INDEX

Sr No.

Particulars

Page No

Introduction

Structure of the Company

11

Financial Analysis

19

Leverage

30

Corporate Risk

31

Bibliography

32

A.INTRODUCTION
TATA GROUP
Tata Group is one of India's largest and most respected business groups. Tata Group's name is
synonymous with India's industrialisation. The Group gave India her first steel plant, hydroelectric plant, inorganic chemistry plant and created a reservoir of scientific and technological
manpower for the country. Its Trusts have instituted the Tata Institute of Social Sciences in
1936; India's first cancer hospital, the Tata Memorial in 1941, and in 1945, the Tata Institute
of Fundamental Research, which became the cradle of India's Atomic energy program. Today,
Tata Group comprises 96 operating companies in seven business sectors: information systems
and communications; engineering; materials; services; energy; consumer products; and
chemicals. The Group has operations in more than 54 countries across six continents, and its
companies export products and services to 120 nations.
Jamsetji Nusserwanji Tata laid the foundations of Tata Group when he started a private
trading firm in 1868. In 1874, he set up the Central India Spinning Weaving and
Manufacturing Company Limited and thus marked the Group's entry into textiles. In 1887,
Jamsetji Tata formed a partnership firm, Tata & Sons, with his elder son Sir Dorabji Tata and
his cousin Ratanji Dadabhoy Tata. His younger son Sir Ratan Tata joined the firm in 1896. In
1902, the Indian Hotels Company was incorporated to set up the Taj Mahal Palace and Tower,
India's first luxury hotel, which opened in 1903. The Tata Iron and Steel Company (now
known as Tata Steel) was established to set up India's first iron and steel plant in Jamshedpur.
The plant started production in 1912. In 1910, Tata Hydro-Electric Power Supply Company,
(now Tata Power) was set up. In 1917, Tata Oil Mills Company was established to make
soaps, detergents and cooking oils. In 1932, Tatas entered aviation sector with the
establishment of Tata Airlines. In 1939, Tata Chemicals, presently, the largest producer of
soda ash in India, was established. In 1945, Tata Engineering and Locomotive Company
(renamed Tata Motors in 2003) was established to manufacture locomotive and engineering
products. In 1954, India's major marketing, engineering and manufacturing organisation,
Voltas, was established. In 1962, Tata Finlay (now Tata Tea), one of the largest tea producers,
was established. In 1968, Tata Consultancy Services (TCS), India's first software services
company, was established as a division of Tata Sons. In 1970, Tata McGraw-Hill Publishing
Company was created to publish educational and technical books. In 1984, Titan Industries, a
joint venture between the Tata Group and the Tamil Nadu Industrial Development

Corporation (TIDCO), was set up to manufacture watches. In 1996, Tata Teleservices (TTSL)
was established to lead the Group's foray into the telecom sector. In 1998, Tata Indica, India's
first indigenously designed and manufactured car, was launched by Tata Motors. In 2000,
Tata Tea acquired the Tetley Group, UK. This was the first major acquisition of an
international brand by an Indian business group. In 2001, Tata entered into insurance business
in joint venture with Tata AIG. In 2007, Tata Steel acquired Corus the fifth largest steel
company in the world.
Tata Group Companies
The two Promoter companies of Tata Group are: Tata Sons and Tata Industries. Tata Sons
is the promoter of all key companies of the Tata Group and holds the bulk of shareholding in
these companies. Tata Sons is the owner of the Tata name and the Tata trademark, which are
registered in India and several other countries. Tata Industries was set up by Tata Sons in
1945 as a managing agency for businesses it promoted. Tata Industries' mandate was recast,
in the early 1980s, to promote the Group's entry into new and high-tech areas.

