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Notes to Accounts of Tata Global Beverages Ltd.

Mar 31, 2016

1. General Information:

Tata Global Beverages Limited ("the holding company") and its subsidiaries, joint ventures and associates (together, "the Group") is a global beverages company engaged in the trading, production and distribution of Tea, Coffee and Water. The group has branded beverage business operations mainly in India, Europe, US, Canada and Australia, plantation business in India/Sri Lanka and extraction business mainly in India, US and China.

2. Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2016 aggregated Rs. 2.29 Crores (Rs. 7.70 Crores) (Capital Advances Rs. 1.15 Crores (Rs. 1.83 Crores)).

3. Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the confirmations received in response to intimation in this regard sent by the Company to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at March 31, 2016.

4. The company had entered into a put option agreement with International Finance Corporation (IFC) in relation to their investment in Amalgamated Plantations Private Limited (APPL) under which IFC could exercise a put option by 29th April 2016, with an obligation on the Company to purchase a maximum of 300 Lakhs shares. This option was not exercised by IFC.

5. (a) During the previous year, pursuant to a Scheme of Amalgamation of Mount Everest Mineral Water Limited (Subsidiary of the Company) with the Company as sanctioned by the Honorable High Courts of Himachal Pradesh and Calcutta, all assets and liabilities of the subsidiary had been transferred to and vested with the Company retrospectively with effect from 1st April 2013.

The amalgamation has been accounted for in the books of account of the Company according to the "Pooling of Interests Method" of accounting as per the Accounting Standard (AS) 14, ''Accounting for Amalgamations'' specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014.

All assets and liabilities, reserves have been recorded in the books of account of the Company at their existing carrying amounts and in the same form.

Further, in accordance with the Scheme, the difference between carrying value of investments in the Amalgamating Company as reflected in the books of the Company and the corresponding paid up capital of the amalgamating Company along with the debit balance in the Statement of Profit and Loss as of April 1, 2013 of the Amalgamating Company had been adjusted against the securities premium account of the Company. The application and reduction of the securities premium account was effected as an integral part of the sanctioned Scheme under reference to section 391 and section 394 of the Companies Act, 1956 read with section 78 and section 100 of the Companies Act, 1956.

(b) The company during 2013-14 had entered into a development agreement with Tata Reality and Infrastructure Limited for development of commercial /residential property through a special purpose vehicle TRIL Constructions Limited (TCL). The consideration for the transfer of land with buildings/structures in Yehswantpur, Bangalore was Rs. 195 Crores. The said consideration was discharged by combination of cash, investment in TCL through equity and compulsorily convertible preference shares (Refer Note 13 - Non-Current Investments) and constructed office space in the property to be developed.

6. (a) During the year the Company has evaluated its exposure in its Chinese Subsidiary Company which is under Joint Venture Control. In view of delays in startup and stabilisation of technology for an enhanced product range and on considerations of accounting prudence the Company has recoqnised a provision of Rs. 52.25 Crores (Rs. 23.69 Crores) on account of obligations arising from bank loans availed by the Subsidiary. In previous year the Company had recoqnised a dimuntion, other than temporary, in its investment and convertible loans cumulating to Rs. 38.24 Crores.

(b) The Company has recoqnised an impairment loss in the carrying value of its Patent/Knowhow. The impairment arose on account of revision in the business plans with lower than expected economic benefits over its estimated useful life. A pre tax discounting rate of 22.3 % has been used for value in use evaluation (Refer Note 48).

7. The current tax charge is net of credit on account of writebacks pertaining to earlier years of Rs. 18.10 Crores (Rs. 51.40 Crores). Prior year included one-time credit arising on amalgamation of Mount Everest Mineral Water Limited with the Company and credit relating to debenture redemption premium charged to Securities Premium account in an earlier year.

8. Corporate Social Responsibility (CSR)

As per Section 135 of the Companies Act, 2013, a CSR Committee has been formed by the Company.

(a) Gross Amount required to be spent by the Company during the year Rs. 4.50 Crores

(b) Amount spent during the year on:

9. The Company''s leasing arrangements are in respect of operating leases for premises (residential, office, godown etc.) and motor cars.

These operating leasing arrangements which are cancellable ranges between 5 months to 5 years and are usually renewable on mutually agreeable terms. The aggregate lease rentals payable in respect of premises are charged as Rent and in respect of motor cars amounting to Rs. 4.59 Crores (Rs. 4.34 Crores) are charged under Miscellaneous expense under Note 29 of the Statement of Profit and Loss.

