Tata Global Beverage Directors Report, Tata Global Bev Reports by Directors

Tata Global Beverage

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Directors Report Year End : Mar '16    « Mar 15
The Directors are pleased to submit their fifty third report together
 with the audited financial statements of the Company for the year ended
 31st March 2016.
 Financial Results                                        Rs. in Crores
                                Consolidated             Standalone
                               2015-16   2014-15    2015-16    2014-15
 Revenue from Operations         8,111     7,993      3,084      2,885
 Profit from Operations 
 before Other Income, 
 Finance Costs,                    675       775        342        317 
 Depreciation and Exceptional
 Less: Depreciation               (143)     (133)       (23)       (20)
 Profit from Operations 
 before Other Income, 
 Finance Costs and                 532       642        319        297 
 Exceptional Items
 Add: Other Income 
 (Standalone results 
 include intra-group 
 dividends                          71        70        107        155 
 eliminated on consolidation)
 Less: Finance Costs               (69)      (82)       (30)       (34)
 Profit before exceptional 
 items and taxes                   534       630        396        418
 Exceptional items (net)            11      (130)       265        (69)
 Profit before tax                 545       500        661        349
 Provision for tax                (210)     (216)       (97)       (60)
 Profit after tax                  335       284        564        289
 Share of Net loss in 
 Associates                         (1)      (11)         -          -
 Minority Interest                  (8)      (25)         -          -
 Profit for the year               326       248        564        289
 Add: Surplus brought
 forward from previous year      3,331     3,276        920        820
 Add: Adjustment on 
 Amalgamation                        -        20          -          2
 Amount available for 
 appropriation                   3,657     3,544      1,484      1,111
 Proposed dividend                (142)     (142)      (142)      (142)
 Dividend distribution tax         (23)      (21)       (23)       (19)
 Transfer to general reserve       (68)      (49)       (56)       (29)
 Adjustment on evaluation of 
 useful life of Fixed Asset          -        (1)         -         (1)
                                   (33)     (213)      (221)      (191)
 Retained in profit and 
 loss statement                  3,424     3,331      1,263        920
 State of Company''s Affairs Consolidated Performance
 Consolidated Income from operations for 2015-16 was Rs. 8,111 Crores,
 against Rs. 7,993 Crores in the previous year, reflecting a 2% growth
 aided by improved performance both in the branded and unbranded
 businesses. At prior year exchange rates, the increase would be 3%.
 Within the branded business, India tea business performed well with
 good value and volume growth and our incubatory businesses, such as MAP
 in Australia, Tata Starbucks and NourishCo also increased their
 revenues. Within the non branded portfolio, improvements were mainly
 recorded in Coffee plantation and Coffee extraction businesses.
 Profit from operations declined against the prior year mainly in the
 branded business due to underperformances in some developed markets.
 This decline is largely attributable to commodity price increases in
 coffee and tea in the international markets, higher spends behind
 brands and new launches, category decline in some developed markets and
 increased competitor and retailer activities. The Indian branded and
 non-branded businesses performed well offsetting the lower performance
 in developed markets.  Profit after tax was however significantly
 higher than prior year mainly due to the impact of exceptional items.
 During the year, your Company sold some non-core investments realising
 a profit of Rs.  328Crores.The Company also recoqnised non cash
 impairment losses amounting to Rs. 270 Crores mainly relating to its
 businesses in Eastern Europe and US. While the Company is actively
 pursuing various growth opportunities, the accounting impairment has
 been recoqnised due to underperformances as compared to plans mainly
 arising out of factors like macro- economic instability in Russia and
 category decline in every day black tea in certain markets and higher
 competitive intensity in some markets.
 We continued our focus on green and specialty teas across markets
 during the year under review. There was renewed focus of increasing the
 distribution for our super premium segment whilstfocus on newinnovative
 products continued. TheSuper Green tea which is the first fortified
 green tea with proven health benefits which was launched in UK saw
 significant growth and was ahead of category growth on a full year
 basis. There was also significant growth in the green tea segment in
 India, France and US. Fruit and herbal teas were launched in UK and US
 where customer response has been very positive. Teapigs, our super
 premium tea brand, saw significant growth in UK, US and Canada and
 other international markets with improved distribution.  In India, our
 new coffee brand, Tata Coffee Grand had a high impact launch which
 created the desired buzz and visibility. In addition, Tata Tea Gold
 with a region specific blend was launched in the state of Maharashtra
 which received favourable customer response. Various new products like
 the Signature Collection and London Blend have been launched in select
 developed markets. The year also reflected good execution of the launch
 plans in Middle-East which resulted in market share increases. The
 performance of the businesses under our strategic partnership with
 Starbucks and PepsiCo also saw good growth. In Tata Starbucks, growth
 has been achieved as a result of good in-store performance and
 expansion in the number of stores. NourishCo reflected good growth
 based on significant increase in the sales of Tata Gluco Plus and a
 moderate growth in Himalayan sales.