B. TATA GLOBAL BEVERAGES LTD

Tata

Global

Beverages

Limited (formerly Tata

Tea

Limited)

is

an

Indian multinational non-alcoholic beverages company headquartered in Kolkata, West

Bengal, India and a subsidiary of the Tata Group. It is the world's second-largest
manufacturer and distributor of tea and a major producer of coffee.
Tata Global Beverages markets tea under the major brands Tata Tea, Tetley, Good Earth Teas
and JEMA. Tata Tea is the biggest-selling tea brand in India, Tetley is the biggest-selling tea
brand in Canada and the second biggest-selling in the United Kingdom and the United States
and JEMA is the biggest-selling tea brand in the Czech Republic.
Tata Global Beverages ventured into the Indian cafe market with a 50/50 joint venture with
Starbucks Coffee Company. The coffee shops branded as "Starbucks Coffee - A Tata
Alliance" will source coffee beans from Tata Coffee, a subsidiary company of Tata Global
Beverages.

COMPANY HISTORY
1962
- The Company was incorporated on 18th October, as a private limited company and was
converted into a public limited company on 8th May, 1963. The Company Cultivates tea,
coffee, cardamom, etc., plantations and manufacturing, selling and exporting instant tea and
blended and packeted teas. It has a factory at Munnar (Kerala) for the manufacture of instant
tea and blending and packaging factories at Bangalore (Karnataka) and Naine, Allahabad
(U.P.).
1968
- The Company's operations were adversely affected by heavy development expenses
incurred towards marketing and production of instant tea by the green leaf process, a hitherto
untried

commercial

process

but

one

with

immense

possibilities.

1994
- The Company entered into a joint venture with Hitachi Ltd., Japan, for setting up a joint
venture in Japan. Necessary approvals were received to increase the Company's stake in
Asian

Coffee

Ltd.

(ACL)

to

55%.

2013 -Tata Global Beverages inks pact with Tata Realty for development of property. -Tata
Global Beverages awards Re-imagination scholarships Financial support for eight ''Urban
8

Scholars'' at Brunel University in London. -Starbucks Coffee Company and Tata Coffee
Limited inaugurate roasting and packaging plant in Kushalnagar in Coorg, Karnataka.
2014 -Tata Global Beverages which formed a Joint Venture with PespsiCo India, is
contemplating introducing its nutrient water brand. -Tata Global Beverages acquires 100%
stake in Australian firm -Tata Starbucks forays into Chennai, 50:50 joint venture between
Starbucks Coffee Company and Tata Global Beverages. -The merger of Mount Everest
Mineral Water with its parent firm Tata Global Beverages has got the nod.
Tata Global Beverages is an incredible story, with almost 200 years of history behind us and a
heritage of consistent innovation and development.
It all started when Tata Finlay was set up as a joint venture between Tata Sons and the UKbased tea plantation company, James Finlay and Company in 1962. In 1983 Tata Tea was
born after James Finlay sold his shareholding to Tata, heralding the beginning of a new
journey. The company set out on a path with global ambitions, evidenced by the acquisition
of Tetley in 2000. This was followed by a string of strategic acquisitions including Good
Earth, Jemca, Vitax, Eight O Clock Coffee and Himalayan Water.
Today we are an integrated beverage business that has set out on a journey to become a global
leader in branded good-for-you beverages through innovation, strategic acquisition and
organic growth.
Tata Global Beverages unites the beverage interests of Tata under one umbrella. It signals our
global ambition, as well as marking the next logical step in our evolution from a history in
plantations to becoming a marketing and brand focused organisation with a portfolio of
engaging and exciting strong consumer brands.

OPERATIONS
The company was rechristened as Tata Global Beverages to include the range of health and
nutritional beverages it wants to enter into. Via subsidiary companies, Tata Global Beverages
manufactures 70 million kilograms of tea in India, controls 54 tea estates, ten tea blending
and packaging factories and employs around 59,000 people. The company owns 51 tea
estates in India and Sri Lanka, especially in Assam, West Bengal in eastern India
and Kerala in

the

south.

