asia
manufacturing three varieties of tea and black pepper. In the process,
the health of the tea bushes enhanced significantly; pepper yields are
rising and soil biodiversity is greater than before. The benefits also
include improved health of the workforce.
(ix) Kanan Devan Hills Plantations Private Limited (KDHP) in which your
Company increased its stake to 28.92% during the year, had a reasonably
good 2012-13 on the crop front with production of 20.23 million kgs
against the previous year crop of 19.14 million kgs. Production could
have been higher but for the dry weather that prevailed during the last
quarter of the financial year under review. The price of tea during the
year remained firm and towards the end of the financial year, owing to
all-round drop in production peaked to levels never seen in the past.
Prices have however since begun to soften.
KDHP recorded a profit after tax of Rs. 12 crores compared to Rs. 3
crores in the previous year. Operational results would have been
substantially better but remained subdued due to full year impact of
the steep increase in the wage rates that came into effect at the end
of the previous financial year, almost doubling of fertiliser costs,
and steep increase in power costs. Outlook for KDHP in the current year
is cautiously optimistic.
5. NourishCo Beverages Limited - Joint Venture in Liquid Beverage
Business 2012-13 is the third year of operations of NourishCo
Beverages, the Joint Venture with PepsiCo formed to handle the sales,
marketing and distribution of Himalayan natural mineral water and other
water products through the PepsiCo distribution network. This
significant partnership has enabled a higher visibility and
availability of Himalayan across channels and markets.
NourishCo''s full portfolio of products comprising Himalayan, Tata Water
Plus (TWP) in Pet / Pouch format and Ta ta Gluco Plus (TGP) have made
good progress . Sales volumes of Himalayan have grown during the year
attributable to robust distribution and launch of various print media
and TV commercials. Himalayan today is widely distributed and available
in major niche markets across India. TWP expanded its reach and
distribution significantly during the year. The brand is now available
in Tamil Nadu and Andhra Pradesh. During the year, TWP was also
relaunched by NourishCo in new packaging with an appealing marketing
campaign. Tata Gluco Plus, a glucose based drink is now available in
three exciting flavours - lemon, orange and mango.
We are happy to report that Tata Water Plus, the country''s first
nutrient drinking water, was the Official Hydration Partner for the
18th edition of the Aircel Chennai Open Tennis Tournament held in
January 2013. Tata Water Plus fulfilled the hydration requirements of a
large number of people during the event.
6. Tata Starbucks Limited
Your Company has always believed in creating memorable beverage
experiences for consumers. The joint venture with Starbucks is yet
another strong expression of this belief. Through Ta ta Starbucks, your
Company offers the legendary Starbucks coffee experience, backed by the
trust of the Ta ta name, to Indian consumers. The unique flagship
stores are owned and operated by the joint venture and branded as
Starbucks Coffee - A Ta ta Alliance. During the year, Tata Starbucks
have opened 12 stores in Mumbai and New Delhi.
Starbucks stores offer an extensive product portfolio that includes
Starbucks signature espresso-based beverages, as well as Starbucks VIA
Ready Brew and Starbucks Reserve coffees. The store will also offer Ta
ta Tazo tea and Himalayan mineral water, and its broad food offering
boasts a wide selection ofWestern favorites, as well as locally
relevant flavours. In addition, there is a wide range of Starbucks
merchandise and free Wi-Fi so customers can enjoy the unparalleled
coffeehouse experience that Starbucks is known for globally
Deepening its commitment to community, Tata Starbucks Limited will work
to improve the lives of coffee growing communities in the State of
Karnataka. The joint venture, will work to support ''Swastha'', a school
for children with special needs (in partnership with the Coorg
Foundation). Additionally, Tata Starbucks Limited will work on
initiatives including the promotion of responsible agronomy practices
and training of local farmers, technicians and agronomists to improve
their coffee-growing and milling skills.
7. MoU with Kerala Ayurveda Limited
Following the MoU signed with Kerala Ayurveda Limited (KAL) to develop
beverage and food products around ayurvedic recipes, the Company and
KAL are currently engaged in a collaborative Joint development effort
towards researching and development of formulations for application in
beverages and water categories, aimed at improving health and wellness.
8. Marketing Alliance with SIGCC
Your Company has forged a marketing alliance with South Indian Green
Cardamom Company (SIGCC) for the launch of their first branded product
''Spice Mist.''SIGCC is a company founded, managed and run by the growers
of spices themselves. Spice Mist has been launched in two varieties-
cardamom and pepper. It is the first nationally branded whole spice in
the Indian market. The products have been test marketed in a few
cities. Through this alliance, SIGCC can sell Spice Mist through Tata
Global Beverages''wide distribution network. This will enable the spice
growers to get a better price for their products by selling directly to
the consumer instead of through intermediaries. This alliance
represents yet another move by your Company to add value to India''s
9. Review of Activities
A. The Tea Industry
India''s tea output stood at 1,112 million kgs in 2012 against 1,116
million kgs in 2011. The drop in crop was led by South India.
