DIRECTORS
Your Directors are pleased to submit their report together with the audited results for
the year ended March 31, 2014.
1. Financial Results
The financial results for the year ended on March 31, 2014, are as below:-
|
2013-14 |
2012-13 |
|
Rs. (Lacs) |
Rs. (Lacs) |
| Income from Sales & Services |
|
|
| - Mineral Water |
1930.43 |
1716.92 |
| - Product Development Fees |
600.00 |
460.00 |
| Other Income |
410.81 |
296.62 |
| Total Income |
2941.24 |
2473.54 |
| Profit/(Loss) before interest and depreciation |
352.59 |
172.21 |
| Depreciation and Amortisation |
(113.28) |
(118.16) |
| Exceptional Items |
- |
- |
| Profit before Tax |
239.31 |
54.05 |
| Tax |
- |
- |
| Profit/(Loss) after Tax |
239.31 |
54.05 |
| Profit/(Loss) brought forward from earlier years |
(7685.53) |
(7739.58) |
| Profit/(Loss) carried forward |
(7446.22) |
(7685.53) |
2. Operating Results
Highlights
The year under review was the third full year of operations where NourishCo Beverages
Limited (NBL), the 50:50 Joint Venture set up by Tata Global Beverages Limited (TGBL) and
PepsiCo India Holdings Private Limited (PIH), handled the entire sales, marketing and
distribution of ‘Himalayan’ through the PIH Go-To-Market (GTM) network. This
enabled a higher visibility and availability of Himalayan.
The total volume of Himalayan sales for the year at 13.6 million litres was higher than
12.5 million litres in the previous year. The increase in volume is attributable to robust
distribution and launch of various print media, relevant Brand Activations, merchandising
and TV commercials by NBL.
The sales revenue at Rs. 1930 lacs during the year was higher than Rs. 1717 lacs during
the previous year mainly on account of marginally higher volumes and better realization
during the year which was at a transfer price which was cost plus margins as mutually
agreed between the Parties.
In an inflationary environment, your Company was able to manage the cost increase
within 5%. In addition, aggressive initiatives were undertaken to reduce corporate costs
more so with front end marketing / sales activities transferred to NBL. As a result of the
same your Company has reported a profit of Rs. 239 lacs for the year as compared to Rs. 54
lacs in the previous year.
The strength of the Brand ‘Himalayan’ was vindicated by NBL exploring an
opportunity of increasing the price further from Rs. 45 per litre to take on the mantle of
leadership in the emerging Natural Mineral Water category in India.
The improving price value equilibrium of the brand augurs well with the brand margin
and future investments behind the brand.
This year Himalayan’s Social Media Campaign saw more than 1.9 lakh fans on FB
talking about the brand participating in contests and sharing our stories thus increasing
interaction and creating awareness for the Brand.
The JV between Starbucks and TGBL have opened up significant volume opportunities for
the brand as an exciting new alternate channel not only in India but also in other
advanced markets across the globe. This also enabled Himalayan to be the only brand of
water to be served/poured at all Tata Starbucks outlets in India. The first international
foray with Starbucks Singapore, has ensured that Himalayan Water is now available across
major Starbucks Outlets in Singapore. The Company’s partnership with a leading
business house in Singapore has also opened up the presence of Himalayan across Major
Retail Chains in Singapore.
Your Company continued to work for TGBL on various assignments, straddling innovation,
new product development and incubation in different food formats and received Rs. 600 lacs
as Product Development fees from TGBL against Rs. 460 lacs received last year.
Your Company has been actively involved in the development of several non standardized
new products that solicit statutory approvals from Specified Government appointed
agencies. Your Directors wish to report that owing to a legal impasse, the regulatory
approvals from the above agencies have been stayed. This has led to a delay in the
processing of our applications for new products resulting in change of the launch plans of
these products.
3. Preferential Issue
As on date, TGBL holds 50.07% of the shares in the Company and is the single largest
shareholder of the Company. By virtue of this holding the Company is a subsidiary of TGBL.
During the year, there was a net increment of Rs. 64 lacs on the unutilized corpus
mainly on account of profits made by the Company and its adjustment for various spends as
per the objects earmarked in the preferential issue of 2007. The unutilized portion of the
preferential issue as on March 31, 2014 amounting to Rs. 2526 lacs was placed as Inter
Corporate Deposits and units of Mutual Funds.
4. Dividend
In view of the accumulated losses, your Directors do not recommend any dividend for the
year.
5. Corporate Governance
Your Company has consistently adopted high standards of Corporate Governance and is
committed to and firmly believes in practicing good governance.
