Mar 31, 2023
1) Certain Plantation land meant for usage as tea plantations and for ancillary activities has been leased by the Company to its associate company Kanan Devan Hills Plantation Company Private Limited for a period of 30 years as part of the restructure in 2005, of its South India Plantation Operation.
2) Cost of Buildings include Rs. 5.90 Crores (Rs 5.90 Crores) represented by shares in Co-operative Housing Societies / a Company.
3) (@) Includes amount of Rs. 1.26 Crores (1.26 Crores), Rs.0.62 Crores (Rs. 0.62 Crores), Rs. 0.08 Crores (Rs.0.08 crores), respectively, jointly owned /held with a subsidiary company.
4) Land includes leasehold land amounting to Rs. 0.17 Crores (Rs. 0.17 Crores).
Branded business within India is treated as a single CGU taking into account way the business is managed and the operating structures, and as independent cash inflows are generated at the country level.
Value in use i.e. the enterprise value for each CGU is calculated using cash flow projections over a period of 5 years, with amounts based on medium term strategic plans, subject to experience adjustments. Cash flows beyond the 5 years period are extrapolated using a long term growth rate.
Key assumptions in the business plans include future revenue, associated future levels of marketing support and other relevant cost-base. These assumptions are based on historical trends and future market expectations specific to each CGU.
Other key assumptions applied in determining value in use are:
⢠Long term growth rate - Cash flows beyond the 5 years period are extrapolated using the estimated long-term growth rate applicable for the geographies in which the CGU operate.
⢠Discount rate - The discount rate is based on a Weighted Average Cost of Capital (WACC) for comparable companies operating in similar markets.
The cash generating unit is engaged in trading, manufacturing and sale of a portfolio of products catering to every day consumption needs, and have strong market position and growth potential.
Impairment charge
Based on an assessment carried out, there is no impairment charge in the current year.
Sensitivity Analysis
We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable possible changes in key assumptions based on current recent trends would cause the recoverable amount of the CGU to be less than the carrying value.
a) Inclusive of Rs. 21.86 Crores (Rs. 21.86 Crores) kept in Revaluation Reserve.
b) Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
c) During the financial year 2022-23, the Company has invested an amount of Rs. 100 Crores towards equity capital in Tata Starbucks Private Limited which is a 50:50 joint venture.
d) Investment in preference shares of Amalgamated Plantations Pvt. Ltd. subscribed in an earlier year of Rs 50.14 Crores [67000000 shares of Rs 10 each] is redeemable with a special redemption premium, on fulfilment of certain conditions, within 15 - 17 years from the date of the issue and are designated as fair value through profit and loss. Preference shares subscribed to in the financial year 2021-22 and 2022-23 of Rs 201.63 Crores[200000000 shares of Rs 10 each] are optionally convertible, cumulative and redeemable carrying an annual coupon rate of 6% with special redemption premium issued for a period of 10 years and are also designated as fair value through profit and loss.
e) Preference shares of TRIL Constructions Limited are non-cumulative and mandatorily fully convertible within twenty years from the issue date and the same is carried at cost.
f) Investment carrying values are below Rs. 0.01 crores.
g) Preference shares of TCPL Beverages & Foods Limited (TBFL) are Optionally Convertible non-cumulative and redeemable preference shares with the term of 8 years.
h) During the financial year, the Company has invested Rs 41.50 Crores in Tata SmartFoodz Limited and Rs 46.01 Crores in Tata Consumer Soulfull Private Limited as equity capital.
i) These investments are fully impaired.
j) Mutual fund investments represents surplus cash deployed as a part of treasury operations (Refer to Statement of Cashflow)
k) Refer Note 40B for investment in Tata Consumer Products UK group limited.
$ Secured by mortgage of rights on immovable assets. Loan given during the year for general corporate purposes - Kanan Devan Hills Plantations Company (Pvt.) Ltd. Rs 4 Crores (Rs NIL Crores).
* Secured by mortgage of land
a Outstanding with financial institutions for short duration and yield fixed interest rate. Loans given during the year for general corporate purposes - HDFC Limited Rs 315 Crores (Rs 295 Crores), LIC Housing Finance Limited Rs 70 Crores (Rs 124.75 Crores), Bajaj Finance Limited Rs 375 Crores (Rs 605 Crores).
aa Outstanding with Tata Smartfoodz Limited - Rs 25 Crores and Infiniti Retail Limited Rs 15 Crores for short duration and yield fixed interest rate. Loans given during the year for general corporate purposes - Tata Smartfoodz Limited Rs 25 Crores (Rs 49 Crores), Infiniti Retail Limited Rs 215 Crores (Rs 190 Crores) and Piem Hotel Limited Rs NIL (Rs 20 Crores).
ii) Rights, preferences and restrictions attached to shares
The Company has one class of equity shares having a par value of Re 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
iii) Equity shares allotted as fully paid-up (during 5 years preceding March 31, 2023) pursuant to contracts without payment being received in cash
7459935 equity shares were issued during financial year 2022-23, consequent to and as part of acquisition of TCP UK Group Limited (Refer note 40B).
290421986 equity shares were issued during the financial year 2019-20, consequent to and as part of the merger of Food business of Tata Chemicals Limited with the Company.
i. Capital Reserve
Capital Reserve was created on acquisition of certain plantation business.
ii. Securities Premium Account
Security Premium Account was created on issue of shares at premium. These reserves can be utilised in accordance with Section 52 of Companies Act 2013.
iii. Contingency Reserves
Contingency Reserves are in the nature of free reserves.
iv. Revaluation Reserve
Revaluation Reserve was created on acquisition of shares in Tata Coffee Limited (Refer note 6 - footnote a).
v. Share Based Payment Reserve
Share-based payment reserve represents amount of fair value, as on the date of grant, of unvested and vested shares not exercised till date, that have been recognised as expense in the statement of profit and loss till date.
Consequent to the amendments in the Income Tax Act, 1961, depreciation on Goodwill is no longer available as a deduction from taxable income with effect from April 1, 2020, except that its written down value is available as a deduction in the event of sale of the underlying business. On goodwill of Rs 3578.51 crore recognised in the financial statements, through business combinations, no additional taxable temporary differences are expected to arise, having regard to the nature of the businesses to which the goodwill relates. (also refer notes 2.3(a) and 5)
Employee Shared based payment incentives
The Company has share based incentives for certain employees under Tata Consumer Products Limited - Share-based Long Term Incentive Scheme 2021 ("TCPL SLTI Scheme 2021â) approved by Nomination and Remuneration Committee (NRC).
As per the scheme, the number of shares that will vest is conditional upon certain performance measures being achieved and will be settled through equity shares only. The performance will be measured over vesting period of 3 years. The shares granted under this scheme is exercisable by employees till one year from date of its vesting.
The Company has granted performance share units at an exercise price of Re 1 per shares. Shares granted will vest after 3 years from date of grant. Number of shares that will vest range from 0.5 to 1.2 per performance share unit granted depending on performance measures achieved.
During the year, the performance share units were granted on May 04, 2022 and August 10, 2022. The estimated fair value of performance share units are based on the quoted share price. The aggregate of the estimated fair values of the performance share units granted is Rs 8.59 Crores (Rs 5.36 crores) which will be recognised in the Statement of Profit and Loss over the vesting period.
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2023 aggregated Rs. 12.41 Crores (Rs. 20.43 Crores).
(b) Commitment towards Share Capital contributions in Joint Ventures and Associates - Rs. 25.00 Crores (Rs. 171.00 Crores)
(a) Statutory and other Commercial Claims:
Rs. in Crores |
||
Gross |
Net of Estimated Tax |
|
(i) Taxes, Statutory Duties/ Levies etc. |
21.97 |
20.04 |
(22.59) |
(20.67) |
|
(ii) Commercial and other Claims |
2.70 |
2.43 |
(2.40) |
(1.97) |
|
(b) Labour disputes under adjudication relating to some staff - amount not ascertainable. |
31. 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, 2023.
The Companyâs leasing arrangements are in respect of operating leases for premises (residential, office, factory, godown, etc.) and motor cars. These range between 5 months - 20 years and usually renewable on mutually agreed terms.
The Company has disclosed segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 âOperating Segmentsâ, no disclosures related to segments are presented in this standalone financial statements.
