To the Members
Your Directors are pleased to present the 74th Annual Report together with the AuditedStatement of Accounts for the year ended 31st March 2017.
Your Company has adopted Indian Accounting Standards (Ind AS) from 1st April 2016 andthese are the Company's 3rst annual 3nancial statements prepared in accordance with IndAS with comparatives for the previous year restated as per Ind AS.
The Company's financial performance for the year ended 31st March 2017 is summarizedbelow:
( Rs in Crores)
| ||Standalone ||Consolidated |
| ||2016-17 ||2015-16 ||2016-17 ||2015-16 |
|Revenue from Operations ||779 ||708 ||1606 ||1551 |
|Other Income ||69 ||45 ||23 ||20 |
|Total Income ||848 ||753 ||1629 ||1571 |
|Profit Before Exceptional Items and Taxes ||184 ||109 ||320 ||213 |
|Add: Exceptional Income/(Expenses) ||(2) ||(7) ||(2) ||(7) |
|Profit Before Tax ||182 ||102 ||318 ||206 |
|Provision for Tax ||43 ||37 ||108 ||81 |
|Profit After Tax ||139 ||65 ||210 ||125 |
|Less: Non-controlling Interests || || ||(58) ||(43) |
|Profit After Tax attributable to Shareholders of the ||139 ||65 ||151 ||82 |
|Company || || || || |
|Surplus brought forward from Previous Year ||364 ||343 ||430 ||392 |
|Amount available for appropriation ||503 ||408 ||581 ||474 |
|General Reserve No. I ||(14) ||(11) ||(14) ||(11) |
|General Reserve No. II ||(8) ||(8) ||(8) ||(8) |
|Reversal of Dividend Distribution Tax ||9 ||4 ||9 ||4 |
|Dividend paid relating to Previous Year ||(24) ||(24) ||(24) ||(24) |
|Tax on Dividend ||(5) ||(5) ||(5) ||(5) |
|Balance carried forward ||461 ||364 ||539 ||430 |
1. Revenue from Operations:
Your Company's total income during the year under review was
Rs 848 Crores as compared to Rs 753 Crores in the previous year registering anincrease of 13% over the previous year.
The Consolidated total income during the year under review was Rs 1629 Crores ascompared to Rs 1571 Crores in the previous year registering an increase of 4% over theprevious year.
The Profit before Tax for the year 2016-17 was Rs 182 Crores as against Rs 102 Croresin the previous year. Profit after Tax in 2016-17 stood at Rs 139 Crores as against Rs 65Crores in the previous year.
On a Consolidated basis Profit before Tax for the year 2016-17 was Rs 318 Crores asagainst Rs 206 Crores in the previous year. Profit after Tax (net of minority interest) in2016-17 stood at Rs3151 Crores as against Rs 82 Crores in the previous year.
3. Dividend & Reserves:
Your Directors have recommended a Dividend of Rs 1.75/- per share (face value of Rs 1per share) for the year ended 31st March 2017 which includes a special dividend of Rs0.25 per share to commemorate the completion of 25 years of a Tata Group Company acquiringcontrolling interest in Tata Coffee Limited (erstwhile Consolidated Coffee Limited). Thetotal Dividend amount aggregates to Rs 32.68 Crores plus applicable Dividend DistributionTax. It is proposed to carry forward a sum of
Rs 14.00 Crores towards General Reserve No. I.
4. Share Capital: The Paid-up Equity Share Capital of the Company as on 31st3March2017 was Rs 18.68 Crores comprising of 186770370 Shares of Rs 1/- each. The Company hasnot issued shares with difierential voting rights employee stock options and sweat equityshares. The Company has paid Listing Fees for the Financial Year 2017-18 to each of theStock Exchanges where its equity shares are listed.
5. Material changes and commitment if any a3ecting financial position ofthe Company from the end of the financial year till the date of this Report:
There has been no material change and commitment a3ecting the financial performance ofthe Company which occurred between the end of the financial year of the Company to whichthe financial statements relate and the date of this Report.
