To the Members
Your Directors are pleased to present the 79th Annual Report of TataCoffee Limited ("the Company") along with the Audited Financial y March 312022.Statementsforthefinancial
The financial performance of the Company for the year ended March 312022 on a Standalone and Consolidated basis is summarised below:
| || || || ||(Rs crore) |
|Particulars ||Standalone || ||Consolidated || |
| ||2021-22 ||2020-21 ||2021-22 ||2020-21 |
|Revenue from Operations ||817 ||737 ||2363 ||2255 |
|Other Income ||70 ||78 ||26 ||34 |
|Total Income ||887 ||815 ||2389 ||2289 |
|Expenses || || || || |
|Operating Expenditure ||740 ||672 ||1991 ||1919 |
|Depreciation and Amortization Expenses ||24 ||24 ||81 ||83 |
|Total Expenses ||764 ||696 ||2072 ||2002 |
|Profit before Exceptional Items and Taxes ||123 ||119 ||317 ||287 |
|Add: Exceptional Items and Taxes ||(1) ||- ||(6) ||(3) |
|Profit before Tax (PBT) ||122 ||119 ||311 ||284 |
|Tax expense ||20 ||18 ||78 ||72 |
|Profit for the year ||102 ||101 ||233 ||212 |
|Attributable to: || || || || |
|Shareholders of the Company ||102 ||101 ||148 ||134 |
|Non-Controlling Interests || ||- ||85 ||78 |
|Surplus brought forward from Previous Year ||633 ||562 ||782 ||678 |
|Amount available for appropriation ||735 ||663 ||930 ||812 |
|General Reserve I ||- ||- ||- ||- |
|General Reserve II ||(16) ||(8) ||(16) ||(8) |
|Reversal of Dividend Distribution Tax / Deferred Tax ||- ||6 ||- ||6 |
|Dividend paid relating to Previous Year ||(28) ||(28) ||(28) ||(28) |
|Balance carried forward ||691 ||633 ||885 ||782 |
1. Total Income Standalone
Your Company's Total Income during the year under review was Rs887 crore as compared to Rs 815 crore in the Previous Year.
Consolidated Total Income during the year under review was Rs 2389crore as compared to Rs 2289 crore in the Previous Year registering an increase of Rs 100crore over the previous year.
2. Profits Standalone
Profit before Tax for the year 2021-22 was Rs 122 crore as against Rs119 crore in the previous year. Profit after Tax for the year 2021-22 stood at Rs 102crore as against Rs 101 crore in the previous year.
On a consolidated basis Profit before Tax for the year 2021-22was Rs 311 crore as against Rs 284 crore in the previous year. Profit after Tax (net ofminority interest) for the year 2021-22 stood at Rs 148 crore as against Rs 134 crore inthe previous year.
The Board of Directors have recommended a Dividend of Rs 2.00 per share(previous year Rs 1.50 per share) on face value of Rs 1 each for the financial year endedMarch 31 2022.
The total dividend outgo amounts to Rs 37.35 crore (previousyear Rs 28.02 crore).
The Register of Members and Share Transfer Books of the Company willremain closed from June 4 2022 to June 13 2022 (both days inclusive) for ascertainmentof shareholders eligible to receive dividend for the financial year ended March 31 2022.
In terms of Regulation 43A of SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 ("the Listing Regulations") the DividendDistribution Policy duly approved by the Board is available on the website of the Companyand can be accessed at https://tatacoffee.com/sites/default/files/collaterals/investors/Dividend_Distribution_PolicyRs 0. pdf. The Board hasrecommended dividend based on the parameters laid down in the Dividend Distribution Policyand dividend will be paid out of the profits for the year.
4. Transfer to Reserves
The Board of Directors have decided to retain the entire amount ofprofit for financial year 2021-22 in the Statement of Profit & Loss as at March 312022.
5. Share Capital
The Paid-up Equity Share Capital of the Company as on March 31 2022was Rs 18.67 crore comprising of 186770370 equity shares of Rs 1 each. During the yearunder review your Company has neither issued any shares with differential voting rightsnor has granted any stock options or sweat equity. The Company has paid Listing Fees forthe financial year 2022-23 to each of the Stock Exchanges where its equity shares arelisted.
6. Material changes and commitment if any affectingfinancial position of the Company from the end of the Financial Year till the date of thisReport
There has been no material change and commitment affecting thefinancial performance of the Company which occurred between the end of the Financial Yearof the Company to which the financial statements relate and the date of this Report.
7. COVID-19 and its impact
During the 2nd wave of the Pandemic the country was faced with lot ofdifficulties due to higher infections. Your Company managed to navigate well through thedifficult situation with support of its employees and the Management. There were nodisruption to the Operations of the Company and its wholly owned Subsidiary Tata CoffeeVietnam Company Limited in Vietnam. However the Board and the
Management continues to closely monitor the situation as it evolves anddo it's best to take all necessary measures in the interests of all stakeholders ofthe Company.
