Tata Consumer Products Ltd
Directors Reports
Dear Members,
The Board of Directors is delighted to present the 59th
Annual Report on the business and operations of Tata Consumer Products Limited ("the
Company") along with the summary of standalone and consolidated financial statements
for the year ended March 31, 2022.
In compliance with the applicable provisions of the Companies Act,
2013, ("the Act"), the Securities and Exchange Board of India ("SEBI")
(Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing
Regulations"), this Board?s Report is prepared based on the standalone financial
statements of the Company for the year under review and also present the key highlights of
performance of subsidiaries, joint ventures, and associate companies and their
contribution to the overall performance of the Company during the year under review.
FINANCIAL PERFORMANCE
Key highlights of consolidated and standalone financial performance for
the year ended March 31, 2022, are summarised as under:
|
Consolidated |
Standalone |
|
2021-22 |
2020-21 |
2021-22 |
2020-21 |
| 2020-21 |
|
|
|
|
| Revenue from Operations |
12,425 |
11,602 |
7,932 |
7,154 |
| Profit before Exceptional Items and Taxes |
1,508 |
1,342 |
1,178 |
897 |
| Exceptional items (net) |
(52) |
(31) |
(27) |
(61) |
| Profit before Tax |
1,456 |
1,311 |
1,151 |
836 |
| Provision for Tax |
(377) |
(317) |
(265) |
(217) |
| Profit after Tax |
1,079 |
994 |
886 |
620 |
| Share of net profit/(loss) in Associates and Joint Ventures |
(64) |
(63) |
- |
- |
| Profit for the year |
1,015 |
930 |
886 |
620 |
| Attributable to: |
|
|
|
|
| - Owners of the parent |
936 |
857 |
886 |
620 |
| Retained Earnings - Opening Balance |
6,396 |
5,902 |
3,503 |
3,136 |
| 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 |
6,972 |
6,396 |
4,039 |
3,503 |
OPERATIONS AND BUSINESS PERFORMANCE Consolidated Performance
Consolidated revenue from operations for the year at Rs 12,425 Crores
grew by 7% as compared to the last year. On a like-to-like basis i.e. net of exits of food
service businesses in the international market, consolidated revenue improved by 9%. While
the 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, was
marginally lower as compared to the previous year. India Branded Business benefitted from
the expansion of the distribution reach, focus on premiumisation, and higher investment
behind brands. For the International business, growth trends were witnessed similar to
pre-covid levels in the later part of the year, offsetting the lower offtake in the
earlier half due to covid induced pantry loading in the previous year. Improvements,
mainly in Coffee plantation and extractions businesses, drove 8% growth in the NonBranded
segment.
(' in Crores)
Profit before exceptional items and taxes at Rs 1,508 Crores grew by
12%. Operating Margins remained healthy and improved over the prior year. India Branded
Business margins improved for the year driven by tapering off of tea commodity cost,
despite higher investments in brands, input cost inflation in foods, and growth
initiatives. International Business margins improved over the previous year mainly due to
control over spends despite a sharp increase in the coffee commodity prices. Strong
headwinds faced for input cost inflation across business units in both International and
Indian markets were managed well.
The Group?s net profit at Rs 1,015 Crores grew by 9% after
absorbing higher exceptional expenditure whilst the share of profits from the joint
venture and associates remained flat. Higher exceptional expenditure mainly represents
costs incurred for restructuring and re-organisation and acquisition-related costs.
Improved Joint Venture performance has been offset by an adverse performance by Associate
companies. Tata Starbucks? performance improved significantly driven by revenue
recovery and the opening of additional 50 new stores, in spite of covid led restrictions
impacting performance in the early part of the year. The performance of associate
companies was adversely impacted by lower price realisation, lower crop and cost
pressures.
Standalone Performance
Revenue from operations at Rs 7,932 Crores grew by 11% reflecting growth
in India Branded Business. Revenue grew mainly in the Tea, Salt, and Tata Sampann
portfolio, 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 100
basis points and Salt by 400 basis points. Operating margins registered a healthy growth
driven by tapering off of tea commodity cost in spite of input cost inflation and higher
investments in brands.
Profit before exceptionals and taxes (PBIT) at Rs 1,178 Crores grew by
31% 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 and
lower tax rate.
DIVIDEND 8 RESERVES Dividend Distribution Policy
According to Regulation 43A of the Listing Regulations, the Board has
adopted a Dividend Distribution Policy, which had been placed on the website of the
Company and can be accessed at the link:
https://www.tataconsumer.com/investors/policies. and is also provided
in 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 share
of the Company of Rs 1 each (605%) for the year ended March 31, 2022.
The Board recommended dividends based on the parameters laid down in
the Dividend Distribution Policy.
The said dividend on equity shares is subject to the approval of the
Shareholders at the ensuing Annual General Meeting ("AGM") scheduled to be held
on 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%) of
the Company?s standalone net profit.
The dividend once approved by the Shareholders will be paid on or from
June 29, 2022, and before July 27, 2022.
Book closure
The Register of Members and Share Transfer Books of the Company will
remain 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 March
31, 2022. According to the Finance Act, 2020, dividend income will be taxable in the hands
of the Members w.e.f. April 1, 2020, and the Company is required to deduct tax at source
from the dividend paid to the Members at prescribed rates as per the Income Tax Act, 1961.
Unclaimed dividends
Details of outstanding and unclaimed dividends previously declared and
paid 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 any
amount to general reserve and has decided to retain the entire amount of profit for FY
2021-22 in the profit and loss account.
SHARE CAPITAL
As of March 31, 2022, the authorized share capital of the Company was
Rs 125 Crores comprising of 125,00,00,000 equity shares of Rs 1 each, and the paid-up
equity share capital as at March 31, 2022, was Rs 92.16 Crores comprising of 92,15,51,715
equity shares of Rs 1 each.
The Company had neither issued any shares nor instruments convertible
into equity shares of the Company or with differential voting rights nor has granted any
sweat equity. The Company has granted Performance Share Units to the eligible employees of
the Company and its subsidiary companies in the year under review, the details of the same
are provided below:
Performance Share Units
Under authority granted by the Shareholders through Postal Ballot on
December 28, 2021, the Company had adopted and implemented Tata Consumer Products Limited-
Share-based Long Term Incentive Scheme 2021 (hereinafter referred to as "TCPL SLTI
Scheme 2021" or "this Scheme") for grant of 5,00,000 Performance Share
Units ("PSUs") to the Eligible Employees of the Company and its subsidiary under
this Scheme. This Scheme is intended to reward, retain and motivate the Eligible Employees
of the Company and its subsidiary companies as defined in the Scheme for their performance
and participation in the growth and profitability of the Company.
