The Board of Directors is delighted to present the 59thAnnual Report on the business and operations of Tata Consumer Products Limited ("theCompany") along with the summary of standalone and consolidated financial statementsfor the year ended March 31 2022.
In compliance with the applicable provisions of the Companies Act2013 ("the Act") the Securities and Exchange Board of India ("SEBI")(Listing Obligations and Disclosure Requirements) Regulations 2015 ("ListingRegulations") this Board?s Report is prepared based on the standalone financialstatements of the Company for the year under review and also present the key highlights ofperformance of subsidiaries joint ventures and associate companies and theircontribution to the overall performance of the Company during the year under review.
Key highlights of consolidated and standalone financial performance forthe year ended March 31 2022 are summarised as under:
| ||Consolidated ||Standalone |
| ||2021-22 ||2020-21 ||2021-22 ||2020-21 |
|2020-21 || || || || |
|Revenue from Operations ||12425 ||11602 ||7932 ||7154 |
|Profit before Exceptional Items and Taxes ||1508 ||1342 ||1178 ||897 |
|Exceptional items (net) ||(52) ||(31) ||(27) ||(61) |
|Profit before Tax ||1456 ||1311 ||1151 ||836 |
|Provision for Tax ||(377) ||(317) ||(265) ||(217) |
|Profit after Tax ||1079 ||994 ||886 ||620 |
|Share of net profit/(loss) in Associates and Joint Ventures ||(64) ||(63) ||- ||- |
|Profit for the year ||1015 ||930 ||886 ||620 |
|Attributable to: || || || || |
|- Owners of the parent ||936 ||857 ||886 ||620 |
|Retained Earnings - Opening Balance ||6396 ||5902 ||3503 ||3136 |
|Add /(Less): || || || || |
|- Profit for the year ||936 ||857 ||886 ||620 |
|- Other Comprehensive Income/(Expense) ||31 ||(112) ||23 ||(4) |
|- Dividend Paid ||(373) ||(249) ||(373) ||(249) |
|- Other items ||(18) ||(1) ||- ||- |
|Retained Earnings - Closing Balance ||6972 ||6396 ||4039 ||3503 |
OPERATIONS AND BUSINESS PERFORMANCE Consolidated Performance
Consolidated revenue from operations for the year at Rs 12425 Croresgrew by 7% as compared to the last year. On a like-to-like basis i.e. net of exits of foodservice businesses in the international market consolidated revenue improved by 9%. Whilethe Indian Branded Business grew by 13% led by Tea Salt and new engines of growth(Ready to Drink and Tata Sampann) the International Business net of exits wasmarginally lower as compared to the previous year. India Branded Business benefitted fromthe expansion of the distribution reach focus on premiumisation and higher investmentbehind brands. For the International business growth trends were witnessed similar topre-covid levels in the later part of the year offsetting the lower offtake in theearlier half due to covid induced pantry loading in the previous year. Improvementsmainly in Coffee plantation and extractions businesses drove 8% growth in the NonBrandedsegment.
(' in Crores)
Profit before exceptional items and taxes at Rs 1508 Crores grew by12%. Operating Margins remained healthy and improved over the prior year. India BrandedBusiness margins improved for the year driven by tapering off of tea commodity costdespite higher investments in brands input cost inflation in foods and growthinitiatives. International Business margins improved over the previous year mainly due tocontrol over spends despite a sharp increase in the coffee commodity prices. Strongheadwinds faced for input cost inflation across business units in both International andIndian markets were managed well.
The Group?s net profit at Rs 1015 Crores grew by 9% afterabsorbing higher exceptional expenditure whilst the share of profits from the jointventure and associates remained flat. Higher exceptional expenditure mainly representscosts incurred for restructuring and re-organisation and acquisition-related costs.Improved Joint Venture performance has been offset by an adverse performance by Associatecompanies. Tata Starbucks? performance improved significantly driven by revenuerecovery and the opening of additional 50 new stores in spite of covid led restrictionsimpacting performance in the early part of the year. The performance of associatecompanies was adversely impacted by lower price realisation lower crop and costpressures.
Revenue from operations at Rs 7932 Crores grew by 11% reflecting growthin India Branded Business. Revenue grew mainly in the Tea Salt and Tata Sampannportfolio led by higher distribution reach investment in brands and premiumisation.Strong support to the brands resulted in an improvement in the market share of Tea by 100basis points and Salt by 400 basis points. Operating margins registered a healthy growthdriven by tapering off of tea commodity cost in spite of input cost inflation and higherinvestments in brands.
Profit before exceptionals and taxes (PBIT) at Rs 1178 Crores grew by31% led by revenue growth improved margins and higher other income. Profit after tax at '886 Crores grew by 43% as compared to the previous year mainly due to improved PBIT andlower tax rate.
DIVIDEND 8 RESERVES Dividend Distribution Policy
According to Regulation 43A of the Listing Regulations the Board hasadopted a Dividend Distribution Policy which had been placed on the website of theCompany and can be accessed at the link:
https://www.tataconsumer.com/investors/policies. and is also providedin Annexure 1 attached to this report.
Declaration and payment of dividend
The Board is pleased to recommend a dividend of Rs 6.05 per equity shareof the Company of Rs 1 each (605%) for the year ended March 31 2022.
The Board recommended dividends based on the parameters laid down inthe Dividend Distribution Policy.
The said dividend on equity shares is subject to the approval of theShareholders at the ensuing Annual General Meeting ("AGM") scheduled to be heldon Monday June 27 2022. If approved the dividend would result in a cash outflow of '557.54 Crores. The total dividend payout works out to 62.95% (Previous Year: 60.25%) ofthe Company?s standalone net profit.
The dividend once approved by the Shareholders will be paid on or fromJune 29 2022 and before July 27 2022.
The Register of Members and Share Transfer Books of the Company willremain closed from Saturday June 11 2022 to Friday June 17 2022 (both days inclusive)to determine the eligible shareholders to receive the dividend for the year ended March31 2022. According to the Finance Act 2020 dividend income will be taxable in the handsof the Members w.e.f. April 1 2020 and the Company is required to deduct tax at sourcefrom the dividend paid to the Members at prescribed rates as per the Income Tax Act 1961.
Details of outstanding and unclaimed dividends previously declared andpaid by the Company are given under the Corporate Governance Report.
Transfer to reserve
As permitted under the Act the Board does not propose to transfer anyamount to general reserve and has decided to retain the entire amount of profit for FY2021-22 in the profit and loss account.
As of March 31 2022 the authorized share capital of the Company wasRs 125 Crores comprising of 1250000000 equity shares of Rs 1 each and the paid-upequity share capital as at March 31 2022 was Rs 92.16 Crores comprising of 921551715equity shares of Rs 1 each.
