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Tata Tea Sustainability Report 2007-08
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Abbreviations used in the report
1 Bishop Lefroy Road Kolkata 700 020
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Sustainability Report 2007-08
CONTENTS
CHAPTER PAGE
1 Sustainability at TATA TEA iv
2 MDs Message 5
3 One Strategy 9
4 Profle 15
5 Governance 19
6 Wealth Creation 22
7 Environmental Performance 25
8 Business and beyond 29
a Engaging with stakeholders 30
b Our customers 34
c Our people 35
d Work environment 39
e Our communities 41
f Case study-Creche: Challenging the challenge 43
g Supporting and strengthening communities 44
i
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ii
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Sustainability Report 2007-08
APPL AMALGAMATED PLANTATIONS PRIVATE LIMITEDBPC BANGALORE PACKETING CENTERBRC-OP BRITISH RETAIL CONSORTIUM INSTITUTE OF PACKAGING
BSC BALANCE SCORE CARDCD & SW COMMUNITY DEVELOPMENT AND SOCIAL WORKCMO CHIEF MEDICAL OFFICERCOP COMMUNICATION ON PROGRESSCSR CORPORATE SOCIAL RESPONSIBILITYEU EUROPEAN UNIONFMCG FAST MOVING CONSUMER GOODSGJ GIGA JOULEGRI GLOBAL REPORTING INITIATIVEHACCP HAZARD ANALYSIS AND CRITICAL CONTROL POINTIMO INSTITUTE OF MARKETECOLOGY
ISO INTERNATIONAL STANDARD ORGANIZATIONITO INSTANT TEA OPERATIONSKDHPL KANAN DEVAN HILL PLANTATION COMPANY PRIVATE LIMITEDCO CORPORATE OFFICEKRA KEY RESULT AREAL&L LISTENING AND LEARNINGMEMW MOUNT EVEREST MINERAL WATERMRL MINIMUM RESIDUE LEVELNGO NON GOVERNMENTAL ORGANIZATIONNIPO NORTH INDIA PLANTATIONSNPD NEW PRODUCT DESIGN
NPOP NATIONAL PROGRAMME FOR ORGANIC PRODUCTIONOPD OUT PATIENT DEPARTMENTPCB POLLUTION CONTROL BOARDPDCA PLAN-DO-CHECK-ACTPFA PREVENTION OF FOOD ADULTERATIONPMS PERFORMANCE MANAGEMENT SYSTEMPPC PULLIVASAL PACKETING CENTERQMS QUALITY MANAGEMENT SYSTEMRD RURAL DISTRIBUTORSSA SOCIAL ACCOUNTABILITYSEBI SECURITIES EXCHANGE BOARD OF INDIA
SPP STRATEGIC PLANNING PROCESSTBEM TATA BUSINESS EXCELLENCE MODELTCoC TATA CODE OF CONDUCTTTD TATA TETLEY DIVISIONTTGB TATA TEA (GB) LIMITEDTTL TATA TEA LIMITEDUNGC UNITED NATIONS GLOBAL COMPACT
Abbreviations used in the report
ii
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ata ea is committed to carry orward the ata groups philosophy within its sphere o inuence. Tis includes voluntary disclosure o non fnancialperormance as per guidelines o Global Reporting Initiative (GRI), active participation in United
Nations Global Compact and channeling activities to acilitate achievement o United Nations
Millennium Development Goals.
Sustainability report 2007-08o capture the sustainability challenges posed by a ast evolving business
environment ata ea has been employing GRI guidelines or its sustainability
report. Tis is the ourth report since 2003 and the second consecutive
report to be based on 2006 Guidelines(G3) developed by GRI.
ata ea is a signatory to United Nations Global Compact (UNGC).
Continuing the companys commitment towards making
its business an agent o positive change and
development, this report also communicates on the 10 UNGC principles related to human rights, labour, environment and
anti-corruption; and serves as Communication on Progress (COP)
o UNGC. Te sections showcasing the activities related to the
principles are highlighted by UNGCs logo along with the principles addressed.
Sustainability at AA EA
A BRAND NEW AWAKENING
Te new campaign leverages the unique position that tea
enjoys in our culture and attempts to migrate tea from
being purely a physical and emotional revitaliser to becoming a
catalyst for social awakening.
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Sustainability Report 2007-08
Scope of the reportTis report covers operations o ata ea Limited rom 1 April 2007 to
31 March 2008. Te ocus is on the Indian branded tea operations and 100% export
oriented units o ata etley division in Kochi and Instant ea Operations (IO) in
Munnar. Te strategy or sustainable exit rom the plantations was completed with the
ormation o Amalgamated Plantations Pvt. Ltd. (APPL) in January 2007 and transer o the
business and undertakings o NIPO pursuant to an order o the High Court at Kolkata passed in
April 2008.
Te ata ea Sustainability Report 2007-08, prepared using G3 guidelines can be downloaded rom ourwebsitewww.tatatea.com
For more inormation about this report, please contact:D.K. Sen
Vice-President & [email protected]
Tata Tea Sustainability Report 2007-08
In India tea is much more than just a beverage; it is indeed a way of life.
It is so deeply embedded in our psyche, in our roots, that life cannot
be imagined without a cup of steaming hot tea. Te new campaign hasmotivated people to internalize the tea experience and externalize their
social awakening. Tis campaign has successfully established thought
leadership for the brand to go along with its market leadership.
10
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P.T. Siganporia, Managing Director
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Innovation, saety and climate changeconcerns are now entering the realm obasic requirements or ulllment o new-ageliestyle beverage delivery norms amongstconsumers across geographies and segments.