The Nomination and Remuneration Committee ("NRC") administers
TCPL SLTI Scheme 2021. This Scheme is in accordance with SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 ("SBEB&SE Regulations"). There
has been no material variation in the terms of the PSUs granted under this Scheme.
During the year under review, the Company has granted 65,780 PSUs to
the eligible employees in terms of TCPL SLTI Scheme 2021 in January 2022 and no employee
was granted PSUs equal to or exceeding 1% of the issued share capital of the Company. The
Vesting period for the PSU granted under the Scheme shall not be less than one year and
all the PSUs would vest, based on the Company?s performance, within a period of 3
years from the date of Grant of such PSUs.
In compliance with the requirements of the SBEB&SE Regulations, a
certificate from Secretarial Auditors, confirming implementation of TCPL SLTI Scheme 2021
following SBEB&SE Regulations and shareholder?s resolution, will be available for
electronic inspection by the members during the AGM of the Company.
The statutory disclosures as mandated under the Act and SBEB&SE
Regulations, along with the aforesaid certificate from the Secretarial Auditors, have been
hosted on the website the Company at https://www.tataconsumer.
com/investors/investor-information/annual-reports.
KEY DEVELOPMENTS
Combining Tata Coffee's business into the Company and its wholly-owned
subsidiary through a Composite Scheme of Demerger and Merger
During the year under review, the Board has approved the Composite
Scheme of Arrangement amongst the Company, Tata Coffee Limited ("TCL"), and TCPL
Beverages & Foods Limited ("TBFL") and their respective shareholders and
creditors ("the Scheme").
The Scheme inter alia provides for (a) as a first step, the demerger of
the Plantation Business of TCL into TBFL, and in consideration, the Company (as the
holding company of TBFL) will issue 1 equity share of the Company for every 22 equity
shares held by shareholders of TCL (other than the Company) ("Demerger"); (b) as
a second step, followed immediately by the amalgamation of TCL [comprising the Remaining
Business of TCL (as defined in the Scheme)] with the Company and in consideration, the
Company will issue 14 equity shares of the Company for every 55 equity shares held by
shareholders of TCL (other than the Company) ("Amalgamation"). On the
effectiveness of the Scheme, the shareholders of TCL (other than the Company) as on the
record date will receive an aggregate of 3 equity shares of the Company for every 10
equity shares held by them in TCL.
Through this transaction, TCL shareholders will get access to multiple
growth engines and participation in a larger and fast-growing FMCG business. The Company
shareholders are expected to benefit from better synergies and business efficiencies going
forward.
The Scheme is subject to inter-alia receipt of the approval of the
requisite majority of the public shareholders and creditors of the Companies, the Stock
Exchanges, the Securities and Exchange Board of India, Regional Director, MCA and the
Registrar 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 the
Company, 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 UK
through a preferential issue of equity shares
The Board has approved the acquisition of 2,38,71,793 ordinary shares
of ?1 each representing 10.15% paid-up share capital of Tata Consumer Products UK Group
Limited,
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 of
Rs 570.80 Crores. The consideration payable shall be discharged by way of issue and
allotment of 74,59,935 equity shares of the Company having a face value of Rs 1 each, at a
price of Rs 765.16 per equity share on a preferential basis. The issue of said equity
shares on a preferential basis has been approved by Shareholders through Postal Ballot on
April 29, 2022, and is subject to such other regulatory approvals, as may be required
under applicable law. On the issuance and allotment of shares to TEO, under this
transaction, TCP UK will become a wholly-owned subsidiary of the Company and TEO would
become 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 to
preferential issue are hosted on the website of the Company, which can be accessed at the
link: https://www.tataconsumer.com/investors/shareholder- information/postal-ballots.
The above transactions, along with future re-organisation, will help
unlock value for both the Company and TCL shareholders who are expected to benefit from
the 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 the
Company, after the close of the FY 2021-22 till the date of this report.
IMPACT OF COVID-19 PANDEMIC ON THE PERFORMANCE Overall the group
performance was marginally impacted by the ongoing COVID-19. In the early part of the
year, the 3rd wave caused some disruptions for India Branded Business, but it
was able to recover in the later part of the year. The earlier uptick in tea prices due to
covid 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-19
induced pantry stocking, however, volume growth returned in major markets for both tea and
coffee in the international space by end of FY 2021-22. Tata Starbucks was impacted in the
early part of the year with store operations being disrupted, however by end of the year
2021-22, operations are normalized.
STRATEGIC INITIATIVES
The business continued to strengthen its foundations as a Focused
Consumer Products Company. During the current year, significant progress was made on the
six strategic pillars identified at the beginning of the year.
Strengthen and accelerate core business
Key initiatives include focus on powering brands through higher
investments, driving premiumisation, distribution expansion, and developing alternate
channels for growth in India Business. The Company has met the commitment of 1.3 million
outlets, in India by end-March for direct reach. Significant progress made in sales
through alternate channels with modern trade growing significantly and strengthening our
position in the e-commerce channel. With investments and increased distribution, market
share for both tea and salt has increased.
Drive digital and innovation
Digital is being embedded into every part of the business to stay in
tune with technological advancements and drive efficiencies across the value chain. The
distribution chain has been completely digitised. After the implementation of SAP S/4 HANA
in 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 enterprise
data platform to draw rich insights and analyse to support the business. Digital
initiatives are enabling every touchpoint in the consumer journey as well as enabling
automation in the supply chain. The Company?s innovation efforts are focused on
understanding and pre-empting evolving consumer trends and coming up with high-quality and
differentiated products to delight these increasingly discerning consumers. The innovation
contribution to turnover has increased 2x times over prior year.
