MR. N. CHANDRASEKARAN
Chairman (Non Executive Director)
Appointment: He is the Chairman of the Board at Tata Sons the holding company andpromoter of all Tata group companies. The Tata group companies across 10 businessverticals have aggregate annual revenues over USD 110 billion and a market capitalisationof over USD 165 billion.
He joined the Board of Tata Sons in October 2016 and was appointed Chairman in January2017. He also chairs the Boards of several group operating companies including TataSteel Tata Motors Tata Power and Tata Consultancy Services (TCS) of which he was ChiefExecutive from 2009-17.
Experience: His appointment as Chairman followed a 30-year business career at TCSwhich he joined from university. He rose through the ranks at TCS to become CEO andManaging Director of the leading global IT solution and consulting firm.
Under his leadership TCS generated total revenues of USD 16.5 billion in 2015-16 andconsolidated its position as the largest private sector employer in India and thecountry's most valuable company. TCS has also been placed among the 'Big 4' most valuableIT services brands worldwide ranked as one of the World's Most Innovative Companies byForbes and recognised as a Global Top Employer by the Top Employers Institute across 24countries.
He is also the author of Bridgital Nation a groundbreaking book on harnessingtechnological disruptions to bring Indians closer to their dreams. He has been awardedseveral honorary doctorates by leading universities in India and internationallyincluding an honorary Doctor of Letters from Macquarie University Australia Doctor ofLetters from the Regional Engineering College Trichy Tamil Nadu where he completed aMasters degree in Computer Applications before joining TCS in 1987.
Current external appointments:
He is on the International Advisory Council of Singapore's Economic Development Board.He is the Chairman of Indian Institute of Management Lucknow as well as the President ofthe Court at India Institute of Science Bengaluru. He is the member of Bocconi'sInternational Advisory Council and the Co-Chair India US CEO Forum.
He is an active member of India's bilateral business forums including USA UKAustralia and Japan. He served as a Director on the Board of India's central bank theReserve Bank of India from 2016 till 2020. He served as the Chairman of NASSCOM the apextrade body for IT services firms in India in 2012-13.
MR. HARISH BHAT
Non Executive Director
Appointment: 7th July 2012
Experience: He is the Brand Custodian of Tata Sons. He joined the Tata group in1987 as an officer in the Tata Administrative Service.
During his career of over 30 years with the Tata Group Mr. Bhat has served in severalsenior roles. These include stints as Managing Director and CEO of Tata Global BeveragesCOO of the Watches and Jewellery businesses of Titan Company and in the telecom businessof the
Current external appointments:
He is the Chairman of Tata Coffee Ltd. and a Director on the Boards of several otherTata companies including Trent Ltd. Tata Starbucks Pvt. Ltd. Infiniti Retail Ltd. TataUnistore Ltd. and Tata AIA Life Insurance Company Ltd. He is also a member of the Boardof Governors of the Advertising Standards Council of India.
MR. S. SANTHANAKRISHNAN
Appointment: 11th May 2018
Experience: He has specialised knowledge in M&As valuations corporate lawsand technology. He brings to the Board four decades of rich experience in financeaccounts and international accounting standards strategy and planning and corporate laws.He has been an Independent Director for over 16 years in banks and been a Chairman of abank for over 8 years.
He is a fellow member of the Institute of Chartered Accountants of India (ICAI) and aManaging Partner of PKF Sridhar and Santhanam LLP Chartered Accountants. He was a memberin the Central Council of ICAI for 15 years up to 2015 and has served in variouscommittees of the Institute.
Current external appointments: He is a member on the Boards of various Tatacompanies like Tata Realty and Infrastructure Ltd. Tata Housing Development Company Ltd.Eight O'clock Coffee Company Consolidated Coffee Inc. Tata Coffee Vietnam Company Ltd.and a Director in ICICI Home Finance Co. Ltd. He is a Designated Partner of PKF Sridhar& Santhanam LLP a well-known CA firm. He is also actively involved with variousgovernment and industry bodies. He has been a member of the High-level Committee onCorporate Social Responsibility formed by the Ministry of Corporate Affairs and is also aGovernment Nominee for Central Council of the Institute of Company Secretaries of India(ICSI). He is a member of various Charitable organisations like Chairman of CoorgFoundation in Coorg Voluntary Health Services in Chennai and various other Trusts.
MR. SIRAJ CHAUDHRY
Appointment: 3rd July 2017
Experience: His tenure at Cargill spans nearly 24 years out of a career of over 32years in Agriculture and Food and includes handling the leadership role in India for 12years as well as a global commodity trading role in Geneva. Under his leadership since2007 Cargill India through a combination of green fields and acquisitions hassuccessfully built both their consumer FMCG businesses in India and institutionalbusinesses backed by world-class manufacturing facilities early technology adoptionrobust sales and distribution network and an enviable brand portfolio. Cargill's edibleoil fortification plan has been recognised as one of the pioneering efforts in addressingmalnutrition.
He is a Co-Chair of Federation of Indian Chambers of Commerce & Industry (FICCI)National Committee on Agriculture. He has in the past chaired the FICCI the Agricultureand Food Committee of USA-India Business Council (USIBC) in India and the Agriculture andFood Committee at American Chambers of Commerce.
He has been actively engaged with the World Economic Forum on their agriculture agendain India. He is a thought leader in the space of Agriculture and Food and is consulted bycentral and state governments for his views in these fields. He supports and mentorsstart-ups in the space of Food and Agriculture. He has been closely associated with thecause of food security and nutrition. He has been one of the founders of the United WayDelhi chapter and India Food Banking Network.
Current external appointments:
He is presently the Managing Director & CEO of National Collateral ManagementServices Ltd. (NCML) a Fairfax company. He is also on the Boards of Tata Coffee Ltd. asan Independent Director and as a Director on the Boards of NCML Agribusiness ConsultantsPrivate Ltd. NCML Mktyard Private Ltd. NCML Finance Private Ltd. And ArborealBioinnovations Private Ltd.
MR. BHARAT PURI
Appointment: 7th May 2019
Experience: He is the Managing Director of Pidilite Industries Ltd. He started hiscareer with Asian Paints in 1982 and rose to head Sales & Marketing. He moved toCadbury India as Director of Sales & Marketing in 1998 and was appointed its ManagingDirector in 2002. He has held senior leadership positions in Sales Marketing and GeneralManagement at the regional and global level culminating in his becoming Global PresidentChocolates Gum and Candy for Mondelez International. He has been a successful globalbusiness leader who has built energised and led diverse teams across numerousgeographies.
Current external appointments:
He is the Managing Director of Pidilite Industries Ltd. He is also a Director on theBoards of ICA Pidilite Private Ltd. Tata Consumer Products UK Group Ltd. and TataConsumer Products GB Ltd.
MRS. SHIKHA SHARMA
Appointment: 7th May 2019
Experience: She was the Managing Director and CEO of Axis Bank India's thirdlargest private sector bank from June 2009 up to December 2018. As a leader adept atmanaging change she led the Bank on a transformation journey from being primarily acorporate lender to a bank with a strong retail deposit franchise and a balanced lendingbook. She has more than three decades of experience in the financial sector having begunher career with ICICI Bank Ltd. in 1980.
During her tenure with ICICI Bank she was instrumental in setting up ICICI Securities.As Managing Director and CEO of ICICI Prudential Life Insurance Company Ltd. she led thecompany to become the No.1 private sector life insurance company in India.
She was a member of RBI's Technical Advisory Committee RBI's Panel on FinancialInclusion the Committee on Comprehensive Financial Services for Small Businesses andLow-Income Households. She has chaired CII's National Committee on Banking 2015-2017. Shehas a demonstrated track record of building successful and enduring businesses deepunderstanding of business through data and analytics and has built businesses based onconsumer insight and technology execution.
Current external appointments: She is also an independent director on the Boards ofAmbuja Cements Ltd. Mahindra and Mahindra Ltd Tech Mahindra Ltd Dr Reddy's LaboratoriesLtd. She is a member of the Board of Governors of IIM Lucknow a member of the AdvisoryBoard of Bridgespan and an advisor to several companies.
