1)    Certain Plantation land meant for usage as tea plantations and for ancillary activities has been leased by the Company to its associate company Kanan Devan Hills Plantation Company Private Limited for a period of 30 years as part of the restructure in 2005, of its South India Plantation Operation.

2)    Cost of Buildings include Rs. 5.90 Crores (Rs 5.90 Crores) represented by shares in Co-operative Housing Societies / a Company.

3)    Land includes leasehold land amounting to Rs. 0.17 Crores (Rs. 0.17 Crores).

Branded business within India is treated as a single CGU taking into account the way the business is managed and the operating structures, and as independent cash inflows are generated at the country level.

Value in use i.e. the enterprise value for each CGU is calculated using cash flow projections over a period of 5 years, with amounts based on medium term strategic plans, subject to experience adjustments. Cash flows beyond the 5 years period are extrapolated using a long term growth rate.

Key assumptions in the business plans include future revenue, associated future levels of marketing support and other relevant cost-base. These assumptions are based on historical trends and future market expectations specific to each CGU.

Other key assumptions applied in determining value in use are:

•    Long term growth rate - Cash flows beyond the 5 years period are extrapolated using the estimated long-term growth rate applicable for the geographies in which the CGU operate.

•    Discount rate - The discount rate is based on a Weighted Average Cost of Capital (WACC) for comparable companies operating in similar markets.

The cash generating unit is engaged in trading, manufacturing and sale of a portfolio of products catering to every day consumption needs, and have strong market position and growth potential.

Impairment charge

Based on an assessment carried out, there is no impairment charge in the current year.

Sensitivity Analysis

We have performed sensitivity analysis around the base assumptions and have concluded that no reasonable possible changes in key assumptions based on current recent trends would cause the recoverable amount of the CGU to be less than the carrying value.

a) Costs of these unquoted equity instruments have been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represent the best estimate of fair value within that range.

b)    During the financial year 2023-24, the Company has invested an amount of Rs.25 Crores in Tata Starbucks Private Limited, Rs 119.91 Crores in Tata SmartFoodz Limited and Rs. 25.45 Crores in Tata Coffee Vietnam Company Limited as equity capital.

c)    During the financial year 2023-24, the Company has acquired the preference shares of Tata Consumer Soulfull Private Limited (TCSPL) held by its erstwhile promoters representing the Contingent Consideration payable on acquisition of TCSPL for a part payment of Rs 30 Crores. The preference share represents the contingent consideration payable as per the terms of the original share purchase agreement. The preference shares are recognized in the books at the value of contingent consideration payable. The residual liability is disclosed under “Other Financial Liabilities” in the balance sheet.

d)    Consequent to amalgamation of erstwhile Tata Coffee Limited (TCL) with the Company (refer note 41), the original Investment in Tata Coffee Limited has been reallocated between its Plantation business and the Remaining business. Investment value with respect to plantation business has been added to Investment in TCPL Beverages & Foods Limited (renamed now as Tata Coffee Limited) and the balance investment has been adjusted in Capital reserves. In addition, Revaluation Reserve of Rs. 21.86 Crores in relation to investment in TCL has now been transferred to Capital Reserve.

e)    During the financial year, the Company has acquired 75% equity shares of Capital Foods Private Limited (CFPL), pursuant to a share purchase agreement and shareholder agreement. An Indian Company engaged in in-home food categories under the brand ‘Ching’s Secret’ and ‘Smith & Jones’. The acquisition of 75% equity shareholding has been completed on February 01, 2024 at a purchase consideration of Rs 3881.25 Crores. The balance 25% shareholding will be acquired within the next three years. This acquisition will enable Tata Consumer Products to expand its product portfolio and further strengthen its pantry platform.