10. A) Related Party Disclosure Related Parties Promoter

Tata Sons Limited

Subsidiaries

Tata Global Beverages Group Limited

Tata Global Beverages Holdings

Tata Global Beverages Services Limited

Tata Global Beverages GB Limited

Tata Global Beverages Overseas Holdings Limited

Tata Global Beverages Overseas Limited

Lyons Tetley Limited

Tata Global Beverages U.S. Holdings, Inc.

Tetley USA Inc.

Tata Global Beverages Canada Inc.

Tata Global Beverages Australia Pty Limited

Stansand Limited

Stansand (Brokers) Limited

Stansand (Africa) Limited

Stansand (Central Africa) Limited

Tata Global Beverages Polska Sp.z.o.o

Drassington Limited, UK

Good Earth Corporation

Good Earth Teas Inc.

Teapigs Limited

Teapigs US LLC.

Tata Global Beverages Czech Republic a.s

Joekels Tea Packers (Proprietary) Limited (South Africa)

Tata Global Beverages Investments Limited

Campestres Holdings Limited

Kahutara Holdings Limited

Suntyco Holding Limited

Onomento Co. Limited

OOO Tea Trade LLC

OOO Sunty LLC

Tata Cofee Limited

Consolidated Cofee Inc.

Eight ''O Clock Cofee Company

Eight ''O Clock Holdings Inc.

Tata Tea Extractions Inc.

Tata Global Beverages Capital Limited

Zhejiang Tata Tea Extraction Company Limited

Tata Tea Holdings Private Limited

Earth Rules Pty. Ltd.

Associates

Estate Management Services Pvt. Limited, Sri Lanka

Amalgamated Plantations Pvt. Limited

Kanan Devan Hills Plantation Company Private Limited

TRIL Constructions Limited

Joint Ventures

NourishCo Beverages Limited

Tata Starbucks Private Limited

Associates of Subsidiaries

Bjets Pte. Ltd.

Joint Venture of Subsidiaries

Tetley ACI (Bangladesh) Limited

Southern Tea LLC

Empirical Group LLC

Tetley Clover (Private) Limited

Key Management Personnel

Mr. Ajoy Misra - CEO & Managing Director

Mr. L KrishnaKumar - Executive Director & Group CFO

11. The Company is primarily engaged in tea with some presence in cofee and water. As per the threshold limits prescribed under Accounting Standard (AS-17) on "Segment Reporting" specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, the Company''s reportable activity falls within a single business segment, viz "Buying / Blending and Sale of tea in bulk and value added form" and hence the disclosure requirements are not applicable. It has identified Geographical segment as the secondary segment. During the year and previous year, the value of export sales made by the Company did not exceed the quantitative threshold provided for the relevant Accounting Standards. Accordingly no disclosures in the secondary format of geographical segment is required.

12. Post Retirement Employee Benefits:

The Company operates defined benefit schemes like provident fund and defined contribution superannuation schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. In case of provident fund schemes, contributions are also made by the employees. An amount of Rs. 10.03 Crores (Rs. 9.35 Crores) has been charged to the statement of profit & loss on account of defined contribution schemes.

The Company also operates defined benefit schemes like retirement gratuity, defined superannuation benefits and post retirement medical benefits. The superannuation benefits and medical benefits are restricted to certain categories of employees and qualifying employee/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same (others). The defined benefit schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognized funds have been set up, annual contributions are also made by the Company. Employees are not required to make any contribution.

13. Disclosure requirement for Derivatives Instruments

The Company uses foreign currency hedges to manage its risks associated with foreign currency fluctuations relating to certain firm commitments and highly probable transactions. The Company does not use derivative contracts for trading or for speculative purposes.

14. Unless otherwise stated, figures in brackets relate to previous year and have been rearranged / regrouped wherever necessary.


Mar 31, 2014

1. Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31st March 2014 aggregated Rs 772.40 Lakhs (Rs. 636.37 Lakhs) [Net of advances Rs 271.89 Lakhs (Rs 103.24 Lakhs)].

2. Contingent Liabilities not provided for in respect of:

(a) Claims under adjudication not acknowledged as debts:

Gross Net of Estimated Tax Rs in Lakhs Rs in Lakhs

(i) Taxes, Statutory Duties/ Levies etc. 1111.91 691.97

(1060.45) (665.19)

(ii) Commercial and other Claims 450.87 287.20

(500.61) (315.26)

(b) Labour disputes under adjudication relating to some staff - amount not ascertainable.

(c) Guarantee given to the lender of subsidiaries Rs 2893.89 Lakhs (Rs.13221.77 Lakhs) out of which Rs Nil (Rs.13221.77 Lakhs) is fully backed by a counter guarantee given by another subsidiary

3. Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the confirmations received in response to intimation in this regard sent by the Company to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at 31st March 2014.