 Your Company''s consolidated performance has to be viewed in the context
 of difficult macro economic conditions and the emerging category trends
 in some of the developed markets that the Company operates in and that
 investments are being made for future growth.
 Your Company''s focus in 2016-17 would be to invest in innovations and
 capability building in line with the Group''s medium term strategy plan
 and balancing the same with pressures on EBIT margins by prioritising
 our strategic objectives.  The key focus themes across all regions will
 be to drive innovation and build momentum on the recent launches. Our
 focus will also be on improving distribution and driving cost
 efficiencies. We will meet these objectives through strengthening and
 leveraging people capabilities and robust execution of plans with
 continued commitment to our sustainability initiatives.
 Standalone Performance
 Your Company''s Income from operations for the year ended 31st March
 2016 was Rs. 3,084 Crores, registering an improvement against the prior
 year, driven by increase in volumes and average realisation reflecting
 the increase in both national and regional brands. Profit from
 operations at Rs. 319 Crores was higher than the previous year mainly
 driven by increased sales and lower commodity and input cost trends
 despite higher spends behind brands and new launches. Profit before and
 after tax was significantly higher aided by exceptional income, derived
 through sale of non-core investments partially offset by provisions
 relating mainly to the China extraction business arising out of delays
 in startup and stabilisation of technology for an enhanced product
 Your Company recorded 7% income growth over the prior year with
 increases in the flagship Tata Tea Brands and also in the Regional
 brands. Your Company is pleased to report that it continues to maintain
 both volume and value leadership in the overall branded tea category
 and leadership in the green tea category, in a challenging and
 competitive environment.  During the year, your Company renewed its
 focus on green tea and launched innovative products. The Company
 launched Tata Tea Gold with a region specific blend to strengthen its
 foothold in Maharashtra for which consumer response has been positive.
 In addition, to expand the product category, your Company launched Tata
 Coffee Grand with a unigue blend that is gaining consumer acceptance.
 Share Capital
 The Amalgamation of Mount Everest Mineral Water Limited (MEMW) with the
 Company was completed during the year under review. Pursuant to and in
 consideration of the Scheme of Amalgamation of MEMW with your Company,
 which was effective 18th May 2015, your Company issued and allotted
 1.27 Crore eguity shares of Re. 1 to the eligible shareholders of MEMW,
 post which, the paid up capital of the Company increased to Rs. 63.11
 Your Directors are pleased to recommend for the approval of the
 shareholders, a dividend of Rs. 2.25 per share on the equity share
 capital of the Company with respect to the financial year 2015-16.  The
 total outgo on account of dividend, inclusive of taxes, for 2015-16 is
 Rs. 165 Crores which represents a pay-out of 29% of the Company''s stand
 alone profits.
 Transfer to Reserves
 An amount of Rs. 56 Crores is proposed to be transferred to General
 Reserves out of the amount available for appropriation and an amount of
 Rs. 1,263 Crores is proposed to be retained in the profit and loss
 Review of Subsidiaries, Associates and Joint Venture Companies
 Pursuant to Section 129(3) of the Companies Act, 2013, the consolidated
 financial statements of the Company and its subsidiaries, joint
 ventures and associates, prepared in accordance with the relevant
 Accounting Standards specified under Section 133 of the Companies Act,
 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, form
 part of this Annual Report. Pursuant to the provisions of the said
 section, a statement containing the salient features of the financial
 statements of the Company''s subsidiaries, associates and joint ventures
 in Form AOC-1 is given in this Annual Report. Further, pursuant to the
 provisions of Section 136 of the Companies Act, 2013, the financial
 statements of the Company, consolidated financial statements along with
 relevant documents and separate accounts in respect of subsidiaries are
 available on the website of the Company.
 There have been no material changes in the nature of the business of
 the subsidiaries (including associates and joint ventures) during the
 financial year 2015-16. Acquisitions/ divestments, as applicable, have
 been adequately disclosed in the financial statements.