8. Key Developments: Composite Scheme of Arrangement
The Board of Directors of the Company at its meeting held on March 292022 have approved a Composite Scheme of Arrangement amongst Tata Consumer ProductsLimited ("TCPL") the Company and TCPL Beverages and Foods Limited("TBFL") and their respective shareholders and creditors under Sections 230 to232 and other applicable provisions of the Companies Act 2013 and the rules and/ orregulations made thereunder (the Scheme').
TCPL is the Holding Company of the Company and TBFL is a wholly ownedsubsidiary of TCPL.
The Scheme inter alia provides for the following:
(a) as a first step the demerger of the Plantation Business of theCompany into TBFL and in consideration the consequent issuance of equity shares by TCPL(as the holding company of TBFL) to all the shareholders of the Company (other than TCPL)in accordance with the Share Entitlement Ratio ("Demerger"); (b) as asecond step followed immediately by the amalgamation of the Company (comprising theRemaining Business of the Company with TCPL and in consideration the consequent issuanceof equity shares by TCPL to all the shareholders of the Company (other than TCPL) inaccordance with the Share Exchange Ratio ("Amalgamation"); and (c)various other matters consequential or otherwise integrally connected therewith.
The Scheme is subject to receipt of the approval of the requisitemajority of the public shareholders and creditors (if applicable) of the Companies theStock Exchanges the Securities and Exchange Board of India National Company LawTribunals (benches at Kolkata and Bengaluru) and other regulatory authorities as may beapplicable.
On effectiveness of the Scheme the shareholders of the Company (otherthan TCPL) as on the record date will receive an aggregate of 3 (three) equity sharesof TCPL for every
10 (ten) equity shares held by them in the Company through theissuance of:
1 (one) equity share of TCPL for every 22 (twenty-two) equity shares ofTCL in consideration for the demerger (as per the approved share entitlement ratio);and 14 (fourteen) equity shares of TCPL for every 55 (_fty-five) equity shares ofTCL in consideration for the merger (as per the approved share exchange ratio).
The proposed Scheme would be in the best interest of the Companies andtheir respective shareholders employees creditors and other stakeholders as the proposedrestructuring pursuant to this Scheme is expected inter alia to result in the followingbenefits:
Benefits of the Demerger:
(a) Creating a dedicated plantation vertical with focused attention onthe plantation business which will enable increased efficiencies and generate synergiesamongst the various plantation businesses wholly or partly owned by TCPL and betterresource allocation resulting in enhancement of shareholders' value.
(b) The shareholders of TCL (other than TCPL) will be allotted sharesof TCPL and therefore will be shareholders of a larger branded consumer products businesswith multiple growth avenues and at the same time will continue to participate in theplantation business.
(c) The profile operations management risk and return associated withthe Plantation Business is distinct from that of the Remaining Business and therefore theScheme would lead to sharper focus on both the businesses.
Benefits of the Amalgamation:
(a) Integration of the Company's and TCPL's extractionbusiness activities under a single entity through the amalgamation will result inter-aliain focused management attention operational efficiencies revenue and cost synergiesincluding from commonality of customers sales and supply chain opportunities throughenhanced geographical reach with a wider variety of product offerings which will help ingaining market share optimization of capital operational (including promotion)expenditure leveraging sales and distribution network and simplification of overlappinginfrastructure. (b) The amalgamation of the Company with TCPL would bring about synergy ofoperations and benefit of scale and additionally the legal and regulatory compliances ofboth the listed entities will be unified and streamlined.
(c) The amalgamation will enable efficient consolidation of ownershipinterests in the international branded business owned by TCPL and the Company which willresult in cost benefits higher operating and other efficiencies.
The Company is in the process of obtaining necessary regulatoryapprovals including approval of its Shareholders Creditors Stock Exchanges and NationalCompany Law Tribunal as may be required in this regard.
9. Global Coffee Scenario
According to the estimates of the International Coffee Organization(ICO) for the coffee year 2021-22 global production is at 167.17 million bagsregistering a decrease of 2.1% as compared to 170.83 million bags during previous coffeeyear. Arabica Coffee production 93.97 million bags lower by 7% from that of last year andRobusta production at 73.20 million bags up by 5% from that of last coffee year.
In 2021-22 consumption is expected to exceed production by 3.1 millionbags. Supply and demand trends may be affected by variations due to the downturn in theworld economy increased cost of inputs and production as well import and consumption dueto the conflict in Ukraine. The New York [Intercontinental Exchange (ICE)] May terminalrepresenting Arabica settled at 226.40 c/ lb on March 31 2022 as compared to 123.50 c/ lbon March 31 2021.
As on March 31 2022 the London Robusta May futures settled at 2165USD / MT as compared to 1342 USD / MT on March 31 2021.
10. Company's Performance A. Plantations Weather:
We have recorded a total rainfall of 72.01 inches during the currentcalendar year as against 60.74 inches for the same period last year.
During the season we have recorded well distributed rainfall but thepost monsoon rainfall extended till December impacting the crop.
During the financial year 2021-22 the Company has harvested a Robustacrop of 5506 MT against 6136 MT in the previous year. In case of Arabica a production of1209 MT has been harvested against 1716 MT in the previous season. The coffee harvestingoperation has been completed and Robusta gleaning operation is in progress.
We were able to complete 100% blossom and during the course of backingirrigation we received good natural backing showers. Post-harvest operations such ashandling and white stem borer control are in progress.