MR. SUNIL D'SOUZA
Managing Director & CEO
Appointment: 4th April 2020
Experience: In his previous role he served as Managing Director of Whirlpool IndiaLtd. for over four years. Prior to this he spent almost 15 years at PepsiCo where heheld several leadership roles. During his stint at PepsiCo he handled all commercialaspects of the company's food and beverage portfolio and successfully led the business ina large cluster of Asian countries. He began his career at Hindustan
Unilever Ltd. in 1993. With over 26 years of rich experience he has strong domainknowledge of the consumer products business with distinct focus on strategy growth andexecution.
He is an engineering graduate from the University of Madras and holds a post-graduatediploma in management from the Indian Institute of Management Calcutta.
Current external appointments:
He is also a Director on the Boards of Tata Starbucks Private Ltd. and several otherTata Consumer group companies.
MR. L. KRISHNAKUMAR
Executive Director & Group CFO
Appointment: He joined as the Head of the Finance function of erstwhile Tata Tea inIndia in 2004 and has handled different roles in the Company in India and the UK.
Experience: He started his career with A. F. Ferguson and Co. where he worked as aSenior Consultant with their management consultancy division. He subsequently worked withLarsen and Toubro Ltd. a diversified conglomerate in a variety of areas and was lastlyin their corporate office as General Manager Finance before joining the Tata group. Heis a member of the Institute of Chartered Accountants of India Institute of CostAccountants of India and Institute of Company Secretaries of India and has diverseexperience in consulting manufacturing service and consumer industries.
Current external appointments: He is also a Director on the Boards of TataStarbucks Ltd. NourishCo Beverages Ltd. and several of the Company's overseassubsidiaries. Mr. D'Souza is the Managing Director & CEO of Tata Consumer.
In his previous role he served as the Managing Director of Whirlpool India Ltd. forfour years. Prior to that he spent almost fifteen years at PepsiCo where he held severalleadership roles. During his stint at PepsiCo he handled all commercial aspects of thecompany's food and beverage portfolio and successfully led the business in a large clusterof Asian countries.
He began his career at Hindustan Unilever Ltd. in 1993. With over 26 years of richexperience he has strong domain knowledge of the consumer products business with distinctfocus on strategy growth and execution.
He is an engineering graduate from the University of Madras and holds a post-graduatediploma in management from the Indian Institute of Management Calcutta.
Mr. KrishnaKumar started his career with A. F. Ferguson and Co. and subsequently workedwith Larsen and Toubro Ltd. He joined the Tata group in 2000 in the Hotels business andthereafter took over as the erstwhile Tata Tea's Head of Finance in 2004. Currently he isthe Executive Director and Group CFO. He leads the Global Finance Strategy and M&AInvestor Relations Global Legal and Internal Audit functions. He is a Director on theBoards of Tata Starbucks Ltd. NourishCo Beverages Ltd. and several of the Company'soverseas subsidiaries.
Mr. Krishnakumar has 20 years of global work experience which includesresponsibilities for strategy corporate finance and M&A across a number ofindustries. He joined the Company as Chief Operating Officer in January 2020. He isresponsible for the India Product Supply Organization (procurement manufacturing supplychain and logistics) Tea Buying and Blending Quality Assurance New Business Venturesand Integration and Transformation management. In his previous role he was Senior VicePresident Tata Sons in the Group Chairman's office leading strategy for consumerbusinesses.
He has also worked with Bank of America Merrill Lynch and Rothschild & Co. amongothers. He holds an MBA from the University of Michigan Ann Arbor and a BBA from theUniversity of Hartford Connecticut.
Mr. Chincholikar has been with the Tata group since 2010. Prior to joining TataConsumer he was with Tata Sons as Senior Vice President Group Human Resources. He hasalso worked in organisations such as Mercer Consulting and Aditya Birla Group inleadership roles in India USA and Singapore.
In his current role he leads the people strategy as well as the sustainabilitystrategy commitment and execution for the global organisation. He holds a post-graduatedegree from the Symbiosis Institute of Business Management Pune and is a graduate inStatistics and Operations Research from the University of Mumbai.
Mr. Ahmad joined in 2015 as the Global Chief Marketing Officer. He has played a keyrole in developing a strong portfolio of global brands with a focus on overall brandhealth profitability and premiumisation. In his current role he is responsible fordriving Tata Consumer's growth in the international markets of Europe USA and Canada.Prior to joining he has had a 20-year career with Reckitt Benckiser holding leadershippositions across the UK India the Middle East and East Asia in both strategic andoperational roles. He is a graduate from St Stephens College Delhi and holds an MBAdegree from Case Western University Cleveland Ohio USA.
Mr. Dash is responsible for driving the growth strategy and outcomes includinginnovations for the Packaged Beverages category in India and for the overall business inBangladesh and the Middle East. He has successfully handled various strategic andoperational roles for the Company. Some of his previous roles include Marketing Head forIndia Team Leader of a Venture Team based in the UK and Senior Director Marketing andBusiness Development for Tata Starbucks. He has also worked for ORG Marg in variouscapacities in Consumer and Market Research. Prior to this he was the Global BrandDirector of Tata Consumer.
Ms. Arora joined the Foods business in 2014 to lead the transformation of thisvertical. She will drive the growth strategy and outcomes including innovations for thePackaged Foods category in India. She has over 30 years of wide-ranging experiencespanning Business Operations Marketing Strategic Planning and Communications. In herprevious role she had set up Five by Six Consulting a boutique strategic marketingconsulting firm advising companies like McCain Foods Britannia and Wipro (Consumer).Prior to this she worked as Head of Marketing & Innovation at Britannia and inleadership positions at Balsara and FCB-Ulka. She has an MBA from IIM Ahmedabad and is aChevening scholar from the London School of Economics.
Mr. Grover leads NourishCo a wholly-owned subsidiary of Tata Consumer. NourishCoprovides meaningful hydration solutions in the non-carbonated ready-to-drink beveragessegment in India and around the world.
He joined Tata Consumer as Marketing Head for South Asia in 2010 and has played a keyrole in achieving several milestones for the Company's branded tea business in India.Prior to this he has worked with Unilever holding significant roles such as GlobalStrategy and Archetypes Director for Beverages and Country Head for Beverages in India.
He has an MBA degree in Marketing from the Indian Institute of Management Kolkata andis an engineering graduate from Punjab Engineering College Chandigarh.
Mr. Kar is Head Sales (India) for all channels for the combined Foods and Beveragesportfolio. He joined Tata Consumer in August 2019. He has over 20 years of experience inSales Marketing & Category
Management. He started his career as a graduate engineer with Tata Motors (erstwhileTata Engineering) and worked in the Automobile and Construction Equipment businesses.
After his MBA he joined ITC Ltd. and worked with them for 16 years in various rolesspanning Sales and Marketing. His interest areas include strategy innovation and salestransformation.
He holds an MBA in Marketing & Finance from XLRI Jamshedpur. He also holds aBachelor of Engineering degree in Mechanical Engineering from Delhi College ofEngineering.
Mr. Sony joined the Company in 2017. He is responsible for the development anddeployment of strategies and the delivery of new businesses/acquisitions/alliances todrive the sustainable profitable growth agenda of the Company. He also oversees theInvestor Relations function of the Company. He has over 22 years of experience and hasheld key leadership roles in the private equity and investment banking world. He was theDirector and India Head of Proterra Investment Partners and Partner at Motilal Oswal PEFund. Before that he successfully co-founded an investment bank. He has led multipleM&A deals and successful investments in the food and consumer space in India and hasassisted companies in their strategic transformation processes. He is a CharteredAccountant and a graduate from St. Xavier's College Kolkata.
Mr. Gupta is Global Head of R&D for Tata Consumer and is responsible for leadingthe R&D function and processes across Packaged Beverages Packaged Foods and RTDBeverages. He joined Tata Consumer as Head of Product Innovation for India in 2013 andsubsequently moved into the role of Head of Global NPD for the Beverages business. Duringhis tenure with the Company he has played a key role in achieving successful launches ofInnovation projects across global markets.
Vikas brings with him the diverse experience of the food and beverage industry withdemonstrated leadership capabilities in NPD cost innovation and supply chain to developand launch innovation projects. Before joining Tata Consumer he has worked inGlaxoSmithKline Consumer Healthcare Ltd. and Unilever India Ltd.