 Your Company has adopted a policy for determining material subsidiaries
 in terms of Regulation 16(1)(c) of Securities and Exchange Board of
 India (Listing Obligations and Disclosure Requirements) Regulations,
 2015 (Listing Regulations).The Policy as approved may be accessed on
 the Company''s website at the link:
 Performance highlights of key operating subsidiaries / associates
 /joint ventures Indian Operations Tata Coffee Limited
 Tata Coffee recorded a turnover of Rs. 718 Crores reflecting a growth
 of 5% over the prior year. The improvement is mainly attributable to
 higher instant coffee sales. The turnover of the plantation business
 also showed improvement driven by higher sales of Robusta and Pepper
 offset by lower Arabica volumes due to off year trends. The Instant
 Coffee business reported a strong growth in Africa and a favourable
 portfolio mix of volumes contributed to the Instant Coffee''s turnover
 and profitability. The overall profitability of the plantation business
 was flat impacted by seasonal nature of the business, soft tea prices
 and higher costs. The depreciation policy for Tata Coffee was changed
 to align to a single basis of depreciation for similar type of assets
 as opposed to different basis of depreciation being followed earlier.
 A write-back was taken to exceptional items to reflect the impact of
 the change. Post the impact of exceptional items, Profits before and
 after tax are at prior year levels.
 The Directors of Tata Coffee Limited have recommended a dividend of
 Rs.1.30 per equity share of Re. 1 each for the year 2015-16 which is
 the same as last year.
 The instant coffee operations continues to focus on operational
 discipline, cost reduction and sustainability in operations. With a
 specific focus on cost reduction, various alternatives have been used
 to reduce the power and fuel costs in the instant coffee factories. In
 addition, the Then Unit won the CII Sustainability award and Toopran
 unit won the National level Energy conservation award.
 Tata Coffee also won two awards at the 12th Golden Leaf India Awards
 2016 in recognition of the high quality teas produced at their factory
 located in the Anamalai hills in South India.  Additionally, Plantation
 Trails, Tata Coffee''s hospitality brand, was awarded the''Certificate of
 Excellence''from Trip Advisor, the world''s largest travel website, for
 the third consecutive year. The award is based purely on customer
 feedback and ratings.
 NourishCo Beverages Limited
 NourishCo Beverages Limited, a joint venture with PepsiCo, is driving
 our water agenda in India. It distributes the Himalayan brand whilst it
 manufactures and sells the Tata Water Plus and Tata Gluco Plus brands.
 The Company registered a turnover of Rs. 125 Crores for 2015-16,
 reflecting a growth of 44%.Tata Gluco Plus has been performing
 extremely well and high double digit growth in volume and value terms
 were recorded during the year 2015-16.
 The new proposition of''Gas minus Energy Plusand the visual changes on
 the packaging to communicateEnergyforthe brand were received very
 well by the consumers and have accelerated the brand''s growth rate. We
 strengthened our distribution with presence in Maharashtra, Karnataka,
 Gujarat and Kerala.  In addition, Himalayan sales declared a double
 digit growth in volume and value by focusing on channel mix and
 selective price increases. During the year, a television commercial was
 run with the objective of establishing Himalayan''s source credentials.
 Tata Starbucks Private Limited
 Tata Starbucks recorded a turnover of Rs. 235 Crores during 2015-16
 registering a growth of 39% over the prior year. Tata Starbucks''store
 count stands at 82 at the end of the financial year.  The business
 continues to perform well with revenue growth driven by improved store
 performance and increase in the number of stores. In-store performance
 has been robust helped by various initiatives such as localisation of
 supply chain and other similar initiatives contributing to improving
 Amalgamated Plantations Private Limited (APPL)
 For the financial year 2015-16, turnover at Rs. 570 Crores was in line
 with prior year. However, profits were impacted mainly due to wage
 revisions which were negotiated on a tripartite basis.  The business
 registered record production in February/March 2016 due to good rains
 during end season. During the year, whilst regular tea prices were
 soft, premium teas reflected a hardening trend. In addition APPL is
 also involved with the tea extension planting advisory services
 initiative which ensures that the small tea growers are trained in Good
 Tea Cultivation practices to increase yield and improve compliance and
 quality of green leaf.  This will help them get a fair price for
 sustainable livelihood and become a stable supply base to APPL
 factories. This initiative has led to identification and linkage of
 5,252 small tea growers to APPL Estates for green leaf supply in
 2016-17. Further, certain gardens achieved RA certifications and Trust
 Tea certification, in addition to ISO 22000 and SA 8000.
 Kanan Devan Hills Plantation Company Private Limited (KDHP)
 For the financial year 2015-16, KDHP recorded a turnover of Rs. 259
 Crores. The profitability and operations were impacted by labour unrest
 in its estates and factories for a week in September and for a
 fortnight in October, resulting in heavy loss of production. The unrest
 was across most plantations in Kerala due to demands for wage revision
 and higher bonus. Additionally, loss of production during this period
 of unrest and its aftermath, left the tea fields in overgrown condition
 necessitating substantial costs for ensuing restoration work on the
 affected fields, which further impacted both production and income. The
 Company also incurred substantial increase in costs due to a
 significant increase in labour wages as decided by the Plantation
 Labour Committee, constituted by the Government of Kerala, and this
 plantation industry wide wage revision, done once in three years, was
 due in 2015.