The Company had neither issued any shares nor instruments convertibleinto equity shares of the Company or with differential voting rights nor has granted anysweat equity. The Company has granted Performance Share Units to the eligible employees ofthe Company and its subsidiary companies in the year under review the details of the sameare provided below:
Performance Share Units
Under authority granted by the Shareholders through Postal Ballot onDecember 28 2021 the Company had adopted and implemented Tata Consumer Products Limited-Share-based Long Term Incentive Scheme 2021 (hereinafter referred to as "TCPL SLTIScheme 2021" or "this Scheme") for grant of 500000 Performance ShareUnits ("PSUs") to the Eligible Employees of the Company and its subsidiary underthis Scheme. This Scheme is intended to reward retain and motivate the Eligible Employeesof the Company and its subsidiary companies as defined in the Scheme for their performanceand participation in the growth and profitability of the Company.
The Nomination and Remuneration Committee ("NRC") administersTCPL SLTI Scheme 2021. This Scheme is in accordance with SEBI (Share Based EmployeeBenefits and Sweat Equity) Regulations 2021 ("SBEB&SE Regulations"). Therehas been no material variation in the terms of the PSUs granted under this Scheme.
During the year under review the Company has granted 65780 PSUs tothe eligible employees in terms of TCPL SLTI Scheme 2021 in January 2022 and no employeewas granted PSUs equal to or exceeding 1% of the issued share capital of the Company. TheVesting period for the PSU granted under the Scheme shall not be less than one year andall the PSUs would vest based on the Company?s performance within a period of 3years from the date of Grant of such PSUs.
In compliance with the requirements of the SBEB&SE Regulations acertificate from Secretarial Auditors confirming implementation of TCPL SLTI Scheme 2021following SBEB&SE Regulations and shareholder?s resolution will be available forelectronic inspection by the members during the AGM of the Company.
The statutory disclosures as mandated under the Act and SBEB&SERegulations along with the aforesaid certificate from the Secretarial Auditors have beenhosted on the website the Company at https://www.tataconsumer.com/investors/investor-information/annual-reports.
Combining Tata Coffee's business into the Company and its wholly-ownedsubsidiary through a Composite Scheme of Demerger and Merger
During the year under review the Board has approved the CompositeScheme of Arrangement amongst the Company Tata Coffee Limited ("TCL") and TCPLBeverages & Foods Limited ("TBFL") and their respective shareholders andcreditors ("the Scheme").
The Scheme inter alia provides for (a) as a first step the demerger ofthe Plantation Business of TCL into TBFL and in consideration the Company (as theholding company of TBFL) will issue 1 equity share of the Company for every 22 equityshares held by shareholders of TCL (other than the Company) ("Demerger"); (b) asa second step followed immediately by the amalgamation of TCL [comprising the RemainingBusiness of TCL (as defined in the Scheme)] with the Company and in consideration theCompany will issue 14 equity shares of the Company for every 55 equity shares held byshareholders of TCL (other than the Company) ("Amalgamation"). On theeffectiveness of the Scheme the shareholders of TCL (other than the Company) as on therecord date will receive an aggregate of 3 equity shares of the Company for every 10equity shares held by them in TCL.
Through this transaction TCL shareholders will get access to multiplegrowth engines and participation in a larger and fast-growing FMCG business. The Companyshareholders are expected to benefit from better synergies and business efficiencies goingforward.
The Scheme is subject to inter-alia receipt of the approval of therequisite majority of the public shareholders and creditors of the Companies the StockExchanges the Securities and Exchange Board of India Regional Director MCA and theRegistrar of Companies National Company Law Tribunals (benches at Kolkata and Bengaluru)and other regulatory authorities as may be applicable.
The Scheme and other documents are hosted on the website of theCompany which can be accessed at the link: https://www.tataconsumer.com/investors/scheme-of-amalgamation/tc-tcplb-with-tcpl.
Purchase of non-controlling interests in Tata Consumer Products UKthrough a preferential issue of equity shares
The Board has approved the acquisition of 23871793 ordinary sharesof ?1 each representing 10.15% paid-up share capital of Tata Consumer Products UK GroupLimited
United Kingdom an existing overseas subsidiary of the Company("TCP UK") from Tata Enterprises (Overseas) AG Zug Switzerland("TEO") a minority shareholder of TCP UK for a total purchase consideration ofRs 570.80 Crores. The consideration payable shall be discharged by way of issue andallotment of 7459935 equity shares of the Company having a face value of Rs 1 each at aprice of Rs 765.16 per equity share on a preferential basis. The issue of said equityshares on a preferential basis has been approved by Shareholders through Postal Ballot onApril 29 2022 and is subject to such other regulatory approvals as may be requiredunder applicable law. On the issuance and allotment of shares to TEO under thistransaction TCP UK will become a wholly-owned subsidiary of the Company and TEO wouldbecome a shareholder of the Company holding 0.80% of the paid- up capital of the Company.
The Postal Ballot Notice result and other documents relating topreferential issue are hosted on the website of the Company which can be accessed at thelink: https://www.tataconsumer.com/investors/shareholder- information/postal-ballots.
The above transactions along with future re-organisation will helpunlock value for both the Company and TCL shareholders who are expected to benefit fromthe resulting efficiencies and operational administrative and financial synergies.
MATERIAL CHANGES AND COMMITMENT AFFECTING THE FINANCIAL POSITION
No material changes are affecting the financial position of theCompany after the close of the FY 2021-22 till the date of this report.
IMPACT OF COVID-19 PANDEMIC ON THE PERFORMANCE Overall the groupperformance was marginally impacted by the ongoing COVID-19. In the early part of theyear the 3rd wave caused some disruptions for India Branded Business but itwas able to recover in the later part of the year. The earlier uptick in tea prices due tocovid induced shortage in crop tapered off and resulted in improvement in margins.International business in the early part of the year cycled a higher base with COVID-19induced pantry stocking however volume growth returned in major markets for both tea andcoffee in the international space by end of FY 2021-22. Tata Starbucks was impacted in theearly part of the year with store operations being disrupted however by end of the year2021-22 operations are normalized.
The business continued to strengthen its foundations as a FocusedConsumer Products Company. During the current year significant progress was made on thesix strategic pillars identified at the beginning of the year.
Strengthen and accelerate core business
Key initiatives include focus on powering brands through higherinvestments driving premiumisation distribution expansion and developing alternatechannels for growth in India Business. The Company has met the commitment of 1.3 millionoutlets in India by end-March for direct reach. Significant progress made in salesthrough alternate channels with modern trade growing significantly and strengthening ourposition in the e-commerce channel. With investments and increased distribution marketshare for both tea and salt has increased.
Drive digital and innovation
Digital is being embedded into every part of the business to stay intune with technological advancements and drive efficiencies across the value chain. Thedistribution chain has been completely digitised. After the implementation of SAP S/4 HANAin the India business the platform is being rolled out across our other businesses(mainly International and Tata Coffee) and we have initiated the setup of an enterprisedata platform to draw rich insights and analyse to support the business. Digitalinitiatives are enabling every touchpoint in the consumer journey as well as enablingautomation in the supply chain. The Company?s innovation efforts are focused onunderstanding and pre-empting evolving consumer trends and coming up with high-quality anddifferentiated products to delight these increasingly discerning consumers. The innovationcontribution to turnover has increased 2x times over prior year.