f)    Investment in preference shares of Amalgamated Plantations Private Limited (APPL) subscribed in an earlier year of Rs 37.98 Crores [67000000 shares of Rs 10 each] is redeemable with a special redemption premium, on fulfilment of certain conditions, within 20 years from the date of the issue and are designated as fair value through profit and loss. Preference shares subscribed to in the financial year 2021-22 and 2022-23 of Rs 156.74 Crores [200000000 shares of Rs 10 each] are optionally convertible, cumulative and redeemable carrying an annual coupon rate of 6% with special redemption premium issued for a period of 10 years and are also designated as fair value through profit and loss. The fair value of the preference shares as at March 31, 2024 was reassessed by an independent valuation based on estimated repayment dates and a fair value loss of Rs 52.90 Crores has been recognised in the Statement of Profit and Loss, and disclosed under exceptional items.

g)    The movement of investments in Tata SmartFoodz Limited includes an impairment of Rs 72 crore given the current status of execution of its business plan and for losses incurred on account of impairment of its assets. The discount rate used in measuring the value in use was 19% per annum.

h)    Preference shares of TRIL Constructions Limited are non-cumulative and mandatorily fully convertible within twenty years from the issue date and the same is carried at cost.

i)    Investment carrying values are below Rs. 0.01 crores.

j)    Preference shares of TCPL Beverages & Foods Limited (Renamed to Tata Coffee Limited) are Optionally Convertible noncumulative and redeemable preference shares with the term of 8 years.

k)    These investments are fully impaired.

l)    Acquired fully or partly consequent to amalgamation of Tata Coffee Limited with the Company (Refer note 41).

m)    Mutual fund investments represent surplus cash deployed as a part of treasury operations (Refer to Statement of Cashflow).

n)    Relating to Power Purchase Agreement entered by the Company.

$ secured by mortgage of rights on immovable assets. Loan given during the year for general corporate purposes - Kanan Devan Hills Plantations Company Private Limited Rs Nil (Rs 4 Crores)

^A Outstanding with financial institutions for short duration and yield fixed interest rate. Loans given during the year for general corporate purposes - HDFC Limited Rs Nil (Rs 315 Crores), LIC Housing Finance Limited Rs 126.30 Crores (Rs 70 Crores), Bajaj Finance Limited Rs 350 Crores (Rs 375 Crores).

^AA Outstanding with Tata Coffee Limited - Rs 40 Crores and TRIL Constructions Limited Rs 3 Crores for short duration and yield fixed interest rate. Loans given during the year for general corporate purposes - Tata Smartfoodz Limited Rs 25 Crores (Rs 25 Crores), Infiniti Retail Limited Rs 368 Crores (Rs 215 Crores), TRIL Constructions Limited Rs 3 Crores (Rs Nil), Nourishco Beverages Limited Rs 15 Crores (Rs Nil), Tata Coffee Limited Rs 40 Crores (Rs Nil)

Raw material includes in-transit inventory of Rs. 6.74 Crores (Rs. 32.11 Crores).

Traded Goods includes in transit inventory of Rs 15.23 Crores (Rs. Nil).

During the year ended March 31, 2024- Rs. 24.51 Crores (Rs. 27.53 Crores) was charged to statement of profit and loss for slow moving and obsolete inventories.

ii)    Rights, preferences and restrictions attached to shares

The Company has one class of equity shares having a par value of Re 1 each. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

iii)    Equity shares allotted as fully paid-up (during 5 years preceding March 31, 2024) pursuant to contracts without payment being received in cash

(a)    During the financial year 2023-24, 23823166 equity shares were issued consequent to and as part of the Composite Scheme of Arrangement between the Company, Tata Coffee Limited and TCPL Beverages & Foods Limited (Refer note 41)

(b)    During the financial year 2022-23, 7459935 equity shares were issued consequent to acquisition of 10.15% additional stake in Tata Consumer Products UK Group Limited, an overseas subsidiary from Tata Enterprises (Overseas) AG.

(c) During the financial year 2019-20, 290421986 equity shares were issued consequent to and as part of the merger of Food business of Tata Chemicals Limited with the Company.