He has a Master's degree in Food Technology from the Central Food Technology ResearchInstitute Mysuru. With over 27 years of experience Mr. Thomas was appointed ManagingDirector & CEO of Tata Coffee effective 1st April 2019. Previously heserved as Executive Director and Deputy CEO of Tata Coffee where he was directlyresponsible for the overall delivery of the plantation transformation and instant coffeeagenda.
In his previous assignment he was associated with Kanan Devan Hills Plantation Company(KDHP) since its inception. KDHP is South India's largest tea plantation company and anassociate company of TGB.
He joined the erstwhile Tata Tea in 1992 as Assistant Manager and rose to the positionof MD of KDHP in 2012. Under his leadership KDHP was awarded The Best Company forEmployee Involvement & Participation' in India for 2015. He remains a Director on theBoard of KDHP and serves on various boards of industry associations.
He has a degree in Computer Science from the University of Jodhpur and has completed anAdvanced Management Programme from INSEAD France.
To the Members of Tata Consumer Products Limited
The Directors present the Annual Report of Tata Consumers Products Limited (formerlyTata Global Beverages Limited) along with the audited financial statements for thefinancial year ended March 31 2020. The consolidated performance of the Company and itsSubsidiaries Associates and Joint-Venture Companies has been referred to whereverrequired.
|Particulars ||Consolidated ||Standalone |
| ||2019-20 ||2018-19 ||2019-20 ||2018-19 |
|Revenue from Operations ||9637 ||7252 ||5690 ||3430 |
|Profit before exceptional items and taxes ||1084 ||768 ||781 ||576 |
|Exceptional items (net) ||(275) ||(33) ||(52) ||- |
|Profit before tax 809 || ||735 ||729 ||576 |
|Provision for tax ||(274) ||(261) ||(206) ||(165) |
|Profit after tax ||535 ||474 ||524 ||411 |
|Share of net profit/(loss) in Associates and Joint Ventures ||(75) ||(17) ||- ||- |
|or the year f Profit ||460 ||457 ||524 ||411 |
|Attributable to: || || || || |
|Owners of the parent ||460 ||408 ||524 ||411 |
|Retained Earnings - Opening Balance ||5667 ||5375 ||2784 ||2552 |
|Add /(Less) || || || || |
|Profit for the year ||460 ||408 ||524 ||411 |
|Other Comprehensive Income/(Expense) ||23 ||66 ||(21) ||3 |
|Dividend* ||(190) ||(178) ||(186) ||(183) |
|Other items ||(58) ||(4) ||35 ||1 |
|Retained Earnings - Closing Balance ||5902 ||5667 ||3136 ||2784 |
*This includes Dividend Tax paid on Dividend declared in FY 2018-19. The tax onDividend proposed for FY 2019-20 is payable by the shareholders.
Your Directors are pleased to recommend for the approval of the shareholders a dividendof Rs. 2.70 per equity share of the Company of Re. 1 each (270%) for the year ended March31 2020.
The Board recommended dividend based on the parameters laid down in the DividendDistribution Policy.
Pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 ("Listing Regulations") the dividend distributionpolicy duly approved by the Board has been put up on the website of the Company and can beaccessed at the link: http://www.tataconsumer.com/docs/default-source/default-document-library/tgbl-dividend-policy342ebc881a2368caa65dff02001c5be1.pdf?sfvrsn=0 .
The dividend on Equity Shares fully paid is subject to the approval of the Shareholdersat the Annual General Meeting ("AGM") scheduled to be held on MondayJuly 6 2020. The dividend once approved by the Shareholders will be paid on or after July8 2020.
If approved the dividend would result in a cash outflow of Rs. 248.82 Crore. The totaldividend pay-out works out to 47.5% (Previous Year: 45.5%) of the Company's standalone netprofit.
The Register of Members and Share Transfer Books of the Company will remain closed fromJune 22 2020 to June 29 2020 (both days inclusive) for the purpose of payment ofthe dividend for the Financial Year ended March 31 2020 and the AGM. Pursuant to theFinance Act 2020 dividend income will be taxable in the hands of the Shareholders w.e.f.April 1 2020 and the Company is required to deduct tax at source ("TDS") fromdividend paid to the Members at prescribed rates as per the Income Tax Act 1961.
TRANSFER TO RESERVES
The Board of Directors have decided to retain the entire amount of profit for FY2019-20 in the profit and loss account.
During the year under review the Company has completed the acquisition of the ConsumerProducts Business (India Foods business) from Tata Chemicals Limited ("TCL").Further details relating to this acquisition are given in a subsequent section of thisBoard report. The Company also acquired the branded business of Dhunseri Tea andIndustries Limited which includes the leading local brands in Rajasthan India LalGhora' and Kala Ghora'.
The Consolidated and Standalone numbers accordingly includes the impact of theseacquisitions.
The Consolidated Revenues at Rs. 9637 Crore reflect an increase of 33% mainly due tothe inclusion of India Foods business. On a like to like basis Revenue from operationsfrom the beverages business at Rs. 7573 Crore recorded a growth of 4% mainly due toimprovement in branded business and in the Non-Branded business mainly due to commencementof instant coffee sales from Vietnam.
Profitbefore exceptional items at Rs. 1084 Crore includes the impact of acquisition ofthe Foods business and improved performance of the branded beverage business arising fromgross margin improvements and good control of spends partially offset by higher spendsbehind brands. The non-Branded business has performed marginally behind previous yearmainly due to underperformance in Coffee plantations partially offset by improvement inpepper plantation and commencement of operations in Vietnam.
The Consolidated Profit after tax at Rs. 535 Crore recorded a growth after absorbingthe impact of exceptional items.
The Group Net Profit for the year remained flatwhile Group Net Profits net of minorityinterest at Rs. 460 Crore recorded a growth of 13% as compared to the previous year.Exceptional items for the year primarily relate to costs arising out of the acquisition ofthe food business and non-cash impairment loss on goodwill relating to the brandedbusinesses in Australia and tea business in the US. The accounting impairment has beenrecognised due to a combination of factors like COVID - 19 related impact on specific outof home business segments changes in discount rates due to market conditions and revisionin business plan sensitivities.
The Standalone Revenues at Rs. 5690 Crore reflect an increase of 66% mainly due to theinclusion of India Foods business. On a like to like basis the Revenue from the Beveragesbusiness at Rs. 3626 Crore recorded a growth of 6% during the year under review. Thegrowth is mainly attributable to volume and value growth across all major brands in itsportfolio coupled with the benefit of completion of acquisition of the local brandedbusiness in Rajasthan. However it is to be noted that the performance in India duringMarch 2020 was impacted by the lockdown declared on account of COVID - 19 pandemic. Profitbefore exceptional items at Rs. 781 Crore was favorably impacted by the acquisition of theIndia Foods business and improved performances in branded beverages business arising fromgross margin improvements partially offset by higher spends behind brands. Profit aftertax at Rs. 524 Crore after absorbing impact of exceptional items reflects a growth of 27%.
IMPACT OF COVID-19 ON THE PERFORMANCE
Commencing from the second half of March 2020 COVID-19 pandemic had an impact on theIndian and International business environment. The Company along with its subsidiaries andaffiliates continued to manufacture and supply essential food and beverage items in therelevant markets. The demand for the Group's products for in-home consumption continueswith some short term stocking up. However extended lock down conditions have caused someadverse impact on sales due to disruptions in market openings and supply chain with impactbeing more pronounced in out-of-home sectors. Impact on future operations would to a largeextent depend on how the pandemic develops and the resultant impact on businesses.
SCHEME OF ARRANGEMENT FOR THE DE-MERGER OF CONSUMER PRODUCTS BUSINESS OF TATA CHEMICALSLIMITED INTO THE COMPANY
Pursuant to the Scheme of Arrangement amongst Tata Chemicals Limited ("TCL")and the Company and their respective shareholders and creditors ("Scheme")under Sections 230 to 232 and other applicable provisions of the Companies Act 2013("ACT") duly sanctioned by the Hon'ble National Company Law TribunalKolkata and Mumbai Bench vide Orders dated January 8 2020 and January 10 2020respectively TCL demerged its Consumer Products Business and the same is vested with theCompany with effect from Appointed Date i.e. April 1 2019. The Scheme came into effect onFebruary 7 2020 i.e. the day on which both the Orders were filed with the respectiveRegistrar of Companies and pursuant thereto the entire Consumer Products Business and allthe assets and liabilities duties and obligations as mentioned under the Scheme have beentransferred to and vested in the Company with effect from April 1 2019.