B. Measurement of fair values
The basis of measurement in respect to each class of financial asset, financial liability is disclosed in note 2.2(h) of the financial statement.
The fair value of liquid mutual funds and long term equity investment is based on active market. Fair values of certain non-current investment are valued based on discounted cash flow/book value/EBITDA multiple approach. Derivative financial instruments are generally valued based on Black-Scholes-Merton approach/ Dollar offset principles.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk ;
⢠Liquidity risk ; and
⢠Market risk
i. Risk management framework
The Risk Management Committee of the Board is entrusted with the responsibility to assist the Board in overseeing and approving the Companyâs risk management framework. The Company has a comprehensive Risk policy relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
ii. Credit risk
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.
Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Companyâs approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
iii. Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Companyâs approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
The following are the remaining contractual maturities of financial liabilities (excluding lease liabilities) at the reporting date. The amounts are gross and undiscounted, and exclude the impact of netting agreements.
iv. Market risk
Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rate risk and commodity price risk.
The Company operates across various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
During the year, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedge items.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retiral benefits. The Company generally utilises fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.
The Companyâs equity investments are mainly strategic in nature and are generally held on a long term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
The Company is exposed to the fluctuations in commodity prices mainly for tea, salt and pulses. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. For tea, the Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend. For salt and pulses, these fluctuations are managed through active sourcing and commercial negotiation with customers and suppliers.
The Companyâs objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.
(ii) Defined Benefits:
Gratuity, Pension and Post Retiral Medical Benefits:
The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and postretirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a
specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 daysâ last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
The Company contributes all its ascertained liabilities towards gratuity to the trust set up for the same. Trustees administer the contributions made to the trust. As at March 31, 2023 and March 31, 2022, the plan assets have been primarily invested in insurer managed funds.
Expected Contribution over the next financial year:
The Company is expected to contribute Rs. 0.86 Crores to defined benefit obligation funds for the year ending March 31, 2024.
(iii) Provident Fund
The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the administered rates on an annual basis. The Actuary
40A. The Board of Directors of the Company in its meeting held on March 29, 2022, had approved the composite scheme of arrangement (the Scheme), amongst the Company and its subsidiaries, Tata Coffee Limited (TCL) and TCPL Beverages & Foods Limited (TBFL), in terms of Section 230-232 and other applicable provisions of Companies Act, 2013. The Scheme inter alia provides for the demerger of the Plantation Business (as defined in the Scheme) of TCL into TBFL and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Entitlement Ratio mentioned in the Scheme. This would be followed immediately by the amalgamation of the TCL comprising of the Remaining Business (as defined in the Scheme) with the Company and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Exchange Ratio mentioned in the Scheme.
The Scheme would become effective after receipt of all requisite approvals as mentioned in the Scheme. Pending receipt of necessary approvals, no effect of the Scheme has been given in the financial results for the year ended March 31, 2023.
40B. During the year, the Company has acquired 10.15% additional stake in Tata Consumer Products UK Group Limited, an overseas subsidiary from Tata Enterprises (Overseas) AG (TEO), thereby making it a wholly owned subsidiary of the Company. This transaction was approved by the Shareholder of the Company on April 29, 2022 and was consummated on October 21, 2022 through preferential issue of 74,59,935 equity shares of the Company to TEO at a price of Rs. 765.16 per equity share. Accordingly, the Equity Share capital and Securities Premium has been credited with Rs 0.74 Crores and Rs 570.06 Crores respectively on settlement of the purchase consideration.
ii) Relationship with Struck off Companies
The company does not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.
43 . Unless otherwise stated, figures in brackets relate to the previous year. Previous periodâs figures have been regrouped / rearranged, to the extent necessary, to conform to current periodâs classifications. All the numbers have been rounded off to nearest crore.
Mar 31, 2022
Commencing from this year, Branded business within India is treated as a single CGU taking into account way the business is managed and the operating structures, and as independent cash inflows are generated at the country level.
Value in use i.e. the enterprise value for each CGU is calculated using cash flow projections over a period of 5 years, with amounts based on medium term strategic plans, subject to experience adjustments. Cash flows beyond the 5 years period are extrapolated using a long term growth rate.
Key assumptions in the business plans include future revenue, associated future levels of marketing support and other relevant cost-base. These assumptions are based on historical trends and future market expectations specific to each CGU.
Other key assumptions applied in determining value in use are:
⢠Long term growth rate - Cash flows beyond the 5 years period are extrapolated using the estimated longterm growth rate applicable for the geographies in which the CGU operate.
⢠Discount rate - The discount rate is based on a Weighted Average Cost of Capital (WACC) for comparable companies operating in similar markets.
The cash generating unit is engaged in trading, manufacturing and sale of a portfolio of products catering to every day consumption needs, and have strong market position and growth potential.
Based on an assessment carried out, there is no impairment charge in the current year.
We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable possible changes in key assumptions based on current recent trends would cause the recoverable amount of the CGU to be less than the carrying value.
a) Inclusive of Rs. 21.86 Crores (Rs. 21.86 Crores) kept in Revaluation Reserve.
b) Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
c) During the financial year 2021-22, the Company has invested an amount of Rs. 86 Crores towards equity capital in Tata Starbucks Private Limited which is a 50:50 joint venture.
d) Investment in preference shares of Amalgamated Plantations Pvt. Ltd. subscribed in an earlier year of Rs 46.40 Crores [67000000 shares of Rs 10 each] is redeemable with a special redemption premium, on fulfilment of certain conditions, within 15 - 17 years from the date of the issue and are designated as fair value through profit and loss. Preference shares subscribed to in the financial year 2021-22 of Rs 159.33 Crores[150000000 shares of Rs 10 each] are optionally convertible, cumulative and redeemable carrying an annual coupon rate of 6% with special redemption premium issued for a period of ten years and are also designated as fair value through profit and loss.
e) During the financial year 2021-22, the Company has acquired control of TRIL Constructions Limited (TRIL C), consequent to a Restated Shareholder and Share Purchase Agreement which converted the Associate Company into a Subsidiary with effect from 17th November 2021. Based on the Share purchase Agreement, the Company have acquired Preference Shares of Rs 47.13 Crores from Tata Realty Infrastructure Limited
and have additionally infused Rs 24.87 Crores as preference shares in TRIL C. Preference shares of TRIL C are non-cumulative and mandatorily fully convertible within twenty years from the issue date and the same is carried at cost.
f) Investment carrying values are below Rs. 0.01 crores.
g) During the financial year 2021-22, the Company has formed a wholly owned Subsidiary TCPL Beverages & Foods Limited (TBFL) in connection with the proposed merger of Tata Coffee Limited (Refer Note 40A). The Company has infused Rs 0.05 Crores as equity capital in TBFL and Rs 7.5 Crores as Optionally Convertible non-cumulative redeemable preference shares. These preference shares are issued for a term of eight years.
h) During the financial year 2021-22, the Company has acquired 100% equity of Tata SmartFoodz Limited pursuant to a Share Purchase Agreement with Tata Industries Limited at a total consideration of Rs 395 Crores. Post the acquisition, the Company has additionally invested Rs 35.58 Crores in Tata SmartFoodz Limited as equity capital.
i) These investments are fully impaired.
j) Mutual fund investments represents surplus cash deployed as a part of treasury operations (Refer to Statement of Cashflow).
ii) Rights, preferences and restrictions attached to shares
The Company has one class of equity shares having a par value of Re 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
iii) Equity shares allotted as fully paid-up (during 5 years preceding March 31, 2022) pursuant to contracts without payment being received in cash
290421986 equity shares were issued during the financial year 2019-20, consequent to and as part of the merger of Food business of Tata Chemicals Limited with the Company.
Capital Reserve was created on acquisition of certain plantation business.
ii. Securities Premium Account
Security Premium Account was created on issue of shares at premium. These reserves can be utilised in accordance with Section 52 of Companies Act 2013.
Contingency Reserves are in the nature of free reserves.
Revaluation Reserve was created on acquisition of shares in Tata Coffee Limited (Refer note 7 - footnote a).
v. Share Based Payment Reserve
Share-based payment reserve represents amount of fair value, as on the date of grant, of unvested and vested shares not exercised till date, that have been recognised as expense in the statement of profit and loss till date.