The Board of Directors in its meeting held on April 23, 2024 have recommended a final dividend payment of Rs 7.75 per share for the financial year ended March 31, 2024.

*Excludes dividend paid by erstwhile Tata Coffee Limited to its external shareholders transferred to the company consequent to the scheme of arrangement (Refer Note 41). This payment has been aggregated in the Statement of Changes in Equity to reflect the total dividend payout.

Nature and Purpose of Reserve

i.    Capital Reserve

Capital Reserve was created on acquisition of certain plantation business and on account of amalgamation of remaining business of Tata Coffee. (Refer note 41)

ii.    Securities Premium Account

Securities Premium Account was created on issue of shares at premium. These reserves can be utilised in accordance with Section 52 of Companies Act 2013.

iii.    Contingency Reserve

Contingency Reserve are in the nature of free Reserve.

iv.    Amalgamation Reserve

Amalgamation Reserve was created pursuant to the scheme of amalgamation of Asian Coffee Ltd., Coffee Land Ltd., SIFCO Ltd and erstwhile Tata Coffee Ltd.

v.    Share Based Payment Reserve

Share-based Payment Reserve represents amount of fair value, as on the date of grant, of unvested and vested shares not exercised till date, that have been recognised as expense in the statement of profit and loss till date.

Consequent to the amendments in the Income Tax Act, 1961, depreciation on Goodwill is no longer available as a deduction from taxable income with effect from April 01, 2020, except that its written down value is available as a deduction in the event of sale of the underlying business. On goodwill of Rs 3578.51 crore recognised in the financial statements, through business combinations, no additional taxable temporary differences are expected to arise, having regard to the nature of the businesses to which the goodwill relates. (also refer notes 2.3(a) and 6)

Employee Shared based payment incentives

The Company has share based incentives for certain employees under Tata Consumer Products Limited- Share-based Long Term Incentive Scheme 2021 (“TCPL SLTI Scheme 2021”) approved by Nomination and Remuneration Committee (NRC).

As per the scheme, the number of shares that will vest is conditional upon certain performance measures being achieved and will be settled through equity shares only. The performance will be measured over vesting period of 3 years. The shares granted under this scheme is exercisable by employees till one year from date of its vesting.

The Company has granted performance share units at an exercise price of Re 1 per share. Shares granted will vest after 3 years from date of grant. Number of shares that will vest range from 0.5 to 1.2 per performance share unit granted depending on performance measures achieved.

During the Year, Performance share units were granted on April 25, 2023. The estimated fair value of performance share units are based on the quoted share price. The aggregate of the estimated fair values of the performance share units granted is Rs 30.83 Crores (Rs 8.59 crores) which will be recognised in the Statement of Profit and Loss over the vesting period.

30. CAPITAL COMMITMENT

(a)    Estimated amount of contracts remaining to be executed on capital account and not provided for as at March 31, 2024 aggregated Rs. 28.65 Crores (Rs. 17.58 Crores).

(b)    Commitment towards Share Capital contributions in Joint Ventures - Rs. 125.00 Crores (Rs. 25.00 Crores).

(b)    Labour disputes under adjudication relating to some staff - amount not ascertainable.

(c)    The Company has provided corporate guarantees to lending banks on behalf of its overseas wholly owned subsidiary. As on Balance Sheet date, an amount of Rs. 196.34 Crores is outstanding (Rs. 272.35 Crores) to the lending Banks, for which Corporate Guarantee has been provided.

32. Micro enterprises and small enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 have been determined based on the confirmations received in response to intimation in this regard sent by the Company to the suppliers. No interest in terms of Section 16 of Micro, Small and Medium Enterprises Development Act, 2006 or otherwise has either been paid or payable or accrued and remaining unpaid as at March 31, 2024.

Extension and termination options

Extension and termination options are included in a number of property and equipment leases across the Company. These are used to maximise operational flexibility in terms of managing the assets used in Company’s operation. The majority of extension and termination options held are exercisable only by the Company and not by the respective lessor.