Unlock Synergies
The focus is on improving efficiency and during the year significant
steps were taken. Integration of Tata Soulfull and Tata SmartFoodz was completed within
three months of transaction close. Operations were further streamlined in India and
International markets to drive operational efficiency. The major initiatives include the
Network optimization and operating model design for the foods 3P network and converting
the Australian business into a distributor model. During the year, as part of our
portfolio 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-organisation
plan 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 costs,
assist in creating a single listed entity in capturing the full value of the Group, create
focused verticals for extraction and plantations, and unlocking significant potential
synergies going forward. We plan to further reduce the number of operational entities in
the 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?? and
recognized for its commitment to fostering a positive company culture with an
employee-first approach. The Great Place to Work? is the global authority on workplace
culture. In India, the Great Place to Work Institute partners with more than 1100
organizations annually across over 22 industries to help them build High-Trust, High-
Performance Cultures™ designed to deliver sustained business results. The
certification is awarded post an extensive survey and based purely on employee feedback
and their experience working at the organization.
Explore new opportunities
Our inorganic agenda allows us to expand into new categories and
recruit new sets of consumers. With the acquisition of Tata SmartFoodz Limited, the Group
forayed into the Ready to Eat ("RTE") category. The company owns the brand
"TataQ" and a manufacturing facility that can cater to expansion in the
Group?s product portfolio. The acquisition provides a potential opportunity to unlock
synergies across the value chain by integrating operations within the Group as well as the
option to leverage technology to create a strong pipeline of value- added products in
other parts of the food business.
Embed sustainability
As part of the Tata Group, the ethos of responsibility and
sustainability are interwoven in our corporate and work philosophy. We are committed to a
sustainable way of doing business and for more details refer to Management Discussion and
Analysis Report.
SUBSIDIARIES, JOINT VENTURES, AND ASSOCIATE COMPANIES As defined under
the Act, the Company has 42 subsidiaries, 3 joint ventures, and 2 associate companies as
at March 31, 2022.
Companies that have become or ceased to be Subsidiaries, Joint
Ventures, and Associates Tata SmartFoodz Limited, India ("TSFL")
During the year under review, the Company acquired a 100% equity stake
of TSFL from Tata Industries Limited, consequent to which TSFL became a wholly-owned
subsidiary of the Company with effect from November 16, 2021. TSFL is inter alia engaged
in the business of manufacturing, distribution, and marketing of ready- to-eat packaged
food products under the "Tata Q" brand in India.
TRIL Constructions Limited, India ("TRILC")
During the year under review, the Company acquired compulsorily
convertible preference shares ("CCPS") held by the Tata Realty and
Infrastructure Limited ("Tata Realty") in TRILC and made the additional
investment by way of subscription of CCPS of TRILC. TRILC was formed as an SPV by the
Company and Tata Realty with the object of real estate development of a land parcel in
Bengaluru. The Company?s effective stake in TRILC thereafter increased from 48.40% to
80.46% of the paid-up share capital of TRILC, on a fully diluted basis, resulting in TRILC
becoming a subsidiary with effect from November 17, 2021 (earlier it was an associate
company).
TCPL Beverages & Foods Limited, India ("TBFL")
TBFL was incorporated on February 25, 2022, as a wholly-owned
subsidiary of the Company. The main objects of TBFL include, inter alia, carrying on the
business of manufacturing, trading, producing, cultivating, and selling beverages and
foods of all kinds and of cultivating coffee, tea, etc.
Except as mentioned above, no other company/entity became or ceased to
be a subsidiary, joint venture, or associate during FY 2021-22 and there has been no
material change in the nature of the business of the subsidiaries.
Material Subsidiaries
The Company has 3 unlisted material subsidiaries incorporated outside
India i.e. Tata Consumer Products GB Limited, Tata Consumer Products UK Group Limited, and
the Eight O?Clock Coffee Company Limited.
In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy for determining Material Subsidiaries and the same can
be accessed on the Company?s website at https://www.
tataconsumer.com/investors/policies.
During the year under review, the said Policy was reviewed and amended
by the Audit Committee & the Board of Directors to encompass inter-alia the regulatory
changes brought as per amendment in Regulation 16 of Listing Regulations (effective from
May 5, 2021).
Consolidated Financial Statements
According to Section 129(3) of the Act, the consolidated financial
statements of the Company and its subsidiaries, joint ventures, and associates are
prepared in accordance with the relevant Indian Accounting Standard specified under the
Act, and the rules thereunder form part of this Annual Report. A statement containing the
salient features of the financial statements of the Company?s subsidiaries, joint
ventures, and associates in Form no. AOC-1 is given in this Annual Report.
Further, pursuant to the provisions of Section 136 of the Act, the
financial statements along with other relevant documents, in respect of subsidiaries, are
available 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, associates,
and joint ventures during FY 2021-22 are given in the Management Discussion and Analysis
Report, which forms part of this Annual Report.
PERFORMANCE HIGHLIGHTS OF KEY OPERATING SUBSIDIARIES, JOINT
VENTURES, AND ASSOCIATES
SUBSIDIARIES
Tata Consumer Products UK Group Ltd, UK ("TCP UK")
TCP UK reflects the financial performance of International Tea
Business. The major brands are Tetley, Good Earth and Teapigs. On a like-to-like basis,
i.e. net of business exits, Revenue declined by 3% in constant currency. Whilst there was
revenue growth in the later part of the year, the early part of the year recorded muted
performance due to Covid related pantry loading in the previous year. Profit after tax at
Rs 143 Crores reflected a growth of 13% as compared to the previous year. Operating Margin
generally remained flat against the prior year mainly driven by control over spends
despite inflation driven input cost increases. Improvement in profit after tax was aided
by lower exceptional expenditure. In the current year, exceptional expenditure mainly
represents costs incurred for unlocking synergies and to create a future- ready
organization whilst the previous year had the impact of disposal of businesses.
In the UK, revenue was lower by 3% mainly led by softness in mainstream
grocery, 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 in
market share. Fruit & Herbal based Good Earth tea, Good Earth Kombucha and Good Energy
launched in the prior year continues to grow and is getting good traction with the
consumers. Operating margins marginally improved led by control over spends offset partly
by inflationary trends mainly on input costs. Investment behind brands continues with a
new 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 decline
in both specialty and regular tea, mainly due to Covid-related pantry stocking in the
previous year coupled with covid- related restrictions in the early part of the year. The
focus on digital sales led the e-commerce channel delivering double-digit growth and a
Direct-to-Consumer website was launched. We continued to build on our success in Tetley
Super Teas by driving distribution and launched the new Super Multivitamin teas which were
supported by an integrated campaign.