1
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Dear Stakeholder,
We achieved recognition or our Business Excellence journey during 2007-08 with a High Deltaimprovement award accorded to the ata ea stand alone operations in action plans, process,address o emanating concerns, results and holistic growth at the JRD qv Awards Nite on 29th July2008 Our teams led the growth agenda o the stand alone entity even as we led the transormationand growth agenda to emerge as a global beverage business Te teams co-created several
breakthrough programs and achieved results with our consumers, internal and channel customers,supplier/ vendor partners, local and central governmentalagencies, environmental and societal stakeholders in a holistic manner We will nowmerge our eorts as one global beverage business as we move ahead A ocus oninnovation, climate change and saety has in enabled us to alter our previous norms osourcing, delivery and construct o product oerings and we are beginning to see the benetsrom such a commitment Tese issues have enabled us alter our previous norms o sourcing,delivery and construct o product oerings and we are beginning to see the benets rom sucha commitment While implementation o these initiatives tends to enhance the short termcost o operation, they are the real costs o conducting a sustainable business and we standcommitted to developing our business accordingly We rmly believe that such eorts are in
keeping with the ata Groups Sustainability Policy, reect our core ata Values and help usbuild brand equity while enriching operations in the long term
In the last report we shared our business strategy o identiying opportunities or strategicinnovation and market expansion and the Environmental, Social and Governance (ESG)considerations linked with the strategy Tis year we are happy to share the milestones o our
journey across these as well as the new ESG issues that are now actored in the way we do ourbusiness Te signicant milestones achieved in the Stand Alone entity include:
Continued volume growth in the Indian branded tea business or the third consecutive year with a
volume growth o nearly 15% in 2007-08 Over the last three years the branded business hasgrown 35% in volume and 47% in value termsNew product development or evolving consumer palate such as High Clarity tea and OrganicInstant tea, ata ea Lie (a regular every day tea enhanced with natural herbal extracts), andetley Green ea rangeApproval rom the High Court or restructuring o the North India Plantations as AmalgamatedPlantations Private Limited (APPL) With the ormation o APPL in 2007-08 and Kanan Devan
Leading the transformation and growth agenda
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Hills Plantation Company Private Limited (KDHP) in 2005, we have exited all but two o theplantations earlier managed by usContinued support o welare activities to KDHP stakeholders through management oGeneral Hospital, High Range School and Srishti
Our eorts to ensure inclusive growth while expanding our brands continue through the
Gaon Chalo initiative which aims at improving the rural distribution o the Company whileproviding growth opportunities to the economically backward strata o the society Gaon Chalohas now turned into a movement, touching the lives o 20,000 rural citizens o India across 10,000
villages Tis unique co-created rural market access channel is currently under study by other ataGroup companies, who will participate to widen the spread o oerings and enhance the ruralstakeholder penetration, both working to enhance the economic viability o all entities
Climate change aligned Business Strategy is now a ata Group commitment and at ata ea weare beginning to understand complexity and address issues going orward Even while that is underconsideration, we commenced activity in specic areas as a build up to an organized eort oreduce the use o ossil uels a bio-gasication plant using spent tea has been commissioned at our
Instant ea manuacture unit at Munnar We initiated mapping o our carbon ootprint across ourmanuacturing acilities and shall evaluate recommendations as they emanate
Our commitment to the ten principles o the United Nations Global Compact (UNGC) remainsas deep and unwavering as beore We are glad to note that the 2006-07 Communication onProgress (COP) was appreciated as a notable COP In keeping with our commitment, we haveemployed the Jaago Re campaign or ata ea or as an attempt at social awakening and arehappy that it touched the chords o millions o Indians From September, we have launched the second
phase o the Jaago Recampaign to awaken the youth to consider issues and exercise their ranchise atelections, even as we provide them apolitical linkage options to enable them to do so
We hope that the inormation presented in the Report and on our website provides a view oour commitment to the triple bottom line and enables you to track the progress o our BusinessExcellence journey We look orward to your eedback on our initiatives and on this Report
P Siganporia
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Nestled amongst the sylvan plantations is Shrishti Welfare Centre,
exemplifying the deep entrenchment of ESG issue in the conduct
of our business.
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2
Rereshing options or sustainable business in achanging world.
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One Strategy
Changing scenarioTe tea industry is going through a state o ux and there are several changes
occurring across the industry Te change in consumer liestyle and increase in
awareness has led to the change in beverage preerence o domestic customers Te globalization
o the trade and increased opportunities o global sourcing has rendered the tea
industry highly competitive Globalization has also led to strengthening o
regulations and saety standards across ood industry Tere has been
emergence o modern interactive trade ormats and high expectation o rural markets
Strategy or changeTe company recognizes that key success actor in the changing
scenario is keeping abreast with consumer preerences especially youth,
regularly meeting their expectations, increasing the reach o products, oering innovative
products across segments and markets, managing raw tea sourcing, leadership
in thought, ood regulation & policy ormulation and supply chain issues o take the
leadership position the company has revisited its strategy Te inputs or the Strategic
Planning Process (SPP) come rom several sources: various actors shaping the industry,
critical success actors, strategic challenges in realizing the vision, internal and
external assessments and eedback received rom ormal/inormal meetings with dierent
stakeholders
Growing together: Inclusive growth and new marketsRural India accounts or 40% o branded tea
sales Te company initiated project Gaon Chalo
that aims at improving the Rural Distribution
o the Company while providing growth
opportunities to the economically backward
strata o the society Te Project has helped
ata eas belie that in order to uel the
economic development o the country,
organizations must extend their support
to disadvantaged communities Currently
35% o the companys Gaon Chalo Channel
Partners hail rom these communities Te state
o Uttar Pradesh (UP) was selected or Project Gaon Chalo since it accounts or 16% o the
Indian population, o which 80% resides in rural areas
Q2
07
0.00
0.20
0.40
0.60
0.80
1.00
1.20
Q3
07
Q4
07
Fig. 1.0 Quarter wise average sales in lac Kg
Market share in % as per ACN Retail Audit
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Te companys % market share in Uttar Pradesh increased rom 19% in mid 2006 to26% by end o 2007 Te all India % volume share increased rom 185% in March 2007 to21% in March 2008 Te all India % valueshare increased rom1855 in 2006-07 to2040 2007-08 ata ea products are beingrouted through NGOs who appoint RuralDistributors 1 (RD-1) Tese RD-1s help appointsupervisors (RD-2s) who vis-it villages and distributeto rural dealer amilies (RD-3s) Tese amiliessell in the villages to earn a margin equivalent tothe retail margin In a span o one year sincestarted, the company is working
with 12 RD-1s, 60 RD-1 coordinators and 430RD-2s in 10,000 villages reaching out to 20,000RD-3s across UP, total sale 1885 lac Kg o tea till Dec 2007