 Despite the labour unrest, the productivity for the season was higher
 than the previous year and total crop production performance was better
 than that of other companies in Munnar.  The average price of tea
 achieved for the year was also higher than previous year, due to the
 increased production of high value teas and firming up of tea prices
 during the second half. In the Great Places to Work Survey (2015)
 conducted by the Economic Times and Great Place to Work9 Institute,
 KDHP was ranked 97 in the Top 100 of India''s Best Companies to Work for
 in 2015. On the quality front, KDHP won two awards at the 2016 Golden
 Leaf India Awards competition held at Dubai, a testimony to the
 stringent quality standards adopted by the Company. Additionally, two
 tea factories were awarded the Appreciation Award under the Small
 Industry Category of the Kerala State Pollution Control Award, 2016.
 This is a testimony to the strict safety standards maintained by all
 KDHP establishments. On the certifications front, KDHP continues to
 maintain all certifications of international repute, including
 Rainforest Alliance, Fairtrade, Organic, ISO 22000, ETP, GMP and
 Trustea. It was a moment of great joy and pride when the Company passed
 the Rainforest Alliance annual audit, with an astounding score of
 International Operations
 Eight O Clock Coffee Company (EOC)
 EOC''s total income, under IGAAP, during 2015-16 at Rs. 1,046 Crores was
 higher than the previous year''s income of Rs. 1,008 Crores. The
 increase in top line is mainly due to favourable currency movement. The
 business grew its non-promoted volumes over prior year but a
 significant increase in competitor intensity through additional
 promotional events and deeper discounting adversely affected the
 overall sales. Profits were impacted because of lower sales coupled
 with increase in coffee commodity costs. During the year, Eight O Clock
 Coffee was the recipient of two Reggie awards for their earlier
 partnership with Warner Brothers celebrating the 20th anniversary of
 the hit comedy TV showFriends.The award recognises the best marketing
 campaigns activated by brands with a focus on strategy, creativity,
 originality, integration and results.The campaign resulted in
 introducing the brand to a younger consumer base which ultimately
 contributed to brand sales growth.
 Tata Global Beverages Group Limited, UK
 The consolidated income from Tata Global Beverages Group Limited, UK,
 under IGAAR which substantially reflects the financial performance of
 the Tetley business and other international brands, at Rs. 3,313Crores,
 was lower than prior year mainly due to adverse translation impact. At
 constant exchange rates, there was a marginal underlying topline
 growth. The improvement in underlying sales is mainly due to
 improvements in the Teapigs brand, Russia, Middle East, South Africa,
 and coffee business in Australia partially offset by lower performance
 in other key markets. The operating profit was behind prior year mainly
 due to category de-growth and high competitive intensity in some major
 markets, higher commodity prices, impact of the macro- economic
 condition prevailing in countries like Russia and higher spends on new
 launches and market entries. The underlying performance of the main
 brands was strong with many successes.  Teapigs, our super premium
 brand has done exceedingly well by growing distribution in UK, US and
 in other international markets. Green tea has exceeded expectations and
 our growth is significantly higher than the category growth in UK.
 Super greens is the star performer in UK and the green tea portfolio,
 though small, has significantly increased in the last couple of years.
 In addition to UK, green tea has also done well in US, Canada and
 France. During the year, fruit and herbal categories were launched in
 UK and US and the initial response is positive. A new premium variant,
 the Signature Collection which was launched in Canada is gaining
 distribution and a new blend -British Brandswas launched in US.
 Various advertisement campaigns were deployed in markets to support the
 Tetley brand and new launches. Whilst in the UK there was a focus on
 Tetley advertisement using the iconic teafolkand implementation of a
 new pack, Canada concentrated on Signature Collections and new
 packaging changes. We continue to be market leaders in Canada and have
 gained volume share in the UK.
 The Company is happy to inform you that for the second year running,
 Tetley has been recoqnised in the 2015 Great Taste Awards, winning
 coveted gold stars for its Kenyan Gold (Blend Collection), Pure Green,
 Redbush Vanilla, Super Green Tea, Boost, Lime and Serenity, and Mood
 Infusions. The Great Taste Awards is one of the world''s largest and
 most trusted food and drink awards, organised by the Guild of Fine
 Food. This respected seal of approval is a sign of quality, which
 consumers can trust whilst buying food and drink from their local
 Non Cash Goodwill impairments were recorded during the year under
 review mainly relating to its businesses in Eastern Europe and US.