Other smaller markets had a mixed performance. Australia had a
favourable performance on account of the change in distribution model and Tetley continued
to gain market share and firmly established itself as a significant player in the
Mainstream black tea brand. US Branded Tea was impacted by volume decline due to the
COVID-19 induced higher base in the previous year whilst the rest of Europe?s
performance was stable.
Tata Coffee Limited, India ("TCL"):
Revenue from Operations at Rs 817 Crores grew by 11% against the prior
year. 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 value
realisation, despite the challenging demand scenario in some markets. Coffee Plantations
recorded growth both for Arabica and Robusta, led by higher volumes and prices. Tea
plantations were impacted by lower volumes on account of adverse weather conditions and
lower price realisation.
Tata Coffee Vietnam Company Limited, Vietnam ("TCV"):
Revenue from Operations at Rs 258 Crores grew by 13% against the
previous year in constant currency. TCV
recorded a Profit after tax of Rs 5 Crores as compared to a loss in the
previous year. Revenue growth was led by higher volume and value realisation. Plant
operations improved with 98% capacity utilization for the year. Profitability improvement
was mainly led by revenue growth and cost mitigation strategy, despite significant
inflationary pressure on costs.
Eight O'Clock Coffee Company, USA ("EOC"):
Revenue from Operations at Rs 1,296 Crores was flat against the
previous year in constant currency. Profit after tax at Rs 172 Crores grew by 10%. Price
increase taken to manage inflation in coffee commodity costs was offset by volume-related
softness mainly in bags due to covid led pantry loading in the prior year. Operating
margin improved mainly due to price increases taken to partially offset inflationary
pressure on green cost, proactive coffee commodity hedging, and cost management
initiatives. A new Digital campaign was launched for the Eight O?Clock coffee brand,
"Over delivery in every cup" and video creative for Barista blends - "Be
Your Own Barista" proposition to drive awareness. EOC continued scaling innovations
with 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 previous
year, driven by strong brand performance and higher distribution reach. All three flagship
brands - Tata Gluco Plus, Tata Copper Water, and Himalayan registered strong growth. A new
variant of Tata Gluco Plus in the form of Jelly was launched during the year which
received good traction from target customers. Tata Copper Water continues to deliver
substantial growth in the core markets while rapidly expanding its footprints in new
geographies. Himalayan also registered double-digit growth with higher distribution and
improved realisation against the prior year.
ASSOCIATES
Amalgamated Plantations Private Limited, India ("APPL"):
Revenue from Operations at Rs 852 Crores, grew by 5%. APPL reported a
net loss due to lower realization and wage cost increase. Prior year had recorded
substantial increase in tea prices due to covid induced crop shortages, which tapered off
in the current year. APPL with continued focus on quality initiatives achieved better
realisation 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 after
tax was lower as compared to the previous year mainly driven by crop loss due to extreme
weather conditions.
JOINT VENTURE
Tata Starbucks Private Limited, India ("TSPL"):
Revenue from Operations at Rs 636 Crores grew by 76% and net loss
declined significantly. Revenue growth was led by higher revenue realization from existing
stores and due to new stores added during the year. As Covid restrictions eased through
the year, robust sequential recovery of sales was achieved and added 50 new stores with
expansion 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 and
Brahmaputra Riverfront in Guwahati, and smaller footprint stores. Tata Starbucks cafe now
has 268 stores, across 26 cities in India.
For further analysis on the consolidated performance, attention is
invited to the section on Management Discussion and Analysis, notes to the consolidated
financials and Form No. AOC 1
DIRECTORS AND KEY MANAGERIAL PERSONNEL Appointments & Cessation of
Directors
Mr. N. Chandrasekaran (DIN 00121863) Non-Executive, (Non-Independent)
Director of the Company, who was retiring by rotation at the 58th Annual
General Meeting held on June 25, 2021 ("58th AGM") was re-appointed
by the Members at 58th AGM.
Mr. P. B. Balaji (DIN 02762983), who was earlier appointed as
Additional Director with effect from August 8, 2020, and in respect of whom, a notice
under 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 and
being eligible, offers himself for re-appointment. A resolution seeking Members?
approval for his re-appointment forms part of the Notice of the ensuing Annual General
Meeting.
Dr. K. P. Krishnan (DIN 01099097) was appointed as an Additional
Director under the category of NonExecutive, Independent Director with effect from October
22, 2021, subject to the approval of members. The Members through
Postal Ballot on December 28, 2021, approved the appointment of Dr. K. P. Krishnan, as a
NonExecutive, Independent Director of the Company for a term of 5 years commencing from
October 22, 2021, up to October 21, 2026.
Mr. David Crean (DIN 09584874), was appointed as an Additional Director
under the category of Non-Executive, Independent Director with effect from May 4, 2022,
subject to the approval of members. Mr. David Crean holds office as an Additional
Director, till the conclusion of the ensuing 59th Annual General Meeting
("59th AGM"). A notice under Section 160 of the Act, has been
received from a member nominating the candidature of Mr. David Crean for appointment as
Non-Executive, Independent Director of the Company. The Nomination and Remuneration
Committee ("NRC") and the Board have considered and recommended to the Members
for the appointment of Mr. Crean as Non-Executive, Independent Director and a resolution
seeking Shareholders? approval for his appointment forms part of the Notice of the
ensuing 59th AGM.
Mr. Siraj Chaudhry, (DIN 00161853) was appointed as an Independent
Director at the 54th Annual General Meeting held on August 18, 2017, for a
period of 5 years with effect from July 3, 2017, till July 2, 2022. Based on the
recommendation of the NRC, his re-appointment for a second term of 5 years is proposed at
the ensuing 59th AGM for the approval of the Members by way of special
resolution.
Mr. S. Santhanakrishnan (DIN 00032049), Non-Executive, Independent
Director of the Company has resigned and ceased to be a Director of the Company effective
close of business hours of October 12, 2021. The Board places on record its appreciation
for his invaluable contribution and guidance during his tenure as Director of the Company.
The above appointments/re-appointments were recommended by Nomination
and Remuneration Committee and approved by the Board and consequently recommended by the
Board to Members as applicable.
