The 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)

- 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)

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