The

company

is

the

largest

manufacturer

of Assam

tea and Darjeeling tea and the second-largest manufacturer of Ceylon tea.
Set up in 1964 as a joint venture with UK based James Finlay and Company to develop
value-added tea, Tata Global Beverages has now product and brand presence in 50 countries.
It is one of India's first multinational companies. The operations of Tata Global Beverages
and its subsidiaries focus on branded product offerings in tea, but with a significant presence
in plantation activity in India and Sri Lanka.
The consolidated worldwide branded tea business of Tata Global Beverages contributes to
around 86 per cent of its consolidated turnover with the remaining 14 per cent coming from
bulk tea, coffeeand investment income. With an area of approx 159 km under tea cultivation,
Tata Global Beverages produces around 30 million kg of black tea annually. Instant tea is
used for light density 100% teas, iced tea mixes and in the preparation of ready-to-drink
(RTD) beverages.
Tata Global Beverages owns five brands in India: Tata Tea, Tetley, Kanan Devan, Chakra
Gold, and Gemini. The company has a 100% export-oriented unit (KOSHER and HACCP
certified) manufacturing instant tea in Munnar, Kerala, which is the largest such facility
outside the United States. Tata Global Beverages has subsidiaries in Australia, Great
Britain, United States, Czech Republic and India.

10

STRUCTURE
Tata Global Beverages currently employs 3,000 people around the world but through
partnerships, joint ventures and our supply chains, many thousands more contribute to
our business.
Were one global business now, totally focused on what matters most innovation and brands
thanks to a new 3-part company structure:
Our regions consumer driven and market focused

Three primary consumer focused business units,each headed by a Regional President

Responsible for their own P&L, balance sheet and business plan

Linked by common capabilities, culture and our global strategy

Our functions building our global capabilities

Specialist Operations, Finance, HR, Communications and IS functions

Responsible for building common business practices across our regions

Management Team - setting and driving our global strategy

A senior team responsible for strategy and governance

Responsible for allocating our global resources

Responsible for defining our company values and culture

11

OUR BRANDS

Our brands are our most valuable assets and we are cherishing them, nurturing them
and ultimately aim to grow them.
Were on a mission to make the world a better place through life-enhancing sustainable
hydration. Weve got the brands we need to do it and the distribution channels to meet
global demand.
With a fantastic portfolio of brands and products that we are intensely passionate about, we
delight millions of consumers across the world with great tasting beverages every single day.
TETLEY

12

Tetley is enjoyed in 70 countries worldwide and is the second largest tea brand globally
thanks to its commitment to innovating and being relevant to the consumer. For all these
reasons it is also market leader in Canada. In the UK, Tetley is the brand leader in
Decaffeinated tea, and Tetley Green is the fastest-growing green tea brand. Innovations
include the launch of Blend of Both in the UK, Infusions (a liquid Real Brew tea mix for
water) in Canada, and the very latest new product Chai Latte in Australia, which is an
indulgent tea drink, made with real spices and low in caffeine but high in taste!
TATA TEA
Tata Tea enjoys almost legendary status and is a household name in India. It is the market
leader in India and has strong brands in its portfolio such as Tata Tea Gold, Tata Tea
Premium, Kannan Devan, Chakra Gold, Agni and Gemini. Tata Tea celebrated its 25th year in
2012, amidst widespread publicity. But its not just about tea. The company also promotes
social awakening and action through its landmark Jaago Re marketing campaigns. This year
the focus has been on gender bias against women. The Power of 49 campaign marks a new
phase in Tata Teas iconic Jaago Re series of campaigns. Women constitute 49% of the voter
base in India. The objective of this campaign is to awaken women to the power within them
and encourage them to exercise their right to vote at the next general elections
GOOD EARTH
Good Earth has gone from strength to strength since its inception as a herbal and speciality
tea business on the US west coast. It produces a wide range of premium teas of exceptional
flavour, based on top quality ingredients, and has a strong commitment to sustainability,
producing a 100% GM free range. The brand synonymous with bold flavors launched a
marketing campaign last year that champions the boldness of its products. The concept of
'Tea Untamed' is being used to capture the essence of Good Earth underpinned by the launch
of two new tea flavors Cocoa Tango and Sweetly Twisted.
EIGHT OCLOCK COFFEE
Renowned for "brewing memories for generations" Eight O'clock Coffee was recently named
one of America's greatest brands. The 4th largest coffee brand by volume in the US, the brand
has recently increased its relevance to consumers even further with eye-catching new
packaging.

