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Transcript of Tata Coffee Limited
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TATA COFFEE LIMITEDINTRODUCTION
(Company was incorporated as a public limited company under the Indian Companies Act, 1913
as Consolidated Coffee Estates (1943) Limited on 19th November 1943. The name of the
Company was changed to Consolidated Coffee Limited w.e.f. 12th June 1967 and was further
changed to Tata Coffee Limited w.e.f. 11th August, 2000 and a fresh Certificate of Incorporation
was obtained from the Regist of Companies, Karnataka, Bangalore)
COMPANY OVERVIEW
The Company is a Public Limited Company and is a subsidiary of Tata Tea Limited. TheCompany¶s activities range from growing of coffee and tea to the manufacture and marketing of
value added coffee products including roasted and ground coffee and instant coffee besidestimber value added operations.
The coffee operations of the Company are concentrated in the southern part of Karnataka i.e.,
Coorg, Hassan and Chikmagalur Districts. The Company owns 18 coffee estates and 7 tea estateshaving an aggregate acreage of 31613 Acres. These include the recent acquisition of the Tata Tea
Limited Estates in Anamalais. Apart from coffee, pepper and cardamom is also grown onitsestates as inter-crops. The Company is one of the largest exporters of coffee beans. The
Company has a curing works, pepper processing unit and a roasting & grinding plant at
Kushalnagar. The Company also deals in plantation requirements such as fertilizers, chemicalsand estate equipment. The Company has timber reserves, which are used as a shade for coffee plantations. As part of its plans to optimize the utilization of its captive timber resources, the
Company has embarked into Timber Value-Addition, the focus being on moving up the valuechain. Tata Coffee is also one of the largest exporters of instant coffee from India. The Company
has two instant coffee manufacturing facilities one in Toopran, Andhra Pradesh and the other atTheni, Tamil Nadu both of which are 100% EOUs.
The Company grows coffee in its own estates , processes the beans, exports green coffee and
retails coffee under its own brands in the domestic market. Its activities range from the growingand curing of coffee to the manufacture and marketing of value-added coffee products. The
Company is present in all segments of the product matrix. It has brands like Mr. Bean in the premium filter coffee market, Tata Café and Tata Kaapi in the Institutional segment and Mysore
Gold and International Tata Café in the Instant coffee export segment. The Company¶s out of home initiatives include the µJiffy µvending machines.
BOARD OF DIRECTORS
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y R.K. Krishna Kumar (Chairman)
y R. Govindarajan
y P.T. Siganporia
y U.M. Rao
y Prof. A. Monappa
y Ms. Sangeeta Talwar
y Venu Srinivasan
y S. Santhanakrishnan
y T. V. Alexander
y Hameed Huq (Managing Director)
ANALYSIS OF ACOUNTING POLICIES
Basic of accounting
The financial statement are prepared at going concern under the historical cost convention onan accrual basis and comply on in all the material respects with the General Accepted
Accounting Principles in India and the relevant provision of the Companies Act, 1956,
except those items covered under µACCOUNTING STANDARD - 30¶ on µFinancial
instrument: Recognition and Measurement¶ which are measured at fair value.
Fixed assets
Fixed Assets are stated at cost less depreciation. Interest on qualifying assets (i.e. Assets
that take substantial time to be ready for intended use) is capitalized at the applicable
borrowing cost on the funds used for acquiring such assets. Roll over charges, andexchange differences, relating to foreign currency borrowing attributable to Fixed Assets are
capitalized upto 31.03.2007 and charged to P&L Account afterwards. The Fixed assets are tested
for impairment and wherever required,provision is made.