During the financial year 2021-22 the Company produced 4.240 millionkgs against 4.946 million kgs in the previous year. The turnover during the year was Rs64_crore as against Rs 90 crore last year. While the pandemic extended monsoon andincidence of Tea Mosquito Bug (TMB) impacted production challenges of a sharp drop in teaprices from last year's record levels and a higher wage and input cost impacted theturnover. During the year the South Indian Sale average declined by 21.35%_ and NorthIndia by 12.38% compared to the previous year. Pan India production was higher by 4% butlower than pre-pandemic period. South India production was marginally lower by 1%.
The Company has achieved a pepper production of 713 MT for thefinancial year 2021-22 against 790 MT harvested during financial year 2020-21. Atplantations Pepper watering during summer months is a continuous process to protect thevines from moisture stress.
Kushalnagar - Coffee Curing Works & Pepper Processing Unit
Kushalnagar Works Coffee Curing Unit is an important cog in the wheelsof Tata Coffee. The facility is a processing hub for Tata Coffee's entire produce ofCoffee and also extends green coffee processing services to the coffee growers in SouthIndia spread across various growing Regions. Additionally it also houses the Pepperprocessing Unit and two roasting Units for Tata Coffee Grand and Tata Starbucks. The Unitis certified for ISO 9001:2015 SA-8000:2014 Rain Forest Alliance (RSA) Organic Coffeeprocessing and Caf? Practices.
The Pepper Processing Center is certified by Export Inspection Agency(EIA) which enables the Company to process pepper meeting all the required GlobalStandards. The Unit is also certified for Organic Pepper processing and is certified underFSSC 22000 5.1 and SA 8000:2014.
Coffee & Pepper Exports
During the financial year 2021-22 the green coffee sales exceeded10000 MT out of which the exports stood at 7977 MT of coffee as against 7325 MT in theprevious year. Your Company continued to focus on growth through premiumization buildinga wider market outreach and building relationships with the best in class roastersglobally.
The total sales of pepper for the company stood at 845 MT in FY2021-22 as against 885 MT in FY 2020-21. Your company was able to place certifiedpepper in the market capitalizing on increased demand of sustainable produce in themarket and with a steady increase in volumes.
On Instant Coffee in FY 2021-22 your company clocked sales of 8495MT from Indian operations and 4865 MT from the Vietnam operation. The salesnumbers were 7446 MT and 4536 MT respectively from India and Vietnam for FY2020-21. Despite headwinds and inflationary pressures across inputs we were able grow oursales across regions enter new markets and maintain share with key customers.
AMA Plantation Trails
The operations of Ama Plantation Trails the hospitality business ofthe Company have recovered from the effects of Covid Pandemic and the bookings havereached the level of pre-pandemic levels. The Company's association and partnershipwith Indian Hotels Company Limited have augmented well for the operations leveraging groupsynergies and immersive experiences for the guests.
B. Instant Coffee Operations
During financial year 2021-22 Instant Coffee Division performed welldespite global headwinds induced by COVID-19 pandemic and accentuated in steep increase inOcean freights packing material costs and energy costs. The challenges during the yearwere overcome by smart sourcing of green beans focused productivity and cost enhancementmeasures and continuous focus on developing customized products.
The new state-of-the-art 5000 Tonnes per annum Freeze-dried CoffeePlant in Vietnam has achieved 98% capacity utilization with enhanced yields andimprovement in unit operational metrics. The manufacturing units at Theni and Toopran inIndia have performed well with a capacity utilization of 98% despite severe operatingconstraints. New technologies have been adopted to reduce energy and water consumptionimprove safety and enhance people productivity through training.
The Company continues to enhance its market standing and competitiveedge by enhanced product portfolio customized solutions and new products. The year2021-22 has witnessed continued diversification of our sales and market portfolio.
C. Starbucks Roastery
A state-of-the-art roasting plant for Tata Starbucks is also located atKushalnagar and produces single origin coffees of India Kenya and Sumatra as well asCold Brew Espresso Blonde Espresso and Diwali Blend variants catering to the exclusiverequirements of Tata Starbucks outlets across India. An additional roasting and automatedpacking line have been added to cater to the growth plans of Tata Starbucks. The Unit iscertified under FSSC 22000 5.1 SA-8000:2014 and compliance to Ethical Sourcingrequirement of Starbucks.
D. Tata Coffee Grand
Tata Coffee Grand leverages the deep heritage of Tata in coffee and hasa product that is an innovative offering in the Indian market within the instant coffeeportfolio. Tata Coffee Grand is an intensely rich and aromatic coffee a blend of thefinest coffee powder & "favor locked decoction crystals" which givesconsumers a best in class' taste experience in the instant coffee category. Theportfolio also has Roast &
Ground (Filter coffee) variant with a widespread presence across allthe southern_states.
A new launch in the portfolio is Tata Coffee Quick Filter which waslaunched in October 2021. Quick Filter is a favoured instant coffee chicory mix thatdelivers the taste of filter coffee making it convenient for those who do not have thetime or expertise to make filter coffee to easily experience the aromatic favorful tasteof filter coffee.