 While the Company is actively pursuing various growth opportunities,
 the accounting impairment has been recoqnised due to underperformances
 as compared to plans mainly arising out of factors like macro-economic
 instability in Russia and category decline in every day black tea /
 competitive intensity in other markets.
 Tata Tea Extractions Inc.
 Tata Tea Extractions Inc., a wholly owned subsidiary in the USA
 supplies customer specific tea ingredients to Iced Tea Beverage
 companies. During the year, the income from sales in underlying
 currency increased by 1%, while the Profit from Operations grew by over
 5%, when compared to the previous year. This was mainly on account of
 improved realisation from customers despite challenging market
 conditions, favourable blend mix and a marginal reduction in the cost
 of goods sold.
 In addition to the existing products, Tata Tea Extractions has
 developed a new formulation during the year to cater to the
 requirements of new customers as well as existing customers. The
 initial feedback on this formulation from some of the customers have
 been favourable. In the manufacturing plant in Munnar, we are also
 working on an enhanced product range for one of our major customers.
 Developmental activities such as these, coupled with the existing
 product range is expected to help the company to sustain and grow the
 extraction business.
 Zhejiang Tata Tea Extraction Company Limited- China Joint Venture
 Delays continue in stabilisation of the China business. While
 prospective customers have shown interest in our instant tea products,
 the final conversion to orders will be dependent on meeting the product
 profile requirements. Going forward, stabilising the production process
 and establishing a pipeline of external customers and successful
 scaling of technology will be key to the success of the project. In
 view of the continued uncertainty of the business, your Company is
 evaluating various options for restructuring the business.
 Estate Management Services Private Limited (EMSPL)
 Estate Management Services Private Limited, Sri Lanka (EMSPL) in which
 your Company owns 31.85% of the shares, is the holding company of
 Watawala Plantations Limited (WPL). WPL is one of the largest producers
 of tea and palm oil in Sri Lanka and amongst the most efficiently run
 in that country. EMSPL also owns Watawala Tea Ceylon Limited (WTCL)
 which is in the branded business and owns three key
 brands''Zesta'',''Watawala'' and''Ran Kahata''which together command 33%
 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 Middle East.
 EMSPL has continued to perform well during 2015-16. Watawala
 Plantations PLC registered growth in profitability driven by better
 performance of tea and rubber segments. Watawala Tea Ceylon also
 recorded healthy growth in operating performance with both revenue and
 profitability substantially improving over the previous financial year.
 Companies which have become or ceased to be Subsidiaries, Associates
 and Joint Ventures
 During 2015-16, RBC Hold Co LLC ceased to be a subsidiary as it was
 dissolved during the year. As stated above, Mount Everest Mineral Water
 Limited, an erstwhile subsidiary, was amalgamated with the Company,
 effective 18th May, 2015. No other company became or ceased to be a
 subsidiary, joint venture or associate during 2015-16.
 Human Resources and Industrial Relations
 During the year under review, a key agenda of the Company was to
 prioritise HR imperatives to support the Company''s ambitious growth
 plans. The theme was ''Raising the Bar''and laying down practices on HR
 policies and principles to support in accelerating business Growth. The
 Company further continued leveraging the 3 tier leadership program to
 build the leadership capabilities across regions.
 During the year under review, industrial relations remained harmonious
 at all our offices and establishments.
 Corporate Governance and MD &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.
 Vigil Mechanism /Whistle Blower Policy
 The Company has a vigil mechanism for directors and employees to report
 their concerns about unethical behaviour, actual or suspected fraud or
 violation of the code of conduct/business ethics that provides for
 adeguate safeguards against victimisation of the director(s) and
 employee(s) who avail of the mechanism.  No director/employee has been
 denied access to the Chairman of the Audit Committee.
 Internal Financial Controls
 The Company has adeguate system of Internal Controls which are detailed
 in the Management Discussion and Analysis Report.
 Governance Guidelines
 The Company has adopted a governance guidelines on Board effectiveness.
 The guidelines cover aspects relating to composition and role of the
 Board, Chairman and Directors, Board diversity, definition of
 independence, term of directors, retirement age and committees of the
 Board. The guidelines also cover aspects relating to nomination,
 appointment and induction and development of directors, directors
 remuneration, subsidiary oversight, code of conduct, Board
 effectiveness reviews and mandates of Board committees.