Depreciation and Amortization
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Depreciation on Fixed Assets is provided at the rates stated in Schedule XIV of the
Companies Act, 1956, on written down value method except that Fixed Assets at Instant
Coffee Division, Anamallais, Corporate Office and certain Fixed Assets at the Curing Works
under the straight-line method. Leasehold improvements are being depreciated over the lease
period. In respect of certain assets, depreciation has been provided at the rates arrived at
based on its estimated useful life or as per the Rates prescribed in Schedule XIV whichever is
higher. (Refer Schedule 4) Increase in value of Fixed Assets upto 31.03.2007 due to Foreign
exchange fluctuations is depreciated over the balance residual life of the Asset.
Valuation of Inventories
Valuation of Stock is dealt as under: -
- Raw Materials and Stores & Spares At weighted average cost - Coffee, Instant Coffee, Tea, Pepper, Plywood and Trading Stock. At lower of cost and net
realizable value.
- Work-in-Progress At lower of cost and net realizable value.
- Cardamom and Other Produces At since realized/estimated realizable value.
BALANCE SHEET OF TATA COFFEE LIMITED
AS AT 31ST
MARCH 2010
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SOURCES OF FUNDS
Shareholders¶ fundShare Capital
Reserve & Surplus
2010
(Rs. In lakh)
2009
(Rs. In lakh)
1867.70
34120.26
1867.70
28405.60
LOAN FUNDSecured loans
Unsecured loans
Deferred Tax Liability(NET)
9864.22
5000.00
1460.62
14666.51
3000.00
952.39
TOTAL 52312.80 48892.20
APPLICATION OF FUNDFixed Assets
Gross Block
Less: Depreciation 32815.71
10267.12
32570.61
9306.99Net Block
Capital Working In Prgs.(includes advances)
22548.59
770.32
23,263.62
1110.51
Investments
Current Assets, Loans & AdvancesInventories
Sundry Debtors
Cash and Bank Balance
Others Current Assets
Loans & Advances
23318.91 24,374.13
14,677.62 14,677.62
11,674.88
2,502.20
2,024.21
125.06
6,980.24
12,545.97
2,663.63
945.82
91.87
7,030.80
TOTAL (A) 23,306.59 23,278.09
CURRENT LIABILITIES AND
PROVISIONSCurrent Liabilities
Provisions
6,577.94
2,412.38
11,535.60
1,906.0
TOTAL (B) 8,990.32 13,441.60
NET CURRENT ASSETS (A-B) 14316.27 9836.49
TOTAL 52312.80 48892.20
PROFIT AND LOSS ACCOUNT
(FOR THE YEAR ENDED 31ST MARCH 2010)
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INCOMESales
Less: Excise
Other Incomes
2010
(Rs.In lakh)
2009
(Rs.In lakh)
32814.45
66.28
31309.31
88.11
4594.26
722.20
2457.42
931.23
TOTAL 37342.43 33678.62
EXPENDITUREDepreciation
Accretion)/ Decretion of Stock
29551.19
1138.72
1652.60
34123.99
1222.29
(4508.26)
TOTAL 32342.51 30838.02
PROFIT BEFORE TAXProfit for tax- Current
Prior year
Deferred
mm Fringe benefit
4999.92
1292.71
508.23
-
2840.60
814.00
82.18
80.00
PROFIT AFTER TAX
ADD: Surplus brought forward from previous year
3198.98
842.15
1864.42
1330.88
PROFIT AVALIABLE FOR
APPROPRIATION
4041.13 3195.30
APPROPRIATIONGeneral reserve 1
General reserve 2
Debenture redemption reserve account
319.90
284.42
383.29
186.44
259.99
595.65
987.61 1042.02Dividends :Final(proposed)
Tax on Dividend1400.78
232.65
1120.62
190.45
1633.43 1311.07
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Surplus carried to Balance Sheet 1420.09 842.15Significant Accounting Policies / Notes onAccountsEPS - Basic & Diluted (on Rs.10 per Share).....................
(Refer Note B 15 of Schedule 12)
Rs. 17.13 Rs. 9.98
FINANCIAL RATIOS AND THEIR INTERPRETATION
Different Financial Ratios
TYPES OF RATIO INTERPRETATION
Current ratio =
Current AssetsCurrent Liabilities
· It measures the short term
liquidity of a firm. A firm with ahigher ratio has better liquidity.