13

HIMALAYAN
Himalayans Live Natural brand philosophy and unique packaging makes it a premium
lifestyle mineral water brand in India. The brand enjoys an aspirational equity among
consumers and has the potential of truly becoming an international and iconic brand and the
recent re-launch has further strengthened its brand equity
TATA GLUCO PLUS
Tata Gluco Plus has been brought to the Indian market through NourishCo Beverages Ltd,
our Joint Venture with PepsiCo India. Tata Gluco Plus is a glucose-based, lemon-flavoured
drink in a unique cup format that provides instant energy to consumers. It offers the benefit of
glucose energy, mineral salts and iron that provide instant refreshment and recharge.
TATA STARBUCKS
Tata Global Beverages has always believed in creating memorable beverage experiences for
consumers. Our joint venture with Starbucks is yet another strong expression of this belief.
Through Tata Starbucks, we can proudly offer the legendary Starbucks coffee experience,
backed by the trust of the Tata name, to Indian consumers. The inaugural flagship store,
branded 'Starbucks Coffee a Tata alliance' opened in October 19, 2012 in Horniman Circle,
Mumbai. Since then this 50:50 JV has expanded in New Delhi, India as well with many more
Starbucks stores planned throughout the country. Our partnership with Starbucks is all about
serving the perfect cup of coffee and Indian Espresso Roast sourced locally through the
coffee sourcing and roasting agreement with Tata Coffee is a hallmark of all Starbucks stores
in this market, highlighting the quality espresso available in Indian. We also jointly offer a
premium tea product branded Tata Tazo and the stores carry Himalayan mineral water

14

SUSTAINABILITY
Sustainability is at the heart of our plans for long term success
Our world faces some fundamental challenges a growing population, diminishing
natural resources, threats to the environment from waste, climate change and
inequalities in health and wealth. Governments and individuals need to act now and so
do businesses like ours.
Good all round
Were on a mission to make sure the products we sell are good for consumers, good for the
environment and good for the people in our global supply chains. Thats what Life
enhancing sustainable hydration is all about.
So weve put sustainable thinking at the heart of Tata Global Beverages Limited. Were
focusing on using our brands to make it easier for people to consume sustainably. Were using
sustainability challenges to drive innovation. Were engaging with stakeholders to help them
help us take positive action and weve created a culture that encourages our employees to
make responsible choices.
Supporting local communities
Were also providing funds and practical support for communities touched by our business
around the world through corporate initiatives, brand campaigns and employee volunteering.

15

CORPORATE GOVERNANCE
Tata Global Beverages Limited aims to deliver long-term value for our shareholders by
providing products and brands that consumers enjoy without ever compromising on
integrity, our environmental and social obligations or regulatory compliance.
We have clear management processes and policies in place that ensure this is the case they
also guarantee transparency and openness in everything we do, at every level of our company.

Our corporate governance system

Our corporate governance system meets international standards and best practice. The
system:

ensures we operate within accepted standards of propriety, fair play and justice

enables all our employees to voice any concerns they have openly and without fear or
inhibition

provides a Tata Code of Conduct covering every employee, including our executive
directors

We also operate in accordance with our Tata Business Excellence Model, Code for Prevention
of Insider-Trading and Code of Corporate. Tata non-executive directors are also covered by a
condensed Code of Conduct.

