TATA TEA

Abhilash
Joel
Krishna
Nagini
INTRODUCTION
Tata Tea Limited is a group company of
Tata Group.
Tata Tea was formed in 1983 from the
erstwhile Tata Finlay Company, a joint
venture company formed in 1964.
Tata Tea Limited is involved in the tea
extract business for last 40 odd years.
The company has five major brands in the
Indian market - Tata Tea, Tetley, Kanan
Devan, Chakra Gold and Gemini tea.
Tata Tea leads market share in terms of
value and volume in India.
OBJECTIVE OF THE STUDY
NALYSIS OF ANNUAL REPORT OF TATA TEA WITH


RESPECT TO THE FOLLOWING TERMS :

  Secured and
 Unsecured loans
 Income Statement
 Accounting policy
 Balance Sheet
 Fixed assets
 Cash Flow Statement
 Liabilities
 Notes To Accounts
 Depreciation
 Directors Report
 Inventories
 Corporate Governance
 Dividends
Report
 Reserves and Surplus
 Auditors Report


ACCOUNTING

POLICY
Accounting policy refers to the specific
accounting principles and the methods of
applying those principles adopted by an
entity in the preparation and presentation
of financial statements.

 FIXED ASSETS
§ Assets which are permanent in nature and
held by a business for a long period of
time.
§ Types of fixed assets- tangible and intangible


 OBSERVATION:
üThe tangible assets of the company include
land, tea estates land fuel area, buildings,
bridges, plant and machinery, motor
vehicles furniture fixture and office
equipment.
üThe intangible assets include capitalized
software, non compete fee.
üThere is an increase in the fixed assets by
Rs.353.89 lakhs over the previous year.

 LIABILITIES
Liabilities are debts or obligations of a
company.
Liabilities are of two types:

I. Long term liabilities

II.Current liabilities


OBSERVATIONS


üThe Liabilities of Tata tea include sundry

creditors, outstanding dues of micro and
small enterprises
üThere is a increase in the liabilities by 18.59%
over the previous year which clearly state
 DEPRECIATION

 Depreciation is a measure of the wearing out,

consumption or other loss of value of a
depreciable asset arising from use, efflux of time,
or obsolescence through technology and market
changes.

OBSERVATIONS


ü As more of plant and machinery is added in the

business during the year hence, depreciation is
increased by 4.75% during the year
ü
 INVENTORIES
 Inventory is the most important non-monitory
current asset that appears in the balance sheet.
 Inventories represent stock of the following items:
I. Finished goods held for sale
II.WIP(goods in the production process
III.Raw materials, maintenance supplies and
consumables and loose tools

 OBSERVATIONS
ü Inventory has increased mainly due to the
purchases of raw materials and finished goods by
48.65% .
ü
 DIVIDENDS

 Dividend is distribution of divisible profit among

members.
 Preference share holders have a preferential right
on the divisible profit of the company.

OBSERVATIONS


ü The dividends declared for the year is Rs. 509.53

lakhs which is decreased by 36.43% over the
previous year.



 RESERVE & SURPLUS

Reserves and surplus are retained earnings

normally arise out of profitable operations.
These are surpluses earned by the firm and
decide to retain with in the business.

OBSERVATIONS


üThe company has capital reserve,

Revaluation reserve and contingency
reserve which remained unchanged in the
year
üDebenture redemption reserve has
increased by Rs. 3000 lakhs and general
reserve have increased by Rs.1591 lakhs
during the year
 SECURED AND UNSECURED
LOANS
 Secured and unsecured loans are a major parts of
long term liabilities
 In secured loans, the fixed assets usually owned by
the firm, assigned to the lender by a pledge or
mortgage act as the security
 Unsecured loans are loans where in case of default
in the repayment of the loan, the lender cannot
form fall upon any security or take possession.

OBSERVATIONS


ü There is a 17.90% decrease in the secured loans

which clearly indicates that loans are cleared to
some extent.
ü There is 44.01% increase in the unsecured loans.

 BALANCE SHEET
 The balance sheet lists assets, liabilities and
owners equity of the business.
 The balance sheet balances the listed accounts
with the accounting equation;
 ASSETS = LIABILITIES + OWNER’S EQUITY
(CAPITAL)


OBSERVATIONS


ü Fixed assets have increased.

ü Investments have increased slightly.
ü Current assets have increased slightly.
ü Share capital remained unchanged.
ü Reserves and surplus have decreased slightly.
ü Long term liabilities: secured loans are paid upto
some extent and there is a increase in unsecured
loans.
ü Current liabilities are decreased.

 CASH FLOW STATEMENT
Cash flow statement presents cash receipts
and payments and payments classified by
operating, investing and financing activities.
A cash flow statement helps to assess the
ability of the firm to generate and use cash to
the benefit of shareholders.

OBSERVATIONS


üThe cash is generated from operating activities

for Rs. 582.40 lakhs
üThe cash generated from investing activities is
Rs36982.08 lakhs.
üThe cash which is generated in financing
activities have turned out to be Rs.3152.90
lakhs.
NOTES TO ACCOUNTS

Notes to accounts contain the information

about all the matters which are disputed or
need further disclosure.

It is very important to go through the notes
to accounts while using any of the financial
statements.


It assists in understanding the important

information that may be concealed in the
financial statements but revealed in the
notes to accounts.

DIRECTOR’S REPORT
 A report given by the director for the benefit of
shareholders is called as the directors report.

OBSERVATIONS


ü The Company recorded improved operations

during 2008-09 with total income increasing
by 21% to Rs.1524.64 crores compared with
Rs. 1263.29 crores in the previous year
ü The total outgo on account of dividend, inclusive
of taxes, for 2008-09 is Rs. 125.33 crores
which represents a pay-out of 79% of the
company’s stand alone profits.



CORPORATE GOVERNANCE
REPORT
 It is a report of laws, regulations, processes and
customs affecting the way a company is
directed, administered, controlled or managed

OBSERVATIONS


ü The report gives information regarding directors

and its corporate governance policy.

AUDITORS REPORT
 The auditors report states the assessment of the
company by a group of qualified auditors.
 They make sure that the profits depicted in the
company are true so that it does not depict
any false information in the books of accounts.

OBSERVATIONS


ü The auditors report states that the audit is in

accordance with the auditing standards
generally accepted in India.
ü It also involves the evaluation of financial
statement presentation.



 THANKYO
U