As per the provisions of the Scheme of Arrangement your Company has issued andallotted 290421986 equity shares of Re. 1 each to the eligible shareholders of TCL whoheld shares as on Record Date i.e. as on March 5 2020. The allotment of the saidshares were approved by the Scheme Implementation Committee of the Board at their meetingheld on March 11 2020. The Company had received the in-principle listing approval of theaforementioned shares from BSE Limited (BSE) The National Stock Exchange of India Limited(NSE) and The Calcutta Stock Exchange Limited (CSE) vide their respective letters datedMarch 18 2020 March 19 2020 and March 20 2020.
However due to the outbreak of COVID-19 and the lock down announced by the State andthe Central Governments the Company could not print and dispatch share certificates tothe shareholders holding shares of the Company in Physical form. In the interest of theshareholders your Company credited the shares held in Dematerialised form. The tradingapproval in respect of 285025471 equity shares of Re. 1 each was received from NSE andBSE vide their respective letter dated March 31 2020 and from CSE vide its letter datedApril 30 2020. The shares were admitted for trading w.e.f. April 1 2020 on NSE and BSEwhereas on CSE the shares were admitted for trading w.e.f. May 4 2020. The Company willcomplete the process of printing and dispatch of the physical share certificates(constituting 1.8% of the total newly issued shares pursuant to the Scheme) to theshareholders after the lockdown restrictions are eased and will also seek the permissionfrom the exchanges for the trading of these shares.
Post the above allotment of shares the paid-up share capital of the Company hadincreased to Rs. 92.16 Crore comprising of 921551715 equity shares of Re. 1 each(previously Rs. 63.11 Crore comprising of 631129729 equity shares of Re. 1 each).
Pursuant to the Scheme of Arrangement the following key events took place in theCompany during Financial Year 2019-20:
(i) Change in Name of the Company
Pursuant to the above Scheme an application was made to the Office of the Registrar ofCompanies ("ROC") West Bengal for issue of a fresh Certificate ofIncorporation for change of name of the Company from Tata Global Beverages Limited to TataConsumer Products Limited. Accordingly ROC issued a fresh Certificate of Incorporationwhich was made effective from February 10 2020. Accordingly the name of the Company waschanged from Tata Global Beverages Limited to Tata Consumer Products Limited effectiveFebruary 10 2020.
(ii) Increase in Authorized Share Capital of the Company
The authorised share capital of the Company increased from Rs. 1100000000 (RupeesOne Hundred and Ten Crore) to Rs. 1250000000 (Rupees One Hundred and Twenty-Five Crore)divided into 1250000000 (One Hundred and Twenty-Five Crore) Equity Shares of Re. 1(Rupee One) each.
(iii) Alteration to Memorandum & Article of Association of the Company
Pursuant to above Scheme the Memorandum and Articles of Association (MoA andAoA') of the Company stands amended as follows:-
- Name Clause' due to change in name to Tata Consumer Products Limited from Tata Global Beverages Limited.
- Object Clause' due to additions/alterations in objects of the Company to include the objects for carrying on the business activities of the Consumer Products Business of Tata Chemicals Limited.
c) Share Capital Clause' due to increase in the Authorised Share Capital of theCompany to Rs. 125 Crore from Rs. 110 Crore.
CHANGES IN SHARE CAPITAL
During the year under review the authorised share capital of the Company increased toRs.1250000000 (Rupees One Hundred and Twenty-Five Crore) divided into 1250000000(Rupees One Hundred and Twenty-Five Crore) Equity Shares of Re. 1 (Rupee One) each and thepaid-up Equity Share Capital as at March 31 2020 is Rs. 921551715 comprising of921551715 equity shares of Re. 1 each. During FY 2019-20 your Company has neitherissued any shares with differential voting rights nor has granted any stock options orsweat equity.
As on March 31 2020 none of the Directors or the Key Managerial Personnel of theCompany holds instruments convertible into equity shares of the Company.
SUBSIDIARIES ASSOCIATES AND JOINT VENTURE COMPANIES
As defined under the Act the Company has 39 subsidiaries 3 associates and 5 jointventure companies. There has been no material change in the nature of the business of thesubsidiaries.
Pursuant to Section 129(3) of the Act the consolidated financial statements of theCompany and its subsidiaries associates and joint ventures prepared in accordance withthe relevant Accounting Standard specified under of the Act and the rules thereunder formpart of this Annual Report. A statement containing the salient features of the financialstatements of the Company's subsidiaries associates and joint ventures in Form AOC-1 isgiven in this Annual Report. Further pursuant to the provisions of Section 136 of theCompanies Act 2013 the audited financial statements along with other relevant documentsin respect of subsidiaries are available on the website of the Company in the linkhttps://www.tataconsumer.com/investors/investor-relations/subsidiaries/subsidiary-financials
The details of the business of some of the subsidiaries associates and joint venturesduring FY 2019-20 are given in the Management Discussion and Analysis ("MD&A")attached.
The Company has revised the policy for determining material subsidiaries in terms ofRegulation 16(1)(c) of then Listing Regulations as amended from time to time. The policyas approved may be accessed on the Company's website at the linkhttps://www.tataconsumer.com/docs/default-source/default-document-library/policy-on-material-subsidiary.pdf?sfvrsn=0 .
PERFORMANCE HIGHLIGHTS OF KEY OPERATING SUBSIDIARIES ASSOCIATES AND JOINT VENTURES
Tata Consumer Products UK Group Ltd UK (TCPG) substantially reflects thefinancial performance of the Tetley business and a few other international brands. Revenuefrom operations in underlying terms and excluding the impact of the Czech Business exitwas flat as compared to the prior year. While decline in everyday black tea category andhigher competitive intensity in some markets continue sales increases were experienced inother markets. In developed markets where TCPG operates everyday black tea category is indecline with growth in non-black tea categories and our focus is to increase our presencein these growing categories.
UK and Canada which are large markets for TCPG recorded a good growth in volumeswhereas adverse performances were experienced in markets like US Australia and Europe(excluding UK). Most of the countries reflected good retail sales in the last month of thefiscal due to short term stocking up resulting from COVID-19 pandemic. However our Foodservice and Out-of-Home businesses mainly in US and Australia have been impacted due tothe lockdown. Profit before tax and exceptional items reflects a robust increase mainlydue to gross margin expansion lower promotional spends and good control over spendsoffset partially by higher investment behind brands. Exceptional items includerestructuring costs and non-cash impairment loss on goodwill relating to the brandedbusinesses in Australia and tea business in the US. The accounting impairment arose due toa combination of factors like COVID-19 related impact on specific out-of-home businessdiscount rates due to market conditions and revision in business plan sensitivities.
Further during the year TCPG has increased its shareholding in Kahutara HoldingsLimited from 65% to 100% at a nominal value to rationalize the holding structure earliercreated for the Russian business from which we exited a couple of years back.
Tata Coffee Limited reported marginally improved revenue from operations. Theimprovement in turnover is mainly due to improved volume in coffee plantations and instantcoffee. The profit before tax was impacted due to underperformance primarily in coffeeplantations impact of lockdown associated with COVID-19 pandemic and lower realization inCoffee extraction business which were partially offset by increased profitability frompepper crop. Profit after tax however is marginally higher as compared to previous yearmainly due to reduction of tax rates in India.
Tata Coffee Vietnam Company Limited 100% subsidiary of Tata Coffee Limited whichhas a state-of-the-art freeze-dried instant coffee plant with an annual capacity of5000MT has started commercial operations in May'2019. The company has successfullystabilized its operations and has continuously improved its capacity utilization quarteron quarter throughout the year. Freeze Dried coffee is a growing segment worldwide in thepremium Instant Coffee Segment. The business generated revenue of Rs. 126 Crore during theyear FY 2019-20.
Eight O'Clock Coffee Limited (EOC) US Revenue growth was flat as comparedto prior year mainly due to improvements in private label sales offset by underperformancein K-Cup sales. However profits before tax and profit after tax is higher as compared tothe previous year mainly due to gross margin expansion coupled with lower weight ofpromotions and lower advertisement expenditure.