The focus is on improving efficiency and during the year significantsteps were taken. Integration of Tata Soulfull and Tata SmartFoodz was completed withinthree months of transaction close. Operations were further streamlined in India andInternational markets to drive operational efficiency. The major initiatives include theNetwork optimization and operating model design for the foods 3P network and convertingthe Australian business into a distributor model. During the year as part of ourportfolio evaluation we exited our tea cafe format Quick Service Restaurant business.This will enable our Company to better focus on its core FMCG business. A re-organisationplan was announced for the merger of
Tata Coffee Limited and simplification of the international business.This would yield operational efficiencies in management legal and administrative costsassist in creating a single listed entity in capturing the full value of the Group createfocused verticals for extraction and plantations and unlocking significant potentialsynergies going forward. We plan to further reduce the number of operational entities inthe TCP Group over the period of the next few years to drive efficiencies.
Create Future-Ready Organisation
The Company was certified as a Great Place to Work?? andrecognized for its commitment to fostering a positive company culture with anemployee-first approach. The Great Place to Work? is the global authority on workplaceculture. In India the Great Place to Work Institute partners with more than 1100organizations annually across over 22 industries to help them build High-Trust High-Performance Cultures designed to deliver sustained business results. Thecertification is awarded post an extensive survey and based purely on employee feedbackand their experience working at the organization.
Explore new opportunities
Our inorganic agenda allows us to expand into new categories andrecruit new sets of consumers. With the acquisition of Tata SmartFoodz Limited the Groupforayed into the Ready to Eat ("RTE") category. The company owns the brand"TataQ" and a manufacturing facility that can cater to expansion in theGroup?s product portfolio. The acquisition provides a potential opportunity to unlocksynergies across the value chain by integrating operations within the Group as well as theoption to leverage technology to create a strong pipeline of value- added products inother parts of the food business.
As part of the Tata Group the ethos of responsibility andsustainability are interwoven in our corporate and work philosophy. We are committed to asustainable way of doing business and for more details refer to Management Discussion andAnalysis Report.
SUBSIDIARIES JOINT VENTURES AND ASSOCIATE COMPANIES As defined underthe Act the Company has 42 subsidiaries 3 joint ventures and 2 associate companies asat March 31 2022.
Companies that have become or ceased to be Subsidiaries JointVentures and Associates Tata SmartFoodz Limited India ("TSFL")
During the year under review the Company acquired a 100% equity stakeof TSFL from Tata Industries Limited consequent to which TSFL became a wholly-ownedsubsidiary of the Company with effect from November 16 2021. TSFL is inter alia engagedin the business of manufacturing distribution and marketing of ready- to-eat packagedfood products under the "Tata Q" brand in India.
TRIL Constructions Limited India ("TRILC")
During the year under review the Company acquired compulsorilyconvertible preference shares ("CCPS") held by the Tata Realty andInfrastructure Limited ("Tata Realty") in TRILC and made the additionalinvestment by way of subscription of CCPS of TRILC. TRILC was formed as an SPV by theCompany and Tata Realty with the object of real estate development of a land parcel inBengaluru. The Company?s effective stake in TRILC thereafter increased from 48.40% to80.46% of the paid-up share capital of TRILC on a fully diluted basis resulting in TRILCbecoming a subsidiary with effect from November 17 2021 (earlier it was an associatecompany).
TCPL Beverages & Foods Limited India ("TBFL")
TBFL was incorporated on February 25 2022 as a wholly-ownedsubsidiary of the Company. The main objects of TBFL include inter alia carrying on thebusiness of manufacturing trading producing cultivating and selling beverages andfoods of all kinds and of cultivating coffee tea etc.
Except as mentioned above no other company/entity became or ceased tobe a subsidiary joint venture or associate during FY 2021-22 and there has been nomaterial change in the nature of the business of the subsidiaries.
The Company has 3 unlisted material subsidiaries incorporated outsideIndia i.e. Tata Consumer Products GB Limited Tata Consumer Products UK Group Limited andthe Eight O?Clock Coffee Company Limited.
In line with the requirements of the Act and the Listing Regulationsthe Company has formulated a Policy for determining Material Subsidiaries and the same canbe accessed on the Company?s website at https://www.tataconsumer.com/investors/policies.
During the year under review the said Policy was reviewed and amendedby the Audit Committee & the Board of Directors to encompass inter-alia the regulatorychanges brought as per amendment in Regulation 16 of Listing Regulations (effective fromMay 5 2021).
Consolidated Financial Statements
According to Section 129(3) of the Act the consolidated financialstatements of the Company and its subsidiaries joint ventures and associates areprepared in accordance with the relevant Indian Accounting Standard specified under theAct and the rules thereunder form part of this Annual Report. A statement containing thesalient features of the financial statements of the Company?s subsidiaries jointventures and associates in Form no. AOC-1 is given in this Annual Report.
Further pursuant to the provisions of Section 136 of the Act thefinancial statements along with other relevant documents in respect of subsidiaries areavailable on the website of the Company at the link:https://www.tataconsumer.com/investors/investor-relations/subsidiaries/subsidiary-financials.
The details of the business of key operating subsidiaries associatesand joint ventures during FY 2021-22 are given in the Management Discussion and AnalysisReport which forms part of this Annual Report.
PERFORMANCE HIGHLIGHTS OF KEY OPERATING SUBSIDIARIES JOINT
VENTURES AND ASSOCIATES
Tata Consumer Products UK Group Ltd UK ("TCP UK")
TCP UK reflects the financial performance of International TeaBusiness. The major brands are Tetley Good Earth and Teapigs. On a like-to-like basisi.e. net of business exits Revenue declined by 3% in constant currency. Whilst there wasrevenue growth in the later part of the year the early part of the year recorded mutedperformance due to Covid related pantry loading in the previous year. Profit after tax atRs 143 Crores reflected a growth of 13% as compared to the previous year. Operating Margingenerally remained flat against the prior year mainly driven by control over spendsdespite inflation driven input cost increases. Improvement in profit after tax was aidedby lower exceptional expenditure. In the current year exceptional expenditure mainlyrepresents costs incurred for unlocking synergies and to create a future- readyorganization whilst the previous year had the impact of disposal of businesses.
In the UK revenue was lower by 3% mainly led by softness in mainstreamgrocery however Out-ofHome consumption has grown with trends back to pre- covid levels.Teapigs and Good Earth continue to grow by 8% over the prior year with the increase inmarket share. Fruit & Herbal based Good Earth tea Good Earth Kombucha and Good Energylaunched in the prior year continues to grow and is getting good traction with theconsumers. Operating margins marginally improved led by control over spends offset partlyby inflationary trends mainly on input costs. Investment behind brands continues with anew campaign on "Tetley" on National TV and social media.
In Canada we continued to hold the leading position in the Tea market.For the current year a revenue decline of 7% in constant currency was led by a declinein both specialty and regular tea mainly due to Covid-related pantry stocking in theprevious year coupled with covid- related restrictions in the early part of the year. Thefocus on digital sales led the e-commerce channel delivering double-digit growth and aDirect-to-Consumer website was launched. We continued to build on our success in TetleySuper Teas by driving distribution and launched the new Super Multivitamin teas which weresupported by an integrated campaign.