4. The Company had entered into a put option agreement with International Finance Corporation (IFC) in relation to their investment in Amalgamated Plantations Private Limited (APPL). In terms of the said agreement, IFC has the right to exercise a put option whereby the Company is obliged to purchase a maximum of 300 lakhs shares in APPL, if certain conditions or events stipulated in the said agreement do not occur.

5. a) The Company''s leasing arrangements are in respect of operating leases for premises (residential, office, godown, etc.) and motor cars.

These operating leasing arrangements which are cancellable ranges between 5 months to 5 years and are usually renewable on mutually agreeable terms. The aggregate lease rentals payable in respect of premises are charged as Rent and in respect of motor cars amounting to Rs. 406.16 Lakhs (Rs.337.78 Lakhs) are charged under Miscellaneous expense under Note 28 of the statement of Profit and loss account.

6. The Company has only one reportable primary segment i.e. tea. It has identified Geographical segment as the secondary segment During the year and the previous comparable year, the value of export sales made by the Company did not exceed the quantitative threshold set. Accordingly, reporting on disclosures in the secondary format of geographical segment are not applicable to the Company.

7. The Board of Directors of the Company in its meeting held on 12th November 2013 had approved the scheme of merger of its subsidiary, Mount Everest Mineral Water Limited (MEMW), with the Company in terms of a scheme of amalgamation under Section 391-394 and other applicable provisions of the Companies Act, 1956. The necessary approvals from the Stock exchanges and SEBI have been obtained. The scheme is proposed to be placed for approval at a Court convened meeting of the shareholder of the Company to be held on 4th June 2014. The appointed date of the scheme is 1st April 2013. The scheme would be effective on the receipt of necessary approvals and completion of formalities as laid down there under. Accordingly, the operating results of MEMW would be reflected by the Company from the appointed date of 1st April 2013 after the scheme becomes effective post obtaining all the requisite approvals. In terms of the scheme, till such date the scheme becomes effective the merging entity''s business operations are being carried out in trust on behalf of the Company.

8. Unless otherwise stated, figures in brackets relate to previous year and have been rearranged/regrouped wherever necessary.


Mar 31, 2013

1. General Information:

Tata Global Beverages Limited ("the holding company") and its subsidiaries, joint ventures and associates (together, "the Group") is a global beverages company engaged in the trading, production and distribution of Tea, Coffee and Water. The group has branded beverage business operations mainly in India, Europe, US, Canada and Australia, plantation business in India/Sri Lanka and extraction business mainly in lndia, US and China.

Redeemable at premium of Rs. 195247 per debenture on 4.11.2013, at the end of 3 years from the date of a llotment 4.11.2010.

Series 1 - 3000 Debentures aggregating to Rs. 30000 Lakhs are secured by way of a first mortgage on certain immovable properties of the Company and first ranking exclusive charge on Long-Term Bank Deposit of Rs. 3000 Lakhs.

Series 2 - 250 Debentures aggregating to Rs. 2500 Lakhs are secured by way of a first mortgage on certain immovable properties of the Company and pledge of shares of certain companies held as investments

2. Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 st March 2013 aggregated Rs 636.37 Lakhs (Rs. 689.63 Lakhs) (Net of advances Rs. 103.24 Lakhs (Rs. 32.96 Lakhs)).

3. Contingent Liabilities not provided for in respect of:

(a) Claims under adjudication not acknowledged as debts:

Gross Net of Estimated Tax Rs. in Lakhs Rs. in Lakhs

(i) Taxes, Statutory Duties/ Levies etc. 1060.45 665.19

(700.01) (434.92)

(ii) Commercial and other Claims 500.61 315.26

(483.25) (311.63)

(b) Labour disputes under adjudication relating to some staff - amount not ascertainable.

(c) Counter Guarantee given on behalf of an Associate Company Rs. Nil (Rs. 21.30 Lakhs).

(d) Guarantee given to the lender of a subsidiary Rs. 13221.77 Lakhs (Rs. 6788.60 Lakhs), which is fully backed by a counter guarantee given by another subsidiary.

4. Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the confirmations received in response to intimation in this regard sent by the Company to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at 31st March 2013.

5 a) The Company had entered into a put option agreement with International Finance Corporation (IFC) in relation to their investment in Amalgamated Plantations Private Limited (APPL). In terms of the said agreement, IFC has the right to exercise a put option whereby the Company is obliged to purchase a maximum of 300 Lakhs shares in APPL, if certain conditions or events stipulated in the said agreement do not occur.