Our Code of Conduct

We operate in line with a comprehensive Code of Conduct, which applies to all our
employees including our managing and executive directors. The Code is accessible to
everyone who works for our company

Meeting our social and environmental obligations

16

We have systems in place that encourage and recognise employees participation in

environmental and social initiatives that support our aim to be a sustainable business and also
benefit the wider community.

Our corporate governance structure

Our corporate governance structure ensures that corporate governance is made a priority at
every level of our company. It assigns responsibility and accountability to individuals, Board
committees and management teams.

Our Board of Directors

The Tata Board is made up of 13 directors including the chairman (currently a nonexecutive), 1 executive director and 12 non-executive directors out of which 7 are
independent directors. The Board holds overall responsibility for all aspects of corporate
governance and ensures that we operate in line with all relevant processes and policies.

Our Ethics and Compliance Committee

The committee, which comprises three members, ensures that we operate at all times in line
with external and internal insider trading guidelines and the Tata Code of Conduct.

Coporate Sustainability Reporting Committee

The committee monitors and guides the policies weve put in place covering environmental
management, social responsibility, health & safety and product stewardship.
Our Audit Committee, Remuneration Committee, Shareholders and Investors Grievance
Committee, Executive Committee and Nomination Committee also play an important, if
more indirect role, in ensuring that we maintain the highest standards of corporate
governance in every aspect of our operations.

17

INDIA
Tata Global Beverages operates the General Hospital in Munnar, Kerala. It is a secondary
level Health Care Delivery institution with 150 beds. For over 100 years it has primarily
catered to the health needs of tea plantation workers and their families spread over 500 square
kilometers and reaching over 100,000 people.
This hospital also extends its services to other people in and around Munnar because it is the
only reputed medical establishment in a geographical radius of 30kms. This hospital has all
vital major specialities with round the clock casualty, ICU, Neonatal Intensive Care Unit
(NICU), labour room, blood bank, laboratory, operating rooms, pharmacy, ambulance,
physiotherapy, laundry, library and kitchen to support the functions of various wards of
different specialities of patients admitted from general to special wards.
Notably, an integrated counselling and testing centre for regular HIV screening, testing and
treating has been incorporated in the hospital. This hospital remains a recognized hub for
various Government implemented programmes such as Tuberculosis detection and treatment
and universal immunization programme.
This hospital won the Federation of Indian Chamber of Commerce and Industry (FICCI)
award in recognition of Corporate Initiative in Family Planning in 1989. It was assessed
and declared as aBaby Friendly Hospital and was awarded Best Industrial Hospital in
1990. This hospital hosted several regional national and one international conference, further
developing its impact and influence. South India Plantation Medical Officers Conference
(SIPMOC) was held in 2002.
This hospital extends free health service to many communities, including the local tribal
population called Muthuvans. This is well accepted and appreciated.
With a dedicated team of doctors and other staff, this hospital maintains a high level of
standards, ethics and discipline and is adequately equipped to extend excellent health care to
the plantation workers and local population with all available resources, without
compromising the quality of health care.
18

C. FINANCIAL ANALYSIS AT TATA GLOBAL BEVERAGES LTD

DEFINITION OF 'FINANCIAL ANALYSIS'
The process of evaluating businesses, projects, budgets and other finance-related entities to
determine their suitability for investment. Typically, financial analysis is used to analyze
whether an entity is stable, solvent, liquid, or profitable enough to be invested in. When
looking at a specific company, the financial analyst will often focus on the income statement,
balance sheet, and cash flow statement. In addition, one key area of financial analysis
involves extrapolating the company's past performance into an estimate of the company's
future performance.
OBJECTIVE OF FINANCIAL ANALYSIS
Creditors and investors, as well as managers, use financial statement analysis to judge the
past performance and current position of a company, and also to judge its future potential and
the risk associated with it. Creditors use the information gained from their analysis to make
reliable loans that will be repaid with interest. Investors use the information to make
investments that will provide a return that is worth the risk.