38.B SEGMENT DISCLOSURE

The Company has disclosed segment information in the consolidated financial statements which are presented in the same financial report. Accordingly, in terms of Paragraph 4 of Ind AS 108 ‘Operating Segments’, no disclosures related to segments are presented in this standalone financial statements.

B.    Measurement of fair values

The basis of measurement in respect to each class of financial asset, financial liability is disclosed in note 2.2(g) of the financial statement.

The fair value of liquid mutual funds and long term equity investment is based on active market. Fair values of certain noncurrent investment are valued based on discounted cash flow/book value/EBlTDA multiple approach. Derivative financial instruments are generally valued based on Black-Scholes-Merton approach/Dollar offset principles.

C.    Financial risk management

The Company has exposure to the following risks arising from financial instruments:

•    Credit risk;

•    Liquidity risk; and

•    Market risk

i.    Risk management framework

The Risk Management Committee of the Board is entrusted with the responsibility to assist the Board in overseeing and approving the Company’s risk management framework. The Company has a comprehensive Risk policy relating to the risks that the Company faces under various categories like strategic, operational, reputational and other risks and these have been identified and suitable mitigation measures have also been formulated. The Risk Management Committee reviews the key risks and the mitigation measures periodically. The Audit Committee has additional oversight in the area of financial risks and control.

ii.    Credit risk

Credit risk is the risk that counterparty will not meet its obligations leading to a financial loss. The Company is exposed to credit risk arising from its operating (primarily trade receivables) and investing activities including deposits placed with banks, financial institutions and other corporate deposits. The Company establishes an allowance for impairment that represents its estimate of expected losses in respect of financial assets. Financial assets are classified into performing, under-performing and non-performing. All financial assets are initially considered performing and evaluated periodically for expected credit loss. A default on a financial asset is when there is a significant increase in the credit risk which is evaluated based on the business environment. The assets are written off when the Company is certain about the non-recovery.

a. Trade Receivables

The Company has an established credit policy and a credit review mechanism. The Company also covers certain category of its debtors through a credit insurance policy. In such case the insurance provider sets an individual credit limit and also monitors the credit risk. The concentration of credit risk arising from trade receivables is limited due to large customer base.

Management believes that the unimpaired amounts that are past due by more than 90 days are still collectible in full, based on historical payment behavior and analysis of customer credit risk.

b. Financial instruments and cash deposits

The credit risk from balances / deposits with banks, other financial assets and current investments are managed in accordance with the Company’s approved policy. Investments of surplus funds are made only with approved counterparties and within the limits assigned to each counterparties. The limits are assigned to mitigate the concentration risks. These limits are actively monitored by the Company.

iii. Liquidity Risk

Liquidity risk is the risk that the Company may encounter difficulty in meeting its obligations. The Company monitors rolling forecast of its liquidity position on the basis of expected cash flows. The Company’s approach is to ensure that it has sufficient liquidity or borrowing headroom to meet its obligations at all point in time. The Company has sufficient short term fund based lines, which provides healthy liquidity and these carry highest credit quality rating from reputed credit rating agency.

Exposure to liquidity risk

The following are the remaining contractual maturities of financial liabilities (excluding lease liabilities) at the reporting date. The amounts are gross and undiscounted, and exclude the impact of netting agreements.

iv. Market risk

Market risk is the risk that the fair value of the future cash flows will fluctuate because of changes in the market prices such as currency risk, interest rate risk and commodity price risk.

a) Currency risk

The Company operates across various geographies and is exposed to foreign exchange risk on its various currency exposures. The risk of changes in foreign exchange rates relates primarily to the Company’s operating activities and translation risk, which arises from recognition of foreign currency assets and liabilities.