Sonnets by Tata Coffee' a range of Reserve Single OriginLimited Edition Coffee produced from high quality Arabica coffee beans was launched inFebruary 2021 which is distributed and marketed by the Holding Company viz. TataConsumer Products Limited. The roasting grinding and packaging of the Product is done outof Kushal Nagar Works. This range of roast and ground coffee provides a unique tasteexperience.
During the year under review the Company has received the followingawards:
1. ICD Theni won the Gold Award issued by the Society of EnergyEngineers and Managers for Energy (SEEM) as a recognition for the efforts towardsachieving sustainable energy performance at the unit
2. ICD Theni Unit won Greentech energy conservation Award for FY2020-21 for sustainability initiatives & energy Management from Greentech FoundationNew Delhi
3. Top Exporter in Karnataka (Silver) for FY 2020-21 recognised byFederation of Indian Export Organisations
4. Export Excellence Award (FY 2016-17 & FY 2017-18) by MadrasExport Processing Zone (MEPZ) Ministry of Commerce and Industry
5. Sustainable Agriculture Award from Federation of Indian Chamber ofCommerce & Industry (FICCI)
6. Best of the Best Coffee in the World - India's Best Coffee -Ernesto Illy International Coffee award
7. Plantations and ICD Theni won the Gold Award and ICD Toopran wonthe Silver AwardOHSSAI Foundation HSE&S Excellence Award
8. ICD Toopran was awarded the HR Achievers Gold Star Award-2021 fromFederation of Telangana Chambers of Commerce and Industry_(FTCCI)
9. ICD Theni has recently won prestigious Award- EHS Excellence &Maturity Award (Bronze) from by CII-Southern Region 10. Highest Exporter Award forFY 2018-19 and 2019-20 to Theni Unit from MEPZ Ministry of Commerce and Industry
12. Capital Expenditure
During the year Rs 44 crore was incurred towards capital expenditureprimarily on account of modernization upgradation re-planting welfare and otherprogrammes undertaken in various units of the Company.
13. New technology and sustainability projects at Instant Coffee Units
During the year under review the Company has invested in newertechnologies and sustainability projects as under: a. Theni Unit has introduced Adiabaticcooling system replacing cooling towers to reduce water requirement by about 20%. b. TheniUnit has invested a back-pressure turbine which has led to savings of 650 units ofelectricity per day. c. Introduction of high efficiency motors and pumps replacing oldmotors and pumps in ICD Theni has led to savings of about 1900 units of electricity perday. d. ICD Toopran introduced Zero Liquid Discharge system using scale ban technology torecover and recycle 60 Kilo Litres of water per day.
14. Subsidiary Companies and Consolidated Financial StatementsSubsidiary Companies I. Consolidated Coffee Inc. (CCI) and Eight O' Clock HoldingsInc.
CCI is the Holding Company of Eight O' Clock Holdings Inc. andEight O' Clock Holdings Inc. is the Holding Company of Eight O' Clock CoffeeCompany.
The Consolidated Net Profit of CCI after taxes was Rs 172 crore(USD 23.109 million) as compared to Rs 156 crore (USD 20.973 million) for theprevious year.
II. Eight O' Clock Company (EOC)
The Total Income of EOC during the financial year 2021-22 was Rs1295 crore (USD 175 million) compared to Rs 1293 crore (USD 174 million) in theprevious Financial Year. The Bag coffee volumes were down compared to previous year due tothe Covid spike in the first half of the year. K-cup volumes were up on the strength fromour new value sized products and increased spend in trade marketing to make pricing morecompetitive. EOC's private label business also grew both in volumes turnover andoperating profits.
The focus going forward is to grow the base through line extensions andwhite space opportunities.
III. Tata Coffee Vietnam Company Limited (TCVCL)
The Total Income of TCVCL a wholly owned subsidiary of Tata CoffeeLtd. during the financial year 2021-22 was Rs 258 crore (USD 34.745 million) compared toRs 228 crore (USD 30.653 million) in the previous financial year. TCVCL commissioned a5000 MTPA Freeze-dried Coffee Plant in Vietnam during May 2019. The plant has successfullyramped up capacity to the levels of upto 98% in its third year of operation despite theCOVID-19 pandemic and related issues in Vietnam. The unit was able to operate without anyproduction loss and ensured safety of plant personnel. During the year the Company facedwith issues around container availability and disproportionate increases in Ocean freight.However the Company undertook measures to mitigate the impact though not fully.
The TCVCL unit has continuously focussed on new product developmentleveraging its unique pilot plant and co-created products with customers. The productcustomization has enabled quick customer acquisition and improved the market standing ofthe company. New markets in South East Asia and Europe have been accessed.
The Unit continues to set benchmarks on Safety with zero Safetyaccidents reported during the year and setting high level of standards in Food safetymatters. To sustain the occupational safety the unit is in the process of obtaining ISO14001 and 45000 certifications. The unit is taking lead in water management therebyreducing the consumption levels by 17% from baseline levels. The Unit is certified forLEED (Leadership in Energy and Environmental Design) BRC (British Retail Consortium)Halal Kosher UTZ and RFA.