METHODS OF FINANCIAL ANALYSIS

Financial statement analysis can be performed by employing a number of methods or
techniques. The following are the important methods or techniques of financial statement
analysis.
1. Ratio Analysis
Ratio analysis is the analysis of the interrelationship between two financial figures.
2. Cash Flow Analysis
Cash flow analysis is the analysis of the change in the cash position during a period.
3. Comparative Financial Statements
19

Comparative financial statement is a analysis of financial statements of the company for two
years or of the two companies of similar types.
4.Trend Analysis
Trend analysis is the analysis of the trend of the financial ratios of the company over the
years.
The methods to be selected for the analysis depend upon the circumstances and the users'
need. The user or the analyst should use appropriate methods to derive required information
to fulfil their needs.

20

BALANCE SHEET
Balance

Sheet

of

Tata

Beverage

Global

------ in Rs. Cr. -----

Mar '15 Mar '14

12 mths 12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
Networth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities

Application Of Funds
Gross Block
Less: Revaluation Reserves
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets

61.84
61.84
1.27
0.00
2,416.6
7
2,479.7

61.84
61.84
0.00
0.00
2,507.92

2,569.76
8
405.26 368.89
72.24
87.62
477.50 456.51
2,957.2
3,026.27
8
Mar '15 Mar '14
12 mths 12 mths
340.80
21.86
147.46
171.48
11.28
2,231.8
6
819.27
93.62
21.01
933.90

267.53
3.50
114.63
149.40
9.06
2,405.66
635.92
114.87
7.88
758.67
21

Loans and Advances

Fixed Deposits
Total CA, Loans & Advances
Deferred Credit
Current Liabilities
Provisions
Total CL & Provisions
Net Current Assets
Miscellaneous Expenses
Total Assets
Contingent Liabilities
Book Value (Rs)

285.31 367.76
0.00
0.00
1,219.2
1,126.43
1
0.00
0.00
369.91 376.35
306.63 287.94
676.54 664.29
542.67 462.14
0.00
0.00
2,957.2
3,026.26
9
96.59
52.29
41.56
40.08

PROFIT & LOSS STATEMENT

Profit & Loss account of Tata
Global Beverage

-------- in Rs. Cr. -------

Mar '15 Mar '14

12 mths 12 mths
Income
Sales Turnover
Excise Duty

2,884.77 2,682.96
0.24
0.00
22

Net Sales
Other Income
Stock Adjustments
Total Income
Expenditure
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Admin Expenses
Miscellaneous Expenses
Preoperative Exp Capitalised
Total Expenses

Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earning Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)

2,884.53
86.24
27.99
2,998.76

2,682.96
357.09
5.10
3,045.15

1,882.82
27.84
161.92
0.00
0.00
522.98
0.00
2,595.56
Mar '15
12 mths
316.96
403.20
34.19
369.01
19.94
0.00
349.07
0.00
349.07
60.05
289.00
712.75
0.00
142.00
19.77

1,741.50
29.98
131.57
0.00
0.00
501.06
0.00
2,404.11
Mar '14
12 mths
283.95
641.04
39.20
601.84
16.35
0.00
585.49
0.00
585.49
138.52
446.97
662.61
0.00
139.14
7.95

6,183.99 6,183.99
4.67
7.23
230.00 225.00
41.56
40.08
23

CASH FLOW STATEMENT

Cash Flow of Tata Global Beverage

Net Profit Before Tax

Net Cash From Operating Activities
Net
Cash
(used
in)/from
Investing Activities
Net Cash (used in)/from Financing
Activities
Net (decrease)/increase In Cash and
Cash Equivalents
Opening Cash & Cash Equivalents
Closing Cash & Cash Equivalents