During the year, the Company has designated certain foreign exchange forward contracts as cash flow hedges to mitigate the risk of foreign currency exposure on highly probable forecasted transactions. Hedge effectiveness is determined at inception and periodic prospective effectiveness testing is done to ensure the relationship exist between the hedged items and hedging instruments, including whether the hedging instruments is expected to offset changes in cash flows of hedge items.

b)    Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The interest rate risk can also impact the provision for retiral benefits. The Company generally utilises fixed rate borrowings and therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of change in the market interest rates.

The Company is not exposed to significant interest rate risk as at the respective reporting dates.

c)    Price Risk

The price risk is the risk arising from investments held by the Company and classified in the balance sheet either as fair value through other comprehensive income or at fair value through profit or loss.

The Company’s equity investments are mainly strategic in nature and are generally held on a long term basis. Further, the current investments are in units of liquid mutual fund and these are not exposed to significant price risk.

d)    Commodity Risk

The Company is exposed to the fluctuations in commodity prices mainly for tea, salt, coffee and pulses. Mismatch in demand and supply, adverse weather conditions, market expectations etc., can lead to price fluctuations. For tea, the Company manages these price fluctuations by actively managing the sourcing of tea, private purchases and alternate blending strategies without impacting the quality of the blend. For salt, coffee and pulses, these fluctuations are managed through active sourcing and commercial negotiation with customers and suppliers through appropriate hedging policies.

Capital Management

The Company’s objective for capital management is to maximize shareholder wealth, safeguard business continuity and support the growth of the Company. The Company determines the capital management requirement based on annual operating plans and long term and other strategic investment plans. The funding requirements are met through optimum mix of borrowed and own funds.

Gratuity, Pension and Post Retiral Medical Benefits:

The Company operates defined benefit schemes like retirement gratuity, defined pension benefits and post-retirement medical benefits. There are other superannuation benefits and medical benefits restricted to certain categories of employees/directors in the form of pension, medical and other benefits in terms of a specific policy related to the same. The defined benefit schemes offer specified benefits to the employees on retirement. The gratuity benefit provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 to 30 days’ last drawn salary payable for each completed year of service. Vesting occurs upon completion of five continuous years of service.

The Company contributes all its ascertained liabilities towards gratuity to the trust set up for the same. Trustees administer the contributions made to the trust. As at March 31, 2024 and March 31, 2023, the plan assets have been primarily invested in insurer managed funds.

Expected Contribution over the next financial year:

The Company is expected to contribute Rs. 11.57 Crores to defined benefit obligation funds for the year ending March 31, 2025.

The Company operates Provident Fund Schemes and the contributions are made to recognized funds maintained by the Company and for certain categories contributions are made to State Plans. The Company has an obligation to fund any shortfall on the yield of the trust's investments over the administered rates on an annual basis. The Actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumption:

41. BUSINESS COMBINATION

Amalgamation of erstwhile Tata Coffee Limited with the Company

The Board of Directors of the Company in its meeting held on March 29, 2022, had approved the composite scheme of arrangement (the Scheme), amongst the Company and its subsidiaries, Tata Coffee Limited (TCL) and TCPL Beverages & Foods Limited (TBFL), in terms of Section 230-232 and other applicable provisions of Companies Act, 2013. The Scheme inter alia provides for the demerger of the Plantation Business (as defined in the Scheme) of TCL into TBFL and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Entitlement Ratio mentioned in the Scheme. This would be followed immediately by the amalgamation of the TCL comprising of the Remaining Business (as defined in the Scheme) with the Company and as consideration, issue equity shares of the Company to all the shareholders of TCL (other than to itself) in accordance with the Share Exchange Ratio mentioned in the Scheme.

The aforesaid Scheme was sanctioned by Hon’ble National Company Law Tribunal (NCLT) Kolkata Bench vide order dated November 10, 2023 and Bengaluru Bench vide order dated October 31, 2023. The Scheme has become effective from January 01, 2024 upon filing of the certified copy of the orders passed by NCLT with the relevant Registrar of Companies on December 11, 2023. Pursuant to the Scheme, the name of the TCPL Beverages & Foods Limited was also changed to Tata Coffee Limited with effect from February 02, 2024. All the assets, liabilities, reserves and surplus of the Remaining Business have been transferred to and vested in the Company. The Appointed Date of the Scheme is January 01, 2024.