Performance of Subsidiaries
Pursuant to the provisions of Section 129(3) of the Companies Act 2013(the Act') a statement containing the salient features of Financial Statementsof the Company's subsidiaries in Form AOC - 1 is annexed as
Further pursuant to the provisions of Section 136 of the Act thestandalone and consolidated financial statements of the Company and of its subsidiariesare available on the Website of the Company at https://tatacoffee.com/investors/overview.
The Company does not have any Associate or Joint Venture Companies.Further the Company's policy on determining the material subsidiaries as approvedby the Board is uploaded on the Company's website athttps://tatacoffee.com/sites/default/files/collaterals/investors/Policy_for_Determining_Material_for_ Disclosure.pdf.
15. Directors' Responsibility Statement
Based on the framework of Internal Financial Controls and compliancesystems established and maintained by the Company the work performed by the InternalAuditors Statutory Auditors and Secretarial Auditors including the Audit of InternalFinancial Controls over financial reporting by the Statutory Auditors and the reviewsperformed by Management and the relevant Board Committees including the Audit Committeethe Board is of the opinion that the Company's internal financial controls wereadequate and effective during Financial Year 2021-22.
Accordingly pursuant to Sections 134(5) of the Act the Board ofDirectors to the best of its knowledge and ability confirm that: i. in the preparationof the annual accounts for the Financial Year ended March 31 2022 the applicableaccounting standards have been followed and there are no material departures; ii. theyhave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the Financial Year and of the profit of theCompany for that period; iii. they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities; iv. they have prepared the Annual Accounts for the Financial Yearended March 31 2022 on a going concern basis; v. they have laid down internal financialcontrols to be followed by the Company and such Internal Financial Controls are adequateand operating effectively; vi. they have devised proper systems to ensure compliance withthe provisions of all applicable laws and that such systems are adequate and operatingeffectively.
16. Directors and Key Managerial Personnel Directors
The Board of Directors at its meeting held on March 22 2022 subjectto the approval of the Shareholders re-appointed Mr. Chacko Purackal Thomas as ManagingDirector & CEO of the Company not liable to retire by rotation for a further term ofthree (3) years with effect from April 1 2022.
The terms of remuneration in relation to the said re-appointment wasrecommended by the Nomination & Remuneration Committee and approved by the Board onApril 26 2022. A resolution in this behalf is set out at Item no. 8 of the Notice ofAnnual General Meeting for Members' approval.
Further the Board of Directors at the said meeting subject to theapproval of the Shareholders re-appointed Mr. K. Venkataramanan as ExecutiveDirector Finance & CFO of the Company not liable to retire by rotation for afurther period of one (1) year with effect from October 25 2022. The terms ofremuneration in relation to the said re-appointment was recommended by the Nomination andRemuneration Committee and approved by the Board on April 26 2022. Afiresolution in thisbehalf is set out at Item no. 9 of the Notice of Annual General Meeting for Members'approval.
In accordance with the provisions of Section 152 of the Act and theArticles of Association Mr. Sunil A. D'Souza Non-Executive Director of theCompany retires by rotation at the ensuing Annual General Meeting and being eligible hasoffered himself for re-appointment. The Board recommends his re-appointment.
During the year under review Mr. V Leeladhar retired as IndependentDirector effective December 6 2021 after completing his term of appointment. The Boardplaces on record its appreciation for the contributions and guidance made by Mr.Leeladhar during his stint with the Company as a Director.
The Board of Directors at the meeting held on July 28 2021 based onthe recommendation of the Nomination and Remuneration Committee appointed Mr. SVenkatraman as an Additional Director (Non-Executive Independent) of the Company witheffect from the said date. Pursuant to the provisions of Section 161 of the Act Mr.Venkatraman holds office till the date of ensuing Annual General Meeting and is eligiblefor appointment. A resolution for his appointment as an Independent Director of theCompany for a term of 5_years effective from July 28 2021 to July 27 2026 is set out atItem No. 7 of the Notice of Annual General Meeting for approval by the Members by way of aSpecial Resolution. Based on the recommendations of the Nomination and RemunerationCommittee the Board of Directors at its meeting held on March 22 2022 havere-appointed Dr. P G Chengappa as an Independent Director of the Company for asecond term of office for a period of 3 years with effect from May 18 2022 to May 172025 which is subject to the approval of the Members by way of a Special Resolution.Afiresolution in this behalf is set out at Item No. 6 of the Notice of Annual GeneralMeeting for Members' approval.
All the Independent Directors of the Company have given theirdeclarations to the Company under Section 149(7) of the Act that they meet the criteria ofindependence as provided under Section 149(6) of the Act read with Regulation 16(1)(b) ofSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015 (the Listing Regulations'). There has been no change in thecircumstances affecting their status as Independent Directors of the Company.
During the year under review the Company did not have any pecuniaryrelationship or transactions with any of its Directors other than payment of remuneration/ Incentive to the Executive Directors and payment of sitting fees commission toNon-executive Directors and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board / Committees of the Company.