------ in Rs. Cr. ---Mar '15 Mar '14

12 mths
12 mths
349.05
585.49
50.22
147.67
126.16

147.31

-166.08

-308.05

10.30

-13.07

4.66

15.36

14.96

2.29

24

KEY RATIOS

Key Financial Ratios of Tata Global

Beverage

Mar '15 Mar '14

Investment Valuation Ratios

Face Value
Dividend Per Share
Operating Profit Per Share (Rs)
Net Operating Profit Per Share (Rs)
Profitability Ratios
Operating Profit Margin(%)
Profit Before Interest And Tax
Margin(%)
Gross Profit Margin(%)
Net Profit Margin(%)
Adjusted Net Profit Margin(%)
Return On Capital Employed(%)
Liquidity And Solvency Ratios
Current Ratio
Quick Ratio
Debt Equity Ratio
Long Term Debt Equity Ratio
Debt Coverage Ratios
Interest Cover
Total Debt to Owners Fund
Financial Charges Coverage Ratio
Financial Charges Coverage Ratio
Post Tax

1.00
2.30
5.13
46.65

1.00
2.25
4.59
43.39

10.98 10.58
9.77 9.33
10.29
10.01
9.50
15.28

9.97
16.65
15.58
14.95

1.34
0.52
0.19
0.13

1.34
0.66
0.18
0.13

13.22 11.54
0.19 0.18
13.81 11.96
10.04 12.82
25

Management Efficiency Ratios

Inventory Turnover Ratio
Debtors Turnover Ratio
Investments Turnover Ratio
Fixed Assets Turnover Ratio
Total Assets Turnover Ratio
Asset Turnover Ratio

3.52
27.67
3.52
9.12
0.98
0.96

Profit & Loss Account Ratios

Material Cost Composition
65.27
Expenses as Composition of Total
11.20
Sales
Cash Flow Indicator Ratios
Dividend Payout Ratio Net Profit
49.13
Dividend Payout Ratio Cash Profit 45.96
Earning Retention Ratio
60.33
Cash Earning Retention Ratio
62.42

4.22
23.96
4.22
10.93
0.89
0.97

64.90
13.31
31.12
30.03
49.37
52.21

Earnings Per Share

4.67 7.23
BOOK VALUE
40.08 41.56
D. FINANCIAL HIGHLIGHTS FOR THE YEAR 2014-2015
REVENUES RS 7993 CRORES (INCREASE 3%)
OPERATING PROFIT RS 642 (INCREASE 3%)

Companys Income from Operations for the year ended 31st March 2015 was Rs. 2,885
crores, registering an improvement against the prior year, driven by increase in volumes and
prices with improved performance of both national and regional performance from the nonbranded business. Markets such as India, Canada, and Australia along with new businesses
like Starbucks, NourishCo and MAP business in Australia contributed to revenue growth
within the branded business. As regards the non branded business, while Coffee extraction
sales were higher, plantation business was impacted by seasonality and pest infestation
translating to lower crop available for sale.
26

Profit from operations at Rs. 297 crores was higher than previous year mainly driven by top
line improvements. Profit before and after tax was however lower because of the impact of
exceptional items.
For the financial year, Income from operations at Rs 7993 crores increased by 3%. At
constant exchange rate the increase is higher at 5%. Profit from operations at Rs 642 crores is
3% higher than the previous year. The increase in profits reflects strong performance in
branded business partially offset by lower profits in the non-branded business. Operating
profits were higher than the previous year despite increasing investment in new ventures and
product initiatives. Post the adverse impact of exceptional items, the Group Consolidated Net
Profit is Rs 248 crores.
The year saw a strong focus on the green & specialty tea category, innovative product
launches and strong marketing campaigns
Tata Global Beverages Ltd. today announced its results for the Quarter ended June 2015. The
Company reported a steady growth in revenue as compared to the corresponding period last
year.
Income from operations, at Rs 2029 crores, increased by 6% as compared to corresponding
quarter of the previous year. At previous year exchange rate the increase is 9%. Profit from
operations Rs 153 crores is lower than the comparative quarter of the previous year mainly
due to higher expenditure on brands and new initiatives.
The quarter saw strong performance by the business in India. Other markets like Canada,
Middle East and Russia performed well. Continued focus on the green & specialty tea
category across geographies enabled share gains in key markets.
For the quarter, Income from operations at Rs 823 crores increased by 13% over
corresponding quarter of previous year reflecting improved performance in the branded tea
operations. Profit from operations and Profit after tax is higher than corresponding quarter of
previous year reflecting improved operating performance.
Tata Global Beverages is today an integrated beverage business that has set out on a journey
to become a global leader in branded good for you beverages through innovation, strategic
acquisition and organic growth. With over 200 years of history in the beverage market and a
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heritage of innovation and development, Tata Global Beverages has successfully evolved
from a predominantly domestic Indian tea farming company to become a marketing and
brand focused global organisation with a portfolio of strong brands.