Other smaller markets had a mixed performance. Australia had afavourable performance on account of the change in distribution model and Tetley continuedto gain market share and firmly established itself as a significant player in theMainstream black tea brand. US Branded Tea was impacted by volume decline due to theCOVID-19 induced higher base in the previous year whilst the rest of Europe?sperformance was stable.
Tata Coffee Limited India ("TCL"):
Revenue from Operations at Rs 817 Crores grew by 11% against the prioryear. Profit after tax at Rs 102 Crores was marginally higher than the previous year.Revenue growth was driven by Coffee Extractions through higher volume and valuerealisation despite the challenging demand scenario in some markets. Coffee Plantationsrecorded growth both for Arabica and Robusta led by higher volumes and prices. Teaplantations were impacted by lower volumes on account of adverse weather conditions andlower price realisation.
Tata Coffee Vietnam Company Limited Vietnam ("TCV"):
Revenue from Operations at Rs 258 Crores grew by 13% against theprevious year in constant currency. TCV
recorded a Profit after tax of Rs 5 Crores as compared to a loss in theprevious year. Revenue growth was led by higher volume and value realisation. Plantoperations improved with 98% capacity utilization for the year. Profitability improvementwas mainly led by revenue growth and cost mitigation strategy despite significantinflationary pressure on costs.
Eight O'Clock Coffee Company USA ("EOC"):
Revenue from Operations at Rs 1296 Crores was flat against theprevious year in constant currency. Profit after tax at Rs 172 Crores grew by 10%. Priceincrease taken to manage inflation in coffee commodity costs was offset by volume-relatedsoftness mainly in bags due to covid led pantry loading in the prior year. Operatingmargin improved mainly due to price increases taken to partially offset inflationarypressure on green cost proactive coffee commodity hedging and cost managementinitiatives. A new Digital campaign was launched for the Eight O?Clock coffee brand"Over delivery in every cup" and video creative for Barista blends - "BeYour Own Barista" proposition to drive awareness. EOC continued scaling innovationswith range extensions in Flavors of America and Barista Blends.
NourishCo Beverages Limited India ("NourishCo"):
Revenue from Operations at Rs 344 Crores grew by 83% over the previousyear driven by strong brand performance and higher distribution reach. All three flagshipbrands - Tata Gluco Plus Tata Copper Water and Himalayan registered strong growth. A newvariant of Tata Gluco Plus in the form of Jelly was launched during the year whichreceived good traction from target customers. Tata Copper Water continues to deliversubstantial growth in the core markets while rapidly expanding its footprints in newgeographies. Himalayan also registered double-digit growth with higher distribution andimproved realisation against the prior year.
Amalgamated Plantations Private Limited India ("APPL"):
Revenue from Operations at Rs 852 Crores grew by 5%. APPL reported anet loss due to lower realization and wage cost increase. Prior year had recordedsubstantial increase in tea prices due to covid induced crop shortages which tapered offin the current year. APPL with continued focus on quality initiatives achieved betterrealisation as compared to market trends.
Kanan Devan Hills Plantations Company Private Limited India("KDHP"):
Revenue from Operations at Rs 394 Crores was lower by 8%. Profit aftertax was lower as compared to the previous year mainly driven by crop loss due to extremeweather conditions.
Tata Starbucks Private Limited India ("TSPL"):
Revenue from Operations at Rs 636 Crores grew by 76% and net lossdeclined significantly. Revenue growth was led by higher revenue realization from existingstores and due to new stores added during the year. As Covid restrictions eased throughthe year robust sequential recovery of sales was achieved and added 50 new stores withexpansion into 8 new cities. The new stores are a mix of landmark store openings viz.Golden Temple complex in Amritsar Jio World Drive in Bandra Kurla Complex in Mumbai andBrahmaputra Riverfront in Guwahati and smaller footprint stores. Tata Starbucks cafe nowhas 268 stores across 26 cities in India.
For further analysis on the consolidated performance attention isinvited to the section on Management Discussion and Analysis notes to the consolidatedfinancials and Form No. AOC 1
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments & Cessation ofDirectors
Mr. N. Chandrasekaran (DIN 00121863) Non-Executive (Non-Independent)Director of the Company who was retiring by rotation at the 58th AnnualGeneral Meeting held on June 25 2021 ("58th AGM") was re-appointedby the Members at 58th AGM.
Mr. P. B. Balaji (DIN 02762983) who was earlier appointed asAdditional Director with effect from August 8 2020 and in respect of whom a noticeunder Section 160 of the Act was received from a member was appointed as Non-Executive(Non-Independent) Director by the Members at 58th AGM. Further Mr. P. B.Balaji NonExecutive Non-Independent Director of the Company retires by rotation andbeing eligible offers himself for re-appointment. A resolution seeking Members?approval for his re-appointment forms part of the Notice of the ensuing Annual GeneralMeeting.
Dr. K. P. Krishnan (DIN 01099097) was appointed as an AdditionalDirector under the category of NonExecutive Independent Director with effect from October
22 2021 subject to the approval of members. The Members throughPostal Ballot on December 28 2021 approved the appointment of Dr. K. P. Krishnan as aNonExecutive Independent Director of the Company for a term of 5 years commencing fromOctober 22 2021 up to October 21 2026.
Mr. David Crean (DIN 09584874) was appointed as an Additional Directorunder the category of Non-Executive Independent Director with effect from May 4 2022subject to the approval of members. Mr. David Crean holds office as an AdditionalDirector till the conclusion of the ensuing 59th Annual General Meeting("59th AGM"). A notice under Section 160 of the Act has beenreceived from a member nominating the candidature of Mr. David Crean for appointment asNon-Executive Independent Director of the Company. The Nomination and RemunerationCommittee ("NRC") and the Board have considered and recommended to the Membersfor the appointment of Mr. Crean as Non-Executive Independent Director and a resolutionseeking Shareholders? approval for his appointment forms part of the Notice of theensuing 59th AGM.
Mr. Siraj Chaudhry (DIN 00161853) was appointed as an IndependentDirector at the 54th Annual General Meeting held on August 18 2017 for aperiod of 5 years with effect from July 3 2017 till July 2 2022. Based on therecommendation of the NRC his re-appointment for a second term of 5 years is proposed atthe ensuing 59th AGM for the approval of the Members by way of specialresolution.
Mr. S. Santhanakrishnan (DIN 00032049) Non-Executive IndependentDirector of the Company has resigned and ceased to be a Director of the Company effectiveclose of business hours of October 12 2021. The Board places on record its appreciationfor his invaluable contribution and guidance during his tenure as Director of the Company.
The above appointments/re-appointments were recommended by Nominationand Remuneration Committee and approved by the Board and consequently recommended by theBoard to Members as applicable.
Brief particulars and expertise of directors seekingappointment/re-appointment together with their other directorships and committeememberships have been given in the annexure to the Notice of the AGM in accordance withthe requirements of the Listing Regulations and Secretarial Standards.