Key Managerial Personnel (KMP)
In terms of Section 203 of the Act the following are the KeyManagerial Personnel of the Company: Mr. Chacko Purackal Thomas Managing Director &CEO Mr. K. Venkataramanan Executive Director Finance & CFO
Mr. N. Anantha Murthy Head Legal & Company Secretary
Board and Committee Meetings
An Annual Calendar of Board and Committee Meetings planned during theyear was circulated in advance to the Directors. The Board has constituted an AuditCommittee comprising of Mr. S Venkatraman as Chairman and Ms._ Sunalini Menon Mr. SirajAzmat Chaudhry and Dr._ P._ G._ Chengappa as its Members. There have been no instancesduring the year where recommendations of the Audit Committee were not accepted by theBoard.
The details of the composition of the Board and its Committees and thenumber of meetings held and attendance of Directors at such meetings are provided in theCorporate Governance Report which forms part of the Annual Report.
The Directors have devised proper systems and processes for complyingwith the requirements of applicable Secretarial Standards issued by the Institute ofCompany Secretaries of India and that such systems were adequate and operatingeffectively.
17. Policy on Director's Appointment and Remuneration and otherdetails (a) Procedure for Nomination and Appointment of Directors
The Nomination and Remuneration Committee (NRC) has been mandated tooversee and develop competency requirements for the Board based on the industryrequirements and business strategy of the Company. The NRC reviews and evaluates theprofiles of potential candidates for appointment of Directors and meets them prior tomaking recommendations of their nomination to the Board. Specific requirements for theposition including expert knowledge expected are communicated to the appointee.
On the recommendation of the NRC the Board has adopted and framed aRemuneration Policy for the Directors Key Managerial Personnel and other employeespursuant to the applicable provisions of the Act and SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (the Listing Regulations). Theremuneration determined for Executive / Independent Directors is subject to therecommendation of the NRC and approval of the Board of Directors. The Non-ExecutiveDirectors are 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; however the Non-Executive Directors are entitled to sittingfees for attending the Board / Committee Meetings.
It is afirmed that the remuneration paid to Directors Key ManagerialPersonnel and all other employees are in accordance with the Remuneration Policy of theCompany. The Company's Policy on Directors' Appointment and Remuneration andother matters provided in Section 178(3) of the Act and Regulation 19 of the ListingRegulations have been disclosed in the Corporate Governance Report which forms part ofthe Annual Report.
(b) Familiarization / Orientation program for Independent Directors
The Independent Directors attend a Familiarization / OrientationProgram on being inducted into the Board. Further various other programmes are conductedfor the benefit of Independent Directors to provide periodical updates on regulatoryfront industry developments and any other significant matters of importance. The detailsof Familiarization Program are provided in the Corporate Governance Report and is alsoavailable on the Company's Website.
The Company issues a formal letter of appointment to the IndependentDirectors outlining their role function duties and responsibilities the format ofwhich is available on the Company's Website at www.tatacoffee.com.
18. Board Evaluation
Pursuant to the applicable provisions of the Act and the ListingRegulations the Board has carried out an Annual
Evaluation of its own performance performance of the Directors and theworking of its Committees based on the evaluation criteria defined by Nomination andRemuneration Committee (NRC) for performance evaluation process of the Board itsCommittees and Directors.
The performance of the Board was evaluated by the Board after seekinginputs from all the directors on the basis of criteria such as the Board composition andstructure effectiveness of board processes information and functioning etc.
The performance of the Committees was evaluated by the Board afterseeking inputs from the Committee members on the basis of criteria such as the compositionof committees effectiveness of Committee meetings etc.
The performance assessment of Non-Independent Directors Board as awhole and the Chairman were evaluated at separate meetings of Independent Directors. Thesame was also discussed in the meetings of NRC and the Board. Performance evaluation ofIndependent Directors was done by the entire Board excluding the Independent Directorbeing evaluated.
19. Internal Control Systems & their adequacy
The Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to the Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial disclosures.
20. Reporting of Frauds
There was no instance of fraud during the year under review whichrequired the Statutory Auditors to report to the Audit Committee and / or to the Board asrequired under Section 143(12) of the Act and the rules made thereunder.
21. Transfer to Investor Education and Protection Fund (IEPF) a)Transfer of unclaimed dividend to IEPF
As required under Section 124 of the Act the Unclaimed Dividend amountaggregating to Rs 3308344 lying with the Company for a period of seven years weretransferred during the Financial Year 2021-22 to the Investor Education and ProtectionFund (IEPF) established by the Central Government. b) Transfer of shares to IEPF
As required under Section 124 of the Act 93635 equity shares inrespect of which dividend has not been claimed by the members for seven consecutive yearsor more have been transferred by the Company to the Investor Education and ProtectionFund Authority (IEPF) during the Financial Year 2021-22. Details of shares transferred toIEPF have been uploaded on the Website of IEPF as well as the Company.
22. Related Party Transactions
All Related Party Transactions that were entered into during theFinancial Year under review were on an arm's length basis and in the ordinarycourse of business and are in compliance with the applicable provisions of the Act and theListing Regulations. There were no materially significant Related Party Transactions madeby the Company during the year that required shareholders' approval under Regulation23 of the Listing Regulations.