Accounting Treatment

The amalgamation has been accounted in accordance with “Pooling of interest method” as laid down in Appendix C - ‘Business combinations of entities under common control’ of Ind AS 103 notified under Section 133 of the Companies Act read with the Companies (Indian Accounting Standards) Rules, 2015. Accordingly, comparatives have been restated to give effect of the amalgamation from the beginning of the previous year.

The difference between the assets, liabilities and acquired reserves were transferred to Capital Reserves, further cancellation of investment in TCL allocated to remaining business and shares issued pursuant to the scheme and the revaluation reserves in relation to investment have been transferred to Capital Reserve.

Consequent to the scheme coming into effect and in accordance with the Share Exchange ratio enshrined in the scheme, the Company has allotted its 2,38,23,166 equity shares of Re. 1/- each (fully paid-up) to the equity shareholders of erstwhile TCL other than the Company as on the ‘Record Date’ fixed for the said purpose, i.e., January 15, 2024 (36,09,571 equity shares were issued for demerger of the Plantation Business of TCL into TBFL and 2,02,13,595 equity shares were issued on the amalgamation of TCL comprising of the Remaining Business with the Company).

In addition, pursuant to the scheme, the authorised equity share capital of the Company stands increased, by Rs. 25 Crores, being the authorised equity share capital of TCL.

Detail of adjustment of assets and liabilities along with reserves of erstwhile Tata Coffee Limited and consequential adjustment to Capital Reserves as on the appointed and effective date of lanuary 01, 2024:

Other details:

•    Profit for remaining business for the period April 01, 2023 till December 31, 2023 was Rs 46.99 Crores (before taxes).

•    Statutory CSR contribution for TCL for FY 23-24 was Rs. 1.23 Crores. Out of this, Rs. 1.20 Crores was spent by TCL till December 31, 2023 and the balance Rs. 0.03 Crores has been spent by the company post amalgamation to fulfill this obligation within March 31, 2024.

42A . The Board of Directors of the Company, in its meeting held on October 31, 2023, has approved the Scheme of Amalgamation of NourishCo Beverages Limited, Tata SmartFoodz Limited and Tata Consumer Soulfull Private Limited (wholly owned subsidiaries) with the Company. The Appointed Date of the Scheme is April 01, 2024. The Scheme is subject to necessary statutory and regulatory approvals, including sanction by the Hon’ble National Company Law Tribunal under Sections 230 and 232 of the Companies Act, 2013.

42B. The Company has entered into a share purchase agreement ('SPA') on January 12, 2024 with Fabindia Limited for acquisition of up to 100% stake of Organic India Private Limited (OIPL). The acquisition of 99.99% equity shareholding has been completed on April 16, 2024 at a purchase consideration of Rs 1707.99 Crores subject to adjustment on finalisation of the financials of OIPL.

Note 1: Debt includes lease liabilities

Note 2: Debt service = Interest and Lease payments and Principal Repayments

Note 3: EBIT = Profit before exceptional items + Finance Costs - Interest and Investment Income

Note 4: Capital Employed = Tangible Net Worth (including non-current investments) + Total Debt + Deferred Tax Liabilities

Note 5: Working Capital = Current Assets - (Current Liabilities - Current maturities of long term borrowings and lease liabilities - Commercial papers for acquisition funding)

ii) Relationship with Struck off Companies

The company does not have any transaction with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956, during the current year and in the previous year.

45. Unless otherwise stated, figures in brackets relate to the previous year. Previous period’s figures have been regrouped / rearranged, to the extent necessary, to conform to current period’s classifications. All the numbers have been rounded off to nearest crore.