Brief particulars and expertise of directors seeking
appointment/re-appointment together with their other directorships and committee
memberships have been given in the annexure to the Notice of the AGM in accordance with
the 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 the
Company had no pecuniary relationship or transactions with the Company, other than sitting
fees, commission, and reimbursement of expenses incurred by them for the purpose of
attending 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 proven
competence and integrity. Besides the experience, strong financial acumen, strategic
astuteness, and leadership qualities, they have a significant degree of commitment towards
the Company and devote adequate time to the meetings and preparation. In terms of the
requirement of the Listing Regulations, the Board has identified core skills, expertise,
and competencies of the Directors in the context of the Company?s businesses for
effective functioning, which are detailed in the Corporate Governance Report.
Committees of the Board
As required under the Act, and the Listing Regulations, the Company has
constituted 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 Committee
to review specific business operational matters and other items that the Board may decide
to delegate.
Details of all the Committees such as terms of reference, composition,
and meetings held during the year under review are provided in the Report on Corporate
Governance, a part of this Annual Report.
The Board, from time to time, based on the necessity, has delegated
certain operational power to committees of directors formed for specific purposes like
disinvestment of non-strategic investment, matters relating to the Scheme of Arrangement,
Preferential issue of shares, etc.
Board Meetings
The Board meets at regular intervals to discuss and decide on the
Company/business policy and strategy apart from other Board business. The Board exhibits
strong operational oversight with regular presentations in quarterly meetings. The
Board/Committee meetings are pre-scheduled, and a tentative annual calendar of the Board
and Committee meetings is circulated to the Directors well in advance to help them plan
their schedule and ensure meaningful participation in the meetings. Only in case of
special and urgent business, if the need arises, the Board?s or Committee?s
approval is taken by passing resolutions through circulation or by calling the Board
Committee meetings at short notice, as permitted by law.
The agenda for the Board and Committee meetings includes detailed notes
on 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 of
this Annual Report. The intervening gap between the meetings was within the period
prescribed under the Act and the Listing Regulations.
INDEPENDENT DIRECTORS' DECLARATION
As on March 31, 2022, Mr. Bharat Puri, Ms. Shikha Sharma, Mr. Siraj
Chaudhry, and Dr. K. P. Krishnan were Independent Directors on the Board.
According to the provisions of Section 149 of the Act and Regulation 25
of the Listing Regulations, the Independent Directors of the Company have submitted
declarations that each of them meets the criteria of independence as provided in Section
149(6) of the Act along with Rules framed thereunder and Regulation 16(1) (b) of Listing
Regulations. There has been no change in the circumstances affecting their status as
independent directors of the Company. In terms of Regulation 25(8) of the Listing
Regulations, the Independent Directors have confirmed that they are not aware of any
circumstance or situation that exists or may be reasonably anticipated that could impair
or impact their ability to discharge their duties with an objective independent judgment
and 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 of
Corporate Affairs ("MCA") Notification dated October 22, 2019, regarding the
requirement relating to enrollment in the Data Bank created by MCA for Independent
Directors, had been received from all Independent Directors.
SELECTION AND PROCEDURE FOR NOMINATION AND APPOINTMENT OF DIRECTORS
The Nomination and Remuneration Committee ("NRC") of the
Board is entrusted with the responsibility for developing competency requirements for the
Board, based on the industry and strategy of the Company. The Board composition analysis
reflects an in-depth understanding of the Company, including its strategies, environment,
operations, financial condition, and compliance requirements.
The NRC makes recommendations to the Board regarding the
appointment/re-appointment of Directors, and Key Managerial Personnel ("KMP")
and other members of the Senior Management. The role of the NRC encompasses conducting a
gap analysis to refresh the Board periodically, including each time a Director?s
appointment or re-appointment is required.
The NRC is also responsible for reviewing the profiles of potential
candidates vis-a-vis the required competencies, undertaking reference, and due diligence,
and meeting potential candidates before making recommendations of their nomination to the
Board. The appointee is also briefed about the specific requirements for the position
including expert knowledge expected at the time of appointment.
The Remuneration Policy and the Policy on Nomination, Appointment, and
Removal 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 by
the NRC and the Board of Directors to encompass inter-a)ia the regulatory changes brought
as per amendment in the Listing Regulations concerning the scope of NRC and criteria of
Independence of a director.
The Company?s governance guidelines cover aspects mainly relating
to the composition and role of the Board, Chairman and Directors, Board diversity, and
Committees of the Board. As per the Company?s policy on the retirement of Directors,
the retirement age for Managing/ Executive Directors is 65 years, Non-Executive
(NonIndependent) Directors is 70 years, and Non-Executive, Independent Directors is 75
years.
Criteria for determining qualifications, positive attributes, and
independence of a director
In terms of the provisions of Section 178(3) of the Act and Regulation
19 of the Listing Regulations, the NRC has formulated the criteria for determining
qualifications, positive attributes, and independence of Directors, the key features of
which are as follows:
• Qualifications - The Board nomination process encourages
diversity of thought, experience, knowledge, age, and gender. It also ensures that the
Board has an appropriate blend of functional and industry expertise.
• Positive Attributes - Apart from the duties of directors as
prescribed in the Act, the Directors are expected to demonstrate high standards of ethical
behavior, communication skills, and independent judgment. The Directors are also expected
to abide by the respective Code of Conduct as applicable to them.
• Independence - A director will be considered independent if
he/she meets the criteria laid down in Section 149(6) of the Act, the Rules framed
thereunder, and Regulation 16(1)(b) of the Listing Regulations, as amended from time to
time.
ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES, AND INDIVIDUAL
DIRECTORS
Pursuant to the provisions of the Act, Listing Regulations and the
Governance Guidelines for the Tata group companies, the Board of Directors has carried out
an annual evaluation of its own performance, Board Committees, and Individual Directors.
The Nomination and Remuneration Committee ("NRC") approved a
framework in the form of a questionnaire for annual evaluation of the Board, Board
Committees and Individual Directors.
The Board evaluated its performance after seeking inputs from all the
Directors based on criteria such as the Board composition and structure, effectiveness of
board processes, information and functioning, etc. The performance of the Committees was
evaluated by the Board after seeking inputs from the Committee members based on criteria
such as the composition of committees, effectiveness of committee meetings, etc. The above
criteria are broadly based on the Guidance Note on Board Evaluation issued by the
Securities and Exchange Board of India on January 5, 2017.