Sustainable business model or plantations:Te success o our model, KDHPL, or exit rom plantations in South India enabled us torestructure the plantations in North India Tis was echoed in the creation o APPL in
North India Wherein these 2 models work on dierent principles they highlight theviability o sustainable business models while balancing diverse stakeholder requirements
Ensuring air labour standards across value chain We have a responsibility to ensure the growth o our entiresupply chain in both nancial and extra nancial matters Our view is that a closenetwork o positive relationships based on condence with business partners, suppliers andcontractual parties open up new opportunities and provide the company with resourcesand inormation critical to the penetration o new markets Te implementationo SA 8000 to all packeting centers has led us to address the requirement o social
accountability viz child labour, orced
labour, health & saety o workorce,reedom o association & collectivebargaining, discrimination, disciplinary
practices, working hours & compensation in asystematic manner Nearly 100% o our
vendors are now certied to ISO certiedand large section is HACCP/BRC-OPcertied
100
25 25 25
ISO 9001
(2000)
ISO 14000
(2000)
ISO 18000
(2000)
ISO 22000
(2005)
HACCP BRC-IOP
Fig.1.2 Supplier certification ( % )
Fig. 1.1 Volume share % in India as on
March 2008
16.3 16.7
18.5
21
0
5
10
15
20
25
2002 Mar-06 Mar-07 Mar-08
Volume%
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All these measures have been taken to promote establishment o systems and transparencyalong our value chain Tis in turn allows us to ensure that we deliver better quality products to ourconsumers
Tought LeadershipL has been providing leadership in areas o product saety and health eg, leading by
being the rst to adopt HACCP in the tea industry, using o only PFA approved chemicals,
proactive leadership in lobbying or amendment to the PFA Act to: a) include enzymes in tea
manuacture, b) use o specic articial avouring agents, c) progressive reduction in the levels oiron llings
Te legal and audit department keeps track o industry developments and requirements that might
have a potential impact on the companys processes and practices so that anticipatory measures may
be taken well in advance or uture legislations, which orms key input towards the SPP
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Creating brand dierentiation through ocus on innovation
Ms. Sangeeta alwar, Executive Director
At ata ea we believe in creating relevant brand dierentiation and building a strong ranchisewith our consumers and customers Tis ocus along with continuous innovation in all aspectso brand marketing and sales has helped to transorm our brands into trust marks and love marks
2007-08 was an extremely eventul year or us We attained market leadership in volume terms or
the rst time in June ata ea was rated as the most trusted beverage by the Brand Equity surveyin 2007
In an attempt to migrate the ata ea brand medium o physical and emotional rejuvenation to a
platorm o intellectual and social awakening we launched theJaago Re campaign in October 2007
Te campaign successully established ata ea as a thought leader in the tea category connecting
with the hearts, minds ands souls o young India emerging social consciousness Tis campaign won
the prestigious INDYs 2008 Award or the best advertisement with a social message
In the previous two years ata ea had launched one o the most innovative rural marketing
programs in UP, working with a network o NGOs to sell tea through villagers thus co-creatingvalue or them On the back o this initiative ata ea launched a girl child education program in
UP ata eaKaliyan Tey say i you teach a girl you teach a amily, i you teach a man, he learns
alone educated women help to nurture and build responsible
societies Educating the girl child we eel will help to transorm
mindsets, accelerate symbols o progress and help to diligently address
issues such as high birth rates, amily nutrition, literacy, HIV/Aids,
violence etc
While we ocus on our external stakeholders we are also striving toimprove the diversity index within our organization, by recruiting
women candidates ata ea is actively working on creating an enabling
environment or its women employees
In sum, this is certainly a dening moment or us and one that will
encourage us to work towards attaining greater heights With this and
more to come we have certainly created the momentum to continue
sustainable growth or delivering value to our internal and external
stakeholders
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Consumer preference has made Tata Tea the market leader in volume terms.
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ProfleAddressing emerging opportunities to strengthen leadershipposition in the world tea market and global beverage sector.
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Global Prole
Te company is addressing emerging opportunities to strengthen the leadership position in
the world tea market and global beverage sector Tere has been increase in the share o high
margin products o increase the global ootprint and reach to key customer segments and
geographies, several acquisitions have been done Focusing on green tea extract
70 percent stake has been acquired in a joint venture with Zhejiang ea Import and Export
Company in China or manuacture and marketing o polyphenols, green tea extracts, cold and hot
water soluble instant tea, liquid tea concentrates and other value added tea beverage products Te
perormance o etley in international branded tea markets is robust with volume o sales about
6% higher than during the previous year Te growth o the etley brand was enabled by customer
and consumer insight relevant innovation, introduction o new products, cash generation and in
pioneering the agenda or growth o the beverage portolio Despite global competition in all key
markets, aggressive marketing eorts have grown etleys market hare wand prots in most
key markets
www.tatatea.com
India Prole
Te Indian operations are involved in production o branded black tea and instant tea or
exports and the company has evolved as FMCG branded B2C construct Te company made entry
into the water segment by taking stake in the Mount Everest Mineral Water Te company currently
holds 3173% o the paid up share capital o MEMW Te main products are branded tea consumer
packs available in all states in India, distributed by a network o channel partners Te business is
divided into three distinct operations:
A Branded ea Operations
Te Branded tea business continued to maintain the volume growth that it had recorded in the
last three years Te national and regional brands o the company recorded a volume growth o
nearly 15% during the year under review In terms o volume market share, according to reports o
independent market survey agencies, the company is now the market leader having
ata ea: ProleSecond largest global branded tea operations in the world
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outperormed its nearest competitor
Growth in volume was achieved
during 2007-08 across all the brands o
the Company and the highest growth was
achieved by ata ea Agni Over the last three
years the branded business the grown 35% in
volume and 47% in value terms
B Instant ea
Instant ea unit at Munnar produced 3959
lakh Ibs during 2007-08 compared with
4141 lakh Ibs in the previous year Powders
are being developed or customers as per their
requirements o an ongoing and need basis
New product development such as HighClarity ea is being pursued During the
year the Unit had achieved the capability to
manuacture Organic Instant ea which
has been duly certied by IMO Control,
Bangalore as per NPOP & EU guidelines
C. ata etley Division:
It is a 100% export oriented unit in Kochi
and packs around 4 Mn Kg in consumer
packs It is a key supply base to all
GB markets outside India, 60%
to Australia and 20% to Poland and
Middle east
ata ea the most trusted beverage*
*Brand Equity survey 2007
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The secondJaago Re campaign for social awakening was launched
recently. Tata Tea is using the compaign to awaken the Indian youth to
exercise their franchise.