Key Managerial Personnel
As on March 31 2022 the following were Key Managerial Personnel("KMP") of the Company as per Sections 2(51) and 203 of the Act:
a) Mr. Sunil D?Souza Managing Director & CEO
b) Mr. L. Krishnakumar Executive Director & Group CFO
c) Mr. John Jacob Chief Financial Officer and
d) Mr. Neelabja Chakrabarty Company Secretary.
Pecuniary relationship or transactions with the Company
During the year under review the Non-Executive Directors of theCompany had no pecuniary relationship or transactions with the Company other than sittingfees commission and reimbursement of expenses incurred by them for the purpose ofattending meetings of the Board/ Committee(s) of the Company.
BOARD OF DIRECTORS AND MEETINGS The Board of Directors
The Board of the Company is comprised of eminent persons with provencompetence and integrity. Besides the experience strong financial acumen strategicastuteness and leadership qualities they have a significant degree of commitment towardsthe Company and devote adequate time to the meetings and preparation. In terms of therequirement of the Listing Regulations the Board has identified core skills expertiseand competencies of the Directors in the context of the Company?s businesses foreffective functioning which are detailed in the Corporate Governance Report.
Committees of the Board
As required under the Act and the Listing Regulations the Company hasconstituted the following statutory committees:
1) Audit Committee
2) Nomination and Remuneration Committee
3) Stakeholders Relationship Committee
4) Risk Management Committee
5) Corporate Social Responsibility & Sustainability Committee
In addition to the above the Board has formed an Executive Committeeto review specific business operational matters and other items that the Board may decideto delegate.
Details of all the Committees such as terms of reference compositionand meetings held during the year under review are provided in the Report on CorporateGovernance a part of this Annual Report.
The Board from time to time based on the necessity has delegatedcertain operational power to committees of directors formed for specific purposes likedisinvestment of non-strategic investment matters relating to the Scheme of ArrangementPreferential issue of shares etc.
The Board meets at regular intervals to discuss and decide on theCompany/business policy and strategy apart from other Board business. The Board exhibitsstrong operational oversight with regular presentations in quarterly meetings. TheBoard/Committee meetings are pre-scheduled and a tentative annual calendar of the Boardand Committee meetings is circulated to the Directors well in advance to help them plantheir schedule and ensure meaningful participation in the meetings. Only in case ofspecial and urgent business if the need arises the Board?s or Committee?sapproval is taken by passing resolutions through circulation or by calling the BoardCommittee meetings at short notice as permitted by law.
The agenda for the Board and Committee meetings includes detailed noteson the items to be discussed to enable the Directors to make an informed decision.
The Board of Directors had held 7 (seven) meetings during FY 2021-22.For further details please refer to the Corporate Governance Report which forms part ofthis Annual Report. The intervening gap between the meetings was within the periodprescribed under the Act and the Listing Regulations.
INDEPENDENT DIRECTORS' DECLARATION
As on March 31 2022 Mr. Bharat Puri Ms. Shikha Sharma Mr. SirajChaudhry and Dr. K. P. Krishnan were Independent Directors on the Board.
According to the provisions of Section 149 of the Act and Regulation 25of the Listing Regulations the Independent Directors of the Company have submitteddeclarations that each of them meets the criteria of independence as provided in Section149(6) of the Act along with Rules framed thereunder and Regulation 16(1) (b) of ListingRegulations. There has been no change in the circumstances affecting their status asindependent directors of the Company. In terms of Regulation 25(8) of the ListingRegulations the Independent Directors have confirmed that they are not aware of anycircumstance or situation that exists or may be reasonably anticipated that could impairor impact their ability to discharge their duties with an objective independent judgmentand without any external influence.
Further the declaration of compliance with Rule 6(3) of the Companies(Appointment and Qualification of Directors) Rules 2014 as amended by the Ministry ofCorporate Affairs ("MCA") Notification dated October 22 2019 regarding therequirement relating to enrollment in the Data Bank created by MCA for IndependentDirectors had been received from all Independent Directors.
SELECTION AND PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS
The Nomination and Remuneration Committee ("NRC") of theBoard is entrusted with the responsibility for developing competency requirements for theBoard based on the industry and strategy of the Company. The Board composition analysisreflects an in-depth understanding of the Company including its strategies environmentoperations financial condition and compliance requirements.
The NRC makes recommendations to the Board regarding theappointment/re-appointment of Directors and Key Managerial Personnel ("KMP")and other members of the Senior Management. The role of the NRC encompasses conducting agap analysis to refresh the Board periodically including each time a Director?sappointment or re-appointment is required.
The NRC is also responsible for reviewing the profiles of potentialcandidates vis-a-vis the required competencies undertaking reference and due diligenceand meeting potential candidates before making recommendations of their nomination to theBoard. The appointee is also briefed about the specific requirements for the positionincluding expert knowledge expected at the time of appointment.
The Remuneration Policy and the Policy on Nomination Appointment andRemoval of Directors of the Company are available at: https://www.tataconsumer.com/investors/policies.
During the year under review the Policy was reviewed and amended bythe NRC and the Board of Directors to encompass inter-a)ia the regulatory changes broughtas per amendment in the Listing Regulations concerning the scope of NRC and criteria ofIndependence of a director.
The Company?s governance guidelines cover aspects mainly relatingto the composition and role of the Board Chairman and Directors Board diversity andCommittees of the Board. As per the Company?s policy on the retirement of Directorsthe retirement age for Managing/ Executive Directors is 65 years Non-Executive(NonIndependent) Directors is 70 years and Non-Executive Independent Directors is 75years.
Criteria for determining qualifications positive attributes andindependence of a director
In terms of the provisions of Section 178(3) of the Act 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 encouragesdiversity of thought experience knowledge age and gender. It also ensures that theBoard has an appropriate blend of functional and industry expertise.
Positive Attributes - Apart from the duties of directors asprescribed in the Act the Directors are expected to demonstrate high standards of ethicalbehavior communication skills and independent judgment. The Directors are also expectedto abide by the respective Code of Conduct as applicable to them.
Independence - A director will be considered independent ifhe/she meets the criteria laid down in Section 149(6) of the Act the Rules framedthereunder and Regulation 16(1)(b) of the Listing Regulations as amended from time totime.
ANNUAL EVALUATION OF THE BOARD ITS COMMITTEES AND INDIVIDUALDIRECTORS
Pursuant to the provisions of the Act Listing Regulations and theGovernance Guidelines for the Tata group companies the Board of Directors has carried outan annual evaluation of its own performance Board Committees and Individual Directors.
The Nomination and Remuneration Committee ("NRC") approved aframework in the form of a questionnaire for annual evaluation of the Board BoardCommittees and Individual Directors.
The Board evaluated its performance after seeking inputs from all theDirectors based on criteria such as the Board composition and structure effectiveness ofboard processes information and functioning etc. The performance of the Committees wasevaluated by the Board after seeking inputs from the Committee members based on criteriasuch as the composition of committees effectiveness of committee meetings etc. The abovecriteria are broadly based on the Guidance Note on Board Evaluation issued by theSecurities and Exchange Board of India on January 5 2017.
