Analyst Presentation May 2012 Agenda Summary Financials Macro Environment Operating Performance Highlights Financial Review 2011-12 Summary Financials – vs Prior Year Group income at Rs 6630 crores up 10% against prior year reflecting favourable translation impact and improved performance in most major markets. EBIT at Rs 527 crores is higher than prior year by 4% aided by favourable translation impact and improved operating performance. Investment in new growth areas through alliances Profit before exceptional items at Rs 551 crores improves over previous year by 14% due to reduction in interest costs. PAT ahead of prior year by 48% aided by improved operational performance, lower interest and lower effective tax rate. The increase will be 62% based on like to like accounting policies. Macro Environment Volatile exchange market • USD/GBP strengthen against most currencies • Favourable translation impact Commodity costs remain firm • Tea prices remain firm • Coffee prices reduces from earlier high but still higher than prior year but marginally lower than budget Interest rates • Softness continues in short term rates in international markets • Short term interest rates harden in India • Company gains by restructuring/ repaying high cost debts Continuing competitive intensity. Operating Performance Highlights Strong performance in India – portfolio growth. Continue volume and value market leadership Favourable impact of cost interventions Good coffee performance in Russia continues. Strong performance in instant coffee units and coffee plantation units UK – maintains market share despite black tea market declining 3% yoy. Market leadership in Redbush / Decaff teas continues. Strong performance in green – No 2 position in UK. Significant growth in Tea Pigs – our premium brand Canada continues market leadership – significant distribution gains for new blends/products launched in market. Strong innovation agenda continues. US coffee performance impacted by firm commodity costs over price recovery. Operating Performance Highlights – South Asia 12% Top line growth for the year over previous year with portfolio growth Maintained MAT market volume and value leadership with 19.6%^ and 21.3%^ respectively “Soch Badlo” campaign launched to celebrate 25 Chart Title activities undertaken years of theBar brand. Various improved visibility, improved distribution and resulted in brand portfolio growth. • Soch Badlo digital campaign won 3 awards at Goa Fest 2012 Gaon Chalo (Rural penetration) continued and footprint extended to 8 more states. ^ AC nielsen MAT – Mar 12 Operating Performance Highlights – CAA Canada • Tetley continues to be volume and value leaders. • New blends/ products launched in earlier months reports significant distribution gains • Strong innovation agenda • Substantial interest generated for the Tetley Foodservice programmes US Bartranslation Chart Title • Price increases and favourable improves top-line performance. Higher commodity costs and increased merchandising costs erode margins. • EOC new mid-size bag rollout very successful. Australia • New lines (fruit and herbal, decaff green) gaining distribution. Strong performances by Tetley Chai Latte and Extra strong Operating Performance Highlights – EMEA UK – maintains top-line in a competitive intensive market wherein the black tea market has declined by 3%, Market leaders in UK for Tetley Decaff and Tetley Redbush. Green tea volume growth year on year. (No 2 position in UK) Teapigs brand of super premium teas continue to grow with distribution gains. Some teapigs SKU won the Great Taste award with lemongrass scooping the Bar Chart Title 3 gold star awards. Strong coffee performance in Russia with continued focus on distribution and increased listing in key accounts. Recovery of Tetley brand continues in Poland. Gain of 6 ppts in volume share which is at 4.5%. Operating Performance Highlights – Non Branded Business Tata coffee registers