A note on Corporate Governance as also the certificate from Company’s Auditors
confirming compliance of Corporate Governance norms, together with Management Discussion
and Analysis are included in the Annual Report.
6 . Amalgamation of the Company with Tata Global Beverages Limited (TGBL)
Your Directors at its meeting held on November 12, 2013 approved the scheme of merger
of the Company with TGBL under a scheme of amalgamation under Sections 391-394 and other
applicable provisions of the Companies Act, 1956. The Scheme would become effective after
receipt of all requisite statutory and court approvals, including shareholders’
approval. As per the directions of the Hon’ble High Court at Himachal Pradesh, a
meeting of the shareholders of the Company is being convened on June 14, 2014, for seeking
their approval to the scheme of amalgamation of the Company with TGBL with effect from the
Appointed date, namely, 1st April 2013.
Additionally, as required under Clause 5.16 of the SEBI circular, approval to the said
scheme of amalgamation is also being obtained from the shareholders by way of postal
ballot in which the Company needs approval of majority shares from the public
shareholders.
The merger of your Company with TGBL will actualize the credo of ‘Live
Natural’ resonating with a significant consumer base around the world and open up
opportunities in newer geographies in the coming year.
7. Directors Responsibility Statement
Pursuant to the requirement of Section 217(2AA) of the Companies Act, 1956 (‘the
Act’) and based on the representations received from the operating management, your
Directors hereby confirm that:-
i) in the preparation of the annual accounts for 2013-14, the applicable accounting
standards have been followed and there are no material departures.
ii) they have, in the selection of the accounting policies, consulted the Statutory
Auditors and have applied them consistently and made judgements 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 profit / loss of the Company for the
financial year.
iii) they have taken proper and sufficient care to the best of their knowledge and
ability for the maintenance of adequate accounting records in accordance with the
provisions of the Act, 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.
8. Directors
Mr Harish Bhat resigned from the Board with effect from the close of business hours on
March 31, 2014 upon his induction as a member of the Group Executive Council of the Tata
Group. He was also the Chairman of the Board of Directors. Your Directors wish to place on
record their appreciation for the leadership and contributions made by Mr Bhat during his
association with the Company.
The Board of Directors vide a Board Circular Resolution dated April 11, 2014 appointed
Mr L Krishnakumar as the Additional Director of the Company with effect from April 1, 2014
to hold office upto the date of the forthcoming Annual General Meeting. Mr Krishnakumar
was also appointed as the Chairman of the Board of Directors at the Board Meeting held on
May 13, 2014. The Company has received notice from a member along with prescribed deposit
intimating its intention to propose the candidature.
Resolution seeking approval of the Members for appointment of Mr L Krishnakumar as
Director of the Company whose office shall be liable to retirement by rotation has been
incorporated in the Notice of the forthcoming Annual General Meeting along with brief
details about him.
Pursuant to Section 149 and other applicable provisions of the Companies Act, 2013,
your Directors are seeking appointment of Mr Ajit C Shah, Mr Ranjit Barthakur, Mr V
Subramanian and Mr Sumanth Badiga as Independent Directors for five consecutive years for
a term upto August 7, 2019. Details of the proposal for appointment of Mr Ajit C Shah, Mr
Ranjit Barthakur, Mr V Subramanian and Mr Sumanth Badiga are mentioned in the Explanatory
Statement under Section 102 of the Companies Act, 2013 of the Notice of the Twenty Third
Annual General Meeting. Mr Ajoy K Misra shall retire at the forthcoming Annual General
Meeting and being eligible offers himself for re-appointment.
The Company has received declarations from all the Independent Directors of the Company
confirming that they meet with the criteria of independence as prescribed both under
sub-section (6) of Section 149 of the Companies Act, 2013 and under Clause 49 of the
Listing Agreement with the Stock Exchange.
None of the above mentioned Directors are disqualified from being appointed as a
Director as specified in terms of Section 164 of the Companies Act, 2013.
9. Statutory Auditors
The Members are requested to appoint the Statutory Auditors and fix their remuneration.
M/s SNB Associates, Chartered Accountants, the retiring Auditors have furnished
certificate of their eligibility for reappointment as required under the Act.
The Audit Committee and the Board of Directors recommends the re-appointment of M/s SNB
Associates, Chartered Accountants as the Auditors of the Company.
10. Cost Auditors
The Central Goverment has approved the appointment of M/s Deodhar & Associates as
cost Auditors for the Company for conducting Cost Audit for the financial year 2012-13.