Tata Tea Extractions Inc. US had a stable performance as compared to the previousyear notwithstanding the impact of the COVID 19 pandemic. For the year endedMarchprofitsare 31 in line 2020 sales and operating with the previous year. HoweverProfit After Tax was marginally impacted because of lower dividend income received duringthe year.
Amalgamated Plantations Private Limited ("APPL") India - Revenue for theyear is higher by 3% aided by higher orthodox tea sales (volumes and realisation) whereasCTC recorded lower sales. The operating loss in APPL has reduced due to better salesrealisations achieved. The company has reported a loss due to the high debt levels andresultant finance costs. Various restructuring options are being evaluated.
Kanan Devan Hills Plantations Company Private Limited ("KDHP") India -Revenue from operations is flat against previous year mainly due to lower volumes offsetby improved realization. However Profit before tax has reduced as compared to theprevious year primarily due to higher employee costs. The crop production for the year wasimpacted by extensive frost damage followed by drought conditions earlier during the year.
Tata Starbucks Private Limited our joint venture with Starbucks Corporationreflected a growth of 21% for the year due to sales growth in stores coupled with storeexpansion. The sales growth was however subdued on account of the COVID-19 pandemic whichresulted in store close-down across cities. During the year Tata Starbucks has added 39stores taking the overall count to 185 stores as at March 31 2020. Tata Starbucks is nowpresent in 11 cities across India. The business achieved high store growth across formatsairports highways and smaller footprint stores. Profitability was adversely reversal ofdeferred tax assets due to tax rate changes implementation of the new accounting standardfor leases and also to some extent by the impact of lockdown associated with COVID-19pandemic whereas previous year had a benefit arising from recognition of deferred taxassets.
After the year end post the relaxation in the lockdown conditions more than 30 storesin Mumbai Delhi NCR Bengaluru Chennai Pune Kolkata and Surat have opened fordelivery and takeaway.
NourishCo Beverages Limited our 50:50 Joint Venture with Pepsico in Indiareported a lower revenue as compared to the previous year mainly due to the COVID-19related disruptions and rationalization of product range. However profitability has beenmaintained at previous years' levels due to good cost management. The Company hasinitiated the process for exiting the Joint-Venture arrangement and for the buy-out of theother JV partner stake in this company.
Companies which have become or ceased to be Subsidiaries Associates and Joint Ventures
During the FY 2019-20 Coffee Trade LLC the Company's step-down subsidiary which wasincorporated as part of restructuring of operations in Russia was under liquidationconsequent to completion of the restructuring. Tata Consumer Products Overseas HoldingsLimited UK the Company's subsidiary disposed of 100% of the equity shareholding in TataGlobal Beverages Czech Republic a.s. No other company became or ceased to be a subsidiaryjoint venture or associate during FY 2019-20.
The names of the following subsidiaries were changed during the year 2019-20 and tilldate of this report: controls
- Tata Consumer Products UK Group Limited from Tata Global Beverages Group Limited.
- Tata Consumer Products GB Limited from Tata Global Beverages GB Limited.
- Tata Consumer Products Capital Limited from Tata Global Beverages Capital Limited.
- Tata Consumer Products Overseas Holdings Limited from Tata Global Beverages Overseas Holdings Limited.
- Tata Consumer Products US Holdings Inc from Tata Global Beverages US Holdings Inc.
- Tata Consumer Products Canada Inc from Tata Global Beverages Canada Inc.
g) Tata Consumer Products Australia Pty. Limited from Tata Global Beverages AustraliaPty. Limited. For further analysis on the consolidated performance attention is invitedto the section on Management Discussion and Analysis notes to the consolidated financialstatements and Form AOC 1.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION
There are no material changes affecting the financial position of the Companysubsequent to the close of the FY 2019-20 till the date of this report.
The Integrated reporting by the Company is in line with the Integrated Reportingframework developed by the International Integrated Reporting Council. The Company aims toenhance its reporting in line with the framework in a phased manner.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external agencies including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed bythe management and the relevant Board Committees including the Audit Committee the Boardis of the opinion were that the Company's internal financial adequate and operatingeffectively during the financial year 2019-20.
Pursuant to Section 134(5) of the Companies Act 2013 the Board of Directors to thebest of their knowledge and ability confirm that for the financial year 2020:
(i) In the preparation of the accounts the applicable accounting standards have beenfollowed and that there are no material departures;
(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 affairs of the
Company at the end of the financial year and of the profits of the
(iii) They have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;
(iv) They have prepared the accounts on a going concern basis;
(v) forThey have laid down internal financial the Company which are adequate and areoperating effectively;
(vi) They have devised proper systems to ensure compliance with the provisions of allapplicable laws and such systems are adequate and are operating effectively.
DIRECTORS AND KEY MANAGERIAL
Mr. Sunil D'souza was appointed as Additional Director and Managing Director and ChiefExecutive Officer with effect from April 4 2020 for 5 years. A resolution seekingshareholders' approval for approving his appointment and terms of appointment includingremuneration forms part of the Notice of the ensuing Annual General Meeting.
Mr. Harish Bhat (DIN 00478198) retires by rotation and being eligible offers himselffor re-appointment. A resolution seeking shareholders' approval for his re-appointmentforms part of the Notice of the ensuing Annual General Meeting.
The members in the last Annual General Meeting held on June 11 2019 have appointed Mr.Bharat Puri (DIN 02173566) and Mrs. Shikha Sharma (DIN 00043265) as IndependentDirectors for a period of 5 years i.e. from May 07 2019 to May 06 2024 The IndependentDirectors were appointed by the Board based on recommendation of the Nomination andRemuneration Committee after duly considering the integrity experience and expertise ofthe Directors. The Board has also re-appointed Mr. Ajoy Misra as a Managing Director andChief Executive Officer for a period of one year i.e. from April 1 2019 to March 312020.
During the year under review Mr. V. Leeladhar (DIN 02630276) Mrs. Ranjana Kumar (DIN02930881) and Mrs. Mallika Srinivasan (DIN 00037022) ceased to be Independent Directorswith effect from close of business hours on August 25 2019 due to completion of theirrespective terms to the office of directors of the Company. The Board places on record itsappreciation for their invaluable contribution and guidance.
Mr. Ajoy Misra has retired as Managing Director and CEO of the Company on March 312020. The Board placed on record its appreciation for the valuable services rendered byMr. Ajoy Misra during his tenure as Managing Director and CEO of the Company.
During the year under review the non-executive directors of the Company had nopecuniary relationship or transactions with the Company other than sitting feescommission and reimbursement of expenses incurred by them for the purpose of attendingmeetings of the Board/ Committee(s) of the Company.
Pursuant to the provisions of Section 203 of the Act the KMPs of the Company as onMarch 31 2020 were; Mr. Ajoy Misra Managing Director & CEO Mr. L. KrishnakumarExecutive Director & Group CFO Mr. John Jacob Chief Financial officer and Mr.Neelabja Chakrabarty Company Secretary. However consequent upon retirement of Mr. AjoyMisra at the close of business hours on March 31 2020 and Mr. Sunil D'Souza beinginducted as Managing Director & CEO effective April 4 2020 the KMPs of the Companyas on the date of this report are Mr. Sunil D'souza Managing Director & CEO Mr. L.Krishnakumar Executive Director & Group CFO Mr. John Jacob Chief Financial Officerand Mr. Neelabja Chakrabarty Company Secretary.
Apart from the above no other person was appointed or had ceased to be the Director orkey managerial personnel of the Company during FY 2019 - 20.
Brief particulars and expertise of directors seeking appointment/re-appointmenttogether with their other directorships and committee memberships have been given in theannexure to the Notice of the AGM in accordance with the requirements of the ListingRegulations and Secretarial Standards.
BOARD OF DIRECTORS AND MEETINGS
The members of the Company's Board of Directors are eminent persons of provencompetence and integrity. Besides experience strong financial astuteness and leadershipqualities they have a significant degree of commitment towards the Company and devoteadequate time to the meetings and preparation. In terms of requirement of ListingRegulations the Board has identified core skills expertise and competencies of theDirectors in the context of the Company's businesses for effective functioning which aredetailed in the Corporate Governance Report.