Employee Share based payment incentives
The Company has introduced share based incentives to certain employees during the year ended March 31, 2022, under Tata Consumer Products Limited- Share-based Long Term Incentive Scheme 2021 ("TCPL SLTI Scheme 2021â) approved by Nomination and Remuneration Committee (NRC).
As per the scheme, the number of shares that will vest is conditional upon certain performance measures being achieved. The performance will be measured over vesting period of 3 years. The shares granted under this scheme is exercisable by employees till one year from date of its vesting.
The Company has granted 65780 number of performance share units during the year ended March 31, 2022 at an exercise price of Re 1 per share. Shares granted will vest equally each year over 3 years from date of grant. Number of shares that will vest range from 0.5 to 1.2 per performance share unit granted depending on performance measures achieved.
The basis of measurement in respect to each class of financial asset, financial liability is disclosed in note 2.2(h) of the financial statement.
The fair value of liquid mutual funds and long term equity investment is based on active market. Fair values of certain non-current investment are valued based on discounted cash flow/book value/EBITDA multiple approach. Derivative financial instruments are generally valued based on Black-Scholes-Merton approach/ Dollar offset principles.
The Company has exposure to the following risks arising from financial instruments:
⢠Credit risk ;
⢠Liquidity risk ; and
⢠Market risk
i. Risk management framework
The Risk Management Committee of the Board is entrusted with the responsibility to assist the Board in overseeing and approving the Companyâs risk management framework. The Company has a comprehensive Risk policy relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.
Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.
b. Financial instruments and cash deposits
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Companyâs approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparty. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Companyâs approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rate risk and commodity price risk.
a) Currency risk
The Company operates across various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
During the year, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedge items.
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retiral benefits. The Company generally utilises fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.
The Companyâs equity investments are mainly strategic in nature and are generally held on a long term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
The Company is exposed to the fluctuations in commodity prices mainly for tea, salt and pulses. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. For tea, the Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend. For salt and pulses, these fluctuations are managed through active sourcing and commercial negotiation with customers and suppliers.
The Companyâs objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.
Gratuity, Pension and Post Retiral Medical Benefits:
The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and postretirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 daysâ last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption:
40 R. The Board of Directors of the Company in its meeting held on March 29, 2022, has approved the composite scheme of arrangement (the scheme), amongst the Company and its subsidiaries, Tata Coffee Limited (TCL) and TCPL Beverages & Foods Limited (TBFL), in terms of Section 230-232 and other applicable provisions of Companies Act, 2013.
The Scheme inter alia provides for the demerger of the Plantation Business (as defined in the Scheme) of TCL into TBFL and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Entitlement Ratio mentioned in the Scheme. This would be followed immediately by the amalgamation of the TCL comprising of the Remaining Business (as defined in the Scheme) with the Company and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Exchange Ratio mentioned in the Scheme.
The Scheme would become effective after receipt of all requisite approvals as mentioned in the Scheme. Pending receipt of necessary approvals, no effect of the Scheme has been given in the financial results for the year ended March 31, 2022.
40 B. The Board of Directors of the Company in its meeting held on March 29, 2022 has also approved acquisition of additional 10.15% stake in Tata Consumer Products UK Group Limited, an overseas subsidiary, through an issue of equity shares of the Company on a preferential basis, as consideration for the acquisition. Post completion of this acquisition after requisite approvals, Tata Consumer Products UK Group Limited will become a wholly owned subsidiary of the Company.
ii) Relationship with Struck off Companies
The company does not have any transaction with companies struck off under section 248 of the Companies Act, 2013 or section 560 of Companies Act, 1956, during the current year and in the previous year.
43. Unless otherwise stated, figures in brackets relate to the previous year. Previous periodâs figures have been regrouped / rearranged, to the extent necessary, to conform to current periodâs classifications. All the numbers have been rounded off to nearest crore.
Mar 31, 2021
Certain Plantation land meant for usage as tea plantations and for ancillary activities has been leased by the Company to its associate company Kanan Devan Hills Plantation Company Private Limited for a period of 30 years as part of the restructure in 2005, of its South India Plantation Operation.
Cost of Buildings include Rs. 5.90 Crores (Rs. 5.90 Crores) represented by shares in Co-operative Housing Societies / a Company.
(@) Includes amount of Rs. 1.26 Crores (Rs. 1.26 Crores), Rs. 0.62 Crores (Rs. 0.62 Crores), Rs. 0.08 Crores (Rs.0.08 Crores), respectively, jointly owned /held with a subsidiary company.
Land includes leasehold land amounting to Rs. 0.17 Crores (Rs. 0.17 Crores).
Value in use i.e. the enterprise value for each CGU is calculated using cash flow projections over a period of 5 years, with amounts based on medium term strategic plans, subject to experience adjustments. Cash flows beyond the 5 years period are extrapolated using a long term growth rate.
Key assumptions in the business plans include future revenue, associated future levels of marketing support and other relevant cost-base. These assumptions are based on historical trends and future market expectations specific to each CGU.
Other key assumptions applied in determining value in use are:
⢠Long term growth rate - Cash flows beyond the 5 years period are extrapolated using the estimated long-term growth rate applicable for the geographies in which the CGUs operate.
⢠Discount rate - The discount rate is based on a Weighted Average Cost of Capital (WACC) for comparable companies operating in similar markets.
The long term growth rates and discount rates applied in the value in use calculations have been set out below:
These cash generating units are generally engaged in trading, manufacturing and sale of a portfolio of products catering to every day consumption needs, and have strong market position and growth potential.
Based on an assessment carried out, there are no impairment charges in the current year.
We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable possible changes in key assumptions based on current recent trends would cause the recoverable amount of the CGUs to be less than the carrying value.
Inclusive of Rs. 21.86 Crores (Rs. 21.86 Crores) kept in Revaluation Reserve.
Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
During the financial year 2020-21, the Company has invested an amount of Rs. 97.50 Crores towards equity capital in Tata Starbucks Private Limited which is a 50:50 joint venture.
Investment in preference shares of Amalgamated Plantations Pvt. Ltd., are redeemable with a special redemption premium, on fulfilment of certain conditions, within 13 - 15 years from the date of the issue and are designated as fair value through profit and loss.
Preference shares of TRIL Constructions Ltd. are non-cumulative and mandatorily fully convertible within 12 years from the issue date, the same is carried at cost.
Investment carrying values are below Rs. 0.01 Crores.
The Company has, with effect from May 18, 2020 acquired control of NourishCo Beverages Limited (NCBL) by purchasing other Joint Venture partnerâs stake in NCBL at a consideration of Rs 13 Crores.
The Company acquired 100% equity of Tata Consumer Soulful Private Limited (Formerly Kottaram Agro Foods Private Limited), pursuant to a share purchase agreement dated February 17, 2021 at a cash consideration of Rs 155.80 Crores and contingent consideration of Rs 76.20 Crores. The said contingent consideration has been recognised under Other Financial Liability with a corresponding recognition of Other Financial Asset.
The Company has one class of equity shares having a par value of Re 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
290,421,986 equity shares were issued during the financial year 2019-20, consequent to and as part of the merger of Food business of Tata Chemicals Limited with the Company.
1,27,31,159 equity shares were issued during the financial year 2015-16, consequent to and as part of the amalgamation of the erstwhile Mount Everest Mineral Water Limited with the Company.
Capital Reserve was created on acquisition of certain plantation business.
Security Premium Account was created on issue of shares at premium. These reserves can be utilised in accordance with Section 52 of Companies Act 2013.
Contingency Reserves are in the nature of free reserves.
Revaluation Reserve was created on acquisition of shares in Tata Coffee Limited (Refer Note 6 - footnote a).
CONTINGENCIES:
(a) Statutory and other Commercial Claims: |
Rs in Crores |
|
Gross |
Net of Estimated Tax |
|
(i) Taxes, Statutory Duties/ Levies etc. |
14.67 |
12.41 |
(15.86) |
(13.47) |
|
(ii) Commercial and other Claims |
2.40 |
1.97 |
(2.40) |
(1.97) |
(b) Labour disputes under adjudication relating to some staff - amount not ascertainable.
(c) The Company has extended letter of Comfort amounting to Rs 150 Crores to the lenders of its Associate Company engaged in plantation business who have provided working capital borrowings facilities.
31. 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, 2021.
32. 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. 11.44 Crores (Rs. 8.96 Crores).