Consumption increased by 1.9% to 890 million kgs in 2012 versus 873
million kgs in 2011 resulting in lower inventories. As a result tea
prices strengthened, increasing by Rs. 18 /kg over 2011. The outlook
for 2013-14 is for prices to be fully firm to dearer if crop intakes
follow seasonal norms.
Tea Exports from India declined by 14 million kgs in 2012 mainly due to
the higher price levels with teas from other origins looking more
attractive price-wise. Import of tea into India in 2012 was only
marginally lower than the previous year.
B. Domestic Branded Tea Operations
Branded operations continued its excellent performance ending the year
2012-13 with a 7% growth over the previous year in volume and 16% by
value. The national brands recorded a 7% growth over the previous year.
All the national brands performed well, in spite of significant price
increases taken on all the brands in view of increased commodity cost,
and notwithstanding the fact that some competitor brand held onto
constant consumer prices in the first quarter and moved prices up only
The Regional brands also performed well, registering good growths over
last year led mainly by Chakra Gold and Kanan Devan which recorded
impressive growth during the year.
Your Company maintained its volume and value leadership position with a
MAT volume and value share of 20.5% and 22.2% respectively, well ahead
of its major competitors.
Tata Tea established itself as a thought leader in the tea category in
India by positioning tea as a medium for social awakening through the
Jaago Re campaign. Jaago Re helped build a differentiated positioning
for brand Ta ta Tea - while tea may wake you up, Tata Tea awakens you!
The campaign has continuously evolved, from the time it was launched in
2007. However the common thread underlying the success of its various
avatars is Jaago Re''s ability to identify social trends long before
they become fully evident and call out to the nation to awaken to it.
Since inception the Jaago Re campaign has won various laurels and
recognitions. Tata Tea achieved volume leadership of the branded tea
category towards the end of 2007 and value market leadership in 2011.
This makes Jaago Re a campaign which delivers strong business results
while doing social good through its overall message.
Tata Tea''s Jaago Re campaign won the ''Cause Marketing Campaign'' a ward
at the Forbes India Philanthropy Awards (FIPA) 2012. FIPA announced ten
awards for people and organisations who have been change makers,
innovators and executors in the field of philanthropy. The award is in
recognition of the Jaago Re campaign''s success in integrating ''cause''
with '' brand.''
A new Jaago Re campaign featuring Shah Rukh Khan was launched in record
time in the month of March to coincide with International Women''s day
and more importantly tap the sentiment of the nation towards women.
With a strong call for a ''choti shuruaat'' towards putting women first,
we believe this will go a long way in highlighting this important
social cause, and also strengthening the equity of the brand.
The Gaon Chalo initiative aimed at promoting distribution in the rural
areas has been a special initiative undertaken by your Company and has
been very successful over the years. The initiative commenced about 5
years ago and has made rapid progress. The core of the solution to
enhance rural penetration was to create synergies among the local
communities, in particular tying up with Non Government Organisations
(NGO) who are well established in most villages across the country. The
Gaon Chalo initiative currently covers many states across the country.
C. International Branded Operations
The UK market witnessed decline in volumes in the backdrop of decline
in black tea category, increased competitive intensity and a shift in
consumer behavior. However growth in green tea and specialty teas
continues to be strong. Tetley recorded growth in green tea volumes as
well as Redbush variety driven by a combination of focus on specific
market segments, good merchandising efforts and the effect of new
marketing campaigns. Your Group increased its investment behind brands
to support volumes and this strategy has helped in the growth in green
teas and other specialty teas. Difficult trading environment prevailed
in Europe due to competitive intensity. Your Group is in the process of
restructuring its business model in certain geographies with a view to
Profitability of the US operations was significantly higher than the
prior year driven by lower coffee cost, effective cost management and
royalty income under the licensing arrangement with Keurigs for the
coffee - pods. During 2012-13, Eight O Clock Coffee (EOC) launched
coffee-pods (K-cups) to fit in existing Keurig brewers for the US
market, as part of a licensing deal with Green Mountain Coffee Roasters
Inc. EOC K cups have met with good market response.