In order to ensure confidentiality the Board evaluation was undertakenthrough a Board application for evaluation managed by an independent agency. All theDirectors participated in the evaluation process. The responses received from the Boardmembers were compiled by the independent agency and a consolidated report was submitted tothe Chairman of the NRC and the Chairman of the Board.
The Board and the NRC reviewed the performance of individual Directorsbased on criteria such as the contribution of the individual Director to the Board andCommittee meetings like preparedness on the issues to be discussed meaningful andconstructive contribution and inputs in meetings etc.
In a separate meeting of Independent Directors the performance ofNon-Independent Directors and the Board as a whole and the Chairman of the Company wasevaluated taking into account the views of Executive Directors and Non-ExecutiveDirectors.
The above evaluations were then discussed at the Board meeting thatfollowed the meeting of the Independent Directors and the NRC at which the performance ofthe Board its Committees and individual Directors was also discussed. The performanceevaluation of Independent Directors was done by the entire Board excluding theIndependent director being evaluated.
During the year the Company had also actioned the feedback from theBoard evaluation process conducted in FY 2020-21. The Board Board Committees and theIndependent Directors discussed the evaluation report and various suggestions received inthe evaluation process in FY 2021-22 and agreed on an action plan.
According to the provisions of Section 178(3) of the Act andRegulation 19 of the Listing Regulations the NRC has formulated a policy relating to theremuneration for the Directors KMP Senior Management and other employees.
The philosophy for remuneration is based on the commitment to fosteringa culture of leadership with trust. While formulating this policy the NRC has consideredthe factors laid down in Section 178(4) of the Act which are as under:
That the level and composition of remuneration are reasonableand sufficient to attract retain and motivate Directors of the quality required to runthe company successfully;
The relationship of remuneration to performance is clear andmeets appropriate performance benchmarks; and
Remuneration to Directors key managerial personnel and seniormanagement involves a balance between fixed and incentive pay reflecting short and longterm performance objectives appropriate to the working of the Company and its goals.
The Remuneration Policy of the Company is available at:https://www.tataconsumer.com/ investors/ policies
The key principles governing the Remuneration Policy are as follows:
The role played by the individual;
Reflective of the size of the company complexity of the sector/industry/Company?s operations and the Company?s capacity to pay;
Consistent with recognized best practices; and
Aligned to any regulatory requirements.
In accordance with the Policy the Managing Director & CEOExecutive Director KMP Senior Management and other employees are paid a fixed salarywhich includes basic salary allowances perquisites and other benefits and also annualincentive remuneration/performance- linked incentive subject to achievement of certainperformance criteria and such other parameters as may be considered appropriate from timeto time by the NRC and the Board. The performance-linked incentive is driven by theoutcome of the performance appraisal process and the performance of the Company.
Remuneration for Independent Directors and Non IndependentNon-Executive Directors
The Non-Executive Directors including Independent Directors are paidsitting fees for attending the meetings of the Board and Committees of the Board. As perthe policy the overall remuneration (sitting fees and commission) should be reasonableand sufficient to attract retain and motivate Directors aligned to the requirements ofthe Company including considering the challenges faced by the Company and its futuregrowth imperatives. The remuneration should also be reflective of the size of the Companythe complexity of the business and the Company?s capacity to pay the remuneration.
The Company pays a sitting fee of Rs 30000 per meeting per Directorfor attending meetings of the Board Audit Nomination and Remuneration and ExecutiveCommittees. For Risk Management Stakeholder?s Relationship Corporate SocialResponsibility & Sustainability Committees and other special Board committees asitting fee of Rs 20000 per meeting per Director is paid. The Company also paid sittingfees of Rs 30000 per meeting per Independent Director for attending the IndependentDirectors? meeting.
Within the ceiling as prescribed under the Act the NonExecutiveDirectors 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 Members of the Company had approved payment of commission to theNon-Executive Directors at the Annual General Meeting held on July 5 2018 for eachfinancial year to be distributed among the Directors in such manner as the Board ofDirectors may from time to time determine within the overall maximum limit of 1% (onepercent) per annum of net profit or such other percentage as may be specified by the Actfrom time to time. No Stock option has been granted to any Non-Executive Director.
As a policy Mr. N. Chandrasekaran Chairman has abstained fromreceiving commission from the Company.
Further in line with the internal guidelines of the Company nopayment is made towards commission to the Non-Executive Directors of the Company who arein employment with any other Tata Company. Accordingly no commission was paid to Mr. P.B. Balaji Non-Executive (Non-Independent) Director.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS IndependentDirectors play a pivotal role in upholding corporate governance norms and ensuringfairness in decision-making. Being experts in various fields they also bring independentjudgement on matters of strategy risk management controls and business performance.
At the time of appointing a new Independent Director a formal letterof appointment is given to the Director inter alia explaining the role duties andresponsibilities of the Director. The Director has also explained in detail thecompliances required from him/her under the Act SEBI Regulations and other relevantregulations.
By way of an introduction to the Company presentations are also madeto the newly appointed Independent Director on relevant information like an overview ofthe Company?s businesses market and business environment growth and performanceorganizational set up of the Company governance and internal control processes.
Ongoing familiarisation aims to provide insights into the Company andthe business environment to enable all the Independent Directors to be updated on newerchallenges risks and opportunities relevant to the Company?s context and to lendperspective to the strategic direction of the Company.
Familiarisation programme for the Independent Directors along with thedetails of familiarisation programmes imparted to Independent Director during andcumulative upto FY 2021-22 is placed on the Company?s website and the same can beaccessed at the link: https://www.tataconsumer.com/corporate-governance/compliances-and-fi lings.
The Company recognizes and embraces the importance of a diverse boardin its success. The Company believes that a truly diverse board will leverage differencesin thought perspective knowledge skill regional and industry experience cultural andgeographical background age ethnicity race and gender which will help the Company toretain its competitive advantage. The Board has adopted the Board Diversity Policy (as apart of the Policy on Nomination Appointment & Removal of Directors) which sets outthe approach to the diversity of the Board of Directors. The Policy is available on thewebsite of the Company at https://www.tataconsumer. com/investors/policies.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The Board hasadopted policies and procedures for the governance of orderly and efficient conduct of itsbusiness including adherence to the Company?s policies safeguarding its assetsprevention and detection of frauds and errors accuracy and completeness of theaccounting records and timely preparation of reliable financial disclosures. TheCompany?s internal control systems are commensurate with the nature of its businessthe size and complexity of its operations and such internal financial controls concerningthe Financial Statements are adequate.
The Company has a strong and independent in-house Internal Audit("IA") department that functionally reports to the Chairman of the AuditCommittee thereby maintaining its objectivity. The remediation of deficiencies by the IAdepartment has resulted in a robust framework for internal controls and details of whichare provided in the Management Discussion and Analysis Report. Further Statutory Auditorsin its report expressed an unmodified opinion on the adequacy and operating effectivenessof the Company?s internal financial controls over financial.
