Risks and Mitigation

We are exposed to global market forces; fluctuations in national economies; societal unrest and geopolitical uncertainty; evolving legislation; natural crises and so on

Failure to recognise and respond to any of these factors could directly impact the profitability of our operations

We continuously evaluate potential short-term market volatility and longer term socio-economic and political scenarios

We engage with governments, local regulators and community organisations to contribute to, and anticipate, important changes in public policy

The most significant emerging risk is the ongoing COVID-19 crisis

It has impacted the price and supply of our key raw materials across various markets

We are monitoring the situation carefully as it evolves, to understand the potential impact on our people and our business

Consumer lifestyles and preferences are changing and there is a shift towards nonblack, fruit and herbal, ready-todrink and ready-to-eat options

Consumer preferences and market trends are monitored continually

Recipes are regularly reviewed and reformulated to improve the value of our products

Our businesses continue to review their products and to partner with others to enable a swift and innovative response to changing consumer sentiment

We operate in multiple geographies and thus, both interest rates and exchange rates across countries are critical to our business

Establishing currency hedging policies and practices

Indian Rupee has weakened considerably against some of the major trading currencies this year

British Pound continued to trade with a weak bias over BREXIT uncertainty, and is expected to remain volatile

Changes in commodity costs can have a material impact on our operating results, asset values and cash flows

The commercial implications of commodity price movements are continuously assessed and, where appropriate, are reflected in the pricing of our products

Tea prices in India remain benign, while coffee prices continue to decline. The tea raw material prices have seen a volatility in the short term due to the lockdown.

Plantation vertical of key subsidiaries and associate companies depends on rainfall, ageing of bushes and pest attacks, among others

The companies undertake various initiatives to improve plantation yield and profitability, such as replanting with new varieties, irrigation facilities and pest management

Plantations suffered from adverse weather conditions including floods and pest attacks

Failure to reduce our environmental footprint and to meet stakeholders’ expectations, particularly relating to climate change, water availability, packaging waste and sustainable agriculture, can damage our license to operate, erode consumer trust and increase our cost of doing business

Programmes for energy management, water reduction, wastewater treatment, packaging management, waste reduction

Local and international partnerships on common issues

Focus on sustainable procurement

Zero waste to landfill and greater share of renewable power in energy consumption, in our Beverages business

Many of our operations, by their nature, have the potential for loss of life or workplace injuries to employees, contractors and visitors

We have a continuous safety audit programme to verify implementation of safety management and support a culture of continuous improvement

Best practice safety and occupational health guidance is shared across the businesses

During the year, we registered a Lost Time Injury Frequency Rate (LTIFR) of 0.88, up from 0.58 in the previous fiscal; this is calculated on the basis of one million hours worked

Poor quality or contamination could result in safety issues, reputational damage, financial losses and product recalls

Growing impact of a social media-led scrutiny and tougher legal environment can further magnify the impact

Establishing a company-wide quality assurance programme, along with product testing and traceability programmes

Engaging with suppliers to comply with clear and stringent norms for raw material safety and quality

Supporting product compliance by seeking relevant external accreditations

We did not have any product recalls

Continued increase in the concentration of retailers and independent wholesalers on whom we depend to distribute our products can lead to reduced availability of our portfolio in unforeseen circumstances

Work closely with existing channel partners to drive incremental transactions

Capture opportunities associated with existing and new distribution channels

Stronger play in modern trade

We are further strengthening our distribution and sales network using technology to improve our execution skills in the market

Our IT infrastructure has been moved completely to the cloud for greater efficiency in our operations, thus exposing us to the breach of information security through cyber attacks

In parallel to developing our technology systems, we invest in developing the IT capabilities of our people across our businesses

We have installed a comprehensive information security policy, insurance and monitoring systems to safeguard against any unforeseen events

There is an ongoing programme of investment in both technology and people to enhance our cyber-security capabilities

During the year, we have reviewed IT disaster recovery plans across the businesses

As an international business complying with multiple complex regulations, people with whom we deal must live up to our values and standards and share that responsibility

Unacceptable behaviour like bribery and corruption pose a threat to our ethical competence

The Tata Code of Conduct is designed to ensure suppliers, representatives and all those we deal with, adhere to our values and standards

Drawing assistance for the Company and its subsidiaries from respective legal departments and/or external legal advisors

Developing and implementing internal policies and procedures to ensure compliance

We did not have any compliance concerns