6. Global Coffee Scenario: The Global Coffee Markets in 2016-17 presenteddistinctly difierent pictures for Arabica and Robusta Coffees. On an overall basis thecrop year 2016-17 witnessed a balanced scenario between supply (production) and demand(consumption). The total production of coffee across multiple estimates was around 155million bags (60 kgs) matched by almost equal demand of 155 million bags. However thebreak-up provides a difierent picture. The Arabica production estimated at 95 millionbags was an all-time record and the Robusta production at an estimated 60 million bags wasthe lowest in over 5 years. This deffcit of Robusta over 10% on demand - was onlypartly compensated by the Arabica surplus. This was indeed the driving force behind theterminal movements for the year.
The New York (ICE) terminal representing Arabica settled at 141.65 Cents / lb (Julfutures) on 31st March 2017. It had settled for the same position at 129.35 Cents / lb(Jul futures) on 1st April 2016. This year wide rise in the Arabica terminal was a modest9.5%. In sharp contrast the London terminal representing Robusta coffee saw an increaseof 43% through the year. It settled at 2171 $ / MT (Jul futures) on 31st March 2017 asagainst a close of 1519 $ / MT on the same position at the start of the year on 1st April.The sharp deffcit of Robusta coffee was therefore the key deffning feature of the marketthrough the FY 2016-17.
7. Company's Performance:
During the financial year 2016-17 the Company has harvested a Robusta crop of 6000 MTas against 6222 MT in the previous year. In the case of Arabica a production of 1628 MThas been harvested in being an o3 year as against 1899 MT in the previous season. Thecoffee harvesting operation and post-harvest operations has been completed as perschedule.
Planting district of Coorg and Hassan recorded a 46% shortfall in rainfall leading to adrought like situation. The distribution was also distorted with some unprecedentedshowers during harvest period. The average temperature increased significantly a3ectingthe growth of plants and also the development of bean.
The Company produced a total of 5.666 Million Kgs of Made tea for the Financial Year2016-17 as against 6.180 Million kgs in the previous year. The current year's productionis less by 8%. Shortfall in quantum of rainfall recorded during the season and withdistorted distribution coupled with increased day temperature a3ected the 3ush growth andthereby impacting crop.
The Company has achieved a pepper production of 544 MT for the Financial Year 2016-17compared to 599 MT harvested during 2015-16. The density and grade percentage of pepperthis year has been good. The Company has initiated various steps to further enhance theproduction base of pepper in the coming years.
The Company's Curing Works at Kushalnagar (KNW) cured a total of 11528 MT Coffeeduring the current year as against 11162 MT in the previous year. In addition a recordquantity of 520 MT of Monsoon Coffee was processed against the average quantity of 300 MTin the recent years.
Pepper Processing Unit:
The entire Pepper of the Company is graded and processed at KNW. The unit has graded& processed 5373MT of Pepper during the Financial Year 2016-17. The unit is certifiedunder ISO 22000:2005 and SA 8000:2008.
Green Coffee Exports:
During the Financial Year 2016-17 your Company exported 6420 MT of coffee as against6332 MT in the previous year. Your Company continues to focus on growth through PremiumDifierentiated Coffees with volumes sold at 52% of the total exports at very healthypremiums.
Plantation Trails our hospitality business continues to grow and perform exceedinglywell recording the highest ever revenues and Profits since inception. Emphasis for theyear has been on the digital transformation and realignment for the business. A new mobileenabled website and payment gateway a new reservation module and a complete revamp ofthe social media channels and digital marketing approach have given the business theonline edge. Chickmagalur was recently introduced as a new destination and the propertycontinues to receive positive reviews.
Plantation Trails was the recipient of several industry awards during the yearincluding the prestigious recognition by Trip Advisor for the "Certificate ofExcellence-Winner". International and domestic travel media continue to make mentionsabout Coorg and the Plantation Trails' experience.