All Related Party Transactions are placed before the Audit Committeefor prior approval. Prior omnibus approval of the Audit Committee is obtained for thetransactions which are repetitive in nature or when the need for these transactions cannotbe foreseen in advance.
None of the transactions entered into with Related Parties fall underthe scope of Section 188(1) of the Act. Details of transactions with Related Parties asrequired under Section 134(3)(h) of the Act read with Rule 8(2) of the Companies(Accounts) Rules 2014 are given in Annexure - B in Form
AOC - 2 and forms part of this Report.
The Company has adopted a Policy for dealing with Related PartyTransactions. The Policy as approved by the Board is available at the web link:https://tatacoffee.com/sites/default/files/collaterals/investors/related-party-transaction-policy-april2022.pdf.
23. Corporate Governance and Management Discussion & AnalysisReport
Your Company is in compliance with all the applicable provisions ofCorporate Governance as stipulated under Chapter IV of the Listing Regulations. A reporton Corporate Governance as required under the Listing Regulations is provided in aseparate section and forms part of the Annual Report. A Certificate from a PracticingCompany Secretary regarding compliance with the conditions stipulated in the ListingRegulations forms part of the Corporate Governance Report.
Pursuant to Regulation 34 of the Listing Regulations the ManagementDiscussion and Analysis is presented in a separate section forming part of this AnnualReport.
24. Business Responsibility Report
As required under Regulation 34 of the Listing Regulations theBusiness Responsibility Report is provided in a separate section and forms part of theAnnual Report.
(i) Statutory Auditors
The Members of the Company at their Annual General Meeting held on June14 2021 approved the appointment of M/s._ Deloitte Haskins & Sells LLP CharteredAccountants (Firm Registration No. 117366W/W-100018) as the statutory auditors of theCompany for a period of five years commencing from the conclusion of the 78th AGM held onJune 14 2021 until the conclusion of 83rd AGM of the Company to be held in the year 2026.
Rati_cation of appointment of Statutory Auditors at every AGM has beendispensed with by the Ministry of Corporate Affairs. Accordingly the Notice convening theensuing AGM does not carry any resolution on rati_cation of appointment of StatutoryAuditors.
(ii) Cost Auditors
In terms of the provisions of Section 148 of the Act read with theCompanies (Cost Records and Audit) Rules 2014 as amended from time to time the Board ofDirectors based on the recommendation of the Audit Committee has appointed M/s.S.Mahadevan & Co (Firm Registration No. 000007) Cost Accountants as Cost Auditor ofthe Company for conducting the Cost Audit for the Financial Year 2022-23 on aremuneration as mentioned in the Notice of 79th Annual General Meeting.
A Certificate from M/s. S.Mahadevan & Co. Cost Accountants hasbeen received to the effect that their appointment as Cost Auditor of the Company ifmade would be in accordance with the limits specified under Section 141 of the Act andRules framed thereunder. A resolution seeking Member's rati_cation for theremuneration payable to the Cost Auditor forms part of the Notice of 79th Annual GeneralMeeting and the same is recommended for your consideration and rati_cation.
(iii) Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the rules madethere under the Company had appointed M/s. BMP & Co. LLP Company Secretaries toundertake the Secretarial Audit of the Company for the year ended March 31 2022. TheSecretarial Audit Report issued in this regard is annexed as
Annexure - C.
The Auditors' Report and the Secretarial Audit Report for theFinancial Year ended March 31 2022 do not contain any qualification or reservation oradverse remarks.
26. Risk Management
The Company has constituted a Risk Management Committee which has beenentrusted with the responsibility to assist the Board in (a) approving the Company'sRisk Management Framework and (b) overseeing all the risks that the organization facessuch as strategic financial liquidity security regulatory legal reputational andother risks that have been identified and assessed to ensure that there is a sound RiskManagement Policy in place to address such concerns / risks. The Risk Management processcovers risk identification assessment analysis and mitigation. Incorporatingsustainability in the process also helps to align potential exposures with the riskappetite and highlight risks associated with chosen strategies.
The Audit Committee has additional oversight in the area of financialrisks and controls. Major risks identified by the business and functions aresystematically addressed through mitigating actions on a continuing basis.
The Company has adopted a Risk Management Policy in accordance with theprovisions of the Act and Regulation 21 of the Listing Regulations.
27. Particulars of Loans Guarantees and Investments
The details of Loans Investments and Guarantees covered under theprovisions of Section 186 of the Act are given in the Notes to the Financial Statementsforming part of Annual Report.
28. Fixed Deposits
During the year under review your Company has neither accepted norrenewed any deposits from the public within the meaning of Section 73 of the Act and theCompanies (Acceptance of Deposits) Rules 2014.
29. Employees Welfare
The Company continues to focus on welfare and improving the quality oflives of its employees by providing educational assistance to their children employeewellness sessions periodic occupational health checks merit scholarships to employeechildren spiritual peace by yoga classes cr?che and child care facilities transport atsubsidised rate to school going children supply of provisions at cost and other homeappliances on instalment basis through co-operative stores and providing housing loaninterest subsidy & interest free loans for the employee family wellness.
Apart from the welfare initiatives implemented during last year thefollowing were the focus areas in the welfare initiatives during financial year 2021-22:
Long service award for all the employees with 25 years of service.