The Board meets at regular intervals to discuss and decide on Company / business policyand strategy apart from other Board business. The Board exhibits strong operationaloversight with regular presentations in quarterly meetings. The Board / Committee meetingsare pre-scheduled and a tentative annual calendar of the Board and Committee meetings iscirculated to the Directors well in advance to help them plan their schedule and ensuremeaningful participation in the meetings. Only in case of special and urgent business ifthe need arises the Board's/Committee's approval is taken by passing resolutions throughcirculation or by calling Board/Board Committee meetings at short notice as permitted bylaw. The Company has complied with Secretarial Standards issued by the Institute ofCompany Secretaries of India on Board meetings and Annual General Meetings.
The agenda for the Board and Committee meetings includes detailed notes on the items tobe discussed to enable the Directors to take an informed decision.
The Board of Directors had held 7 (seven) meetings during FY 2019-20. For furtherdetails please refer to the Corporate Governance Report which forms part of this AnnualReport. The intervening gap between the meetings was within the period prescribed underthe Act and the Listing Regulations.
INDEPENDENT DIRECTORS' DECLARATION
The Independent Directors have submitted a declaration that they meet the criteria ofindependence and that they are not aware of any circumstance or situation which exist ormay be reasonably anticipated that could impair or impact their ability to dischargetheir duties with an objective independent judgment and without any external influencepursuant to Regulation 25 of the Listing Regulations.
Further declaration on compliance with Rule 6(3) of the Companies (Appointment andQualification of Directors) Rules 2014 as amended by Ministry of Corporate Affairs("MCA") Notificationdated October 22 2019 regarding the requirement relatingto enrollment in the Data Bank created by MCA for Independent Directors has been receivedfrom all the Independent Directors.
Pursuant to the provisions of Section 149 of the Act the independent directors havesubmitted declarations that each of them meet the criteria of independence as provided inSection 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) ofListing Regulations. In terms of Regulation 25(8) of the Listing Regulations theIndependent Directors have confirmed that they are not aware of any circumstance orsituation which exists or may be reasonably anticipated that could impair or impact theirability to discharge their duties.
Based on the confirmation / disclosures received from the Directors the followingNon-Executive Directors are Independent as on March 31 2020:
1) Mr. Bharat Puri
2) Mrs. Shikha Sharma
3) Mr. S. Santhanakrishnan
4) Mr. Siraj Azmat Chaudhry
COMMITTEES OF THE BOARD
The Company has seven Board Committees as on March 31 2020:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Stakeholders Relationship Committee
4) Risk Management Committee
5) Corporate Social Responsibility Committee
6) Executive Committee
7) Scheme Implementation Committee
During FY 2019 20 Ethics & Compliance Committee and Committee was merged with theBoard. The Scheme Implementation Committee being a Special Committee formed forimplementation of the Scheme of Arrangement with Tata Chemicals Limited has beendissolved after the allotment of shares pursuant to the Scheme in March 2020.
Details of all the Committees along with their main terms composition and meetingsheld during the year under review are provided in the Report on Corporate Governance apart of this Annual Report.
SELECTION AND PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS
The Company has a Nomination and Remuneration Committee ("NRC") whichis responsible for developing competency requirements for the Board based on the industryand strategy of the Company. The Board composition analysis reflects an in-depthunderstanding of the Company including its strategies environment operations financialcondition and compliance requirements.
The NRC makes recommendations to the Board in regard to appointment /re-appointment ofDirectors and Key Managerial Personnel ("KMP"). The role of the NRCencompasses conducting a gap analysis to refresh the Board on a periodic basis includingeach time a Director's appointment or re-appointment is required. NRC is also responsiblefor reviewing the profiles of potential candidates vis-a-vis the required competenciesundertake a reference and due diligence and meeting of potential candidates prior tomaking recommendations of their nomination to the Board. The appointee is also briefedabout the specific requirements for the position including expert knowledge expected atthe time of appointment.
The Nomination & Remuneration policy of the Company is available at:https://www.tataconsumer.com/investors/ policies?reload. The Company's governanceguidelines on Board effectiveness cover aspects relating to composition and role of theBoard Chairman and Directors Board diversity term of Directors retirement age andCommittees of the Board. The guidelines also cover key aspects relating to nominationappointment induction and development of Directors Directors remuneration oversight onsubsidiary performances code of conduct Board effectiveness reviews and various mandatesof Board committees. As per the Governance Guidelines adopted by the Board the retirementage for Managing/Executive Directors is 65 years Non-Executive (Non-Independent)Directors is 70 years and Non-Executive Independent Directors is 75 years.
CRITERIA FOR DETERMINING QUALIFICATIONS POSITIVE ATTRIBUTES AND INDEPENDENCE OF ADIRECTOR
In terms of the provisions of Section 178(3) of the Companies Act 2013 and Regulation19 of the Listing Regulations the NRC has formulated the criteria for determiningqualifications positive attributes and independence of Directors the key features ofwhich are as follows:
Qualifications The Board nomination process encourages diversity of thoughtexperience knowledge age and gender. It also ensures that the Board has an appropriateblend of functional and industry expertise.
Positive Attributes - Apart from the duties of Directors as prescribed in theAct the Directors are expected to demonstrate high standards of ethical behaviorcommunication skills and independent judgment. The Directors are also expected to abide bythe respective Code of Conduct as applicable to them.
Independence - A Director will be considered independent if he / she meets thecriteria laid down in Section 149(6) of the Act the Rules framed thereunder andRegulation 16(1)(b) of the Listing Regulations.
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUAL DIRECTORS
The Board of Directors has carried out an annual evaluation of its own performanceBoard Committees and individual directors pursuant to the provisions of the Act and theListing Regulations.
The Board evaluated its performance after seeking inputs from all the directors on thebasis of criteria such as the Board composition and structure effectiveness of boardprocesses information and functioning etc. The performance of the Committees wasevaluated by the Board after seeking inputs from the committee members on the basis ofcriteria such as the composition of committees effectiveness of committee meetings etc.The above criteria are as provided by the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India.
The Chairman of the Board had one-on-one meetings with the Independent Directors andthe Chairman of NRC had one-on-one meetings with the Executive and Non-Executive(Non-Independent) Directors. These meetings were intended to obtain Directors' inputs oneffectiveness of the Board/Committee processes.
The Board and the NRC reviewed the performance of individual directors on the basis ofcriteria such as the contribution of the individual director to the board and committeemeetings like preparedness on the issues to be discussed meaningful and constructivecontribution and inputs in meetings etc.
In a separate meeting of independent directors performance of non-independentdirectors and the board as a whole was evaluated. The Independent Directors in the saidmeeting also evaluated the quality quantity and timeliness of flow of information betweenthe Company management and the Board that is necessary for the Board to effectively andreasonably perform their duties. Additionally the Chairman of the Board was alsoevaluated on key aspects of his role taking into account the views of executive directorsand non-executive directors in the aforesaid meeting. The above evaluations were thendiscussed in the board meeting that followed the meeting of the independent directors andNRC at which the performance of the Board its Committees and individual directors wasalso discussed. Performance evaluation of independent directors was done by the entireboard excluding the independent director being evaluated.
Pursuant to the provisions of Section 178(3) of the Act and Regulation 19 of theListing Regulations the NRC has formulated a policy relating to the remuneration for theDirectors KMP Senior Management and other employees.
The philosophy for remuneration is based on the commitment of fostering a culture ofleadership with trust.
While formulating this policy the NRC has considered the factors laid down in Section178(4) of the Act which are as under:
That the level and composition of remuneration is reasonable and sufficient toattract retain and motivate Directors of the quality required to run the companysuccessfully;
Relationship of remuneration to performance is clear and meets appropriateperformance benchmarks; and Remuneration to Directors key managerial personnel and seniormanagement involves a balance between fixed and incentive pay reflecting short andlong-term performance objectives appropriate to the working of the Company and its goals.
The key principles governing the Remuneration Policy are as follows:
Role played by the individual;
Reflective of size of the company complexity of the sector/ industry /Company's operations and the Company's capacity to pay;
Consistent with recognised best practices; and
Aligned to any regulatory requirements.