B. Instant Coffee Operations:
The financial year 2016-17 saw the Instant Coffee Division achieving record sales andproduction. The total sales volumes for the financial year 2016-17 was 8812 MT compared to7660 MT in the previous financial year registering an increase of 15% over the previousyear. The production for the year was 84743MT compared to 7986 MT in the last 3scal. Theplant capacity utilization is more than the designed capacity (8400 TPA). Thestate-of-the-art Freeze Dried Coffee (FDC) facility also underwent a limiteddebottlenecking project to achieve its full capacity during the year.
The sales volume growth was healthy across all key geographies namely Russia andCommonwealth of Independent States Africa Europe and Middle East. The Company continuedto consolidate its dominant market positions in Russia and Africa and also expanded intopotential growth markets in Asia. The Company significantly increased its value addedfocus in terms of product and packaging. New product variants developed for select marketshelped the Company to provide right value to the buyers and also difierentiate itself fromthe competition. The Company also strengthened its sales and marketing team to ensurewidespread reach and deeper customer connect.
Tata Coffee Grand:
The Company manufactures Tata Coffee Grand' an Instant Coffee for sale indomestic market which is being distributed and marketed by the Holding company TataGlobal Beverages Ltd. The Brand has received positive response in the market. In additionduring the year there were two product variants HTS (Hot Tea Shops) with blend of SprayDried Coffee with Chicory and R&G with blend of Roasted and Ground coffee withChicory packed for the domestic market as part of overall Tata Coffee Grand portfolio.
C. Starbucks Roastery:
The Unit did 15% higher production and processed 119 MT during the current year asagainst 102 MT in the previous year. The Unit is successfully qualified by Starbucks forExpresso India Estates Blend Kenya Sumatra and Italian roasted coffees. The Unitcontinues to cater exclusively to the requirements of TATA Starbucks outlets in India fromits state-of-the-art Coffee Roasting Facility at Kushalnagar Works. The Unit is certifiedunder ISO 9001:2008 (Quality Management System) FSSC 22000 (Food Safety & StandardsCertification) ISO 14001:2004 (Environment Management System) and FSSAI (Food Safety andStandards Authority of India).
8. Business Growth:
Your Company has a dedicated team of Management and Operating Personnel who have beeninstrumental in the growth of the business over the years. Your Directors believe that theCompany has the potential to further scale up its business volumes and Profitability andare in the process of identifying new avenues of growth and effective utilization of itsexisting resources.
9. Quality Awards:
(i) Sustainability Awards:
Your Company has consistently been committed to environment protection and co-existswith nature at the coffee plantations.
The Company has been awarded the Excellence in Work Place Safety' trophy for itselephant conservation project in the Confederation of Indian Industry IQ National SafetyCompetition. Further the Company was recognized as the Most Ethical Company' in theAgriculture Sector in November 2016.
The Anandapur Karadibetta Ubban Valparai and Yemmigoondi Estates of the Company havebagged Regional and Specialty awards for their Arabica and Robusta Coffee.
(ii) Instant Coffee Operations (ICD):
ICD-Toopran stepped into a milestone of achieving EHS 4 star in 2016-17 which hasproven the continual development in the areas of Environmental Occupational Health andSafety Management Systems.
ICD-Toopran also achieved the prestigious FTAPCCI (Federation of Telangana and AndhraPradesh Chambers of Commerce and Industry) Award for excellence in IndustrialProductivity.
ICD-Theni received SEEM (Society of Energy Engineers and Managers) National EnergyManagement Award 2016.
Instant Coffee Unit Toopran
Toopran Unit was certified for Integrated Management System (IMS) comprising of ISO9001 ISO 14001 OHSAS 18001 along with certification on ISO 22000 HALAL KOSHER BISFSSAI SA 8000 UTZ SAN-RA.