(b) Amount spent during the year:
* For certain investments categorised under level 3, cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
The basis of measurement in respect to each class of financial asset/liability is disclosed in note 2.2(h) of the financial statement.
The fair value of liquid mutual funds and long term equity investment is based on active market. Fair values of certain non-current investment are valued based on discounted cash flow/book value/EBITDA multiple approach. Derivative financial instruments are generally valued based on Black-Scholes-Merton approach/ Dollar offset principles.
The Company has exposure to the following risks arising from financial instruments:
Covid 19 pandemic - The Companyâs performance was not adversely impacted by the Covid pandemic but recorded good top line growth. However, tea commodity costs were adversely impacted. There can be future business uncertainties depending on developments in relation to the pandemic, particularly those arising from the second wave in India, which could include market closures, supply constraints and commodity cost volatility. Assessment of impact of Covid 19 pandemic on various elements of the risk management framework has been dealt with in the relevant sections below:
i. Risk management framework
The Risk Management Committee of the Board is entrusted with the responsibility to assist the Board in overseeing and approving the Companyâs risk management framework. The Company has a comprehensive Risk policy relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
ii. Credit risk
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.
a. Trade Receivables
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.
Impact of Covid 19 pandemic - Based on recent trends observed , collection pattern and insurance covers in place, the Company does not envisage any material risks. Future outlook will depend on how the pandemic develops and the resultant impact on businesses
b. Financial instruments and cash deposits
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Companyâs approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
Impact of Covid 19 pandemic- Based on the recent trends observed, type of instruments and strength of the counterparties, the Company does not envisage any material risks. Wherever the underlying assets/ instruments are subject to market risks, the same have been marked to market as at the Balance Sheet date. Future outlook will depend on how the pandemic develops and the resultant impact on businesses.
i. Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Companyâs approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities (excluding lease liabilities) at the reporting date. The amounts are gross and undiscounted, and exclude the impact of netting agreements.
Market risk
Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rate risk and commodity price risk.
a) Currency risk
The Company operates across various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
During the year, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedge items.
Impact of Covid 19 pandemic- The pandemic can cause continuing volatility in the currency market and this risk would be mitigated through effective hedging policies. Further, the Company basis the recent trends believe that the probability of the non-occurrence of forecasted transactions is minimal. The Company also does not expect any material deterioration in both counterparty credit risk and own credit risk. Accordingly, the Company continues to believe that there is no impact on effectiveness of its hedges. Future outlook would depend on how the pandemic develops and the resultant impact on businesses.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retiral benefits. The Company generally utilises fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
Price Risk
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.
The Companyâs equity investments are mainly strategic in nature and are generally held on a long term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
Commodity Risk
The Company is exposed to the fluctuations in commodity prices mainly for tea, salt and pulses. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. For tea, the Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend. For Salt and Pulses, these fluctuations are managed through active sourcing and commercial negotiation with customers and suppliers.
Impact of Covid 19 pandemic- Based on recent trends, the Company believes that depending on the prevalence of lockdown conditions in regions from where raw materials are sourced, disruptions to the supply chain cannot be ruled out. This is an area which will be dynamically reviewed and managed by the Company. Future outlook will depend on how the pandemic develops and the resultant impact on businesses
The Companyâs objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.
Gratuity, Pension and Post Retiral Medical Benefits:
The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and postretirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 daysâ last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
The Company contributes all its ascertained liabilities towards gratuity to the trust set up for the same. Trustees administer the contributions made to the trust. As at March 31, 2021 and March 31, 2020, the plan assets have been primarily invested in insurer managed funds.
The Company is expected to contribute Rs. 6.67 Crores to defined benefit obligation funds for the year ending March 31, 2022
The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption:
Mar 31, 2019
1. General Information
Tata Global Beverages Limited (âThe Holding Companyâ) and its subsidiaries (together referred to as âThe Groupâ) and the Groupâs associates and joint ventures are 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 and extraction business mainly in India and US.
The Holding Company is a public limited company incorporated and domiciled in India and has its registered office at Kolkata, West Bengal, India. The Holding Company has its primary listings on the Bombay Stock Exchange and National Stock Exchange in India.
The financial statements for the year ended March 31, 2019 were approved for issue by Companyâs board of directors on April 23, 2019.
1) Certain plantation land meant for usage as tea plantations and for ancillary activities has been leased by the Company to its associate company Kanan Devan Hills Plantations Company Private Limited for a period of 30 years as part of the restructure in 2005, of its South India Plantation Operation.
2) Cost of Buildings include Rs. 5.90 Crores (Rs 5.90 Crores) represented by shares in Co-operative Housing Societies / a Company.
3) (@) Includes amounts of Rs. 1.26 Crores (1.26 Crores), Rs.0.62 Crores (Rs. 0.62 Crores), Rs. 0.08 Crores (Rs.0.08 Crores) under land, buildings and plant and equipment respectively, jointly owned /held with a subsidiary company.
4) Land includes leasehold land amounting to Rs. 0.17 Crores (Rs. 0.17 Crores).
a) Inclusive of Rs. 21.86 Crores (Rs. 21.86 Crores) kept in Revaluation Reserve.
b) Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
c) During the financial year 2018-19, the Company has invested an amount of Rs. 35.80 Crores towards equity capital in Tata Starbucks Private Ltd. which is a 50:50 joint venture.
d) Investment in preference shares of Amalgamated Plantations Pvt. Ltd., are now redeemable with a special redemption premium, on fulfilment of certain conditions, within 13 - 15 years from the date of the issue and are designated as fair value through profit and loss. During the year, fair value difference of Rs 10.08 Crores arising on extension of redemption period has been accounted as part of equity investment.
e) Preference shares of TRIL Constructions Ltd. are non-cumulative and mandatorily fully convertible within six years from the issue date, the same is carried at cost.
f) Investment carrying values are below Rs. 0.01 crores.
Raw material includes in transit tea inventory of Rs. 2.69 Crores (Rs. 1.57 Crores).
Finished Goods include in transit inventory of Rs. NIL (Rs. 0.87 Crores).
During the year ended March 31, 2019 - Rs. 5.86 Crores (Rs. 2.76 Crores) was charged to statement of profit and loss for slow moving and obsolete inventories.
Secured receivables are backed by security deposit.
Includes due from Related Parties - Rs. 43.12 crores (Rs. 64.96 Crores).
Inventories and trade receivables have been hypothecated to banks for the working capital facilities availed.
b) Rights, preferences and restrictions attached to shares
The Company has one class of equity shares having a par value of Re 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Equity shares allotted as fully paid-up (during 5 years preceding March 31, 2019) pursuant to contracts without payment being received in cash 1,27,31,159 equity shares were issued during the financial year 2015-16, consequent to and as part of the amalgamation of the erstwhile Mount Everest Mineral Water Limited with the Company.
The Board of Directors in its meeting held on April 23, 2019 have recommended a final dividend payment of Rs. 2.50 per share for the financial year ended March 31, 2019.
f) Nature and Purpose of Reserve
i) Capital Reserve
Capital Reserve was created on acquisition of certain plantation business.
ii) Securities Premium Account
Security Premium Account was created on issue of shares at premium. These reserves can be utilised in accordance with Section 52 of Companies Act 2013.
iii) Contingency Reserves
Contingency Reserves are in the nature of free reserves.
iv) Revaluation Reserve
Revaluation Reserve was created on acquisition of shares of Tata Coffee Limited (Refer note 6).
2. Capital Commitment
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2019 aggregated Rs. 10.49 Crores (Rs. 10.97 Crores).
(b) Commitment towards Share Capital contributions in Joint Ventures - Rs. 25.40 Crores (Rs. 40.00 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, 2019.
4. 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. 7.66 Crores (Rs. 6.14 Crores).
(b) Amount spent during the year:
5. Leases
The Companyâs leasing arrangements are in respect of operating leases for premises (residential, office,factory, godown, etc.) and motor car. These range between 5 months - 15 years and usually renewable on mutually agreed terms.
6. a) Related Party Disclosure Related Parties Promoter
Tata Sons Private 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.
Tata Water LLC Tetley USA Inc
Empirical Group LLC Tata Global Beverages Canada Inc Tata Global Beverages Australia Pty Limited Earth Rules Pty Ltd.
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 Coffee Trade LLC (w.e.f 18.09.2017)
Tea Trade LLC (ceased w.e.f 03.11.2017)
Sunty LLC (ceased w.e.f 03.11.2017)
Tata Coffee Limited
Tata Coffee Vietnam Company Limited Consolidated Coffee Inc.