In accordance with the policy the Managing Director Executive Director KMPs SeniorManagement and employees are paid fixed salary which includes basic salary allowancesperquisites and other benefits and also annual incentive remuneration / performance linkedincentive subject to achievement of certain performance criteria and such other parametersas may be considered appropriate from time to time by the NRC and the Board. Theperformance linked incentive is driven by the outcome of the performance appraisal processand the performance of the Company.
REMUNERATION FOR INDEPENDENT DIRECTORS AND NON INDEPENDENT NON EXECUTIVE DIRECTORS
The Non-Executive Directors including Independent
Directors are paid sitting fees for attending the meetings of the Board and Committeesof the Board. As per the policy the overall remuneration (sitting fees and commission)should be reasonable and sufficient to attract retain and motivate Directors aligned tothe requirements of the Company including considering the challenges faced by the Companyand its future growth imperatives. The remuneration should also be reflective of the sizeof the Company complexity of the business and the Company's capacity to pay theremuneration.
The Company pays a sitting fee of Rs. 30000 per meeting per Director for attendingmeetings of the Board Audit Nomination and Remuneration and Executive Committees(Rs.20000 in case of Mr. N. Chandrasekaran Chairman and Mr. Harish Bhat Non-ExecutiveDirector being the employee of other Tata Companies). For meetings of all otherCommittees of the Board a sitting fee of Rs. 15000 per meeting per Director is paid(Rs.10000 in case ofMr. Harish Bhat Non-Executive Director being the employee of otherTata Companies). Within the ceiling as prescribed under the Act the Non-ExecutiveDirectors including Independent Directors are also paid a commission the amount whereofis recommended by the NRC and approved by the Board. The basis of determining the specificamount of commission payable to a Non-Executive Director is related to his attendance atmeetings role and responsibility as Chairman or member of the Board / Committees andoverall contribution as well as time spent on operational matters other than at themeetings.
The shareholders of the Company had approved payment of commission to the Non-ExecutiveDirectors at the Fifty Fifth Annual General Meeting held on July 5 2018 for eachfinancial year to in such manner as the Board of Directors may from time to timedetermine within the overall maximum limit of 1% (one percent) per annum or such otherpercentage as may be specified by the Act from time to time. No Stock option has beengranted to any Director.
As a policy Mr. N. Chandrasekaran Chairman has abstained from receiving commissionfrom the Company.
Further in line with the internal guidelines of the Company no payment is madetowards commission to the Non-Executive Directors of the Company who are in employmentwith any other Tata Company. Accordingly no commission is paid to Mr. Harish Bhat Non-Executive (Non-Independent) Director.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
As trustees of shareholders independent directors play a pivotal role in upholdingcorporate governance norms and ensuring fairness in decision making. Being experts invarious fields they also bring independent judgement on matters of strategy riskmanagement controls and business performance.
At the time of appointing a new Independent Director a formal letter of appointment isgiven to the Director inter alia explaining the role duties and responsibilities of theDirector. The Director is also explained in detail the compliances required from him / herunder the Act SEBI Regulations and other relevant regulations.
By way of an introduction to the Company presentations are also made to the newlyappointed Independent Director on relevant information like overview of the Company'sbusinesses market and business environment growth and performance organisational set upof the Company governance and internal control processes.
Ongoing familiarisation aims to provide insights into the Company and the businessenvironment to enable all the Independent Directors to be updated of newer challengesrisks and opportunities relevant in the Company's context and to lend perspective to thestrategic direction of the Company.
The details for familiarisation programme of the Independent Directors are put up onthe website of the Company. As required under Regulation 46(2)(i) of the ListingRegulations the details of familiarisation programmes conducted during FY 2019-20 is alsoput on the Company's website and the same can be accessed at the link :https://www.tataconsumer.com/investors/Board-Of-Directors-List/familiarization-programme?reload
The Company recognizes and embraces the importance of a diverse board in its success.The Company believes that a truly diverse board will leverage differences in thoughtperspective knowledge skill regional and industry experience cultural and geographicalbackground age ethnicity race and gender which will help the Company to retain itscompetitive advantage. The Board has adopted the Board Diversity Policy which sets out theapproach to diversity of the Board of Directors.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY
The Board has adopted policies and procedures for governance of orderly and efficientconduct of its business including adherence to the Company's policies safeguarding itsassets prevention and detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures. The Company'sinternal control systems are commensurate with the nature of its business the size andcomplexity of its operations.
The Company has a strong and independent in-house Internal Audit ("IA")department that functionally reports to the Chairman of the Audit Committee therebymaintaining its objectivity. Remediation of deficiencies by the IA department has resultedin a robust framework for internal controls and details of which are provided in theManagement Discussion and Analysis Report.
The details including the composition of the Audit Committee and terms of reference ofthe Committee are included in the Corporate Governance Report which is a part of thisreport.
CORPORATE GOVERNANCE AND MD&A
The Company has complied with the corporate governance requirements under the CompaniesAct 2013 and Listing Regulations. A separate section on Corporate Governance along with acertificate from the practicing Company Secretary confirming compliance is annexed andforms part of this report.
A detailed report on Management Discussion and Analysis forms an integral part of thisreport and also covers the consolidated operations reflecting the global nature of ourbusiness.
STATUTORY AUDITORS AND AUDITORS' REPORT
At the 54th Annual General Meeting held on August 18 2017 the shareholders hadapproved the appointment of M/s. Deloitte Haskins & Sells LLP Chartered Accountants(ICAI Firm Registration No.117366W/W-100018) as the Statutory Auditors for a period of 5years commencing from the conclusion of the 54th Annual General Meeting until theconclusion of the 59th Annual General Meeting theto be held in the year 2022 subject toratification shareholders every year if so required under law. Pursuant to the amendmentto Section 139 of the Companies Act 2013 effective May 7 2018 ratification every yearfor the appointment of the Statutory Auditors is no longer required and accordingly theNotice of ensuing Annual General Meeting does not include the proposal for seekingShareholders' approval for ratification of Statutory Auditors' appointment.
M/s. Deloitte Haskins & Sells LLP has furnished a certificate of their eligibilityand consent under section 139 and 141 of the Act and the Companies (Audit and Auditors)Rules 2014 for their continuance as the Auditors of the Company for the FY 2020 - 21. Interms of the Listing Regulations the Auditors have confirmedthat they hold a validcertificate issued by the Peer Review Board of the ICAI. The Statutory Auditors' Reportfor FY 2019-20 on the financial statement of the Company forms part of this Annual Report.The report does not contain any qualifications reservations or adverse remarks ordisclaimer.
The Statutory Auditors of the Company have not reported any fraud as specified underSection 143(12) of the Companies Act 2013 in the year under review.
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed Dr. AsimKumar Chattopadhyay Company Secretary in Practice (FCS No. 2303 Certificate of PracticeNo. 880) to carry out the Secretarial Audit of the Company. The Report of the SecretarialAuditor for FY 2019-20 is attached herewith as Annexure 4. There are no qualificationsobservations or adverse remark or disclaimer in the said report.
Your Board has appointed M/s Shome and Banerjee Practicing Cost Accountants (FirmRegistration Number: 000001) as Cost Auditors of the Company for conducting cost audit forthe FY 2020-21. A resolution seeking approval of the members for ratifying theremuneration payable to the Cost Auditors for FY 2020-21 is provided in the Notice of theensuing Annual General Meeting.
The Cost accounts and records as required to be maintained under section 148 (1) of Actare duly made and maintained by the Company.
The Board of Directors of the Company has formed a Risk Management Committee to frameimplement and monitor the risk management plan for the Company.
The Committee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The Committee considers the risks that impact mid-term to long-termobjective of the business including those reputational in nature. The Company has anelaborate Risk Charter and Riskdefiningrisk policy management governance model riskassessment and prioritization process. The Risk Management Committee reviews and monitorsthe key risks and their mitigation measures periodically and provides an update to theBoard on Company's risks outlined in the risk registers. The Audit Committee hasadditional oversight in the area of financial risks and controls.