In order to ensure confidentiality, the Board evaluation was undertaken
through a Board application for evaluation, managed by an independent agency. All the
Directors participated in the evaluation process. The responses received from the Board
members were compiled by the independent agency and a consolidated report was submitted to
the Chairman of the NRC and the Chairman of the Board.
The Board and the NRC reviewed the performance of individual Directors
based on criteria such as the contribution of the individual Director to the Board and
Committee meetings like preparedness on the issues to be discussed, meaningful and
constructive contribution and inputs in meetings, etc.
In a separate meeting of Independent Directors, the performance of
Non-Independent Directors and the Board as a whole, and the Chairman of the Company was
evaluated taking into account the views of Executive Directors and Non-Executive
Directors.
The above evaluations were then discussed at the Board meeting that
followed the meeting of the Independent Directors and the NRC, at which the performance of
the Board, its Committees, and individual Directors was also discussed. The performance
evaluation of Independent Directors was done by the entire Board, excluding the
Independent director being evaluated.
During the year, the Company had also actioned the feedback from the
Board evaluation process conducted in FY 2020-21. The Board, Board Committees and the
Independent Directors discussed the evaluation report and various suggestions received in
the evaluation process in FY 2021-22 and agreed on an action plan.
REMUNERATION POLICY
According to the provisions of Section 178(3) of the Act, and
Regulation 19 of the Listing Regulations, the NRC has formulated a policy relating to the
remuneration for the Directors, KMP, Senior Management, and other employees.
The philosophy for remuneration is based on the commitment to fostering
a culture of leadership with trust. While formulating this policy, the NRC has considered
the factors laid down in Section 178(4) of the Act which are as under:
• That the level and composition of remuneration are reasonable
and sufficient to attract, retain and motivate Directors of the quality required to run
the company successfully;
• The relationship of remuneration to performance is clear and
meets appropriate performance benchmarks; and
• Remuneration to Directors, key managerial personnel, and senior
management involves a balance between fixed and incentive pay reflecting short and long
term 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:
• Market competitiveness;
• 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 & CEO,
Executive Director, KMP, Senior Management, and other employees are paid a fixed salary
which includes basic salary, allowances, perquisites, and other benefits and also annual
incentive remuneration/performance- linked incentive subject to achievement of certain
performance criteria and such other parameters as may be considered appropriate from time
to time, by the NRC and the Board. The performance-linked incentive is driven by the
outcome of the performance appraisal process and 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 Committees of 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 to the requirements of
the Company including considering the challenges faced by the Company and its future
growth imperatives. The remuneration should also be reflective of the size of the Company,
the complexity of the business, and the Company?s capacity to pay the remuneration.
The Company pays a sitting fee of Rs 30,000 per meeting per Director
for attending meetings of the Board, Audit, Nomination and Remuneration, and Executive
Committees. For Risk Management, Stakeholder?s Relationship, Corporate Social
Responsibility & Sustainability Committees, and other special Board committees, a
sitting fee of Rs 20,000 per meeting per Director is paid. The Company also paid sitting
fees of Rs 30,000 per meeting per Independent Director for attending the Independent
Directors? meeting.
Within the ceiling as prescribed under the Act, the NonExecutive
Directors including Independent Directors are also paid a commission, the amount whereof
is recommended by the NRC and approved by the Board. The basis of determining the specific
amount of commission payable to a Non- Executive Director is related to his attendance at
meetings, role, and responsibility as Chairman or Member of the Board / Committees, and
overall contribution as well as time spent on operational matters other than at the
meetings. The Members of the Company had approved payment of commission to the
Non-Executive Directors at the Annual General Meeting held on July 5, 2018, for each
financial year to be distributed among the Directors in such manner as the Board of
Directors may, from time to time, determine within the overall maximum limit of 1% (one
percent) per annum of net profit or such other percentage as may be specified by the Act,
from time to time. No Stock option has been granted to any Non-Executive Director.
As a policy, Mr. N. Chandrasekaran, Chairman, has abstained from
receiving commission from the Company.
Further, in line with the internal guidelines of the Company, no
payment is made towards commission to the Non-Executive Directors of the Company, who are
in 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 Independent
Directors play a pivotal role in upholding corporate governance norms and ensuring
fairness in decision-making. Being experts in various fields, they also bring independent
judgement on matters of strategy, risk management, controls, and business performance.
At the time of appointing a new Independent Director, a formal letter
of appointment is given to the Director, inter alia, explaining the role, duties, and
responsibilities of the Director. The Director has also explained in detail the
compliances required from him/her under the Act, SEBI Regulations, and other relevant
regulations.
By way of an introduction to the Company, presentations are also made
to the newly appointed Independent Director on relevant information like an overview of
the Company?s businesses, market and business environment, growth and performance,
organizational set up of the Company, governance and internal control processes.
Ongoing familiarisation aims to provide insights into the Company and
the business environment to enable all the Independent Directors to be updated on newer
challenges, risks, and opportunities relevant to the Company?s context and to lend
perspective to the strategic direction of the Company.
Familiarisation programme for the Independent Directors along with the
details of familiarisation programmes imparted to Independent Director during and
cumulative upto FY 2021-22 is placed on the Company?s website and the same can be
accessed at the link: https://www.tataconsumer.com/corporate-governance/
compliances-and-fi lings.
BOARD DIVERSITY
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 thought, perspective, knowledge, skill, regional and industry experience, cultural and
geographical background, age, ethnicity, race, and gender, which will help the Company to
retain its competitive advantage. The Board has adopted the Board Diversity Policy (as a
part of the Policy on Nomination, Appointment & Removal of Directors) which sets out
the approach to the diversity of the Board of Directors. The Policy is available on the
website of the Company at https://www.tataconsumer. com/investors/policies.