Vaccination for all the employees.
Supply of sanitizers face masks face shield masks gloves to allemployees who are dealing closely with workers.
Isolation centres for the COVID positive cases were identified inall locations.
Medical assistance for the COVID positive cases and support to thefamily members by providing essential needs.
Facilitation of disinfectant spraying of labour lines hospitalsetc.
Facilitation of COVID 19 preventive management as per theGovernment guidelines.
Skill development identification and recognition of identifiedskilled workers with the certificates.
UNF health project was initiated for women workers to diagnosecervical cancer and anaemia.
Blood donation camp conducted for the employees.
Awareness programme on Tata Code of Conduct (TCoC) Prevention ofSexual Harassment (POSH) was conducted by HR team in all the estates.
On a trial basis Green Oxyguard waste incinerator was installed inone of the estates as a part of the waste management initiative.
30. Policy on Prevention Prohibition and Redressal of SexualHarassment at Workplace
The Company has zero tolerance for sexual harassment at workplace andhas adopted a Policy on Prevention Prohibition and Redressal of Sexual Harassment atworkplace in line with the provisions of the Sexual Harassment of Women at Workplace(Prevention Prohibition and Redressal) Act 2013 (POSH) and the rules made thereunder.The Policy aims to provide protection to employees at workplace and prevent and redresscomplaints of sexual harassment and for matters connected or incidental thereto with theobjective of providing a safe working environment where employees feel secure. TheCompany has reconstitued the Internal Complaints Committee and emphasised on the roles andresponsibilities expected from the members. Training programmes were conducted aroundlocations to strengthen the awareness among the Committee members. The Companycontinuously invests in enhancing the awareness on the Policy across its workforce.
The Company also conducts a periodic (bi-annual) awareness plan acrossthe organization on Ethics Tata Code of Conduct POSH & Whistle Blower policyinvolving workmen as facilitators.
During the financial year 2021-22 the Company received 5 complaints onsexual harassment and all the cases have been disposed of with appropriate actions.
31. Whistle Blower Policy / Vigil Mechanism
The Company has adopted a Whistle Blower Policy to provide a formalmechanism to the Directors' and employees to report their concerns about unethicalbehaviour actual or suspected fraud or violation of the Company's Code of Conduct orEthics Policy. The Policy provides for adequate safeguards against victimization ofemployees who avail of the mechanism and provides to employees' direct access to theChairman of the Audit Committee. It is afirmed that no personnel of the Company have beendenied access to the Audit Committee. The Whistle Blower Policy has been posted on theWebsite of the Company at https://tatacoffee.com/sites/default/files/collaterals/investors/Whistle_Blower_ PolicyRs 24032022.pdf.
32. Corporate Social Responsibility (CSR)
The Company has a Policy on Corporate Social Responsibility and thesame has been posted on the website of the Company athttps://tatacoffee.com/sites/default/files/collaterals/investors/csr-policy-and-actionplans-fy2022-23. pdf. The Annual Report on CSRactivities in terms of the requirements of Companies (Corporate Social ResponsibilityPolicy) Rules 2014 is annexed as Annexure - D which forms part of this Report.
33. Extract of Annual Return
As per the requirements of Section 92(3) of the Act and Rules framedthereunder the extract of the Annual Return for FY 2021-22 is uploaded on thewebsite of the Company and the same is available at https://tatacoffee.com/sites/default/files/collaterals/investors/mgt/Annual-Return-FY-2021-22. pdf.
34. Particulars of Employees and Remuneration
In terms of the first proviso to Section 136 of the Act theReports and Accounts are being sent to the shareholders excluding the informationrequired under Rule 5(2) and (3) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. Any shareholder interested in obtaining the same maywrite to the Company Secretary at the Registered Office of the Company.
The statement containing information as required under the provisionsof Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is given in Annexure - Eand forms part of this Report.
35. Particulars of Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo
The information on Conservation of Energy Technology Absorption andForeign Exchange Earnings and Outgo stipulated under Section 134(3)(m) of the Act readwith Rule 8(3) of the Companies (Accounts) Rules 2014 is annexed as Annexure - Fand forms part of this Report.
36. Significant and Material Orders passed by the Regulators or Courts
There are no significant or material orders which were passed by theRegulators or Courts or Tribunals which impact the going concern status and theCompany's Operations in future.
37. Green Initiatives
In commitment to keep in line with the Green Initiatives and goingbeyond it electronic copy of the Notice of 79th Annual General Meeting of theCompany including the Annual Report for FY 2021-22 are being sent to all Members whosee-mail addresses are registered with the Company / Depository Participant(s).
Your Directors take this opportunity to thank the Parent Company Tata Consumer Products Limited the employees customers vendors investors of theCompany and the communities in which the Company operates for their unstintedco-operation and valuable support extended during the year.
Your Directors also thank the Government of India Government ofvarious States in India and government departments / agencies concerned for theirco-operation. Your Directors appreciate and value the contributions made by each and everymember of the Tata Coffee family.
| ||For and on behalf of the Board |
|Place: Bengaluru ||R. Harish Bhat |
|Date: April 26 2022 ||Chairman |