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LEVERAGE
Operating leverage refers to the firms ability to use fixed operating costs to magnify the
effects of changes in sales on its EBIT while financial leverage is concerned with the firms
ability to use fixed financial charges to magnify the effects of changes in EBIT on the firms
EPS

OPERATING LEVERAGE

Operating leverage is concerned with investment activities of the firm.

It is determined by the cost structure of the firm.
It is the firms ability to use fixed operating costs to magnify the effects of changes in
sales on its earnings before interest and taxes.
The higher the proportion of fixed operating costs to the total operating costs in the
cost structure of a firm, the higher is the degree of operating leverage.
Degree of operating leverage enables us to measure the business risk associated with
the firm.

FINANCIAL LEVERAGE

Financial leverage is concerned with financing activities of the firm.

It is determined by the capital structure of the firm.
It is the firms ability to use fixed financial charges to magnify the effects of changes
in EBIT on tis earnings per share.
The higher the proportion of fixe charges bearing capital to total financial changes in
the capital structure of a firm, the higher is the degrees of financial leverage.
Degree of financial leverage enables us to measure the degree of financial risk,
associated with the firm.

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CORPORATE RISK
BUSINESS RISK
A company's business risk is the risk of the firm's assets when no debt is used. Business risk
isthe risk that is inherent in the company's operations. As a result, there are many factors that
can affect business risk: the more volatile these factors, the riskier the company. Some of
those factors are as follows:
Sales risk - Sales risk is affected by demand for the company's product as well as the price
per unit of the product.
Input-cost risk - Input-cost risk is the volatility of the inputs into a company's product as
well as the company's ability to change pricing if input costs change.
As an example, let's compare a utility company with a retail apparel company. A utility
company generally has more stability in earnings. The company has less risk in its business
given its stable revenue stream. However, a retail apparel company has the potential for a bit
more variability in its earnings. Since the sales of a retail apparel company are driven
primarily by trends in the fashion industry, the business risk of a retail apparel company is
much higher. Thus, a retail apparel company would have a lower optimal debt ratio so that
investors feel comfortable with the company's ability to meet its responsibilities with the
capital structure in both good times and bad.

FINANCIAL RISK
A company's financial risk, however, takes into account a company's leverage. If a company
has a high amount of leverage, the financial risk to stockholders is high - meaning if a
company cannot cover its debt and enters bankruptcy, the risk to stockholders not getting
satisfied monetarily is high.
Let's use the troubled airline industry as an example. The average leverage for the industry is
quite high (for some airlines, over 100%) given the issues the industry has faced over the past
few years. Given the high leverage of the industry, there is extreme financial risk that one or
more of the airlines will face an imminent bankruptcy.

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BIBILOGRAPHY
WWW.TATAGLOBALBEVERAGESLTD.COM
WWW.MONEYCONTROL.COM
WWW.ECONOMICSTIMES.COM
PROFIT.NDTV.COM
http://www.yourarticlelibrary.com/financial-management/difference-between-operatingleverage-and-financial-leverage/44214/
http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/business-financialrisk.asp

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