INTERNAL FINANCIAL CONTROL SYSTEMS AND THEIR ADEQUACY The Board has
adopted policies and procedures for the governance of orderly and efficient conduct of its
business, including adherence to the Company?s policies, safeguarding its assets,
prevention, and detection of frauds and errors, accuracy and completeness of the
accounting records, and timely preparation of reliable financial disclosures. The
Company?s internal control systems are commensurate with the nature of its business,
the size and complexity of its operations and such internal financial controls concerning
the 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 Audit
Committee, thereby maintaining its objectivity. The remediation of deficiencies by the IA
department has resulted in a robust framework for internal controls and details of which
are provided in the Management Discussion and Analysis Report. Further, Statutory Auditors
in its report expressed an unmodified opinion on the adequacy and operating effectiveness
of the Company?s internal financial controls over financial.
AUDIT COMMITTEE
The Committee has adopted a Charter for its functioning. The primary
objective of the Committee is to monitor and provide effective supervision of the
Management?s financial reporting process, to ensure accurate and timely disclosures,
with 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 year
under review, Mr. S Santhanakrishnan, Non-Executive, Independent Director, ceased as
Member and Chairman of the Committee w.e.f. October 12, 2021 and Mr. P.B. Balaji had
stepped down as a member of the Committee w.e.f. August 3, 2021. Dr. K.P. Krishnan was
appointed 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, the
details of which are given in the Corporate Governance Report.
During the year under review, there were no instances when the
recommendations of the Audit Committee were not accepted by the Board.
INTEGRATED REPORT
The Integrated reporting by the Company is in line with the Integrated
Reporting 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 requirements
under the Act, and the Listing Regulations. A separate section on Corporate Governance
along with a certificate from the practicing Company Secretary confirming compliance forms
an integral part of this Annual Report.
A detailed report on Management Discussion and Analysis forms an
integral part of this Annual Report and also covers the consolidated operations reflecting
the global nature of our business.
BUSINESS RESPONSIBILITY REPORT
In accordance with Regulation 34 (2)(f) of the Listing Regulations, for
FY 2021-22, the Company is providing a Business Responsibility Report, which forms part of
this Annual Report.
DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of internal financial controls and compliance
systems established and maintained by the Company, work performed by the internal,
statutory, cost, and secretarial auditors including the audit of internal financial
controls over financial reporting by the statutory auditors and the reviews performed by
the management and the relevant Board Committees, including the Audit Committee, the Board
is of the opinion that the Company?s internal financial controls were adequate and
operating effectively during the financial year 2021-22.
Pursuant to Section 134 (5) of the Act, the Board of Directors, to the
best of their knowledge and ability, confirm that for the financial year ended March 31,
2022:
(i) In the preparation of the annual accounts, the applicable
accounting standards have been followed and there are no material departures;
(ii) They have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profits of the Company for that period;
(iii) They have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
(iv) They have prepared the annual accounts on a ‘going concern
basis?;
(v) They have laid down internal financial controls for the Company
which are adequate and are operating effectively;
(vi) They have devised a proper system to ensure compliance with the
provisions of all applicable laws and such systems are adequate and are operating
effectively.
CORPORATE SOCIAL RESPONSIBILITY ["CSR"] AND SUSTAINABILITY
INITIATIVES
In compliance with Section 135 of the Act, the Company has undertaken
CSR activities, projects, and programs, excluding activities undertaken in pursuance of
its normal course of business. The Natural Foods & Beverages Policy of the Company is
the apex Sustainability Policy that defines the aspiration to be the consumer?s first
choice in sustainable production and consumption. The sustainability pillars of the
Company are Sustainable Sourcing, Climate Change, Water Management, Waste Management, and
Community Development.
Under Section 135 of the Act, the Company was required to spend Rs
13.32 Crores (2%) of the average qualifying net profits of the last three financial years
on CSR activities on projects in FY 2021-22. During the year under review, the Company has
spent Rs 13.54 Crores (2.03%) on CSR activities, which includes the amount spent on
administrative overheads and for impact assessment. The Board of Directors at their
Meeting approved the same. Accordingly, the Company has met its obligation of spending Rs
13.32 Crores for FY2021-22. In addition to the projects specified as CSR activities under
section 135 of the Act, the Company has also carried out several other
sustainability/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, and
other information as required under Companies (Corporate Social Responsibility Policy)
Rules, 2014 are provided in Annexure 2 attached to this Report. The CSR Policy may be
accessed on the Company?s website at the link: https://
www.tataconsumer.com/investors/policies.
Since the average CSR obligation for the preceding 3 financial years
i.e. FY 2018-19, FY 2019-20, and FY 202021 was less than Rs 10 Crores, the impact
assessment report was not applicable in FY 2021-22. However, the Company has voluntarily
undertaken the impact assessment of CSR projects carried out in FY 2020-21, through an
independent agency. The impact assessment report for FY 2020-21 is available on the
website of the Company https://www.tataconsumer.com/sustainability.
STATUTORY AUDITORS AND AUDITORS' REPORT At the 54th AGM held
on August 18, 2017, the Members had approved the appointment of Deloitte Haskins &
Sells LLP, ("Deloitte") Chartered Accountants (ICAI Firm Registration
No.117366W/W-100018) as the Statutory Auditors for a period of 5 (five) years commencing
from the conclusion of the 54th AGM until the conclusion of the 59th
AGM to be held in the year 2022. Accordingly, their first term as Statutory Auditors
expires at the conclusion of the 59th AGM.
Pursuant to the provisions of Section 139(2)(b), an audit firm can be
appointed for two terms of five consecutive years each. Accordingly, the Board approved
the reappointment of Deloitte based on the recommendations of the Audit Committee and the
same is subject to the approval of the Members of the Company. The Notice of ensuing 59th
AGM includes the proposal for seeking Members? approval for the re-appointment of
Deloitte as the Statutory Auditors, for the second term of 5 (five) years commencing from
the conclusion of the 59th AGM until the conclusion of the 64th AGM
to be held in the year 2027.
deloitte has provided their consent and a certificate of their
eligibility 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 second
term of 5 (five) years. In terms of the Listing Regulations, the Auditors have confirmed
that 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 financial
statement of the Company forms part
of this Annual Report. Auditors have expressed their unmodified opinion
on the Standalone and Consolidated Financial Statements and their reports do not contain
any qualifications, reservations, adverse remarks, or disclaimer.