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4GovernanceFocus on long term shareholde
value without compromising o
integrity, social obligations an
regulatory compliance.
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Corporate GovernanceTe corporate governance policies ollowed by ata ea are aimed at ensuring transparency in
all dealings and in the unctioning o Board and management Tese policies seek to ocus on
enhancement o long term shareholder value without compromising on integrity, social
obligations and regulatory compliances Te company operates within accepted standards o
propriety, air and justice and aims at creating a culture o openness in relationships between
itsel and its stakeholders
EthicsTe ata Code o Conduct (CoC) is a comprehensive written code which is applicable to all
employees including the Managing and Executive Directors Te code, which has
been updated in 2008, lays special emphasis on the impact o the groups activities on climate
change Both the ata Code o Conduct and the Code o Conduct or non executive directors are
available on the website o the company
www.tatatea.com/code_conduct.htm
www.tatatea.com/group_corporate.htm
ata ea BoardTe Board as the representative o the shareholders, provides direction and oversight tothe management or maximizing shareholder value As on March 31, 2008 the Board
comprised o 11 directors Currently, there are 7 committees o the Board including
Audit, Investors Grievance, Remuneration, Executive, Ethics & Compliance,
Nomination and Corporate Sustainability Reporting Te Corporate Sustainability Reporting
Committee tasks the Management Committee to identiy shareholders
concerns Te committee also maps risks and opportunities emerging
rom the global sustainability agenda, devises strategies to address them and
thereaer monitors, documents, and communicates the sustainability
perormance as appropriate Tis year the CSR committee has also providedguidance to the management committee on additional ESG issues such as water
and waste management systems and reducing packaging ootprint
www.tatatea.com/invest_relation.htm
Ensuring transparency rom the tea bush to tea cup
1 2 3 10
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ata ea Management FrameworkTe company has adopted the ata Business Excellence Model (BEM) as a means
o driving excellence through the organization as also the Balanced Score Card (BSC)
methodology or tracking progress on longer term strategic goals Tis enables the organization
to ocus on issues beyond nancial perormance, vis--vis its employees, customers and the
society at large Te senior leadership o L and GB consists o the Joint
Management Board Tis body sets long-term direction, in the global context or
the ata ea Group as a whole Te leadership system, which consists o variousFunctional heads and eam leaders across locations, operations and projects utilizes a
structured Plan-Do-Check-Act (PDCA) cycle and ensures a ocus on balancing value or all
stakeholders Te key requirements o stakeholders are the cornerstone and yardstick o our
short-term and long-term strategies Tis is the road map used to create and execute action
plans, ensure act-based business decisions, prioritize and allocate resources and drive continuous
improvement
Additionally, every unit head is engaged in appropriate monitoring and reporting o
compliance issues under Clause 49 o SEBI Regulations Te process considers both
identication o comprehensive risks including, high risk areas and sel-certication by
each entity indicating compliance level rom each entity Tese compliances
are periodically reviewed by Internal / External Auditors to look at the
rigour o compliance and to suggest areas or improvements in critical
processes
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5
We have constantly innovated on the construct o our product oering.Chai Unchai- Te newly introduced chaibar-is one such example.
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Te total income o the company or nancial year 2007-08 was INR 1263 billion,ie 102 % increase over last years income Te prot aer tax also increasedto INR 312 billion rom INR 306 billion Te details o Economic ValueGenerated, Economic Value Distributed, Economic Value Retained are given in the tablesbelow:
Economic value generated(able1.1): Economic value retained:
Economic value distributed (able1.2):
Wealth Creation
Total
Location / Business unit
Brands /Exports
Plantations*
Corporate
07 - 08
Economic Value Distributed(B)
TOTAL (B)
Operating Costs
(See comment)
Employee wages and
benefits
(See comment)
Community investmentsPayments to providers of
capital
Payments to government by
country
(See comment)
91364.650 4406.651 - 1226.552 3638.691 100,636.544
1460.411 1106.623 837.000 - 29.582 3,433.616
1,600.570 1670.046 142.032 25052.748 7627.307 36,092.703
94425.631 7183.320 979.032 26279.300 11295.580 140162.863
Total
Location / Business unit
Brands /Exports
Plantations*
Corporate
TOTAL (C)
Economic Value Retained(C=
A-B)
(See comment)
5963.220
Location / Business unit
Brands /Exports
Plantations*
Corporate
TOTAL (C)
Economic Value Retained(C=
A-B)
13,699.527
(1,210.195)
(6,526.112)
5963.220
Location / Business unit
Direct Economic Value Generated(A)
Revenue from net salesRevenue from sale of
assets
Revenue from financial
investments
Brands /Exports 114336.071 - -
Plantations* 2223.421 - -
Corporate 149.442 16498.571 12918.578
Total 116,708.934 16,498.571 12,918.578
* Includes Interdivisional Sales
Payment to capital providers include Dividend and Tax thereon is included in Payments to Go vernment
Tax relief/credits Subsidies
Investment Grants, R&D
Grants and other revelant
types of grant
Awards
52.63Brands /Exports
Plantations*
Corporate
136.25
* Includes Interdivisional Sales
07-08
Location / Business unit
07 - 08
Location / Business unit Royalty Holidays
Finacial assistance from
Export Credit Agencies
(ECAs)
Financial Investments
Other financial benefits
received or receivable
from any government
from any operation
704.6339.75
704.6339.75
07 - 08
Brands /Exports
Plantations*
Corporate
* Includes Interdivisional Sales
07-08
latoT
latoT
Finacial assistance
received rom government
(able1.4)
(able1.3)
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Shola are tropical montane orest ound above 1500 meters on the southern portion othe Western Ghats. Tey have high ecological signicance in protecting the head watero the rivers. Tey have the capability o holding the water received by precipitation like
a sponge thus preventing rapid runo. ata ea has been involved in the conservationand regeneration o this ecosystem.