The due date for filing the Cost Audit Report for the financial year ended March 31, 2013
was September 30, 2013 and the Cost Audit Report was filed by the Cost Auditors on
September 26, 2013. The due date for filing the Cost Audit Report for the financial year
ended March 31, 2014 is September 30, 2014.
11. Certifications
Your Directors are happy to report that in addition to the existing certifications of
Institute of Fresenius, ISO 9000 and HACCP, the Plant achieved the OHSAS 18000
(Operational Health & Safety Certification) from DNV and the NSF Certification
enabling the use of their logo’s on our product labels.
12. Particulars of Employees
Information as required under Section 217(2A) of the Companies Act, 1956, read with the
Companies (Particulars of Employees) Rules, 1975, as amended, are given in the Annexure
forming part of this report.
However, having regard to the provisions of Section 219(1)(b)(iv) of the Companies Act,
1956, the Annual Report excluding the aforesaid information is being sent to all the
Members of the Company and others entitled thereto. Any Member interested in obtaining
such particulars may write to the Company Secretary at the Corporate Office of the
Company.
13. Particulars of Conservation of Energy, Technology Absorption and Foreign Exchange
Earnings and Outgo
The statement pursuant to Section 217(1)(e) of the Companies Act, 1956, read with the
Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, is
annexed to this report.
14. Insurance
All properties and insurable assets of the Company, including Building, Plant &
Machinery and Stocks are adequately insured, wherever necessary, and to the extent
required.
15. Concluding Remarks
Your Directors wish to convey their appreciation to all employees of the Company for
their sincere and dedicated services during 2013-14, without which such a performance
would not have been possible in a challenging environment.
|
On behalf of the Board of Directors |
| Mumbai, |
L Krishnakumar |
| May 13, 2014 |
Chairman |
ANNEXURE TO THE DIRECTORS’ REPORT
Information in accordance with the Companies (Disclosure of Particulars in the Report
of Board of Directors) Rules, 1988 and forming part of Directors’ Report for the year
ended March 31, 2014 A. CONSERVATION OF ENERGY
| 1. Energy Conservation measures taken |
The use of Hydro-electricity in lieu of diesel generators at the plant have ensured
cost effective reduction in usage of fossil fuels. |
| 2. Additional Investments and proposals if any, under implementation aimed at energy
conservation |
Nil |
| 3. Impact of measures taken |
The effective use of Hydro-electricity at the Plant led to savings in the cost of
operations & reducing Air and Noise pollution. |
| B. RESEARCH & DEVELOPMENT |
|
| 1. Specific area |
i) Flavoured Natural Mineral Water developed with natural flavours. Product is first
of its kind in Indian Market. |
|
ii) Carbonated Natural Mineral Water also first of its kind in Indian Market. |
| 2. Benefits Derived |
Developing a new Product range being extensions of the brand ‘Himalayan’ |
| 3. Plan of action in-house |
The new manufacturing line setup at the Plant utilizing the existing manpower for the
manufacture of the new products. |
| 4. Expenditure on R & D |
Rs. 33.06 Lakhs |
| 5. Other Technology absorption: |
|
| a. Efforts made |
1. In consultation with design experts, developed bottle designs for the new products
enabling the effective use of existing machines at the Plant. |
|
2. The existing bottle designs of our products has been improved, enabling the
strengthening of the bottle. |
|
3. Installation of Racking system for the storage of finished goods, for proper
utilization of space, ease of handling and identification of product. |
| b. Benefits |
Difficult to quantify |
| c. Technology imported during last five years |
None |
6. Foreign Exchange Earnings and outgo
|
Current year ended on |
Previous year ended on |
|
31.03.2014 (Rs.) |
31.03.2013 (Rs.) |
| 1. Foreign Exchange earning |
|
|
| i) Value of Exports at FOB |
608,205 |
263,500 |
| ii) Traveling Expenses |
7,278 |
3,255 |
| 2. Foreign Exchange used for expenses |
|
|
| i) Professional Fees |
2,729,002 |
5,243,155 |
| ii) Traveling Expenses |
428,569 |
480,482 |
| iii) Raw Materials |
384,758 |
Nil |
| iv) Stores & Spares |
48,202 |
41,471 |
| v) Warehousing Charges |
54,168 |
Nil |
| Value of Imports in CIF Basis |
|
|
| i) Raw Material |
707,647 |
Nil |
| ii) Stores & Spares |
61,615 |
47,218 |
|
For and on behalf of the Board |
| Mumbai |
L Krishnakumar |
| Mumbai 13, 2014 |
Chairman |
|