Instant Coffee Unit Theni
Theni Unit was certified for Integrated Management System (IMS) comprising of ISO 9001ISO 14001 BS OHSAS 18001 along with certification on ISO 22000 HALAL KOSHER BRC IFSFSSAI SA 8000 UTZ SAN-RFA.
The Theni Unit Laboratory was certified with NABL (National Accreditation Board forTesting and Calibration Laboratories).
10. Capital Expenditure:
During the Financial Year 2016-17 Rs 4497.53 Lakhs was incurred towards capitalexpenditure primarily on account of welfare modernization upgradation and otherprogrammes undertaken in the various units of the Company.
11. Subsidiary Companies and Consolidated Financial Statements:
I. Eight O' Clock Coffee Company (EOC):
The total Income of EOC during the Financial Year 2016-17 was at Rs 827 Crores underInd AS compared to Rs3843 Crores for the previous year. The EOC's bags volumes sold weremarginally higher than the previous year amidst intense competitive spending. EOC's totalincome also includes royalty income from the single serve K-cups sold under a licensingagreement with Keurig. K-cup volumes were lower than previous year due to intensecompetitive pressures. EOC's Profits were higher on account of higher sales and lowercosts.
II. Consolidated Coffee Inc. (CCI):
CCI is the Holding Company of EOC. The Consolidated net Profit after taxes was Rs 117Crores as compared to Rs 85 Crores for the previous year.
Performance of Subsidiaries:
Pursuant to the provisions of Section 129(3) of the Companies Act 2013 (theAct') a statement containing salient features of Financial Statements of subsidiaries inForm AOC-1 is annexed as Annexure - A.
The Company does not have any Associate or Joint Venture Companies. The Company hasadopted a policy for determining the criteria of material subsidiaries which can be viewedon the Company's website at www.tatacoffee.com.
12. Freeze Dried Instant Coffee Facility in Vietnam:
The Board of Directors of the Company at their meeting held on 19th December 2016approved setting up of a state-of-the-art green3eld Freeze Dried Instant Coffee facilityin Vietnam of 5000 MT capacity per annum through a3Subsidiary Company with an estimatedProject Cost of Rs 350 Crores.
Pursuant thereto the Company has on 4th May 2017 infused an amount of Rs 30.49 Croresin the equity capital of "Tata Coffee Vietnam Company Limited" which is aWholly-owned Subsidiary of the Company. The Directors are happy to report that the Projectis making satisfactory progress.
13. Directors Responsibility Statement:
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company the work performed by the Internal StatutoryCost and Secretarial Auditors including Audit of Internal Financial Controls overfinancial reporting by the Statutory Auditors and the reviews performed by Management andthe relevant Board Committees including the Audit Committee the Board is of the opinionthat the Company's Internal Financial Controls were adequate and effective during theFinancial Year 2016-17.
Accordingly pursuant to Section 134(3)(c) and 134(5) of the Act the Board ofDirectors to the best of their knowledge and ability con3rm that:
(i) in the preparation of the accounts for the Financial Year ended 31st March 2017the applicable accounting standards have been followed and that there are no materialdepartures;
(ii) they have selected such accounting policies and applied them consistently and madejudgments and estimates that are reasonable and prudent so as to give a true and fair viewof the state of a3airs of the Company as at the end of the Financial Year and of theProfits of the Company for that period;
(iii) they have taken proper and su3cient care to the best of their knowledge andability for the maintenance of adequate accounting records in accordance with theprovisions of the Act for safeguarding the assets of the Company and for preventing anddetecting fraud and other irregularities;
(iv) they have prepared the Accounts for the Financial Year ended 31st March 2017 on agoing concern' basis;
(v) they have laid down Internal Financial Controls to be followed by the Company andsuch Internal Financial Controls are adequate and are operating effectively;
(vi) they have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems were adequate and are operating effectively.