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Climate change aligned business strategyis a ata group commitment.
6
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Energy consumption
Several initiatives o energy and resource conservation have been taken across the units Te ataetley division at Kochi has implemented use o light sheets on the roo to eliminate use o electriclighting in the actory during day hours Wind driven roo exhausts have been installed to reduce thetemperature in the actory Te efciency o the machines used have been improved considerably rom65% in 2003 to 80% in 2008 Te Instant ea Division has also installed urbo roo ventilators toincrease the natural lighting in the actory premises Te unit has improved the power actor by onlinepower actor improver to 099 rom 088, which is resulting in reduction o electricity and savings oINR 35,000-40,000 per month Similarly the Pullivasal Packeting Center has replaced all the sodiumvapour lamps with tube lights
Case study: Bio-gasier at Instant ea Division
Te Instant tea division has developed a biogasier which utilizes the tea waste to replace the urnaceoil Te solid tea waste generated in the process contains 60-65% water, which is dried and used asbiouel Tis biouel is converted into producer gas and used by gasier, Te producer gas has thecapacity to replace the urnace oil or uelwood to produce steam Te gasier produces 10 tons osteam/hr and 200 205 tons o steam per day Tough at testing stage the gasier has capacity toreduce by hal the standard requirement o nearly 1800 kilo litre o urnace oil Tis initiative hasalso resulted in optimal utilization o waste generated Earlier the waste generated was transported to
plantations or composting Earlier 35% o the waste generated was dried and used in re wood boilerNow 100% tea waste goes to bio gasier
Environmental perormanceGoing green
Bio-Gasier Plant at Instant Tea Operations, Munnar
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Energy Efciency and GHG emissions
Te GHG emissions related to total direct and indirect energy consumption related to diesel andelectricity consumption is 11950088 tons Co2 eSimilarly the direct energy consumption or the year2007-08 was 289328 J and the indirect energyconsumption was 24461 J (able 20):
Water Consumption
Te total water withdrawan romdierent sources, mainly the municipality
supply and the ground water was 12789246m3Instant tea operations at Munnar was the highest consumer owater with 12551852 m3 It was also the only plant that recycled
water Te total amount o recycled water was 330648m3
A total o 25467910 ons o raw tea was used by dierent unitsand 7113 ons was produced as spent tea waste
Environmental expenditure
Te total expenditure incurred on the environmental initiatives was INR 403 million
Contribution of different energy sources in GHG emission
5%
49%
45%
1%
Diesel Electricity Furnace oil LPG
Energy Consumption
2007-08 2006-07 2005-06
Direct Energy
(TJ)289 300 356
Indirect Energy
(TJ)24 103 113
81%
2%
17%
Used Recycled Discharge
Fig. 2.0
Fig. 2.1 Water Use
7 8 9
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ata ea was awarded the prestigious Businessworld FICCI-SEDFCorporate Social Responsibility Award - 2007 -Corporate Citizen - II
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Business
andbeyond...
7
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Work EnvironmentEngaging with our stakeholdersEngaging with our stakeholders
Te company has identied various stakeholders and has dened processes or engaging withthem proactively, addressing their concerns Good citizenship is practiced at all levels o theorganization, with the lead being taken by the senior leaders
Twoway
communication
Stakeholder
Forum
Frequency
Participants
Feedback
received on
Issues addressed
Employees
Employee satisfaction survey
Regular
Fair treatment and adequate
remuneration
Career growth, jobsatisfaction
End consumer
Members of seniorleadership
Market visits/Open channels
CCMS and unstructured face
face interactions
As per plan/ as and when req
Requirement, needs and
expectations
Products- own and competitcurrent and future
Members of senior leadershiBrand and Sales manager,
Market Research Team
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o synchronize our eorts and better understand the stakeholders expectations, a well dened processhas been put in place, wherein inputs are gathered rom various stakeholders through structured twoway mechanism
Stockists meet
Quarterly
Pricing, discount, schemes,
new opportunities, co. directions,
stockist expectations, reward/recognition
Key processes, customer feedback,competitor activity, on time supply,
product quality
MD & commercial heads,Brand and sales managers
Channel partners
Launches and re-launches
As planned
Product details, co. expectation,
volumes, pricing
Strategic inputs, market reaction,competitor activity
Brand and sales managers,commercial/QM representatives
Ad, Media, other
Market Research Agency
Meetings, briefs, presentations
Regular
Advertising theme, brand positioning
Innovative tools, consumer insight,competitor activity
Commercial head, brand managers,MR manager
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Twoway
communication
Stakeholder
Forum
Frequency
Participants
Feedback
received on
Issues addressed
Contract packers
Own representation in
packing units
Ongoing
Setting up facilities, standards
expected, processes to be followed
Bottlenecks faced,
improved processes
TTL representatives,
SCM & Production heads
Suppliers
Vendor meetings
Formally twice a year/ ongoin
Strategic sourcing, product
quality and specifications,
NPD rate fixation
Innovation, Competitor activit
Supply chain managers,
brand managers
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Brokers
Auctions, Face to face
meetings
Weekly/ Regular
Production, quality and price
Quality, Industry and
market trends, Changingbuyer preferences, Price
analysis, Competitor activity
MD/Head TBB/Other
key personnel
Community & Govt
Meeting with Govt Bodies
Ongoing
Welfare programs, health &
hygiene, agricultural practices
relief & rehabilitation efforts,
infrastructure issues, security
Regulatory issues, PLA issues
subsidies, societal welfare,environmental issues.