Eight âO Clock Coffee Company Eight âO Clock Holdings Inc Tata Tea Extractions Inc Tata Global Beverages Capital Limited Tata Tea Holdings Private Limited
Associates
Amalgamated Plantations Private Limited
Kanan Devan Hills Plantations Company Private Limited
TRIL Constructions Limited
Estate Management Services Pvt Limited, Sri Lanka (ceased w.e.f 28.12.2017)
Watawalla Plantations Plc (ceased w.e.f 28.12.2017)
Joint Ventures
NourishCo Beverages Limited Tata Starbucks Private Limited
Joint Venture of Subsidiaries
Tetley ACI (Bangladesh) Limited
Southern Tea LLC
Tetley Clover (Private) Limited
Key Management Personnel
Mr. Ajoy Misra - CEO & Managing Director
Mr L Krishna Kumar - Executive Director & Group CFO
Subsidiary and Joint Venture of Promoter Company
Tata Investment Corporation Limited Ewart Investments Limited Taj Air Limited
Tata AIG General Insurance Limited
Tata AIA Life Insurance Co Limited
Tata Consultancy Services Limited
Tata International Singapore PTE Limited
Tata Housing Development Company Limited
Tata Elxsi Limited
Tata Industries Limited
Tata Communications Limited
Tata Teleservices Limited
Tata Capital Forex Limited (ceased w.e.f 30.10.2017)
Infiniti Retail Limited
Tata Business Support Services Limited (ceased to be a subsidiary and is an associate w.e.f 27.11.2017)
Employee Benefit Plans
Tata Tea Limited Management Staff Gratuity Fund
Tata Tea Limited Management Staff Superannuation Fund
Tata Tea Limited Staff Pension Fund
Tata Tea Limited Gratuity Fund
Tata Tea Limited Calcutta Provident Fund
# The deposit was placed as a part of cash management and is a general purpose deposit with short-term maturity.
* Provision for employee benefits, which are based on actuarial valuation done on an overall company basis, is excluded.
7. a) Disclosure under Regulation 34(3) of the SEBI (Listing Obligations and disclosure requirements) Regulations, 2015.
8. Financial instruments - Fair values and risk management
A. Accounting classification and fair values
* For certain investments categorized under level 3, cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
B. Measurement of fair values
The basis of measurement in respect to each class of financial asset, financial liability is disclosed in note 2(j) of the financial statement.
The fair value of liquid mutual funds and long term equity investment is based on active market price. Fair values of certain non current investment are valued based on Discounted cashflow/book value/EBITDA multiple approach. Derivative financial instruments are valued based on Black-Scholes-Merton approach/Dollar offset principles.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk ;
- Liquidity risk ; and
- Market risk
i. Risk management framework
The Risk Management Committee of the Board is entrusted with the responsibility to assist the Board in overseeing and approving the Companyâs risk management framework. The Company has a comprehensive risk policy relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
ii. Credit risk
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.
a. Trade receivables
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.
Management believes that the unimpaired amounts that are past due are collectible in full, based on historical payment behaviour and analysis of customer credit risk.
b. Financial instruments and cash deposits
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Companyâs approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
iii. Liquidity risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Companyâs approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The company has sufficient short term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
iv. Market risk
Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rates risk and commodity price risk.
a) Currency risk
The companyâs operates in various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
The Company uses various derivative financial instruments governed by its board approved policy, such as foreign exchange forward and option contracts to mitigate the said risk. The counterparty for these contracts is generally a reputed scheduled bank. The company reports quarterly to a committee of the board, which monitors foreign exchange risks and policies implemented to manage its foreign exchange exposures.
During the year ended March 31, 2019, the company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedge items.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retiral benefits. The Company generally utilises fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
c) Price risk
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.
The Companyâs equity investments are mainly strategic in nature and are generally held on a long term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
d) Commodity risk
The Company is exposed to the fluctuations in commodity prices mainly for tea. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. The Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend.
Capital Management
The Companyâs objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.
9. Post Retirement Employee Benefits
i) Defined Contributions
Amount of Rs. 11.51 Crores (Rs. 10.45 Crores) is recognised as an expense and included in employee benefit expense to the following defined contribution plans:
ii) Defined Benefits
Gratuity, Pension and Post Retiral Medical Benefits :
The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and post retirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 daysâ last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
Sensitivities have been calculated to show the movement in defined benefit obligation in isolation and assuming there are no other changes in market conditions at the accounting date. In presenting the above sensitivity analysis, the present value of the defined benefit obligations has been calcualted using the Projected Unit Credit method at the end of the reporting period , which is the same as that applied in calculating the defined benefit obligation liability recognised in the balance sheet.
The Company contributes all its ascertained liabilities towards gratuity to the trust set up for the same. Trustees administer the contributions made to the trust. As at March 31, 2019 and March 31, 2018, the plan assets have been primarily invested in insurer managed funds.
Expected Contribution over the next financial year:
The Company is expected to contribute Rs. 4.76 Crores to defined benefit obligation funds for the year ending March 31, 2020.
iii) Provident Fund
The Company operates Provident Fund Schemes and the contribution are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption there is no shortfall as on March 31, 2019 and March 31, 2018.
10. Unless otherwise stated, figures in brackets relate to the previous year. All the numbers have been rounded off to nearest crore.
Mar 31, 2018
The areas involving critical estimates or judgmentsâ are:
1. Depreciation and amortization
Depreciation and amortization is based on management estimates of the future useful lives of the property, plant and equipment and intangible assets. Estimates may change due to technological developments, competition, changes in market conditions and other factors and may result in changes in the estimated useful life and in the depreciation and amortization charges.
2. Employee Benefits
The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis using various assumptions. One of the critical assumptions used in determining the net cost (income) for these obligations include the discount rate. Any changes in these assumptions will impact the carrying amount of retirement benefit obligations.
3. Fair Value of derivatives and other financial instruments
Financial instruments are required to be fair valued as at the balance sheet date, as provided in Ind AS 109 and 113. Being a critical estimate, judgment is exercised to determine the carrying values. The fair value of financial instruments that are unlisted and not traded in an active market is determined at fair values assessed based on recent transactions entered into with third parties or based on valuation done by external appraisers, as applicable.
(z) Recent accounting pronouncements
In March 2018, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2018, notifying Ind AS 115, ''Revenue from Contracts with Customers''. The new revenue standard combines, enhances and replaces guidanceâs on recognizing revenue with a single standard. It defines a new five-step model to recognize revenue from customer contracts. This standard is mandatory for the accounting period beginning on April 1, 2018. The Company is in the process of evaluating the impact on the financial statements.
1) Certain Plantation land meant for usage as tea plantations and for ancillary activities has been leased by the Company to its associate company Kanan Devan Hills Plantation Company Private Limited for a period of 30 years as part of restructure of its South India Plantation Operation in 2005.
2) Cost of Buildings include Rs. 5.90 Crores (Rs. 5.90 Crores) represented by shares in Co-operative Housing Societies / a Company.
3) (@) Includes amount of Rs. 1.26 Crores (Rs. 1.26 Crores), Rs. 0.62 Crores (Rs. 0.62 Crores), Rs. 0.08 Crores (Rs. 0.08 Crores), respectively, jointly owned /held with a subsidiary company.
4) Land includes leasehold land amounting to Rs. 0.17 Crores (Rs. 0.17 Crores).
Fair valuation of the investment property as at March 31, 2018 is Rs. 4.92 Crores (Rs. 4.80 Crores) based on valuation (Sales Comparable Approach-Level 2) by a recognized independent valuer.
a) During the year, the Company has sold a significant portion of its holding in Tata Chemicals Limited. Realized gain arising on the transaction amounting to Rs. 625.46 Crores has been accounted under retained earnings.
b) Inclusive of Rs. 21.86 Crores (Rs. 21.86 Crores) kept in Revaluation Reserve.
c) Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
d) During the financial year 2017-18, the Company has divested its stake in Zhejiang Tata Tea Extractions Limited. Resultant profit on disposal net of reversal of impairment provisions of Rs. 18.77 Crores has been recorded under exceptional item.
e) During the financial year 2017-18, the Company has divested its holding in Estate Management Services Private Limited. Resultant profit on disposal of Rs. 105.08 Crores has been recorded under exceptional item.
f) During the financial year 2017-18, the Company has invested an amount of Rs. 10 Crores towards equity capital in Tata Starbucks Private Limited which is a 50:50 joint venture.
g) Investment in preference shares of Amalgamated Plantations Pvt. Ltd., are redeemable with a special redemption premium, on fulfilment of certain conditions, within 10-12 years from the date of the issue and are designated as fair value through profit and loss.
h) Preference shares of TRIL Constructions Ltd. are non-cumulative and mandatorily fully convertible within six years from the issue date, the same is carried at cost.
i) Investment carrying values are below Rs. 0.01 Crores.