Canadian tea business was impacted by competitive intensity and
restructuring of distribution. Trade activation programmes were
implemented to support incremental activities and regain volumes. The
region implemented price increases in all major accounts under
difficult and competitive market conditions. The Canadian business
launched Tetley tea pods (T-Discs) for the Ta ssimo brewing system as
part of a licensing deal with Kraft.
Australia had a good year with an improvement in the underlying income
and profit from operations over the prior year driven by strong
distribution performance and consumer programmes coupled with
successful new products launched last year, namely the new Chai Latte
and Specialty products . The business continues to invest behind brands
to protect black tea volumes and support new product launches in the
market in categories like speciality teas and Chai Latte.
In Pakistan, the business introduced Tetley Gold with an improved
blend, in two select regions. The consumer response to the product has
been very encouraging.
To commemorate 175 years of the iconic Tetley brand, the UK''s first tea
table book titled ''You, me and a cup of tea'' was created by Tetley in
partnership with CLIC Sargent, UK''s leading children and young people''s
cancer charity. The book features a unique collection of 175 memorable
teatime stories from celebrities, Tetley Tea fans and tea drinkers from
across UK. Young people and their families affected by cancer, who have
been supported by CLIC Sargent, have shared their stories in the book
as well and all proceeds from the sales of the book will go to the
D. Tea Extractions
The division''s operations were stable and exports of I nstant tea were
made largely to US, Europe and Far Eastern countries. Profitability of
the division improved during the year driven by improved realisation
due to favourable foreign exchange. The Food Safety Management system
of the division has been recommended for FSSC 22000 certification by
Bureau Veritas, the certification agency. This certificate is globally
recognised under the Global Food Safety Initiative (GFSI) and is a key
consideration for procurement by many of the customers in USA, Europe,
Zhejiang Ta ta Tea Extraction Company Limited, China which is a
subsidiary of your company, is a Joint Venture with Zhejiang Tea Group
Company Limited, China. The JV was set up for the manufacture and
marketing of Instant tea, tea Polyphenol and tea concentrates. The
company commenced its production of green instant tea products after
initial delays and has now started trial exports to USA. The trial
commercial production of green Tea Polyphenols commenced during the
current year, with the first order to be dispatched during the early
part of the next fiscal.
The FOB value of exports during 2012-13 was Rs. 152 crores, against Rs.
157 crores in the previous year. The tea bag unit at Kochi performed
well and exported its products to new markets of Nigeria, US and Sri
Lanka. The Instant Tea unit is working with the commercial team to
develop SKUs for new markets. The Export Credit Guarantee Corporation
(ECGC) of India has recognised your Company as the 3rd most valued
exporter client of the ECGC Kochi branch.
F. Plantation Operations
The crop production in 2012-13 at our Pullivasal and Periakanal Estates
was marginally higher in 2012-13 at 20.73 lakh kgs against 20.62 lakh
kgs in the previous year. The yield achieved was also higher than the
previous year by 1%. Productivity at 50.06 kgs in 2012-13 was however
lower at the two estates compared to the previous year due to
unfavourable weather conditions. The year 2012-13 started with drought
in the region and although the estates received some rainfall later, it
was not adequate to help improve crop growth and productivity.
G. Community Development, Employees'' Welfare and Environment
Your Company continues the legacy of giving back to society through its
focus on community development and social welfare initiatives,
particularly through its engagement with, the General Hospital, Srishti
Welfare Centre and High Range School, in Munnar.
The General Hospital continued to provide quality healthcare which
includes free treatment to the Muthavan tribal community. The hospital
now also has a visiting Ophthalmologist and Orthopedic Doctor thereby
ensuring easy access and higher availability of basic investigatory and
interventional facilities in the locality.
The High Range School is functioning smoothly with CCE (Continuous and
Comprehensive Evaluation) being actively pursued as a part of routine
curriculum. CBSE Class XII and X Results have been consistently good a
nd the fi rst two toppers in the Class XII examinations last year are
children of general workers of KDHP and your Company. We are also
providing scholarship for university education to the workers children
along with entrance coaching for Plus Two Science-stream students.
The Srishti Welfare Centre runs various programmes for the education,
training and rehabilitation of children and young adults with special
needs. The centre now comprises of 5 units - The DARE School, DARE
Strawberry Unit, Athulya, Aranya and The Deli. Trainees and Programme
coordinators of each unit were given opportunities to increase their
knowledge and functional skills by interacting with welfare units
outside their region. The unit also participated in exhibitions,
national and international, where their products received much
appreciation. Through Srishti the Company has helped these people
become productive and respected members of the community.