a record turnover and profit aided by improved realisation in coffee plantations and improved ICD performance Bar Chart Title India and US instant tea operation stable. China commenced commercial operations Performance Highlights – Other Key Initiatives Nourishco operations grow - Launch of Tata Water Plus and Tata Gluco Plus JV formed with Starbucks Investments made to Kerela Ayurveda for product development activities Activate – increase in stake to 43.1%. Financial Review Group Financial Review Quarter ending March Actual PY Variance 1734 1566 168 162 132 19 Particulars (In Rs crores) Year ending March Actual PY Variance Total Operating Income 6631 6003 628 30 EBIT 527 509 18 23 (4) Other Income 94 97 (3) (14) (34) 20 (70) (121) 51 167 121 46 551 485 66 (40) 56 (96) Finance Cost Profit Before Exceptional Items Exceptional Items 23 9 14 127 177 (50) Profit Before Tax 574 494 80 (29) (64) 35 (142) (202) 60 98 113 (15) 432 292 140 (20) (11) (9) (15) 20 (35) (24) (17) (7) Minority Interest in consolidated profit (61) (58) (3) 54 85 (31) Consolidated Group Profit 356 254 102 Tax Profit After Tax Share of Profit from Associates Regionwise Income from Operations Rs Crores Quarter Ending March Varianc Actual PY e Particulars (In Rs Crores) Year Ending March Varianc Actual PY e BRANDS 336 302 34 USA 1352 1227 125 155 135 20 Canada ,South America & Australia 497 483 14 491 437 54 CAA 1849 1710 139 428 402 26 GB & Africa 1468 1356 112 191 187 4 Europe & Middle East 763 708 55 619 589 30 EMEA 2231 2064 167 442 407 35 South Asia Brands 1886 1687 199 10 5 5 Other Beverages 29 22 7 1561 1437 124 Total Brands 5995 5483 512 158 121 37 Total Non Branded Operations 582 478 104 15 8 7 54 43 11 1734 1566 168 6631 6003 628 Other and Eliminations TOTAL OPERATING INCOME Exceptional Items YTD MARCH YTD MARCH 201 2010 137 44 - 37 Cost incurred for long-term initiative and new projects (24) - (19) Reorganization cost incurred in relation to business restructuring (15) (31) (3) (5) Redundancy costs incurred in relation to business restructuring (24) (16) (13) - Loss on assets relating to discontinued business initiatives (18) - - - Provision for future payments under contractual obligation (21) - (6) - New product development cost (9) - - - Provision for settlement of claims (6) - - - Employee Separation Scheme in India - (21) - (1) Others 2 (4) (40) 56 Total 23 9 Q4 Q4 Item 2012 2011 (Rs Crores) - 44 Profit on sale of non-core investment - 37 Actuarial gain on defined benefit pension scheme of an overseas subsidiary (10) - (8) Balance Sheet March 2012 March 2011 Shareholder’s Funds 5631 5065 Loans 916 1041 Other Non Current Liabilities 330 252 Deferred Tax (net) 66 64 6943 6423 Goodwill 3469 3038 Others 824 765 Long Term 474 480 Current 93 107 Cash & Other Deposits 1408 1522 Net Operating Working Capital 610 441 Other Non Current Assets 65 71 TOTAL 6943 6423 NET CASH POSITION +585 +587 Particulars (In Rs Crores) SOURCES OF FUNDS TOTAL APPLICATION OF FUNDS Fixed Assets: Investments : 2011-12 2010/11 2009/10 2008/09 2007/08 2006/07 2005/06 2004/05 133 124 124 108 92 92 67 56 124 Dividend History Exceptional Dividend Dividend THANK YOU HYPERLINKS Commodity Costs Trends – Coffee “C” Price Currency Movements 1.68 GBP vs RUB vs INR 1.66 60.00 55.00 50.00 USD/GBP 1.62 1.60 45.00 1.58 40.00 1.56 1.54 35.00 1.52 30.00 1.50 1.48 25.00 Jan- Feb- M Apr- M Jun- Jul- Aug- Sep- Oct- N Dec- Jan- Feb- M Apr- M 11 11 ar- 11 ay- 11 11 11 11 11 ov- 11 12 12 ar- 12 ay11 11 11 12 12 Month USD/GBP INR/USD RUB/USD USD/RUB & USD/INR 1.64 Commodity costs trends - Tea Average Kolkata Price 08-12 170.00 160.00 150.00 140.00 130.00 120.00 110.00 100.00 90.00 80.00 70.00 60.00 50.00 40.00 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 Sale 2009 2010 2011 2012 Commodity costs trends - Tea Mombasa Average Price (2008-2012) 350 Price (US$/Kg) 300 250 200 150 100 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 2009 2010 Auction No. 2011 2012