14. Directors & Key Managerial Personnel:
Prof. Arun Monappa Non-executive Independent Director of the Company retired on 9thMarch 2017 on reaching the retirement age as per the Governance Guidelines adopted by theBoard. Your Directors wish to place on record their sincere appreciation for the valuablecontribution made by Prof. Monappa during his tenure as Director of the Company.
The Board of Directors at its meeting held on 18th May 2017 appointed Dr. P. G.Chengappa as an Additional Director of the Company with effect from that date. Pursuant tothe provisions of Section 161 of the Act Dr. Chengappa holds o3ce till the date ofensuing Annual General Meeting and is eligible for appointment. A resolution in thisbehalf is set out at Item No.5 of the Notice of Annual General Meeting for members'approval.
Further the Board of Directors at its meeting held on 18th May 2017 subject to theapproval of the Members at the ensuing Annual General Meeting re-appointed Mr. K.Venkataramanan as Executive Director Finance and Chief Financial O3cer for afurther term of 3 years with effect from 25th October 2017 on terms of remuneration asrecommended by the Nomination & Remuneration Committee. A resolution in this behalf isset out at Item No.6 of the Notice of Annual General Meeting for members' approval.
Pursuant to the provisions of Section 152 of the Act Mr. R. Harish Bhat Directorwill retire by rotation at the ensuing Annual General Meeting and being eligible haso3ered himself for re-appointment. The Board recommends his re-appointment.
In terms of Section 203 of the Act the following are the Key Managerial Personnel ofthe Company:
- Mr. Sanjiv Sarin Managing Director & CEO
- Mr. K. Venkataramanan Executive Director Finance & CFO
- Mr. N. Anantha Murthy Head Legal & Company Secretary
Mr. N. S. Suryanarayanan who earlier held the position of Company Secretary retiredfrom the services of the Company effective 19th December 2016.
All the Independent Directors have given their declarations stating that they meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (the Listing Regulations'). In the opinion of theBoard they ful3l the conditions of independence as specified in the Act and the ListingRegulations and are independent of the management.
15. Board and Committee Meetings:
An Annual Calendar of Board and Committee Meetings planned during the year wascirculated in advance to the Directors.
The Board has constituted an Audit Committee comprising of Mr. S. Santhanakrishnan asChairman Ms. Sunalini Menon Mr. V. Leeladhar and Mr. Siraj Azmat Chaudhry as itsMembers. There have been no instances during the year where recommendations of the AuditCommittee were not accepted by the Board.
The details of the composition of the Board and its Committees and number of meetingsheld and attendance of Directors at such meetings are provided in the Corporate GovernanceReport which forms part of the Annual Report.
16. Governance Guidelines:
The Company has adopted Governance Guidelines on Board EFFectiveness. The GovernanceGuidelines encompasses aspects relating to composition and role of the Board Chairman andDirectors Board Diversity Deffnition of Independence Term of Directors Retirement Ageand Committees of the Board. It also covers aspects relating to Nomination AppointmentInduction and Development of Directors Director Remuneration Subsidiary oversight Codeof Conduct Board EFFectiveness Review and Mandates of Board Committees.
17. Policy on Director's Appointment and Remuneration and other details:
(a) Procedure for Nomination and Appointment of Directors:
The Nomination and Remuneration Committee (NRC) has been mandated to oversee anddevelop competency requirements for the Board based on the industry requirements andbusiness strategy of the Company. The NRC reviews and evaluates the resumes of potentialcandidates for appointment of Directors and meets them prior to making recommendations oftheir nomination to the Board. Specific requirements for the position including expertknowledge expected are communicated to the appointee.
On the recommendation of the NRC the Board has adopted and framed a RemunerationPolicy for the Directors Key Managerial Personnel and other employees pursuant to theprovisions of the Act and the Listing Regulations. The remuneration determined forExecutive/ Independent Directors is subject to the recommendation of the Nomination andRemuneration Committee and approval of the Board of Directors. The Non-Executive Directorsare compensated by way of Profit sharing commission and the criteria being theirattendance and contribution at the Board/Committee Meetings. The Executive Directors arenot paid sitting fees; the Non-Executive Directors are entitled to sitting fees for theBoard/Committee Meetings.