Your Group has a clear focus and strategic approach towards driving
Affirmative Action (AA) in India. In pursuance of this initiative, your
Company is committed to directly conducting and supporting initiatives
for socially and economically disadvantaged sections in the country at
large, and specifically the Scheduled Caste and Scheduled Tribe
communities in India. The AA initiative revolves around the four Es -
Employment, Employability, Entrepreneurship and Education. As part of
the initiative, your Company in collaboration with the renowned
Bangalore based NGO, Unnati, sponsored 52 students from Scheduled caste
and Scheduled Tribe communities who have been trained in technical
skills and are now employed in various companies. The NGO provides
skill building in the areas of retailing, hospitality, front office,
Information Technology, etc.
The model of entrepreneurship follows inclusive growth by partnering
with the rural communities, which include AA community. Gaon Chalo
initiative has provided financial stability and growth to the
economically backward communities and at the same time expanded the
reach of our brands.
Munnar in India has long been the hub of your Company''s education
initiatives in India. At the High Range School, the workers''children
from both KDHP and your Company are given free and subsidised
education, irrespective of their community. Apart from the High Range
School, the company undertakes special education through Project DARE.
10. Human Resources and Industrial Relations
During the year under review, industrial relations remained generally
peaceful at all our offices and establishments.
Our focus on attracting and nurturing talent and developing
capabilities has remained sharp during the year, preparing the business
for future growth. One of the development initiatives highlighted
within the Organisation Resource Review Process (ORR) was influencing
and networking. A global two day program was developed and piloted in
the EMEA (Europe, Middle East & Africa) region. A further program was
also conducted in the US in March this year. In addition we are also
developing a senior leadership module for Influencing and networking.
11. Corporate Governance and MD and A
A detailed report on Corporate Governance is separately attached
together with a report on Management Discussion and Analysis (MDA). The
MDA also covers the consolidated operations and reflects the global
nature of our business.
12. Tata Business Excellence Model (TBEM)
Your Group was assessed under the Tata Business Excellence Model on a
consolidated basis for the second successive year in 2012-13. The group
has achieved a n overall improvement in score in the a ssessment done
in 2012-13. The external assessment team shared their findings on the
Group''s TBEM assessment with your senior management team in early
February 2013, and this was also tabled to the Board of Directors,
alongwith an action plan for the future. The feedback from the
assessment gives us an opportunity to understand our strengths and
areas for improvement. This also serves as a means to learn, manage and
improve organisational performance, as we drive towards excellence in
all parts of our business.
13. 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, the Directors hereby confirm that:
i) In the preparation of the Annual Accounts for 2012-13, the
applicable Accounting Standards have been followed and there are no
ii) They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for the financial year.
iii) They have taken proper and sufficient care to the best of their
knowledge and ability for the maintenance of adequate accounting
records in accordance with the provisions of the Companies Act, 1956.
They confirm that there are adequate systems and controls for
safeguarding the assets of the Company and for preventing and detecting
fraud and other irregularities.
iv) They have prepared the Annual Accounts on a going concern basis.
During the year Mr. R N Ta ta stepped down as Director and Chairman of
the Board of your Company upon his reaching the retirement age in
keeping with the Tata Group Guidelines on retirement of directors. Mr.
Tata in his long association of over 21 years, had led the Company with
great distinction, providing guidance and direction, in its quest for
growth and excellence. Mr. Tata''s deep involvement in the Company''s
affairs and his outstanding leadership helped overcome several
challenges which the Company went through during this period. In
matters connected with various aspects of the Company''s strategy and
operations, Mr. Ta ta had provided significant direction and guidance
which enabled the company to transform from an Indian tea company into
a global beverages Company focused on natural beverages.
Mr. Cyrus Mistry was appointed to the Board of your Company as Director
on 22nd June 2012 and later was also appointed as Chairman of the Board
on 20th November 2012. Mr. Mistry has assumed the leadership of the
Company at a historic moment, and his taking over as Chairman will help
bring in a fresh new perspective in guiding the Company towards new
horizons of achievement.
As an expression of its sincere admiration and acknowledgement of the
visionary leadership provided by Mr. Tata and to also mark the occasion
of Mr. Cyrus Mistry taking over as the Chairman of the Board, your
Company has instituted two Annual Scholarships at the High Range
School, Munnar, one to mark Mr. Tata''s stepping down and the other to
mark Mr. Mistry assuming the Chairmanship. These will be called as The
Ratan Ta ta and Cyrus Mistry Scholarship a nd will be awarded to two
top ranking students of the school, who are children of plantation
workers, for pursuit of a professional undergraduate college education.