* Includes deposit of Rs. 4.25 Crores (Rs. 4.25 Crores) secured by mortgage of land and deposits to related parties Rs. Nil (Rs. 6.50 Crores). $ secured by mortgage of rights on immovable assets.
# Property Rights Pending Development represents constructed office space to be delivered to the Company by TRIL Constructions Limited, consequent to a development agreement entered in 2013-14.
Raw material includes in transit tea inventory of Rs. 1.57 Crores (Rs. 5.81 Crores).
Finished Goods include in transit inventory of Rs. 0.87 Crores (Nil).
During the year ended March 31, 2018 - Rs. 2.76 Crores (Rs. 2.16 Crores) was charged to statement of profit and loss for slow moving and obsolete inventories.
* Includes due from Related Parties - Rs. 64.96 Crores (Rs. 58.56 Crores).
Inventories and trade receivables have been hypothecated to banks for working capital facility availed.
b) Rights, preferences and restrictions of equity shares
The Company has one class of equity shares having a par value of Re. 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
c) Equity shares allotted as fully paid-up (during 5 years preceding March 31, 2018) pursuant to contracts without payment being received in cash
12731159 equity shares were issued during the financial year 2015-16, consequent to and as part of the amalgamation of the erstwhile Mount Everest Mineral Water Limited with the Company
The Board of Directors in its meeting held on May 11, 2018 have recommended a final dividend payment of Rs. 2.50 per share for the financial year ended March 31, 2018.
e) Nature and Purpose of Reserve
i) Capital Reserve
Capital Reserve had been created on acquisition of certain plantation business.
ii) Securities Premium Account Security premium account was created on issue of shares at premium. These reserves can be utilized in accordance with Section 52 of Companies Act 2013.
iii) Contingency Reserves
Contingency Reserve are in the nature of free reserves.
iv) Revaluation Reserve
Revaluation Reserve was created on acquisition of shares of Tata Coffee Limited (Refer note 6).
* There are no amounts due and outstanding to be credited to the Investor Education and Protection Fund.
4. Capital Commitment
(a) Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2018 aggregated Rs. 10.97 Crores (Rs. 11.58 Crores).
(b) Commitment towards Share Capital contributions in Joint Ventures Rs. 40.00 Crores (Rs. 13.00 Crores)
(b) Labour disputes under adjudication relating to some staff - amount not ascertainable.
5. Contingent Assets:
Certain insurance/commercial claims are in the final stage of recovery for which amounts are not quantifiable and hence not reported.
6 . 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, 2018.
7.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. 6.14 Crores (Rs. 5.31 Crores).
8. Lease
The Company''s leasing arrangements are in respect of operating leases for premises (residential, office, factory, go down, etc.) and motor cars. These range between 5 months - 15 years and usually renewable on mutually agreed terms.
9.a) Related Party Disclosure
Related Parties
Promoter Associates
Tata Sons Limited Estate Management Services Pvt Limited, Sri Lanka (till 28th December, 2017)
Watawalla Plantations Plc (till 28th December, 2017)
Amalgamated Plantations Pvt Limited
Subsidiaries Kanan Devan Hills Plantation Company Private Limited
TRIL Constructions Limited
Tata Global Beverages Group Limited
Tata Global Beverages Holdings Joint Ventures
Tata Global Beverages Services Limited NourishCo Beverages Limited
Tata Global Beverages GB Limited Tata Starbucks Private Limited Tata Global Beverages Overseas Holdings Limited
Tata Global Beverages Overseas Limited Joint Venture of Subsidiaries
Lyons Tetley Limited Tetley ACI (Bangladesh) Limited
Tata Global Beverages U.S. Holdings, Inc. Southern Tea LLC
Tata Water LLC Tetley Clover (Private) Limited Tetley USA Inc
Empirical Group LLC Key Management Personnel
Tata Global Beverages Canada Inc Mr. Ajoy Misra - CEO & Managing Director
Tata Global Beverages Australia Pty Limited Mr L Krishna Kumar - Executive Director & Group CFO
Earth Rules Pty Ltd.
Stansand Limited Subsidiary and Joint Venture of Promoter Company
Stansand(Brokers) Limited Tata Investment Corporation Limited
Stansand(Africa) Limited Ewart Investments Limited
Stansand(Central Africa) Limited Taj Air Limited
Tata Global Beverages Polska Sp.z.o.o Tata Capital Forex Limited (till October 30, 2017)
Drassington Limited Tata AIG General Insurance Limited
Good Earth Corporation Tata AIA Life Insurance Co Limited
Good Earth Teas Inc. Tata Consultancy Services Limited
Teapigs Limited TC Travel and Services Limited (till October 30, 2017)
Teapigs US LLC. Infiniti Retail Limited
Tata Global Beverages Czech Republic a.s Tata Interactive System Limited
Joekels Tea Packers (Proprietary) Limited Tata Business Support Services Limited (till November 27, 2017)
Tata Global Beverages Investments Limited Tata International Singapore PTE Limited
Campestres Holdings Limited Tata Housing Development Company Limited
Kahutara Holdings Limited Tata Elxsi Limited
Suntyco Holding Limited Tata Industries Limited Onomento Co Limited Coffee Trade LLC (w.e.f September 18, 2017)
Tea Trade LLC (till November 3, 2017) Employee Benefit Plans
Sunty LLC (till November 3, 2017) Tata Tea Limited Management Staff Gratuity Fund
Tata Coffee Limited Tata Tea Limited Management Staff Superannuation Fund
Tata Coffee Vietnam Company Limited Tata Tea Limited Staff Pension Fund
Consolidated Coffee Inc. Tata Tea Limited Gratuity Fund
Eight ''O Clock Coffee Company Tata Tea Limited Calcutta Provident Fund Eight ''O Clock Holdings Inc Tata Tea Extractions Inc Tata Global Beverages Capital Limited
Zhejiang Tata Tea Extraction Company Limited (till 24th July, 2017)
Tata Tea Holdings Private Limited
* For certain investments categorized under level 3, cost have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.
B. Measurement of fair values
The basis of measurement with respect to each class of financial asset, financial liability is disclosed in note 2(j) of the financial statement.
The fair value of liquid mutual funds and long-term equity investment is based on active market. Fair values of certain non-current investment are valued based on discounted cash flow/book value/EBITDA multiple approach. Derivative financial instruments are valued based on Black-Scholes-Merton approach/Dollar offset principles.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk;
- Liquidity risk; and
- Market risk
i. Risk management framework
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 relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
ii. Credit risk
Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.
a. Trade Receivables
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.
Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.
b. Financial instruments and cash deposits
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Company''s approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
iii. Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Company''s approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short-term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
iv. Market risk
Market risk, the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices, such as currency risk, interest rate risk and commodity price risk.
a) Currency risk
The Company operates in various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Company''s operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
The Company uses various derivative financial instruments governed by its board approved policy, such as foreign exchange forward and option contracts to mitigate the said risk. The counterparty for these contracts is generally a reputed scheduled bank. The Company reports quarterly to a committee of the board, which monitors foreign exchange risks and policies implemented to manage its foreign exchange exposures.
During the year ended March 31, 2018, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instrument is expected to offset changes in cash flows of hedged items.
b) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retrial benefits. The Company generally utilizes fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
c) Price Risk
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.
The Company''s equity investments are mainly strategic in nature and are generally held on a long-term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
d) Commodity Risk
The Company is exposed to the fluctuations in commodity prices mainly for tea. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. The Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend.
Capital Management
The Company''s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and owned funds.
(ii) Defined Benefits Gratuity, Pension and Post Retiral Medical Benefits:
The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and post retirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days'' last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.