 Procedure for Nomination and appointment of directors
 The Nomination and Remuneration Committee (NRC) is responsible for
 developing competency requirements for the Board based on the industry
 and strategy of the Company. The Board composition analysis reflects
 in-depth understanding of the Company, including its strategies,
 environment, operations, financial condition and compliance
 The NRC makes recommendations to the Board in regard to appointment of
 new directors. The NRC also conducts a gap analysis to refresh the
 Board on a periodic basis, including each time a directors appointment
 or re-appointment is required. The NRC is also responsible for
 reviewing the profiles of potential candidates vis-a-vis the required
 competencies, undertake a reference and due diligence and meeting of
 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 NRC has formulated the criteria for determining qualifications,
 positive attributes and independence of directors in terms of the
 provisions of Section 178(3) of the Companies Act, 2013 and Regulation
 19 of the Securities and Exchange Board of India (Listing Obligations
 and Disclosure Requirements) Regulations, 2015 (Listing Regulations),
 the key features of which are:
 Qualifications -The Board nomination process encourages diversity of
 thought, experience, knowledge, age and gender. It also ensures that
 the Board has an appropriate blend of functional and industry
 Positive Attributes- Apart from the duties of directors as prescribed
 in the Companies Act, 2013, the directors are expected to demonstrate
 high standards of ethical behaviour, communication skills and
 independent judgment. The directors are also expected to abide by the
 respective Code of Conduct as applicable to them.
 Independence - A director will be considered independent if he / she
 meet the criteria laid down in Section 149(6) of the Companies Act,
 2013 and Regulation 16(1)(b) the Listing Regulations.
 Annual Evaluation of the Board, its Committees and Individual Directors
 The Board of directors had carried out an annual evaluation of its own
 performance, board committees and individual directors as required
 under the Companies Act, 2013 and the Listing Regulations. The
 performance of the board was evaluated by the board after seeking
 inputs from all the directors on the basis of criteria such as board
 composition, structure, board processes and their effectiveness,
 information given to the board etc. The performance of the board
 committees was evaluated by the board after seeking inputs from the
 committee members on the basis of criteria such as committee
 composition, structure, effectiveness of committee meetings etc.
 The Board and the NRC reviewed the performance of the individual
 directors on the basis of criteria such as contribution at meetings,
 their preparedness on the issues to be discussed etc.  Additionally the
 Chairman was also evaluated on key aspects of his role.
 Remuneration Policy
 The NRC has formulated a policy relating to the remuneration for the
 directors, key managerial personnel and other employees.  The
 philosophy for remuneration is based on the commitment of fostering a
 culture of leadership with trust. The remuneration policy has been
 prepared pursuant to the provisions of Section 178(3) of the Companies
 Act, 2013, and Regulation 19 of the Listing Regulations. While
 formulating this policy, the NRC has considered the factors laid down
 in Section 178(4) of the Companies Act, 2013, which are as under:
 That the level and composition of remuneration is reasonable and
 sufficient to attract, retain and motivate directors of the quality
 required to run the company successfully;
 Relationship of remuneration to performance is clear and meets
 appropriate performance benchmarks; and
 Remuneration to directors, key managerial personnel and senior
 management involves a balance between fixed and incentive pay
 reflecting short and long-term performance objectives appropriate to
 the working of the company and its goals.
 The key principles governing the remuneration policy are as follows:
 Market competitiveness
 Role played by the individual
 Reflective of size of the company, complexity of the sector/ industry/
 company''s operations and the company''s capacity to pay
 Consistent with recoqnised best practices and Aligned to any regulatory
 In accordance with the policy, the Managing / Executive directors /
 KMPs / employees are paid basic/ fixed salary, benefits, perquisites
 and allowances and annual incentive remuneration/ performance linked
 bonus subject to achievement of certain performance criteria and such
 other parameters as may be considered appropriate from time to time by
 the Board. The performance linked bonus would be driven by the outcome
 of the performance appraisal process and the performance of the
 Remuneration for independent directors and non independent non
 executive directors
 The non-executive Directors, including Independent Directors, are paid
 Sitting fees for attending the meetings of the Board and Committees of
 the Board. The overall remuneration (sitting fees and commission)
 should be reasonable and sufficient to attract, retain and motivate
 directors aligned to the requirements of the Company including
 considering the challenges faced by the Company and its future growth
 imperatives. The remuneration should also be reflective of the size of
 the Company, complexity of the business and the Company''s capacity to
 pay the remuneration.