Mr. Arun Gandhi stepped down as Director with effect from 15th March,
2013 upon his reaching the retirement age in keeping with the Tata
Group Guidelines on retirement of directors. Mr. Gandhi played an
active and key role in several acquisitions undertaken by the Company,
and also participated actively in various deliberations of the Board of
Directors, including those relating to strategy, financial and
operational controls. Your Directors wish to record their sincere
appreciation for the advice and guidance provided by Mr. Gandhi during
his tenure as a Director.
As reported last year, Mr. P. T Siganporia retired as Director and
Managing Director of the company with effect from 30th June 2012 and
Mr. Harish Bhat took over as the Managing Director with effect from 1
st July 2012.
Mr. L Krishnakumar was appointed as an additional Director and as
Executive Director by your Board with effect from 1st April 2013. Mr. L
Krishnakumar has been associated with the Tata Group since 2000 -
initially with The Indian Hotels Company Limited as its Vice President
- Finance and since 2004, he has been with the Company as the Group
Chief Financial Officer. The appointment and remuneration of Mr. L
Krishnakumar will come up for approval of the members at the
forthcoming Annual General Meeting Mr. L Krishnakumar is a Chartered
Accountant and has also obtained professional qualifications in Cost
Accountancy and Company Secretarial Services and has over 30 years
experience in a variety of industries including consumer goods, hotels,
manufacturing and consulting. Mr. L Krishnakumar is also a Director on
the Board of several overseas subsidiaries of your Company.
Mr. S Santhanakrishnan was appointed as an additional Director by your
Board with effect from 28th May 2013. Mr. S Santhanakrishnan, FCA is
the partner of PKF Sridhar & Santhanam, Chartered Accountants and has
more than 30 years of experience in Finance, Accounts including IFRS,
Strategy & Planning, Global Assurance, Corporate laws and Consulting.
He is a member of the Central Council of the Institute of Chartered
Accountants of India (ICAI). He is actively involved in numerous
industry oriented initiatives of the Reserve Bank of India and the
Ministry of Corporate Affairs. The appointment of Mr. S
Santhanakrishnan will come up for approval of the members at the
forthcoming Annual General Meeting.
Mr. F K Kavarana, Mrs. Ranjana Kumar and Mrs. Mallika Srinivasan retire
by rotation at the forthcoming Annual General Meeting and being
eligible, offer themselves for re-election.
Brief particulars and expertise of these Directors and their other
directorships and committee memberships have been given in the annexure
to the Notice of the Annual General Meeting in accordance with the
requirements of listing agreement with Stock Exchanges.
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.
Your Directors are deeply distressed to report the sad and untimely
demise of Mr. J S Bilimoria on 3rd May 2013. Mr. Bilimoria joined the
Board of your Company in January 2009 and was also the Chairman of the
Audit Committee since January 2010. Mr. Bilimoria made significant
contributions to the deliberations at both the Board and Audit
Committee meetings as well as at other Committees of the Board of which
he was a member. We offer our condolences to Mrs. Bilimoria and her
other family members on this tragic and untimely loss.
The Members are requested to appoint the Auditors and fix their
remuneration. Messrs. Lovelock and Lewes, the retiring Auditors have
furnished certificate of their eligibility for re-appointment as
required under the Companies Act, 1956.
16. Cost Auditors
The Central Government has approved the appointment of M/s. Shome and
Banerjee, 5A Nurulla Doctor Lane, 2nd Floor, Kolkata - 700017 as cost
auditors for the Company for conducting Cost Audit for the financial
year 2012-13. The due date for filing the Cost Audit Report for the
financial year ended 31st March 2012 was 31st January 2013 and the Cost
Audit Report was filed by the Cost Auditors on 27th December 2012. The
due date for filing the Cost Audit Report for the financial year ended
31st March 2013 is 30th September 2013.
17. Particulars of Employees
Information as required under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975, as
amended, forms part of this report. However as per the provisions of
Section 219(1) (b) (iv) of the Companies Act,1956, the report and
accounts are being sent excluding the statement containing the
particulars to be provided under Section 217(2A) of the Companies Act
1956. Any member interested in obtaining such particulars may write to
the Company Secretary for a copy thereof
18. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
A statement giving details of conservation of energy, technology
absorption, foreign exchange earnings and outgo in accordance with
Companies (Disclosure of Particulars in the Report of Board of
Directors) Rules, 1988 is annexed to this report.
19. Concluding Remarks
The Directors are sure that the shareholders would like to join them in
conveying their appreciation to all employees of the Company for their
sincere and dedicated services during 2012-13, without which such
commendable performance would not have been possible in a relatively
challenging global environment.
On behalf of the Board of Directors
Mumbai, (CYRUS P MISTRY)
28th May, 2013 Chairman