MD, Director Special Projects
Head CD&SW, welfare &
medical staff, estate manager
Shareholders
Analyst meet
Half yearly
Financial performance/
future plans
Performance expectations, stakeholder concerns
MD/CFO/ED/
Company Secretary/
Director
AGM
Annual
Company performance,
future plans, stakeholder
concerns
Board Members of TTL
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Our customersContinuous improvement in the Listening and Learning methods help us inknowing the pulse o market and orge long lasting relations with our customers
India is the largest consumer o black tea in the world, which is consumed in more than 90% o
households in India Due to habit driven nature o the category, the only way to trigger brand
switch is to dierentiate and innovate the product Te companys products reach end consumers
passing through internal customers who are involved at dierent levels o value/supply chain Each
o these internal customers provides valuable insights on customer reactions and expectations
Identiying their signicance the company has developed dierent sets o Listening & Learning
methods to capture them Tese L&L methods are evaluated and improved annually at the annual
marketing and sales conerence Notable improvements or the reporting period are:
Benchmarkingagainstlocalandregionalbrandsintroduced
Specialprojectstounderstandtheregionalplayerbusinessmodeltohelparriveatstrategyfor
our brands
Householdpaneltounderstandthemovementofvolumeandshisbysegments
Comprehensiveusage&attitudeandconsumerinsightstudy
Separatereportingandmonitoringofkeyaccounts,specialschemes
Strict benchmarking (achieved for zonal and town level) for media advertisements and
pre-testing o all new theme ads
Bimonthlyscanofallmediaandsubscriptiontotargetgroupscan
Frequencyofretailerandstockistsurveysincreasedfromannualtobiannual
Although, neither the companys operations nor the products are harmul, adequate checks and
measures are in place to ensure that all possible risks are addressed in every process, through Risk
Mapping Process and Review o Risk Register annually by the Audit committee During the
evaluation o new projects, the New Product Design (NPD) process in the orm
o the Stage & Gate model ensures that a detailed analysis is carried out o the
impact o products and adherence to all regulatory norms, prior to their introduction
We have established a Commercial Complaint Management System to listen to dierent types o
consumer complaints ata ea has been engaged in dialogue with industry research bodies, egMRL/pesticide levels in tea, ood grade certication or packing materials, waste disposal, medical
health check up or workers, water quality and energy consumption in production acilities etc All
these go towards ensuring that public concerns with current and uture products and operations are
anticipated and addressed
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Te company has recently experienced accelerated transition, moving rom being hierarchical and
plantation dominated large employee business to very lean and ocused market oriented FMCG
branded B2C construct oday company has 2833 employees Te production operations in the
domestic branded tea value stream are being progressively outsourced
Te company engages its workorce through a robust measurement ramework that aligns the
strategic objectives to perormance metrics and tracks individual and team perormance
Initiatives like ata Business Excellence Model, Balance Score Card (BSC), WL, competency
proling and mapping succession planning etc are in place as part o Perormance ManagementSystem (PMS) Tese systems are supported by segmented approaches o compensation, reward &
recognition, career progression and variable pay
Te PMS or executives enables provision o eedback to employees and make improvements in
the compensation/reward/recognition/bonuses linked to perormance Te corporate objective o
delivering superior value to customers is cascaded through the medium o Corporate BSC, driven
through the unctional BSCs and then linked to key result areas (KRAs) o executives Te KRAs
include goals and targets which are aligned to customer and business needs o the organization
For leadership roles this is complemented by perormance standards and behavioural assessments
on ata leadership practices For the ofcers, sta and workers, specic targets are set to ensureachievement o high perormance As part o extended PMS, other approaches o recognition by
peers/seniors/awards night, career development through training and mentoring, job rotations,
oreign assignments/visits and gis during special occasions urther reinorce high perormance
Employee satisaction survey is taken regularly to assess the eectiveness o PMS
A unique eature o company is employee developmental process that identies individuals who
show extraordinary traits o leadership, termed as Key Resources Tese resources have signicant
responsibility or delivering the business agenda o ata ea and are exclusive to top talent identi-
cation process which trains or uture leadership
Our PeopleEfcient management o human resources and application o systems amidsttransition and adoption to new work culture has been the major ocus
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3 details of Affirmative Action Plan.
SPP based individual
goals & KRA detailed
in PMS & review
Identify successor
during succession
planning
New recruit 360 degree
Feedback
IDP for Top talent &
Ke resources
Competency gap
anal sis
Consolidation of
trainin needs
Training calendar
re aration
Training
nomination
Training feedback
effectiveness
analysis
Further needs
Te company also has a very dynamic system or identication o development needs o the sta,
summarized as ollows (Fig 30):
Tere is structured training module or dierent segments o employees (able 30):
Employee Group Training initiativeEmployee development and career
progression
Senior Management, Top Talent & Key
resources
Managerial grid, leadership development,
behavioural training
Career progression for senior leadership positions,
identification as a group Resource through Group IDP
prog, enhancing the leadership & strategic capabilities
Middle Management and need based
TBEM, EWPM, supply chain, project management,
finance, total quality, brand management, innovation,
benchmarking, team building
Develop competencies for tracking up higher positions
and better work delivery in line with action plan
requirements
Junior Management, SDOs, Officers,
StaffSelling, packaging skills, computer
Picking up specific skills that help in career progression,
job rotations etc
All (need based)Tea testing skills, Sap, PMS, TBEM, EWPM, TCOC,
team building, safety & health
Developing functional skills, align behavioural traits,
health & safety awareness
15%
60%
25%
50
(For Bangalore packeting center, Instant Tea and Tata Tetley Division, Pullivasal Packeting Center )
Fig. 3.1 Agewise breakup of employees
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Fig. 3.2 The total man hours of training
1431
524
842
1200
0
200
400600
800
1000
1200
1400
1600
Ma
nhours
ITO BPC TTD PPC CO
Unit
Location
211
171
197
181
290 9
5
55
12
3
671
528
2
18
56
55
37
42
126
36 9
9
25
4
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
CO PPC
ITD
TTD
BPC GH HR
S
Shrishti
Proje
ctoffic
e
Pulliv
asal
estate
Periaka
nale
state
Contract workers
TraineeConfirmed
Fig. 3.3 Workforce Categorisation
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671
528
344
307
239208
10493
64