It is a3rmed that the remuneration paid to Directors Key Managerial Personnel and allother employees is in accordance with the Remuneration Policy of the Company. TheCompany's Policy on Directors' Appointment and Remuneration and other matters provided inSection 178(3) of the Act and Regulation 19 of the Listing Regulations have been disclosedin the Corporate Governance Report which forms part of the Annual Report.
(b) Familiarization/Orientation program for Independent Directors:
The Independent Directors attend a Familiarization / Orientation Program on beinginducted into the Board. The details of Familiarization Program are provided in theCorporate Governance Report and are also available on the Company's website. The Companyissues a formal letter of appointment to the Independent Directors outlining their rolefunction duties and responsibilities the format of which is available on the Company'swebsite at https://www.tatacoffee.com.
18. Dividend Distribution Policy:
As required under Regulation 43A of the Listing Regulations the Company has formulateda Policy on Dividend Distribution which is attached as Annexure - B. This Policy can alsobe viewed on the Company's website at https://www.tatacoffee.com.
19. Annual Evaluation of Board Performance and Performance of its Committees and ofDirectors:
Pursuant to the applicable provisions of the Act and the Listing Regulations the Boardhas carried out an Annual Evaluation of its own performance performance of the Directorsand the working of its Committees on the evaluation criteria deffned by Nomination andRemuneration Committee (NRC) for performance evaluation process of the Board itsCommittees and Directors.
The Board's functioning was evaluated on various aspects including inter-alia thestructure of the Board meeting of the Board functions of the Board degree of ful3lmentof key responsibilities establishment and delineation of responsibilities to variousCommittees effectiveness of Board processes information and functioning.
The Committees of the Board were assessed on the degree of ful3lment of keyresponsibilities adequacy of Committee composition and effectiveness of Meetings. TheDirectors were evaluated on aspects such as attendance contribution at Board/CommitteeMeetings and guidance/support to the Management outside Board/Committee Meetings.
The performance assessment of Non-Independent Directors Board as a whole and theChairman were evaluated in a separate meeting of Independent Directors. The same was alsodiscussed in the meetings of NRC and the Board. Performance evaluation of IndependentDirectors was done by the entire Board excluding the Independent Director beingevaluated.
20. Internal Control Systems & their adequacy:
The Board has adopted policies and procedures for ensuring the orderly and effcientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures.
21. Reporting of Frauds:
There was no instance of fraud during the year under review which required theStatutory Auditors to report to the Audit Committee and / or Board under Section 143(12)of the Act and the rules made thereunder.
22. Transfer to Investor Education and Protection Fund:
As required under Section 124 of the Act the unclaimed dividend amount aggregating toRs 1002912/- pertaining to the financial year ended on 31st March 2009 and UnclaimedInterest on Debentures aggregating to Rs 59807/- lying with the Company for a period ofseven years were transferred during the year 2016-17 to the Investor Education andProtection Fund established by the Central3 Government.
(i) Statutory Auditors:
The term of o3ce of M/s SNB Associates Chartered Accountants (Firm Registration No.015682N) who were appointed as the Joint Statutory Auditors at the 73rd Annual GeneralMeeting of the Company held on 26th July 2016 expires upon conclusion of the ensuingAnnual General Meeting of the Company.
The Members at the 73rd Annual General Meeting of the Company held on 26th July 2016had appointed M/s.3Deloitte Haskins & Sells LLP Chartered Accountants (FirmRegistration No. 117366W/W-100018) as the Statutory Auditor of the Company to hold o3cefor a term of 3ve years i.e. from the conclusion of the said Annual General Meeting untilthe conclusion of 78th Annual General Meeting of the Company to be held in 2021 subjectto ratification of their appointment by the shareholders every year. The Notice of AnnualGeneral Meeting contains a resolution to this effect for your approval.