The Committee has adopted a Charter for its functioning. The primaryobjective of the Committee is to monitor and provide effective supervision of theManagement?s financial reporting process to ensure accurate and timely disclosureswith the highest levels of transparency integrity and quality of financial reporting.
As on March 31 2022 the Committee comprises Dr. K. P. Krishnan(Chairman) Mr. Bharat Puri Ms. Shikha Sharma and Mr. Siraj Chaudhry. During the yearunder review Mr. S Santhanakrishnan Non-Executive Independent Director ceased asMember and Chairman of the Committee w.e.f. October 12 2021 and Mr. P.B. Balaji hadstepped down as a member of the Committee w.e.f. August 3 2021. Dr. K.P. Krishnan wasappointed as a member as well as Chairman of the Committee effective October 22 2021.
The Committee met 8 (eight) times during the year under review thedetails of which are given in the Corporate Governance Report.
During the year under review there were no instances when therecommendations of the Audit Committee were not accepted by the Board.
The Integrated reporting by the Company is in line with the IntegratedReporting framework developed by the International Integrated Reporting Council (IIRC).The Company aims to enhance its reporting in line with the framework in a phased manner.
CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION AND ANALYSIS
The Company has complied with the corporate governance requirementsunder the Act and the Listing Regulations. A separate section on Corporate Governancealong with a certificate from the practicing Company Secretary confirming compliance formsan integral part of this Annual Report.
A detailed report on Management Discussion and Analysis forms anintegral part of this Annual Report and also covers the consolidated operations reflectingthe global nature of our business.
BUSINESS RESPONSIBILITY REPORT
In accordance with Regulation 34 (2)(f) of the Listing Regulations forFY 2021-22 the Company is providing a Business Responsibility Report which forms part ofthis Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliancesystems established and maintained by the Company work performed by the internalstatutory cost and secretarial auditors including the 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 that the Company?s internal financial controls were adequate andoperating effectively during the financial year 2021-22.
Pursuant to Section 134 (5) of the Act the Board of Directors to thebest of their knowledge and ability confirm that for the financial year ended March 312022:
(i) In the preparation of the annual accounts the applicableaccounting standards have been followed and there are no material departures;
(ii) They have selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profits of the Company for that period;
(iii) They have taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;
(iv) They have prepared the annual accounts on a going concernbasis?;
(v) They have laid down internal financial controls for the Companywhich are adequate and are operating effectively;
(vi) They have devised a proper system to ensure compliance with theprovisions of all applicable laws and such systems are adequate and are operatingeffectively.
CORPORATE SOCIAL RESPONSIBILITY ["CSR"] AND SUSTAINABILITYINITIATIVES
In compliance with Section 135 of the Act the Company has undertakenCSR activities projects and programs excluding activities undertaken in pursuance ofits normal course of business. The Natural Foods & Beverages Policy of the Company isthe apex Sustainability Policy that defines the aspiration to be the consumer?s firstchoice in sustainable production and consumption. The sustainability pillars of theCompany are Sustainable Sourcing Climate Change Water Management Waste Management andCommunity Development.
Under Section 135 of the Act the Company was required to spend Rs13.32 Crores (2%) of the average qualifying net profits of the last three financial yearson CSR activities on projects in FY 2021-22. During the year under review the Company hasspent Rs 13.54 Crores (2.03%) on CSR activities which includes the amount spent onadministrative overheads and for impact assessment. The Board of Directors at theirMeeting approved the same. Accordingly the Company has met its obligation of spending Rs13.32 Crores for FY2021-22. In addition to the projects specified as CSR activities undersection 135 of the Act the Company has also carried out several othersustainability/responsible business initiatives and projects on a global scale.
The Annual Report on CSR containing the composition of the CSR &Sustainability Committee salient features of the CSR Policy details of activities andother information as required under Companies (Corporate Social Responsibility Policy)Rules 2014 are provided in Annexure 2 attached to this Report. The CSR Policy may beaccessed on the Company?s website at the link: https://www.tataconsumer.com/investors/policies.
Since the average CSR obligation for the preceding 3 financial yearsi.e. FY 2018-19 FY 2019-20 and FY 202021 was less than Rs 10 Crores the impactassessment report was not applicable in FY 2021-22. However the Company has voluntarilyundertaken the impact assessment of CSR projects carried out in FY 2020-21 through anindependent agency. The impact assessment report for FY 2020-21 is available on thewebsite of the Company https://www.tataconsumer.com/sustainability.
STATUTORY AUDITORS AND AUDITORS' REPORT At the 54th AGM heldon August 18 2017 the Members had approved the appointment of Deloitte Haskins &Sells LLP ("Deloitte") Chartered Accountants (ICAI Firm RegistrationNo.117366W/W-100018) as the Statutory Auditors for a period of 5 (five) years commencingfrom the conclusion of the 54th AGM until the conclusion of the 59thAGM to be held in the year 2022. Accordingly their first term as Statutory Auditorsexpires at the conclusion of the 59th AGM.
Pursuant to the provisions of Section 139(2)(b) an audit firm can beappointed for two terms of five consecutive years each. Accordingly the Board approvedthe reappointment of Deloitte based on the recommendations of the Audit Committee and thesame is subject to the approval of the Members of the Company. The Notice of ensuing 59thAGM includes the proposal for seeking Members? approval for the re-appointment ofDeloitte as the Statutory Auditors for the second term of 5 (five) years commencing fromthe conclusion of the 59th AGM until the conclusion of the 64th AGMto be held in the year 2027.
deloitte has provided their consent and a certificate of theireligibility under sections 139 and 141 of the Act and the Companies (Audit and Auditors)Rules 2014 for their continuance as the Statutory Auditors of the Company for the secondterm of 5 (five) years. In terms of the Listing Regulations the Auditors have confirmedthat they hold a valid certificate issued by the Peer Review Board of the ICAI.Accordingly Deloitte is eligible for re-appointment as Statutory Auditors of the Company.
The Statutory Auditors? Report for FY 2021-22 on the financialstatement of the Company forms part
of this Annual Report. Auditors have expressed their unmodified opinionon the Standalone and Consolidated Financial Statements and their reports do not containany qualifications reservations adverse remarks or disclaimer.
The Statutory Auditors of the Company have not reported any fraud asspecified under Section 143(12) of the Act in the year under review.
SECRETARIAL AUDITORS AND AUDITORS' REPORT
Pursuant to the provisions of Section 204 of the Act and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed Dr. Asim Kumar Chattopadhyay Company Secretary in Practice (FCS No. 2303Certificate of Practice No. 880) to carry out the Secretarial Audit of the Company. TheReport of the Secretarial Auditor for FY 2021-22 is attached herewith as Annexure 3. Thereare no qualifications observations or adverse remarks or disclaimer in the said report.
COST RECORDS AND COST AUDITORS
During the year under review in accordance with Section 148(1) of theAct the Company has maintained the accounts and cost records as specified by the CentralGovernment. Such cost accounts and records are subject to audit by M/s Shome and BanerjeeCost Auditors of the Company for FY 2021-22.