7
268
Fig. 3.4 Workforce strength at different locations
Te HR policies outline separate approaches, based on employee segment, location, work level,
and nature o job 475workers are members o various unions across D, IO, BPC and PPC
For the mentioned units the turnover or the reporting period was 32 employees and 325
manhours o lost time injuries were reported We have also instituted afrmative action
plan as per the group guidelines, which was approved by the CSR commit-
tee o the Board Data was collected rom within the company on a voluntary
basis and a detailed action plan on employability and education was ormulatedwithin and outside the company ata ea is working closely with Industry bodies
on this initiative As part o the initiative 11 colleges in Kerala were selected or
training o the candidates rom disadvantaged communities on I skills and
Communicative English Tis was requested by the college principals and initial
response has been very good
3 4 5 6
CO PPC TTD
BPC General Hospital
High Range School
Shrishti Project office
Pullivasal estatePeriakanal estate
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At ata ea, we strive to provide and maintain workplace, machinery and equipment and use work
methods that are sae and minimize the risk to health
We provide sae, healthy and ergonomically designed work stations to our employees, which go
well beyond statutory requirement Proper lighting, air conditioning, comortable urniture and
regular house keeping ensures a pleasant workplace in the ofces Fire ghting equipments are
suitably placed and security guards are posted at all work locations to ensure saety o Ls
property and employees Even as the work place is relocated in line with the new business model,
movement is acilitated through special policy deployment that addresses work and amily
requirements eg, extended stay in service apartments, relocation allowance, nancial assistance or
school admission, rental advance and brokerage, daily local conveyance and additional investments
in work stations
We also own ull edged medical acilities surpassing legal requirements As part o our services
to our employees we provide annual medical check ups/ vaccination or contagious diseases, and
ree medical service to employees and amily, dependent parental medical insurance cover, cashless
hospitalization, through arrangements with hospitals
As statute all our employees are covered under various insurance schemes
Various units o the company have instituted dierent saety measures across the actories
Some prominent initiatives taken by ata etley division at Kochi include issuance o Sae
Work Permit prior to execution o all jobs deemed to have a risk element Te packing material
storage warehouse is susceptible to re accidents; smoke sensors and ull edged re ghting
system have been installed in the Systems Dept to counter the re threat All the electrical
switchgears have been upgraded and acoustic enclosures have been built or all equipments
that have a noise generating potential viz - Generator, compressors etc Te unit has also
maintained complete data base o blood types or all actory / ofce personnel so that donors can be
identied without delay Te actory is ISO 9001 certied or QMS and ISO 22000 certied or
Food Saety Management Systems ISO 22000 combines HACCP, Prerequisite Programmes and
Operational Prerequisite Programme into single Food Saety Management Strategy An incinerator
approved by PCB is installed or disposal o paper based process waste
Work EnvironmentSae and healthy work environment at work
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Innovation at work place:
Te company rmly believes that innovation happens best with the people who are involved in
the process Te workers are encouraged to come up with suggestions and innovations that help in
process improvement Tis open door policy has led to inclusion o several improvements in the
production process and signicant cost savings o approximately INR . 5 Million Tese suggestions
include changing the placement o coding window on the carton, rearrangement o checkweigher
and coding machine resulting in optimization o the manpower in the process Also there have
been suggestions that include use o stamp pad instead o stenciling and use o washable cloth maskinstead o surgical masks Te engineering team has designed and built several equipments in the
actory which are a rst, and unique to companys operations A key example is the SNAP Carton
maker, which has enabled the Australian market to sell a new generation carton, using low cost
capital equipment developed entirely at Kochi Tis has enabled the market to have a projected
growth o 2- 3%, as against a 2 % drop had the innovation not been introduced Te actory has also
developed an indigenous teabag enveloping mechanism, at a cost 1/30th o the cost prevailing in
UK (INR 3 million vs 90 million)
Also to improve the traceability o product complaints received rom the market, we have installed
a tag coder which operates in tandem with the Constanta tea-bagging machine at a speed o 150 perminute, which is again a rst-time
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L is committed to the cause o contributing to supporting and strengthening its key
communities Although contributions are made to charitable institutions across the country,
there is well dened process or identiying key communities and implementing social welare
plans, which enables maximum benecial impact to the identied communities We are pioneer
within the industry in CSR and have won several awards in this sphere and have a well structured
process or identiying key communities and implementing social welare plan Our key
communities are concentrated in and around erstwhile estates
Fig 40 Process or identiying key communities and implementing social welare plans
We continue to partner with KDHP and APPL to make the plantation commercially viable and
ensuring continuity and sel sustainability o the society and environment through the community
institutions An annual welare audit is conducted in the identied area to review and strengthen
the process and improve on the impact o the welare activities on the communities with set o
measurements and targets We continue to retain the complete responsibility or the
General Hospital, Shrishti welare center & High Range school at Munnar
Our communitiesCommitted to holistic social development
InputsLeadership
Communication
Communicate across
organization-
Learning & sharing
(welfare committee
meetings)
Take corrective action
Revise / intensify plans
Fix responsibilities and targets
Utilize external / internal resources
Implement action plansAugmentwithvolunteerworkbyseniorleaders
and employees
Develop action plans based for
Health Care
Reproductive health
Child care
Education
Empowerment of women
Community participationRegional / national calamities
Decide on key communities and areas for focus-
Senior leaders use criteria such asVision/values/culture/mindset
Close to area where we operate
Cause espoused and our relative strengthsImpact on society
Beneftstomaximumpeoples
Monitor and review action
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Shrishti Welare Centre (Shrishti) a unit
set up or the dierently abled children o
tea community runs a DARE School or
special children, Strawberry Preserve Unit,
Athulya- Hand Made Paper Unit and
Aranya- a dying unit specializing in shibori
dying, a Japanese tye and dye art orm Te