6. a. The Company''s leasing arrangements are in respect of operating leases for premises (residential, office, godown, etc.) and motor cars and finance lease for certain plant and machinery.

These operating leasing arrangements which are cancellable ranges between 5 months to 5 years and are usually renewable on mutually agreeable terms. The aggregate lease rentals payable in respect of premises are charged as Rent and in respect of motor cars amounting to Rs. 337.78 Lakhs (Rs. 282.68 Lakhs) are charged under Miscellaneous expense under Note 29 of Statement of Profit and Loss.

7. a) Related Party Disclosure

Related Parties Promoter

Tata Sons Limited.

Subsidiaries

Tata Global Beverages Group Limited

Tata Global Beverages Holdings

Tata Global Beverages Services Limited

Tata Global Beverages GB Limited

Tata Global Beverages Overseas Holdings Limited

Tata Global Beverages Overseas Limited

Lyons Tetley Limited

Tata Global Beverages U.S. Holdings, Inc.

Tetley USA Inc.

Tata Global Beverages Canada Inc.

Tata Global Beverages Australia Pty Limited

Stansand Limited

Stansand (Brokers) Limited

Stansand (Africa) Limited

Stansand (Central Africa) Limited

Tata Global Beverages Polska Sp.z.o.o

Drassington Limited, UK

Good Earth Corporation

Good Earth Teas Inc.

Tea pigs Limited

Tata Global Beverages Czech Republic a.s.,

Joekels Tea Packers (Proprietary) Limited (South Africa) Tata Global Beverages Investments Limited Campestres Holdings Limited Kahutara Holdings Limited Suntyco Holding Limited Onomento Co Limited OOO Tea Trade LLC OOO Sunty LLC

Tata Coffee Limited

Consolidated Coffee Inc.

Eight ''O Clock Holdings Inc.

Eight ''O Clock Coffee Inc.

Alliance Coffee Limited Ta ta Tea Extractions Inc.

Tata Global Beverages Capital Limited Mount Everest Mineral Water Limited Zhejiang Tata Tea Extraction Company Limited.

Tata Tea Holdings Private Limited

Associates

Estate Management Services Pvt. Limited, Sri Lanka Amalgamated Plantations Pvt. Limited

Kanan Devan Hills Plantation Company Pvt. Limited (w.e.f. 30th October 2012)

Joint Ventures

NourishCo Beverages Limited Tata Starbucks Limited

Associates of Subsidiaries

The Rising Beverages Company LLC Bjets Pte. Limited (w.e.f. 30th January 2012)

Joint Venture of Subsidiaries

Tetley ACI (Bangladesh) Limited Southern Tea LLC Empirical Group LLC Tetley Clover (Private) Limited.

Ta ta Coffee (Uganda) Ltd. (Dissolved on 21st December 2012)

Key Management Personnel

Mr. P T Siganporia - Managing Director (till 30.06.2012)

Mr. Harish Bhat - Managing Director (w.e.f. 01.07.2012)

Mr. Ajoy Misra - Executive Director

7. The Company has only one reportable primary segment i.e. tea. 11 has identified Geographial segment as the secondary segment. During the year and the previous comparable year, the value of export sales made by the Company did not exceed the quantitative threshold set. Accordingly, reporting on disclosures in the secondary format of geographical segment are not applicable to the Company.

8. Post Retirement Employee Benefits:

The Company operates defined benefit schemes like provident fund and defined contribution superannuation schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognised funds maintained by the Company and for certain categories contributions are made to State Plans. In case of Provident Fund schemes, contributions are also made by the employees. An amount of Rs 706.49 Lakhs (Rs. 641.49 Lakhs) has been charged to the Statement of Profit and Loss on account of defined contribution schemes.

The Company also operates defined benefit schemes like retirement gratuity, defined superannuation benefits and post retirement medical benefits. The superannuation benefits and medical benefits are restricted to certain categories of employees. The defined benefit schemes offer specified benefits to the employees on retirement. Annual actuarial valuations are carried out by an independent actuary in compliance with Accounting Standard 15 (revised 2005) on Employee Benefits. Wherever recognised funds have been set up, annual contributions are also made by the Company. Employees are not required to make any contribution.

During the year the Company has adopted a policy for Post Retirement benefit obligation ("Others") towards qualifying Employee/ Directors in the form of pension, medical and other benefits, by using the principles as stated in AS 15- Employee Benefits. The quantum and payment of the said benefits are subject to eligibility criteria of the retiring employee/directors and is payable at the discretion of the Board after the vesting conditions are fulfilled.