The Statutory Auditors of the Company have not reported any fraud as
specified 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 has
appointed Dr. Asim Kumar Chattopadhyay, Company Secretary in Practice (FCS No. 2303,
Certificate of Practice No. 880), to carry out the Secretarial Audit of the Company. The
Report of the Secretarial Auditor for FY 2021-22 is attached herewith as Annexure 3. There
are 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 the
Act, the Company has maintained the accounts and cost records, as specified by the Central
Government. Such cost accounts and records are subject to audit by M/s Shome and Banerjee,
Cost 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 cost
audit for the FY 2022-23. A resolution seeking approval of the Shareholders for ratifying
the remuneration payable to the Cost Auditors for FY 2022-23 is provided in the Notice of
the ensuing Annual General Meeting.
The Cost accounts and records as required to be maintained under
section 148 (1) of the Act are duly made and maintained by the Company.
RISK MANAGEMENT
The Board of Directors of the Company has formed a Risk Management
Committee to frame, implement, and monitor the risk management plan for the Company. The
Committee is responsible for reviewing the risk management plan and ensuring its
effectiveness. The Committee considers the risks that impact the mid-term to the long-term
objectives of the business, including those reputational in nature.
The Company has an elaborate risk charter and risk policy defining the
risk management governance model, risk assessment, and prioritization process. The Risk
Management Committee reviews and monitors the key risks and their mitigation measures
periodically and provides an update to the Board on the Company?s risks outlined in
the risk registers. The Audit Committee has additional oversight in the area of financial
risks and controls.
Additionally, a third-party organization has benchmarked the
Company?s risk management practice with various companies in India and globally and
pronounced it as a leader the FMCG category. The Company was consecutively for the third
time declared as the winner in the category in "Master of Risk in FMCG
category", at the eighth edition of The India Risk Management Awards 2022 by CNBC
TV-18 and ICICI Lombard. These awards recognize those organizations and teams that have
significantly added to the understanding and practice of risk management.
VIGIL MECHANISM / WHISTLE-BLOWER POLICY The Company?s vigil
mechanism allows the Directors and employees to report their concerns about unethical
behavior, actual or suspected fraud, or violation of the code of conduct /business ethics
as well as to report any instance of leak of Unpublished Price Sensitive Information. The
vigil 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 the
Chairman of the Audit Committee.
The Whistle-Blower Policy of the Company can be accessed on the
Company?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 the
provisions 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 course
of business. These RPTs did not attract provisions of Section 188 of the Companies Act,
2013 and were also not material RPTs under Regulation 23 of the Listing Regulations. All
related party transactions were approved by the Audit Committee and are periodically
reported to the Audit Committee. Prior approval of the Audit Committee was obtained
periodically for the transactions which were planned and/or repetitive in nature and
omnibus approvals were also taken as per the policy laid down for unforeseen transactions.
None of the transactions with related parties falls under the scope of
Section 188(1) of the Act. The information on transactions with related parties pursuant
to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules,
2014 in Form AOC-2 does not apply to the Company for the FY 2021-22 and hence the same is
not provided. The details of the transactions with related parties during FY 2021-22 are
provided 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 disclosed
in the accompanying financial statements.
In line with the requirements of the Act and the Listing Regulations,
the Company has formulated a Policy on Related Party Transactions and the same can be
accessed on the Company?s website at https://www.tataconsumer.
com/investors/policies.
During the year under review, the Policy was reviewed and amended by
the Audit Committee and the Board of Directors to encompass inter-alia the regulatory
changes brought as per amendment in Regulation 23 of the Listing Regulations (effective
from January 1, 2022) as well to bring more clarity on certain other operational aspects
as per industry benchmark.
The said Policy was further amended by the Audit Committee and the
Board of Directors on May 3 & 4, 2022 respectively, to encompass inter-alia the
regulatory changes brought as per amendment in Regulation 23 of Listing Regulations
(effective from April 1, 2022) and criteria for material modification of related party
transactions.
ANNUAL RETURN
As provided under Section 92(3) & 134(3)(a) of the Act, the Annual
Return for FY 2021-22 is uploaded on the website of the Company and can be accessed at
https:// www.tataconsumer.com/investors/investor-information/ annual-returns.
PARTICULARS OF EMPLOYEES
The information required under Section 197 of the Act read with Rule
5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure
4 attached to this report.
Pursuant to Section 197(14) of the Act, the details of remuneration
received by the Executive Director from the Company?s subsidiary company during FY
2021-22 are also given in Annexure 4 attached to this report.
The statements required under Section 197(12) read with Rule 5(2) and
5(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 available
to 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 future
operations.
INDUSTRIAL RELATIONS
During the year under review, industrial relations remained harmonious
at 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 the
workplace and has formulated a policy on prevention, prohibition, and redressal of sexual
harassment at the workplace in line with the provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder
for prevention and redressal of complaints of sexual harassment at workplace. Awareness
programs were conducted at various locations of the Company.
The Company has complied with provisions relating to the constitution
of the Internal Committee under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013.
There were no complaints relating to sexual harassment pending at the
beginning of the financial year. During the year under review, ICC received two complaints
of which one was resolved and the other was under investigation at the end of the
financial year. Accordingly, one complaint remained pending as on the end of the Financial
Year 2021-22.
SECRETARIAL STANDARDS
The Institute of Company Secretaries of India has currently mandated
compliance with the Secretarial Standards on board meetings and general meetings. During
the 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 the
year under review. No amount on account of principal or interest on deposits from the
public was outstanding as on March 31, 2022.
PARTICULARS OF ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, AND FOREIGN
EXCHANGE EARNINGS AND OUTGO [PURSUANT TO COMPANIES (ACCOUNTS) RULES, 2014]
The information on conservation of energy, technology absorption, and
foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Act, read with
Rule 8(3) of the Companies (Accounts) Rules, 2014 is given in Annexure 5 attached to this
report.
ACKNOWLEDGEMENT
The Directors wish to convey their deep appreciation to all the
employees, customers, vendors, investors, and consultants/advisors of the Company for
their sincere and dedicated services as well as their collective contribution to the
Company?s performance.
The Directors thank the Government of India, Governments of various
States in India, Governments of various Countries, and concerned Government departments
for their co-operation.
The Directors regret the loss of life due to the COVID-19 pandemic and
are deeply grateful and have immense respect for every person who risked their life and
safety to fight this pandemic.
The Directors appreciate and value the contribution made by every
member, 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) |
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