· A ratio of 2:1 is considered safe.
Acid test or Quick ratio =
Quick assetsCurrent Liabilities
· It measures the liquidity position
of a firm.· A ratio of 1:1 is considered safe.
Debtor Turnover ratio =sales
Average debtors
· This ratio measures how fastdebts are collected.
·A high ratio indicates shorter time lag between credit sales and
cash collection.
Debt to Total capital ratio =Long term debtTotal equity
yIt indicates what proportion of the permanent capital of a firm
consists of long-term Debt.
yA ratio 1:2 is considered Safe.
yIt measures the share of the totalassets financed By outside funds.
yA low ratio is desirable for
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creditors.
yIt shows what portion of the totalassets is financed by the owners¶capital
yA firm should neither have a
high ratio nor aLow ratio.
Gross Profit margin =Gross profit* 100
Sales
yIt measures the profit in relationto sales.
yA firm should neither have a
high ratio nor a low ratio.
Return on Assets (ROA) =
Net Profit after Taxes * 100 Net worth
yIt measures the profitability of the total funds per investment of a
firm.
Return on Capital Employed(ROCE) =
(Net Profit after Taxes) * 100
capital employed
yIt measures profitability of thefirm with respect to the totalCapital employed.
yThe higher the ratio, the moreefficient use of capital employed
Earnings per Share (EPS) =
Profit after tax
Number of equity Shares
· It measures the profit available tothe equity holders on a per share
basis
Fixed Assets turnover =
Cost of Goods Sold
Fixed Assets
· Higher the ratio, more efficient is
the firm in utilizing Its assets.
Analysis of Financial Ratios for 2010
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Sl.
No
Ratios Particulars
(Rs in crore)
Values Remarks
01. Current Ratio =
Current Assets
Current Liabilities
Current Assets
=23306.56
Current Liabilities
=8990.32
2.59
Times
It is satisfactory
02.
Acid test or Quick ratio =
Quick Assets
Current Liabilities
Quick Assets
= 11631.68
Current Liabilities
=8990.32
1.29
times
It is satisfactory
03. Assets turnover ratio =
sales
average total assets
Sales
= 32814.45
Average total assets
= 61816.48
0.53
Times
It is not good.
04. Debt to equity ratio
Long term debt
Share equity
Long term debt
=14864.22
share equity
=35987.96
0.41
Times
Its good.
05 Net Profit margin =
Net Profit * 100
Sales
Net Profit
= 1420.09
Sales
=32814.45
37.23 % It is satisfactory.
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6. Return on Investments =
Net Profit before Tax * 100
Net Worth
Profit Before Tax
= 6800.86
Net Worth
= 35987.96
18.90% It is not satisfactory
7. Debtors turnover ratio
Sales
Average debtors
Sales
=32814.45
avg. debtors
=2582.915
12.70
Times
It is not good.
8. Earning per share =
Profit after tax
No. of equity share
Profit after tax
= 3198.98
no. of equity share
= 186.77
17.13
It is good.
9. Fixed Assets turnover =
Sales
Fixed assets
Fixed Assets
= 22548.59
Sales
= 56,885.10
2.52
Times
It is safe.
10.
Profit margin ratio =
Profit after tax*100
Sales
Profit after tax
=3198.98
Sales
=32814.45
9.75%
It is not satisfactory
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11. Inventory turnover ratio =
sales
average inventory
Sales
= 32814.45
Average inventory
= 12110.425
2.71
Times
It is not good.
12. Return on assets ratio
Profit after tax
Average total assets
Profit after tax
=3198.98
Average total assets
=61816.48
0.05
Times
Its good.
13.
Debtors collection period =
Average debtors*360
Sales
Average debtors
= 2582.915
Sales= 32814.45
28.34
It is satisfactory