(iii) Provident Fund
The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption there is no shortfall as on March 31, 2018 and March 31, 2017.
10. Unless otherwise stated, figures in brackets relate to the previous year. All the numbers have been rounded off to nearest crore.
Mar 31, 2017
1. Contingent Assets :
Certain insurance/commercial claims are in the final stage of recovery for which amounts are not quantifiable and hence, not reported.
2. 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, 2017.
3. A provision of Rs. 74.41 Crores created by the Company in earlier years, for its liabilities on account of bank loans availed by its Chinese subsidiary, has been, during the year, adjusted against capital infused into that subsidiary for the purpose of liquidating the said bank loans.
4. 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. 5.31 Crores (Rs. 4.50 Crores).
(b) Amount spent during the year:
Other receipts consist of Rs. 41,500 received for vehicles requisitioned for public purposes and Rs. 1,08,000 received by the referral hospital operated by the Company in the plantation district of Munnar. These receipts were promptly deposited in the bank.
5. Lease
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. 4.75 Crores (Rs. 4.59 Crores) are charged under Miscellaneous expense under Note 27 of the Statement of Profit and Loss.
* For certain investments categorised under Level 3, cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range.
** Includes loan amounting to Rs. 24 Crores classified from FVTPL (Level 3) to amortized cost in the financial year 2015-16.
B. Measurement of fair values
The basis of measurement in respect to each class of financial asset and financial liability is disclosed in note 2(i) of the financial statement.
The fair value of liquid mutual funds and long-term equity investment is based on quoted price. Fair values of certain non-current investment are valued based on discounted cash flow/book value/EBITDA multiple approach. Derivative financial instruments are valued based on Black-Scholes-Merton approach/Dollar offset principles.
C. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- Credit risk ;
- Liquidity risk ; and
- Market risk
i. Risk management framework
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 management policy relating to the risks that the Company faces under various categories like strategic, operational, 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 and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.
ii. Credit risk
Credit risk is the risk that counter-party will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and financing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the company is certain about the non-recovery.
a. Trade Receivables
The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk.
Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.
b. Financial instruments and cash deposits
The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the company''s approved policy. Investments of surplus funds are made only with approved counter-parties and within the limits assigned to each counter-parties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.
iii. Liquidity Risk
Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Company''s approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short-term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.
Exposure to liquidity risk
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments and exclude the impact of netting agreements.
iv. Market risk
Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rates risk and commodity price risk.
a) Currency risk
The Company operates in various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Company''s operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.
The Company uses various derivative financial instruments governed by its board approved policy, such as foreign exchange forward and option contracts to mitigate the said risk. The counter-party for these contracts is generally a reputed scheduled bank. The Company reports quarterly to a committee of the board, which monitors foreign exchange risks and policies implemented to manage its foreign exchange exposures.
During the year ended March 31, 2017, the company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure that the relationship exists between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedged items.
b) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retrial benefits. The Company generally utilizes fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
c) Price Risk
The price risk is the risk arising from investments held by the Company and classified in the balance sheet either at fair value through Other Comprehensive Income or at fair value through profit or loss.
The Company''s equity investments are mainly strategic in nature and are generally held on a long-term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.
d) Commodity Risk
The Company is exposed to the fluctuations in commodity prices mainly for tea. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. The Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend.
Capital Management
The Company''s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.
6. Post Retirement Employee Benefits:
(i) Defined Contributions
Amount of Rs. 10.62 Crores (Rs. 10.02 Crores) is recognized as an expense and included in employee benefit expense to the following defined contribution plans:
(ii) Defined Benefits:
Gratuity, Pension and Post Retiral Medical Benefits:
The Company operates defined benefit schemes like retirement gratuity, defined superannuation benefits and post retirement medical benefits. There are superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same
(iii) Provident Fund
The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption there is no shortfall as on March 31, 2017 and March 31, 2016.
7. First-time adoption of Ind AS
The Company has prepared financial statements which comply with Ind AS for periods ending on or after March 31, 2016, together with the comparative period data for the year ended March 31, 2016. In preparing these financial statements, the Company''s opening balance sheet was prepared as at April 1, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP balance sheet as at April 1, 2015 and its previously published Indian GAAP financial statements as at and for the year ended March 31, 2016.
Notes to reconciliation:
A) Reversal of Proposed Dividend
Under the previous GAAP, dividends proposed by the Board of Directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the General Meeting. This has resulted in an increase in equity by Rs. 171.72 Crores and Rs. 171.72 Crores as at March 31, 2016 and April 1, 2015 respectively.
B) Fair value of equity investments through Other Comprehensive Income
Under previous GAAP, current investments were measured at lower of cost or fair value and long-term investments were measured at cost less diminution in the value which is other than temporary. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments were recognized in equity.
C) Amortized cost adjustment on long-term borrowings
Under previous GAAP, redemption premium payable on Debentures were adjusted with Securities Premium in accordance with Section 52 of Companies Act, 2013. Under Ind AS, these Debentures being financial liabilities are measured at amortized cost using the effective interest method and the resultant difference is accounted in the Statement of Profit and Loss. This has resulted in increase in equity by Rs. 10.78 Crores and Rs. 27.26 Crores as at March 31, 2016 and April 1, 2015 respectively.
D) Tax adjustments
Tax adjustments include deferred tax impact on account of differences between previous GAAP and Ind AS. These adjustments have resulted in increase in net profit by Rs. 6.91 Crores for the year ended March 31, 2016.
E) Remeasurement of defined benefit plans
Under Ind AS, remeasurements of defined benefit plans i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of the statement of profit and loss. Under the previous GAAP, these remeasurements were accounted in the statement of profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by Rs. 11.33 Crores. There is no impact on the total equity as at March 31, 2016.
Statement of Cash Flow:
There were no significant reconciliation items between cash flows prepared under Indian GAAP and those prepared under Ind AS.
8. Unless otherwise stated, figures in brackets relate to the previous year. All the numbers have been rounded off to nearest Crore.
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, 2012
Notes:
1. The above Cash Flow Statement has been prepared under the 'Indirect
Method' as set out in the Accounting Standard on 'Cash Flow Statements
(AS-3)' issued by Companies (Accounting Standards) Rules, 2006.
2. Previous year's figures have been rearranged/regrouped wherever
necessary.
Notes forming part of the Financial Statements
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, Water and other beverage products. The
group has branded beverage business operations mainly in India, Europe,
US, Canada and Australia, plantation business in India and extraction
business mainly in India and US.
1. 769276 shares of Tata Chemicals Limited and 210000 shares of Tata
Coffee Limited are pledged against outstanding 3% Non Convertible
privately placed "Series 2" Debentures aggregating to Rs. 2500 Lakhs.
2. Fully provided (Original Cost Rs. 22.14 Lakhs).
1. Contingent Liabilities not provided for in respect of:
(a) Claims under adjudication not acknowledged as debts: Rs. in Lakhs
Gross Net of
Estimated Tax
(i) Taxes, Statutory Duties/ Levies etc. 700.01 434.92
(523.87) (316.47)
(ii) Commercial and other Claims 483.25 311.63
(497.49) (319.75)
(b) Labour disputes under adjudication relating to some staff à amount
not ascertainable.
(c) Counter Guarantee given on behalf of an Associate Company Rs. 21.30
Lakhs (Rs. 34.94 Lakhs).
(d) Guarantee given to the lender of a subsidiary Rs. 6788.60 Lakhs
(Rs. 5950.54 Lakhs), which is fully covered by a counter guarantee
given by another subsidiary.
2. 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 2012.
3. 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.
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 31.10 lakhs
shares in MEMW, if certain conditions or events as stipulated in the
said agreement do not occur. After the independent acquisition of 14.2
lakhs shares in March 2012, the put option agreement was amended
reducing the put option shares at a renegotiated and reduced put option
price for exercise of the shares. The said option was exercised by the
erstwhile promoters in May 2012 bringing to an end the put option
agreement.
4. 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. 282.68 Lakhs (Rs.240.69 Lakhs) are charged under Miscellaneous
Expense under Note 29 of Statement of Profit and Loss.
5. a) Related Party Disclosure
Related Parties Promoter
Tata Sons Ltd.