(ii) Cost Auditors:
In terms of the provisions of Section 148 of the Act read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the Board of Directorsbased on the recommendation of the Audit Committee has appointed M/s. Rao Murthy &Associates Cost Accountants as Cost Auditor of the Company for conducting the Cost Auditfor the Financial Year 2017-18 on a remuneration as mentioned in the Notice of 74thAnnual General Meeting.
A resolution seeking Member's ratification for the remuneration payable to the CostAuditor forms part of the Notice of 74th Annual General Meeting and the same isrecommended for your consideration and ratification.
(iii) Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Act and the rules made there underthe Company had appointed M/s. HBP & Co. Company Secretaries to undertake theSecretarial Audit of the Company for the year ended 31st3March 2017. The SecretarialAudit Report issued in this regard is annexed as Annexure - C.
The Auditors' Report and the Secretarial Audit Report for the Financial Year ended 31stMarch 2017 do not contain any qualification or reservation or adverse remark.
24. Risk Management:
The Company has constituted a Risk Management Committee which has been entrusted withthe responsibility to assist the Board in (a) approving the Company's Risk ManagementFramework and (b) Overseeing all the risks that the organization faces such as strategicfinancial liquidity security regulatory legal reputational and other risks that havebeen identified and assessed to ensure that there is a sound Risk Management Policy inplace to address such concerns/risks. The Risk Management process covers riskidentification assessment analysis and mitigation. Incorporating sustainability in theprocess also helps to align potential exposures with the risk appetite and highlight risksassociated with chosen strategies.
The Audit Committee has additional oversight in the area of financial risks andcontrols. Major risks identified by the business and functions are systematicallyaddressed through mitigating actions on continuing basis.
The Company has adopted a Risk Management Policy in accordance with the provisions ofthe Act and Regulation 21 of the Listing Regulations.
25. Particulars of Loans Guarantees and Investments:
The details of Loans and Investments covered under the provisions of Section 186 of theAct are given in the Notes to the Financial Statements forming part of Annual Report. TheCompany has not provided any guarantees during the Financial Year.
26. Fixed Deposit:
During the year under review your Company has neither accepted nor renewed anydeposits from the public within the meaning of Section 73 of the Act and the Companies(Acceptance of Deposits) Rules 2014.
27. Related Party Transactions:
All Related Party Transactions that were entered into during the Financial Year underreview were on an arm's length basis and in the ordinary course of business and is incompliance with the applicable provisions of the Act and the Listing Regulations. Therewere no materially significant Related Party Transactions made by the Company during theyear that required shareholders' approval under Regulation 23 of the Listing Regulations.
All Related Party Transactions are placed before the Audit Committee for priorapproval. Prior omnibus approval of the Audit Committee is obtained for the transactionswhich are repetitive in nature or when the need for them cannot be foreseen in advance .
None of the transactions entered into with related parties falls under the scope ofSection 188(1) of the Act. Details of transactions with related parties as required underSection 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules 2014are given in Annexure - D in Form AOC-2 and forms part of this Report.
The Company has adopted a Policy for dealing with Related Party Transactions. ThePolicy as approved by the Board may be viewed on the Company's website at the web link:http://www.tatacoffee.com/investors/related_party.pdf.
28. Corporate Governance & Management Discussion & Analysis Report:
Your Company is in compliance with all the applicable provisions of CorporateGovernance as stipulated under Chapter IV of the Listing Regulations. A detailed report onCorporate Governance as required under the Listing Regulations is provided in a separatesection and forms part of the Annual Report. Certificate from the Practicing CompanySecretary regarding compliance with the conditions stipulated in the Listing Regulationsforms part of the Corporate Governance Report.
The Management Discussion and Analysis Report as required under the Listing Regulationsis presented in a separate section and forms part of the Annual Report.
29. Business Responsibility Report:
As required under Regulation 34 of the Listing Regulations the Business ResponsibilityReport is provided in a separate section and forms part of the Annual Report.