 The Company pays a sitting fee of Rs. 30,000 per meeting per director
 for attending meetings of the Board, Audit, Nomination and Remuneration
 and Executive Committees (Rs. 20,000 in case of Mr. Cyrus Mistry,
 Chairman and Mr. Harish Bhat, Director). For meetings of all other
 Committees of the Board, a sitting fee of Rs. 20,000 per meeting per
 director is paid (Rs. 15,000 in case of Mr.  Cyrus Mistry, Chairman and
 Mr. Harish Bhat, Director). Within the ceiling of 1% of net profits of
 the Company computed under the applicable provisions of the Companies
 Act, 2013, the Non-Executive Directors including Independent Directors
 are also paid a commission, the amount whereof is recommended by the
 NRCand determined by the Board. The basis of determining the specific
 amount of commission payable to a Non-Executive Director is related to
 his attendance at meetings, role and responsibility as Chairman/Member
 of the Board/Committees and overall contribution as well as time spent
 on operational matters other than at the meetings. The shareholders of
 the Company had approved payment of commission to the non-executive
 directors at the Annual General Meeting held on 26th August 2014, which
 is valid up to the financial year ending 31st March 2019. No Stock
 option has been granted to the Non-Executive Directors.
 Familiarisation programme for independent directors
 The details for familiarisation of the independent directors are given
 in the website and the same can be accessed at the link boa rd-of-di
 As required under Regulation 46(2)(i) of the Listing Regulations, the
 details of familiarisation programmes conducted during the year
 2015-16, is also put on the Company''s website.
 Number of meetings of the Board
 Nine meetings of the Board of Directors were held during the year
 2015-16. For further details, please refer to the Corporate Governance
 Report, which forms part of this Annual Report.
 Audit Committee
 The details pertaining to composition of audit committee are included
 in the Corporate Governance Report which forms part of this Annual
 Significant and material orders passed by the Regulators or Courts
 There are no significant and material orders passed by the
 Regulators/Courts that would impact the going concern status of the
 Company and its future operations.
 Corporate Social Responsibility and Sustainability initiatives
 The Natural Beverages Policy of Tata Global Beverages is the apex
 policy that incorporates all relevant elements of Sustainability,
 Corporate Social Responsibility, Affirmative Action, Community
 Initiatives and volunteering. It is aligned with the Tata Group
 Sustainability Policy, and is applicable to all units of Tata Global
 Beverages, including associate companies and joint ventures.  Through
 this policy, Tata Global Beverages aspires for global sustainability
 leadership in the natural beverages sector. The policy states that/Tata
 Global Beverages is committed to be the most admired natural beverage
 company in the world by making a big and lasting difference through
 Sustainability and Corporate Social Responsibility. We shall achieve
 this by being the consumer''s first choice in sustainable beverage
 production and consumption/The policy is built around the five pillars
 of sustainability - community development, sustainable sourcing,
 climate change, water management and waste management.
 In compliance with Section 135 of Companies Act, 2013, Tata Global
 Beverages has undertaken CSR activities, projects and programs,
 excluding activities undertaken in pursuance of its normal course of
 business. The report on CSR activities as required under Companies
 (Corporate Social Responsibility Policy) Rules, 2014 is given in
 Annexure 1 forming part of this report. The CSR Policy may be accessed
 on the Company''s website at the link
 default-document-libra ry/corporate-social-responsibility-policy/2
 During the year under review, the Company has spent Rs. 5.53 Crores
 (around 2.46% of the average net profits of last three financial years)
 on CSR activities on projects qualifying as per Section 135 of the
 Companies Act, 2013 duly approved by the CSR Committee.
 In addition to the projects specified as CSR activities under Section
 135 of Companies Act 2013, the Company has also carried out several
 other sustainability/ responsible business initiatives and projects on
 a global scale. In 2015, for the fourth year in a row, Tata Global
 Beverages (TGB) was recoqnised on the Climate Disclosure Leadership
 Index (CDLI), and ranked second in India by CDR
 Particulars of employees
 The Information required under Section 19/ read with Rule 5(1) of the
 Companies (Appointment and Remuneration of Managerial Personnel) Rules,
 2014 are given in Annexure 2 which forms part of this report.
 Pursuant to Section 19/ (14) of the Companies Act, 2013 the details of
 remuneration received by the Managing and Executive directors from the
 Company''s subsidiary company during 2015-16 are also given in Annexure
 2 attached to this report.
 Particulars of Loans, Guarantees or Investments by the Company
 Details of Loans, Guarantees and Investments covered under the
 provisions of Section 186 of the Companies Act, 2013 are provided in
 Annexure 3 attached to this report.
 Risk Management
 The Risk Management Committee of the Board is entrusted with the
 responsibility to assist the Board in overseeing and approving the
 Company''s risk management framework. The Company has a comprehensive
 Risk policy and a Risk Register detailing the risks that the Company
 faces under various categories like strategic, financial, commercial,
 operational, IT, legal, regulatory, people, reputational and other
 risks and these have been identified and suitable mitigation measures
 have also been formulated. The Risk Management Committee reviews the
 key risks, the Risk register and the mitigation measures periodically.
 The Audit Committee has additional oversight in the area of financial
 risks and control.