DARE school identies children with special
needs rom the surrounding communities
and trains them depending on their
requirement Te training i based on the
basis o hearing capacity Children who are
hearing impaired are given training which helps them work in the strawberry preservation unit o the
center Te children with special needs are given training on speech and other orms o education Te
aim is to mainstream the children in the ormal schools Te children who do not join ormal schools
are given training on other orms o art like painting, gardening etc Te hearing impaired candidates
get employed with the Athulya and Aranya centers and earn respectul living or them selves Athulya
uses the waste generated rom the actories and other wastes or manuacturing papers Aranyaspecializes in unique Japanese tie and dye orm o printing called shibori
Te High Range School (HRS) run by the company has taken several pioneering steps in the region
in the eld o education It aims to integrate personality and intellectual maturity along with course
curriculum or overall development o students Currently this mix is 40% and 60% It uses audio visual
method o teaching to make learning more interactive and also exposes the children to the technologies
which makes them more condent Te school in collaboration with Amada Group has developed an
operating system called UBUNU which can analyse student perormance, areas o improvement and
strong areas by an online assessment Currently this system is enabled or english and mathematics only
Identiying the need or additional training or preparation o various entrance exams, the school has
entered into understanding with IME institution or enrollment o the students Te school unded
training o 8 students at IME and reimbursed the lodging and boarding expenses o 5 students It
spent INR 42000 and INR 16952 respectively One o the students o the school R Sairam achieved
the 13 rank in Kerala in AIEEE 2008 examinations
Differently abled - Empowered
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Te support and training provided at DARE
school and condence o earning their own
livelihoods at strawberry preservation unit,
Athulya and Aranya go a long way in making
the people and children with special needs
independent Te act that they become earning
members helps them to lead a normal lie Tis
condence gives them inspiration to progress
ahead in the cycle o lie Te adult work-ers in these units nd their lie partners among
themselves and carry on with the married lie
like a normal couple and become proud parents
Maheshwari and Peter are one such couple with
special needs But this did not restrict
their courage to gain employment at the
Aranya center or dream o a amily o their own
Aer Maheshwari gave birth to baby girl last year, the
couple came across another challenge, where to keepthe girl when they are out or work Te well being
and eeding o child was a problem o counter this,
the company invested approximately INR 35 lakhs
to develop a crche in the Shrishti campus which
became unctional in December 2007 Te crche
is tted with all the required amenities like cribs,
nursing section, play area, etc Te crche maintains
constant temperature with help o heaters despite
o uctuations in external temperature It also has
acilities or cooking and cleaning or the children
2 ull time caretakers are employed in the crche
Te mothers o the children come at required time
to nurse the babies and dont have to worry about
the wellbeing o their children while they are away
working Te crche houses 12 children
CASE SUDY
Creche
A happy mother with her child
Joys of childhood
Full of life
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Disease trackingprofile tracked daily/
weekly/monthly, alongwith referrals and
treatment and reviewed
monthly by CD & SWdept.
Improved maternalhealth
Reproductivehealth
ChildcareEducation
Behaviour change
communication,Building competencies
of personnel
Targets/goals for each activity
are set for the estate medicalofficers by CD & SW dept along
with action plans, reviewed everyquarter for corrective action plan.
Childhood diseases, increase
in welfare audit scores.
Nutritional surveillance,
universal and extendedimmunisation, supplementary
feeding, Vitamin A prophylaxis,Improving service infrastructure
H
ealth
Care
Surveillance of early
warning system for
communicable disease
Analyzed on a monthlybasis for modification/
improvement and
reviewed by CD & SW
dept.
Child care programs
are improving onbirthrates, malnutrition,
family welfare, mandayslost due to medical
reasons.
EducationEnhancement of competencies
and skills of primary school staff
and mahila mandals, enhancedresources for providing high
school level/adult education.
Actions taken are analyzedby CD & SW dept
Unemployment among
non-worker dependentsreduced
Supporting and Strengthening Communities
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Comm
unity
participation
Early reporting, early diagnosis
and treatment system introducedthrough link workers, mahila
mandal and line chowkidars,paramedics, field staff.
Reduction in sick days,
absenteeism referrals,attendance in meetings,
No. of link workers andself help groups
Organization of communitybuilding groups such as
Mahila Mandals
AIDS
awareness/
Adultliteracy
Voluntary blood testing
procedureReduction in Aids cases
Promotion of aids awareness,
aids literacy and encouragingfamily panning
Natural
calamities Treating economically
poor patients in OPD ofreferral hospital in Munnar
Improved health and
reduction in morbidityprofile
Preparation for disasters,provision for economic relief
Environmental
preservation
Partnering with forest dept.,wildlife dept., and other NGOs
for protection of wildlife and
preservation of environmentthrough various joint initiatives,
continuous replanting of fallowareas with high quality clones/species
Region has been recognizedas one of the HOT SPOTS of
the world. Census data showsincrease in population of all
protected species. No. of tea and
energy plantations.
High range wildlife and
environmental preservationassociation, Joint management
of Ervikulam national park,
Employmentof
womenandphys
ically
challenged
Schemes for income
generation, encouragingbank savings
Regular monitoring for
timely action through theestate hospitals and CMOs
Reduction in diseases, more
healthy workers, reduction inhealth related absenteeism
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GRI CONTENT INDEX
Standard Disclosures GRI Indicators Page
Strategy and Analysis 1.1, 1.2 5-7, 9-13
Organizational Profle 2.1-2.10 Cover page, 15-17, Inside front
cover page, 28, 35-38
Report Parameters 3.1-3.13 iv,v
Governance, Commitments and
Engagements
4.1-4.4, 4.6, 4.8-
4.17
11,19-21, 30, 35-37
Economic
EC1 23
EC2 7
EC3 20,23,39
EC4 23
EC6 10,11
EC7 NR
EC8 23,41-45
Environment
EN1 27
EN2 NR
EN3 27
EN4 27
EN8 27
EN11 NR
EN12 NR
EN16 27
EN17 NA
EN19 NA
EN20 NR
EN21 27
EN22 27
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EN23 NA
EN26 26
EN27 NR
EN28 NA
Social
SO1 45
SO2 NR
SO3 NR
SO4 NA
SO5 12
SO8 NA
Human Rights HR1 NR
HR2 NR
HR4 NR
HR5 11,38
HR6 11,38
HR7 11,38
Labour LA1 37
LA2 38
LA4 38
LA5 NR
LA7 38
LA8 13,45
LA10 37
LA13 NR
LA14 NR
Product Responsibility PR1 34,39
PR3 11,12
PR6 NR
PR9 11,23NR-Not reported
NA-Not applicable
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UNGC INDEX
UNGC Principle Page
1 20
2 20
3 20,38
4 38
5 38
6 38
7 27
8 27
9 27
10 i,20
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