Additionally a third-party organization has benchmarked the Company's risk managementpractice with various companies in India and globally and opined it as a leader in riskmanagement practice in the FMCG category. The Company was declared as the winner in thecategory Best Risk Management Framework & Systems FMCG at the 6th edition of TheIndia Risk Management Awards 2020 by CNBC TV-18 and ICICI Lombard. These awards recognizethose organizations and teams that have significantly added to the understanding andpractice of risk management. It also won the CRO Leadership award 2020 from UBS Forum.
VIGIL MECHANISM / WHISTLE BLOWER POLICY
The Company's vigil mechanism allows the Directors and employees to report theirconcerns about unethical behaviour actual or suspected fraud or violation of the code ofconduct /business ethics. The vigil mechanism provides for adequate safeguards againstvictimisation of the Director(s) and employee(s) who avail this mechanism.
No person has been denied access to the Chairman of the Audit Committee.
The Company has revised the Whistle-Blower policy to insert "reporting ofincidents of leak or suspected leak of Unpublished Price Sensitive Information(UPSI)" in terms of Securities and Exchange Board of India (Prohibition of InsiderTrading) Regulations 2015 as amended from time to time and the revised policy wasapproved by the Audit
Committee and the Board at its respective meetings held on March 19 and March 27 2019.The policy as approved may be accessed on the Company's website at the link:http://www.tataconsumer.com/docs/default-source/default-document-library/tgbl_-whistle-blower-policy. pdf?sfvrsn=0 .
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY THE COMPANY
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are provided in Annexure 3 attached to this report.
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the financial year2019-20 were on an arm's length basis and in the ordinary course of business. There areno material related party transactions made by the Company during the year under review.Given that the Company does not have anything to report pursuant Section 134(3) (h) of theCompanies Act 2013 read with Rule 8(2) of the Companies (Accounts) Rules 2014 in FormAOC-2 therefore the same is not provided. All related party transactions are approved bythe Audit Committee and are periodically reported to the Audit Committee. Prior approvalof the Audit Committee is obtained on a yearly basis for the transactions which areplanned and / or repetitive in nature and omnibus approvals are taken as per the policylaid down for unforeseen transactions. The policy on Related Party Transactions asapproved by the Board of Directors is available on the Company's website and may beaccessed at the link: https://www. tataconsumer.com/investors/investor-relations/related_party_disclosure?reload.
The details of the transactions with related parties during FY 2019-20 are provided inthe accompanying financial statements.
Transaction with person or entity belonging to the promoter/ promoter group whichhold(s) 10% or more shareholding in the Company have been disclosed in the accompanyingfinancial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR) AND SUSTAINABILITY INITIATIVES
In compliance with Section 135 of Companies Act 2013 the Company has undertaken CSRactivities projects and programs excluding activities undertaken in pursuance of itsnormal course of business. The Natural Food & Beverages Policy of Tata ConsumerProducts is the apex Sustainability Policy that defines the aspiration to be theconsumer's first choice in sustainable production and consumption. The sustainabilitypillars of the Company are Sustainable Sourcing Climate Change Water Management WasteManagement and Community Development.
The Company aims to support development programs for 1 million community members by theyear 2022. Through Project Jalodari the Company with Tata Trust promotes watersanitation and hygiene (WASH) for the tea communities in Assam and the hill communities inHimachal Pradesh. The Company has provided affordable healthcare to over 100000 communitymembers annually through High Range Hospital Munnar and Research & Referral HospitalChubwa. The Company is proud to collaborate with Tata Chemical Society for RuralDevelopment (TCSRD) with focus on the disadvantagedcommunitiesinMithapurGujaratandtheCoorgFoundation in Kodagu Karnataka. The ImprovingLives Program with UNICEF-ETP is facilitating better health nutrition water &sanitation education and life skills to adolescent girls and women in over 200 teaestates in Assam. Aranya Naturals celebrated its 25th year of enterprise with aninternational conference on Natural Dyes'. Mr. Amitabh Kant CEO Niti Ayogdelivered the inaugural address.
Your Company is one of the six companies in India recognized as Climate ChangeRising Stars' on the CDP India 2019 A-list that was released recently. The carbonfootprint or Green House Gas (GHG) emission for the Company audited by British StandardsInstitute was 26915 tons of CO2e during 2018-19 showing a decrease of 30% between2010-19. About 14% of energy utilised in beverages division in 2019-20 came from renewablesources. All tea packeting centres globally have achieved zero waste to landfill target in2020. Under the Plastic Waste Management Rules in India EPR (Extended ProducerResponsibility) Plan has been framed by your Company for collection and reprocessing ofplastic packaging waste on a brand neutral basis across key markets. In line with our aimto integrate circularity in our business about 21% of all Tata Salt packaging wasrecyclable in 2019-
20. TCPL UK joined the UK Plastics Pact - a collaborative initiative between UKbusinesses and stakeholders across the plastics value chain to embed a circular economyfor plastics in the UK by 2025.
During the year under review the Company has spent Rs. 10.85 Crore (2.42% of theaverage qualifying net profits of last three financial years) on CSR activities onprojects qualifying as per Section 135 of the Companies Act 2013 duly approved by the CSRCommittee of the Board. In as CSR activities under additiontotheprojects specified section135 of Companies Act 2013 the Company has also carried out several other sustainability /responsible business initiatives and projects on a global scale. Salient features of theCSR Policy and details of activities as required under Companies (Corporate SocialResponsibility Policy) Rules 2014 is provided in Annexure 1 forming part of this Report.The CSR Policy may be accessed on the Company's website at the link:https://www.tataconsumer. com/investors/policies?reload
EXTRACT OF ANNUAL RETURN
As provided under Section 92 of the Act and rules framed thereunder the extract ofannual return in Form MGT-9 is given in Annexure 5 which forms part of this report. Incompliance with section 134(3)(a) of the Act MGT 9 is uploaded on Companies website andcan be accessed athttps://www.tataconsumer.com/investors/investor-information/mgt-9?reload .
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are given inAnnexure 2 which forms part of this report. Pursuant to Section 197(14) of the Act thedetails of remuneration received by the Managing Director and the Executive Director fromthe Company's subsidiary company during FY 2019- 20 are also given in Annexure 2 attachedto this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and Regulators / Courts that would impact the going concernstatus of the Company and its future operations.
During the year under review industrial relations remained harmonious at all ouroffices and establishments.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION PROHIBITIONAND REDRESSAL) ACT 2013
The Company has adopted zero tolerance for sexual harassment at workplace and hasformulated 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 and the rules thereunder for preventionand redressal of complaints of sexual harassment at workplace. Awareness programs wereconducted at various locations of the Company. The Company has complied with provisionsrelating to the constitution of Internal Committee under the Sexual Harassment of Women atWorkplace (Prevention Prohibition and Redressal) Act 2013.
During the year under review the Company received one complaint of sexual harassmentand the same was resolved by taking appropriate action. There was no complaint pending ason March 31 2020.
a) As per Listing Regulations the Corporate GovernanceReport with the SecretarialAuditors' Certificate thereon and the Management Discussion and Analysis are attachedwhich forms part of this report.
b) As per Regulation 34 of the Listing Regulations a Business Responsibility Report isattached and is a part of this Annual Report.
c) As per Regulation 43A of the Listing Regulations the Dividend Distribution Policyis uploaded on the Company's website. http://www.tataconsumer.com/docs/default-source/default-document-library/tgbl-dividend-policy342ebc881a2368caa65dff02001c5be1.pdf?sfvrsn=0.
d) The Company has devised proper systems to ensure orderspassed bythe compliance withthe provisions of all applicable Secretarial Standards issued by the Institute of CompanySecretaries of India and that such systems are adequate and operating effectively.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from the public during the year under review.No amount on account of principal or interest on deposits from public was outstanding ason March 31 2020.
PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGSAND OUTGO [PURSUANT TO COMPANIES (ACCOUNTS)
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo pursuant to Section 134(3)(m) of the Act read with Rule 8(3) of theCompanies (Accounts) Rules 2014 is given in Annexure 6 attached to this report.
The Directors wish to convey their deep appreciation to all the employees customersvendors investors and consultants/advisors of the Company for their sincere anddedicated services as well as their collective contribution to the Company's performance.
The Directors also thank the Government of India Governments of various States inIndia Governments of various countries and concerned Government departments for theircooperation.
The Directors appreciate and value the contribution made by every member of the TCPLfamily.