 Disclosures as per the Sexual Harassment of Women at Workplace
 (Prevention, Prohibition and Redressal) Act, 2013
 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 for prevention and
 redressal of complaints of sexual harassment at workplace.
 Deposits from public
 The Company has not accepted any deposits from the public during the
 year under review. No amounts on account of principal or interest on
 deposits from public was outstanding as on 31st March 2016.
 Secretarial Audit
 Pursuant to the provisions of Section 204 of the Companies Act, 2013
 and the Companies (Appointment and Remuneration of Managerial
 Personnel) Rules, 2014, the Company has appointed Dr. Asim Kumar
 Chattopadhyay, Company Secretary in Practice, to carry out the
 Secretarial Audit of the Company. The Report of the Secretarial Audit
 for 2015-16 is attached herewith as Annexure 4.  There are no
 qualifications in the said report.
 Annual Return
 As provided under Section 92(3) of the Companies Act, 2013, the extract
 of annual return in Form MGT-9 is given in Annexure 5 which forms part
 of this report.
 Directors'' Responsibility Statement
 Pursuant to Section 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 2016, 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 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 2016 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.
 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 including audit of
 internal financial controls over financial reporting by the statutory
 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 2015-16.
 Related Party Transactions
 All Related party transactions that were entered into during the
 financial year were on an arms length basis and in the ordinary course
 of business. There are no material significant related party
 transactions made by the Company during the year that would have
 required shareholder approval under Regulation 23(4) of the Listing
 Regulations and the erstwhile Clause 49 of the Listing Agreement. All
 related party transactions are reported to the Audit Committee. Prior
 approval of the Audit Committee is obtained for the transactions which
 are planned and/ or repetitive in nature and omnibus approvals are
 taken within the criteria/ limits laid down for unforeseen
 transactions. The disclosure under Section 134(3)(h) of the Companies
 Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014
 is not applicable. The Policy on Related Party transactions as approved
 by the Board has been uploaded on the Company''s Website and may be
 accessed at the link
 The details of the transactions with related parties during 2015-16 are
 provided in the accompanying financial statements.
 None of the Directors had any pecuniary relationship or transactions
 with the Company during the year under review.
 Directors and key managerial personnel
 At the Annual General Meeting of the Company held on 26th August 2014,
 the members had approved the appointments of Mr. Analjit Singh, Mrs.
 Mallika Srinivasan, Mr.V Leeladhar, Mrs. Ranjana Kumar, Mr. Darius
 Pandoleand Mrs. IreenaVittal as Independent Directors for a term of
 five years from 26th August 2014. All the independent directors have
 given declarations that they meet the criteria of independence as
 provided in Section 149(6) of the Companies Act, 2013 and Regulation
 16(1)(b) of Listing Regulations. In the opinion of the Board, they
 fulfill the conditions of independence as specified in the Act and the
 Rules made thereunder and they are independent of the management.
 Mr. Cyrus P Mistry retires by rotation at the forthcoming Annual
 General Meeting and being eligible, offers himself for re-election.
 Brief particulars and expertise of Mr. Mistry together with his 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 Regulations.
 No director or key managerial personnel was appointed or has retired or
 resigned during the year under review.
 Auditors and Auditors'' Report
 The Members at the Annual General Meeting held on 26th August 2014, had
 appointed M/s. Lovelock and Lewes, as the Statutory Auditors for three
 years subject to ratification by the members each year. The members are
 requested to ratify the appointment of M/s. Lovelock and Lewes as
 Statutory Auditors from the conclusion of the fifty third Annual
 General Meeting till the conclusion of the fifty fourth Annual General
 Meeting. The Auditors'' report on the financial statements for the year
 2015-16 does not contain any qualifications, reservations or adverse
 Cost Auditors
 Your Board has appointed M/s. Shome and Banerjee, 5A Nurulla Doctor
 Lane, 2nd Floor, Kolkata - 700 017 as cost auditors of the Company for
 conducting cost audit for the financial year 2016-17.  The members are
 requested to ratify the remuneration payable to the Cost Auditors for
 Disclosure requirements
 The information on conservation of energy, technology absorption and
 foreign exchange earnings and outgo pursuant to Section 134(3)(m) of
 the Companies Act, 2013, read with Rule 8(3) of the Companies
 (Accounts) Rules, 2014 is given in Annexure 6 attached to this report.
 Concluding Remarks
 The Directors wish to convey their appreciation to all of the Company''s
 employees for their sincere and dedicated services as well as their
 collective contribution to the Company''s performance.
                                 On behalf of the Board of Directors
 Mumbai,                                              Cyrus P Mistry
 24th May 2016                                              Chairman
Source : Dion Global Solutions Limited
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