30. Employees Welfare:
The Company continues to focus on welfare and improving the quality of lives of itsemployees by providing educational assistance to their children crche and child carefacilities transport at subsidized rate to school going children and supply of provisionsat cost through co-operative stores.
31. Policy on Prevention Prohibition and Redressal of Sexual Harassment at Work place:
The Company has zero tolerance for sexual harassment at workplace and has adopted aPolicy on Prevention Prohibition and Redressal of Sexual Harassment at workplace in linewith the provisions of the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013 and the rules made thereunder. The Policy aims toprovide protection to employees at workplace and prevent and redress complaints of sexualharassment and for matters connected or incidental thereto with the objective ofproviding a safe working environment where employees feel secure. The Company has alsoconstituted an Internal Complaints Committee known as the Prevention of Sexual Harassment(POSH) Committee to enquire into complaints of sexual harassment and recommendappropriate action.
During the Financial Year 2016-17 the Company received 2 complaints on sexualharassment which have been disposed of and appropriate actions were taken.
32. Whistle Blower Policy/Vigil Mechanism:
The Company has adopted a Whistle Blower Policy to provide a formal mechanism to theDirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or Ethics Policy. The Policyprovides for adequate safeguards against victimization of employees who avail of themechanism and also provides for direct access to the Chairman of the Audit Committee. Itis a3rmed that no personnel of the Company has been denied access to the Audit Committee.The Whistle Blower Policy has been posted on the website of the Company atwww.tatacoffee.com.
33. Corporate Social Responsibility (CSR):
The Annual Report on CSR activities in terms of the requirements of Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure - E whichforms part of this Report.
The Company has a Corporate Social Responsibility Policy and the same has been postedon the website of the Company at www.tatacoffee.com.
34. Extract of Annual Return:
Pursuant to Section 92(3) of the Act and Rule 12(1) of the Companies (Management andAdministration) Rules 2014 the extract of the Annual Return in the prescribed form i.e.Form MGT-9 is annexed herewith as Annexure F which forms part of this Report.
35. Particulars of Employees and Remuneration:
In terms of the 3rst proviso to Section 136 of the Act the Reports and Accounts arebeing sent to the shareholders excluding the information required under Rule 5(2) and (3)of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014. Anyshareholder interested in obtaining the same may write to the Company Secretary at theRegistered O3ce of the Company. The said information is available for inspection by theMembers at the Registered O3ce of the Company on any working day of the Company upto thedate of the 74th Annual General Meeting.
The statement containing information as required under the provisions of Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is given in Annexure G and forms part of thisReport.
36. Particulars of Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo:
The information on Conservation of Energy Technology Absorption and Foreign ExchangeEarnings and Outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8(3) ofthe Companies (Accounts) Rules 2014 is annexed as Annexure H and forms part of thisReport.
37. Significant and Material Orders passed by the Regulators or Courts:
There are no significant or material orders which were passed by the Regulators orCourts or Tribunals which impact the going concern status and the Company's Operations infuture.
38. Green Initiatives:
In commitment to keep in line with the Green Initiative and going beyond it to createnew green initiatives electronic copy of the Notice of 74th Annual General Meeting of theCompany are sent to all Members whose email addresses are registered with theCompany/Depository Participant(s). For members who have not registered their e-mailaddresses physical copies are sent through the permitted mode.
Your Directors take this opportunity to thank the Parent Company Tata GlobalBeverages Limited the employees customers vendors investors and the communities inwhich the Company operates for their continued valuable support and co-operation extendedto the Company during the year.
Your Directors also thank the Government of India Government of various States inIndia and concerned government departments/agencies for their co-operation.
Your Directors appreciate and value the contributions made by every member of TataCoffee family.
| ||For and on behalf of the Board |
|Place: Bengaluru ||R. HARISH BHAT |
|Date: 18th May 2017 ||Chairman |