The estimates of future salary increases considered in the actuarial valuation takes into account factors like inflation, future salary increases, supply and demand in the employment market etc. The expected return on plan assets is based on actuarial expectation of the average long term rate of return expected on investments of the Funds during the estimated term of the obligations.

The contribution expected to be made by the Company for the year ending 31 st March 2013 is not readily ascertainable.

The Guidance on Implementing AS 15, Employee Benefits (revised 2005) issued by Accounting Standards Board (ASB) states that benefits involving employer established provident funds, which require interest shortfalls to be recompensed are to be considered as defined benefit plans. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities during the quarter ended 31 st December 2011.

The actuary has accordingly provided a valuation and based on the below provided assumptions there is no shortfall as at 31st March 2013.

The Company has adopted a policy for Post Retirement benefit obligation towards Qualifying Employee/Directors. (Refer note 45) The liability net of deferred tax has been adjusted/reversed.

9. Unless otherwise stated, figures in brackets relate to previous year and have been rearranged/regrouped wherever necessary.


Mar 31, 2010

1. Bills discounted and remaining unpaid as at 31st March, 2010 aggregated Rs.Nil (Rs. 133.61 Lakhs).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for as at 31 st March, 2010 aggregated Rs.579.24 Lakhs (Rs. 998 Lakhs).

3. Contingent Liabilities not provided for in respect of:

(a) Claims under adjudication not acknowledged as debts:

(i) Taxes, Statutory Duties/ Levies etc.

(ii) Commercial and other Claims

(iii) Income-tax/Agricultural Income-tax

(b) Labour disputes under adjudication relating to some staff - amount not ascertainable.

(c) Counter Guarantee given on behalf of an Associate Company Rs. 34.94 Lakhs (Rs.52.69 Lakhs).

(d) Guarantee given in connection with acquisition of a subsidiary Rs. Nil (Rs.3 00 Lakhs); Guarantee given to the lender of a subsidiary Rs. 5990.57 Lakhs (Rs. Nil), which is fully covered by a counter guarantee given by another subsidiary.

4. Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the confirmations received in response to intimation in this regard sent by the Company to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at 31 st March, 2010.

5. (a) The Company had entered into a put option agreement with International Finance Corporation (IFC) in relation to their investment in Amalgamated Plantations Private Limited (APPL). In terms of the said agreement, IFC has the right to exercise a put option whereby the Company is obliged to purchase a maximum of 30 million shares in APPL, if certain conditions or events stipulated in the said agreement do not occur.

(b) The Company had entered into a put option agreement with two erstwhile promoters of Mount Everest Mineral Water Limited (MEMW) in relation to their investments in MEMW. In terms of the said agreement, the two erstwhile promoters have the right to exercise a put option whereby the company is obliged to purchase a maximum of 3.11 million shares in MEMW, if certain conditions or events stipulated in the said agreement do not occur.

6. The major components of the Deferred Tax Assets/Liabilities, based on the tax effect of the timing differences, as at 31st March, 2010,areas under:

7. Provision for tax on dividend is net of Rs. 109.47 Lakhs (Rs. 127.72 Lakhs) relating to previous year.

8. a) Basic and Diluted Earnings Per Share have been computed with reference to Profit after tax of Rs. 39147.02 Lakhs (Rs. 15906.15 Lakhs) and weighted average equity shares outstanding (nominal value Rs 10) during the year aggregating to 618.40 Lakhs shares (618.40 Lakhs shares).

b) The Board of Directors has approved sub-division of the equity shares of the Company from Rs. 10 per share to Re. 1 per share subject to approval of shareholders and other concerned authorities. Approval of the Shareholders is being sought through Postal Ballot for which notices have already been dispatched.

(iii) Commission for 2008-09 from two subsidiaries to certain directors - Rs. 8.54 Lakhs (Rs. 28.82 Lakhs).

(iv) Remuneration to Managing Director from a subsidiary - Salary and Bonus Rs. 320.87 Lakhs (Rs. 34.28 Lakhs) and other benefits Rs. 43.32 Lakhs (Rs. Nil). Salary and Bonus for the current year includes Rs. 95.20 Lakhs pertaining to 2008-09 paid in 2009-10.

(v) The above does not include share of recurring retirement benefits payable to former Managing Director.

9. Post Retirement Employee Benefits :

The Company operates defined contribution schemes like provident fund and defined contribution superannuation schemes. For these schemes, contributions are made by the Company, based on current salaries, to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. In case of Provident fund schemes, contributions are also made by the employees. An amount of Rs. 648.91 Lakhs (Rs. 523.39 Lakhs) has been charged to the Profit & Loss Account on account of defined contribution schemes.

 
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