The Board has re-appointed M/s Shome and Banerjee Cost Accountants(Firm Registration Number: 000001) as Cost Auditors of the Company for conducting costaudit for the FY 2022-23. A resolution seeking approval of the Shareholders for ratifyingthe remuneration payable to the Cost Auditors for FY 2022-23 is provided in the Notice ofthe ensuing Annual General Meeting.
The Cost accounts and records as required to be maintained undersection 148 (1) of the Act are duly made and maintained by the Company.
The Board of Directors of the Company has formed a Risk ManagementCommittee to frame implement and monitor the risk management plan for the Company. TheCommittee is responsible for reviewing the risk management plan and ensuring itseffectiveness. The Committee considers the risks that impact the mid-term to the long-termobjectives of the business including those reputational in nature.
The Company has an elaborate risk charter and risk policy defining therisk management governance model risk assessment and prioritization process. The RiskManagement Committee reviews and monitors the key risks and their mitigation measuresperiodically and provides an update to the Board on the Company?s risks outlined inthe risk registers. The Audit Committee has additional oversight in the area of financialrisks and controls.
Additionally a third-party organization has benchmarked theCompany?s risk management practice with various companies in India and globally andpronounced it as a leader the FMCG category. The Company was consecutively for the thirdtime declared as the winner in the category in "Master of Risk in FMCGcategory" at the eighth edition of The India Risk Management Awards 2022 by CNBCTV-18 and ICICI Lombard. These awards recognize those organizations and teams that havesignificantly added to the understanding and practice of risk management.
VIGIL MECHANISM / WHISTLE-BLOWER POLICY The Company?s vigilmechanism allows the Directors and employees to report their concerns about unethicalbehavior actual or suspected fraud or violation of the code of conduct /business ethicsas well as to report any instance of leak of Unpublished Price Sensitive Information. Thevigil mechanism provides for adequate safeguards against victimization of the Director(s)and employee(s) who avail of this mechanism. No person has been denied access to theChairman of the Audit Committee.
The Whistle-Blower Policy of the Company can be accessed on theCompany?s website at the link: https:// www.tataconsumer.com/investors/policies.
PARTICULARS OF LOANS GUARANTEES AND INVESTMENTS BY THE COMPANY
The particulars of loans guarantees and investments covered under theprovisions of Section 186 of the Act have been disclosed in the financial statements.
RELATED PARTY TRANSACTIONS
During the year under review all Related Party Transactions (RPTs)entered into by the Company were on an arms? length basis and in the ordinary courseof business. These RPTs did not attract provisions of Section 188 of the Companies Act2013 and were also not material RPTs under Regulation 23 of the Listing Regulations. Allrelated party transactions were approved by the Audit Committee and are periodicallyreported to the Audit Committee. Prior approval of the Audit Committee was obtainedperiodically for the transactions which were planned and/or repetitive in nature andomnibus approvals were also taken as per the policy laid down for unforeseen transactions.
None of the transactions with related parties falls under the scope ofSection 188(1) of the Act. The information on transactions with related parties pursuantto Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules2014 in Form AOC-2 does not apply to the Company for the FY 2021-22 and hence the same isnot provided. The details of the transactions with related parties during FY 2021-22 areprovided in the accompanying financial statements.
The transactions with the person or entity belonging to the promoter/promoter group which holds (s) 10% or more shareholding in the Company have been disclosedin the accompanying financial statements.
In line with the requirements of the Act and the Listing Regulationsthe Company has formulated a Policy on Related Party Transactions and the same can beaccessed on the Company?s website at https://www.tataconsumer.com/investors/policies.
During the year under review the Policy was reviewed and amended bythe Audit Committee and the Board of Directors to encompass inter-alia the regulatorychanges brought as per amendment in Regulation 23 of the Listing Regulations (effectivefrom January 1 2022) as well to bring more clarity on certain other operational aspectsas per industry benchmark.
The said Policy was further amended by the Audit Committee and theBoard of Directors on May 3 & 4 2022 respectively to encompass inter-alia theregulatory changes brought as per amendment in Regulation 23 of Listing Regulations(effective from April 1 2022) and criteria for material modification of related partytransactions.
As provided under Section 92(3) & 134(3)(a) of the Act the AnnualReturn for FY 2021-22 is uploaded on the website of the Company and can be accessed athttps:// www.tataconsumer.com/investors/investor-information/ annual-returns.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules 2014 is given in Annexure4 attached to this report.
Pursuant to Section 197(14) of the Act the details of remunerationreceived by the Executive Director from the Company?s subsidiary company during FY2021-22 are also given in Annexure 4 attached to this report.
The statements required under Section 197(12) read with Rule 5(2) and5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014(the Rules?) as amended form part of this report and will be made availableto any Member on request as prescribed therein.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators /Courts that would impact the going concern status of the Company and its futureoperations.
During the year under review industrial relations remained harmoniousat all our offices and establishments.
DISCLOSURES AS PER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE(PREVENTION PROHIBITION AND REDRESSAL) ACT 2013
The Company has adopted zero tolerance for sexual harassment at theworkplace and has formulated a policy on prevention prohibition and redressal of sexualharassment at the workplace in line with the provisions of the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013 and the rules thereunderfor prevention and redressal of complaints of sexual harassment at workplace. Awarenessprograms were conducted at various locations of the Company.
The Company has complied with provisions relating to the constitutionof the Internal Committee under the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013.
There were no complaints relating to sexual harassment pending at thebeginning of the financial year. During the year under review ICC received two complaintsof which one was resolved and the other was under investigation at the end of thefinancial year. Accordingly one complaint remained pending as on the end of the FinancialYear 2021-22.
The Institute of Company Secretaries of India has currently mandatedcompliance with the Secretarial Standards on board meetings and general meetings. Duringthe year under review the Company has complied with the applicable Secretarial Standards.
DEPOSITS FROM PUBLIC
The Company has not accepted any deposits from the public during theyear under review. No amount on account of principal or interest on deposits from thepublic was outstanding as on March 31 2022.
PARTICULARS OF ENERGY CONSERVATION TECHNOLOGY ABSORPTION AND FOREIGNEXCHANGE EARNINGS AND OUTGO [PURSUANT TO COMPANIES (ACCOUNTS) RULES 2014]
The information on conservation of energy technology absorption andforeign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act read withRule 8(3) of the Companies (Accounts) Rules 2014 is given in Annexure 5 attached to thisreport.
The Directors wish to convey their deep appreciation to all theemployees customers vendors investors and consultants/advisors of the Company fortheir sincere and dedicated services as well as their collective contribution to theCompany?s performance.
The Directors thank the Government of India Governments of variousStates in India Governments of various Countries and concerned Government departmentsfor their co-operation.
The Directors regret the loss of life due to the COVID-19 pandemic andare deeply grateful and have immense respect for every person who risked their life andsafety to fight this pandemic.
The Directors appreciate and value the contribution made by everymember employee and their families of the Tata Consumer Products Group.
| ||On behalf of the Board of Directors |
| ||N. Chandrasekaran |
|Mumbai ||Chairman |
|May 4 2022 ||(DIN 00121863) |