Subsidiaries
Tata Global Beverages Group Limited Tata Global Beverages Holdings
Limited 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 Ltd Stansand (Brokers) Ltd Stansand (Africa) Ltd
Stansand (Central Africa) Ltd Tata Global Beverages Polska Sp.z.o.o
Drassington Limited, UK Good Earth Corporation Good Earth Teas Inc.
Teapigs Ltd.
Tata Global Beverages Czech Republic a.s, Joekels Tea Packers
(Proprietary) Ltd. (South Africa) Tata Global Beverages Investments
Limited Campestres Holdings Limited Kahutara Holdings Limited Suntyco
Holding Ltd
Onomento Co Ltd
OOO Tea Trade LLC
OOO Sunty LLC
Subsidiaries
Tata Coffee Ltd
Consolidated Coffee Inc.
Eight 'O Clock Coffee Company
Alliance Coffee Ltd. Tata 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 Ltd, Sri Lanka
Watawala Plantations Ltd, Sri Lanka Amalgamated Plantations Pvt Ltd.
Joint Ventures
NourishCo Beverages Limited Tata Starbucks Limited
Associates of Subsidiaries
The Rising Beverages LLC
Joint Venture of Subsidiaries
Tetley ACI (Bangladesh) Ltd Southern Tea LLC Empirical Group LLC Tetley
Clover (Private) Ltd. Tata Coffee (Uganda) Ltd.
Key Management Personnel
Mr. P.T. Siganporia - Managing Director
Mr. Ajoy Misra - Executive Director (w.e.f 1.12.2011)
6. The Company has only one reportable primary segment i.e. tea. It
has identified geographical segment as the secondary segment.
Disclosure is given herewith
ii) The Company's interest in these Joint Ventures is reported as Non
Current Trade Investments (Note - 13) and stated at cost. However, the
Company's share of each of the assets, liabilities, income and
expenses, etc. (each without elimination of the effect of transactions
iii) Capital Commitment of the Company in relation to the interest in
NourishCo Beverages Limited is Rs. 747.50 Lakhs (Rs. 2247.50 Lakhs),
being its contribution to subscribe to the share capital of the Joint
Venture as and when required.
7. 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
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.
641.49 Lakhs (Rs. 661.12 Lakhs) 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. 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.
8. 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.
9. Details of Provision for Future Payments under Contractual
obligations
Provision for Contractual Obligations represents future obligation to
certain eligible retired/current directors of the Company as per
Company Policy. These are expected to materialise in terms of the
outflows mandated in the said policy/contracts.
10. Unless otherwise stated, figures in brackets relate to previous
year and have been rearranged / regrouped wherever necessary.
i. Registration Details
Registration No. 31425
Balance Sheet Date 31.03.2012
State Code 21
ii. Capital raised during the year (Amount in Rs. Thousands)
Public Issue Nil
Bonus Issue Nil
Rights Issue Nil
Private Placement Nil
iii. Position of mobilisation and deployment of funds (Amount in Rs.
Thousands)
Total Liabilities 31655744
Total Assets 31655744
Sources of Funds
Paid Up Capital 618399
Reserves & Surplus 21482674
Unsecured Loans -
Share Warrants Nil
Secured Loans 3668503
Application of Funds
Net Fixed Assets 1427752
Net Current Assets 2712074
Accumulated Losses Nil
Investments 22057013
Miscellaneous Expenditure Nil
Deferred Taxation 177101
iV. Performance of Company (Amount in Rs. Thousands)
Turnover (Total Income) 21293843
Profit/(Loss) Before Tax 3699110
Earnings Per Share (in Rs.) 4.89
Total Expenditure 18426019
Profit/(Loss) After Tax 3026836
Dividend Rate 215%
V. Generic names of two principal products/services of the Company
Item Code No. (ITC Code) 0902Ã
.
Product Description TEA WHETHER OR NOT FLAVOURED
Item Code No. (ITC Code) 21012010
Notes:
1 The above Cash Flow Statement has been prepared under the 'Indirect
Method' as set out in the Accounting Standard on 'Cash Flow Statements
(AS-3)' issued by Companies (Accounting Standards) Rules, 2006.
2 Previous year's figures have been rearranged/regrouped wherever
necessary.
This is the Consolidated Cash Flow Statement referred to in our Report
of even date.
Mar 31, 2011
1 The name of the Company was changed from Tata Tea Limited to Tata
Global Beverages Limited with effect from 2 July 2010. Whilst, there is
no change in the line of business, the change in the name signals the
intent to be truly global and to focus on wider branded beverage
agenda.
2 Estimated amount of contracts remaining to be executed on capital
account and not provided for as at 31 March 2011 aggregated Rs. 1146.33
Lakhs (Rs. 579.24 Lakhs) (Net of advances Rs. 146.92 Lakhs (Rs. Nil)).
3 Contingent Liabilities not provided for in respect of:
a) Claims under adjudication not acknowledged as debts:
Rs in Lakhs
Gross Net of Estimated Tax
i) Taxes, Statutory Duties/Levies etc. 523.87 316.47
(362.10) (208.40)
ii) Commercial and other Claims 497.49 319.75
(157.45) (93.08)
iii) Income Ãtax/Agricultural
Income-tax Nil Nil
(20.62) (20.62)
b) Labour disputes under adjudication relating to some staf à amount
not ascertainable.
c) Counter Guarantee given on behalf of an Associate Company Rs. 34.94
Lakhs (Rs. 34.94 Lakhs).
d) Guarantee given to the lender of a subsidiary Rs. 5950.54 Lakhs (Rs.
5990.57 Lakhs), 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 March 2011.
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 Provision for tax on dividend is net of Rs. 220.82 Lakhs (Rs. 109.47
Lakhs), including Rs. 133.73 Lakhs (Rs. 109.47 Lakhs) relating to
earlier years, on account of dividend received from a subsidiary.
7 Basic and Diluted Earnings Per Share have been computed with
reference to profit after tax of Rs.18058.51 Lakhs (Rs. 39147.02 Lakhs)
and weighted average equity shares outstanding (nominal value Re. 1)
during the year aggregating to 6183.99 Lakhs shares. With effect from 2
July 2010, the face value of the Company's shares has been subdivided
from Rs. 10 per share to Re. 1 per share. Earnings per share for
previous year have been computed based on the revised number of shares.
(iii) Commission from two subsidiaries to certain directors à Rs. 31.45
Lakhs (Rs. 8.54 Lakhs) .
(iv) Remuneration to Managing Director from a subsidiary à Salary and
Bonus Rs. 252.06 Lakhs (Rs. 320.87 Lakhs), and other Benefits Rs. 41.73
Lakhs (Rs. 43.32 Lakhs). Salary and bonus for the current year
includes Rs.35.26 Lakhs (Rs. 95.20 Lakhs) pertaining to 2009/10
(2008/09) paid in 2010/11 (2009/10).
(v) The above does not include share of recurring
retirement Benefits payable to former Managing Director.
8 Interest in Joint Venture
i) During the year the Company has entered into a Joint Venture with
PepsiCo India Holding Private Limited and formed a jointly controlled
entity named NourishCo Beverages Limited, which is incorporated in
India with 50% interest.
ii) The Company's current interest in the Joint venture
is reported as Long-Term Investments (Schedule 6) and stated at cost.
The Company's share in Cash and Bank Balances in this joint venture
is Rs. 252.50 Lakhs (P.Y. Ã Nil).
iii) Capital commitment of the Company in relation to the interest
in NourishCo Beverages Limited is Rs. 2247.50 Lakhs, being its
contribution to subscribe to Share Capital of the joint venture as
and when required.
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
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.
661.12 Lakhs (P.Y. Rs. 648.91 Lakhs) has been charged to the profit and
Loss Account 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
specifed 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.
The estimates of future salary increases considered in the actuarial
valuation takes into account factors like infation, 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.
Experience adjustment on plan liability include Rs. 373.76 Lakhs (2010
Rs. (571.66) Lakhs, 2009 Rs. (328.57) Lakhs, 2008 Rs. (142.68) Lakhs,
2007 Rs. (992.26) Lakhs) and on Plan Assets Rs. 46.13 Lakhs (2010 Rs.
(121.07) Lakhs 2009 Rs. (2.73) Lakhs 2008 Rs. 92.53 Lakhs 2007 Rs.
107.66 Lakhs).
The contribution expected to be made by the Company for the year ending
31 March 2012 is not readily ascertainable.
10 Unless otherwise stated, fgures 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.