INDEX

Sr No. Particulars Page No

1 Introduction 6

2 Structure of the Company 11

3 Financial Analysis 19

4 Leverage 30

5 Corporate Risk 31

6 Bibliography 32

5

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, hydro-

electric 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

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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. 

7

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 JEMČA. 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 JEMČA 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

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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 UK-

based 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.

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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.

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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.

We’re 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

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OUR BRANDS

Our brands are our most valuable assets and we are cherishing them, nurturing them and ultimately aim to grow them.

We’re on a mission to make the world a better place through life-enhancing sustainable

hydration. We’ve 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

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

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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 it’s 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 Tea’s 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 O’CLOCK 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. 

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HIMALAYAN

Himalayan’s ‘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

We’re 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. That’s what ‘Life

enhancing sustainable hydration’ is all about.

So we’ve put sustainable thinking at the heart of Tata Global Beverages Limited. We’re

focusing on using our brands to make it easier for people to consume sustainably. We’re

using sustainability challenges to drive innovation. We’re engaging with stakeholders to help

them help us take positive action and we’ve created a culture that encourages our employees

to make responsible choices.

Supporting local communities

We’re also providing funds and practical support for communities touched by our business

around the world– through corporate initiatives, brand campaigns and employee volunteering.

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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

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.

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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 non-

executive), 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 we’ve 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 a“Baby 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.

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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

Comparative financial statement is a analysis of financial statements of the company for two

19

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 Global

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

Mar '15 Mar '14

12 mths 12 mths

Sources Of Funds

Total Share Capital 61.84 61.84

Equity Share Capital 61.84 61.84

Share Application Money 1.27 0.00

Preference Share Capital 0.00 0.00

Reserves 2,416.67 2,507.92

Networth 2,479.78 2,569.76

Secured Loans 405.26 368.89

Unsecured Loans 72.24 87.62

Total Debt 477.50 456.51

Total Liabilities 2,957.28 3,026.27

Mar '15 Mar '14

12 mths 12 mths

Application Of Funds

Gross Block 340.80 267.53

Less: Revaluation Reserves 21.86 3.50

Less: Accum. Depreciation 147.46 114.63

Net Block 171.48 149.40

Capital Work in Progress 11.28 9.06

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Investments 2,231.86 2,405.66

Inventories 819.27 635.92

Sundry Debtors 93.62 114.87

Cash and Bank Balance 21.01 7.88

Total Current Assets 933.90 758.67

Loans and Advances 285.31 367.76

Fixed Deposits 0.00 0.00

Total CA, Loans & Advances 1,219.21 1,126.43

Deferred Credit 0.00 0.00

Current Liabilities 369.91 376.35

Provisions 306.63 287.94

Total CL & Provisions 676.54 664.29

Net Current Assets 542.67 462.14

Miscellaneous Expenses 0.00 0.00

Total Assets 2,957.29 3,026.26

Contingent Liabilities 96.59 52.29

Book Value (Rs) 40.0841.56

22

PROFIT & LOSS STATEMENT

Profit & Loss account of Tata

Global Beverage-------- in Rs. Cr. -------

Mar '15 Mar '14

12 mths 12 mths

Income

Sales Turnover2,884.7

72,682.96

Excise Duty 0.24 0.00

Net Sales2,884.5

32,682.96

Other Income 86.24 357.09

Stock Adjustments 27.99 5.10

Total Income2,998.7

63,045.15

Expenditure

Raw Materials1,882.8

21,741.50

Power & Fuel Cost 27.84 29.98

Employee Cost 161.92 131.57

Other Manufacturing Expenses 0.00 0.00

Selling and Admin Expenses 0.00 0.00

Miscellaneous Expenses 522.98 501.06

Preoperative Exp Capitalised 0.00 0.00

Total Expenses2,595.5

62,404.11

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Mar '15 Mar '14

12 mths 12 mths

Operating Profit 316.96 283.95

PBDIT 403.20 641.04

Interest 34.19 39.20

PBDT 369.01 601.84

Depreciation 19.94 16.35

Other Written Off 0.00 0.00

Profit Before Tax 349.07 585.49

Extra-ordinary items 0.00 0.00

PBT (Post Extra-ord Items) 349.07 585.49

Tax 60.05 138.52

Reported Net Profit 289.00 446.97

Total Value Addition 712.75 662.61

Preference Dividend 0.00 0.00

Equity Dividend 142.00 139.14

Corporate Dividend Tax 19.77 7.95

Per share data (annualised)

Shares in issue (lakhs)6,183.9

96,183.99

Earning Per Share (Rs) 4.67 7.23

Equity Dividend (%) 230.00 225.00

Book Value (Rs) 40.0841.56

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CASH FLOW STATEMENT

Cash Flow of Tata Global Beverage ------ in Rs. Cr. ----

Mar '15 Mar '14

12 mths 12 mths

Net Profit Before Tax 349.05 585.49

Net Cash From Operating Activities 50.22 147.67

Net Cash (used in)/from

Investing Activities126.16 147.31

Net Cash (used in)/from Financing

Activities-166.08 -308.05

Net (decrease)/increase In Cash and

Cash Equivalents10.30 -13.07

Opening Cash & Cash Equivalents 4.66 15.36

Closing Cash & Cash Equivalents 14.96 2.29

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KEY RATIOS

Key Financial Ratios of Tata Global Beverage

Mar '15 Mar '14

Investment Valuation Ratios

Face Value 1.00 1.00

Dividend Per Share 2.30 2.25

Operating Profit Per Share (Rs) 5.13 4.59

Net Operating Profit Per Share (Rs) 46.65 43.39

Profitability Ratios

Operating Profit Margin(%) 10.98 10.58

Profit Before Interest And Tax

Margin(%)9.77 9.33

Gross Profit Margin(%) 10.29 9.97

Net Profit Margin(%) 10.01 16.65

Adjusted Net Profit Margin(%) 9.50 15.58

Return On Capital Employed(%) 15.28 14.95

Liquidity And Solvency Ratios

Current Ratio 1.34 1.34

Quick Ratio 0.52 0.66

Debt Equity Ratio 0.19 0.18

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Long Term Debt Equity Ratio 0.13 0.13

Debt Coverage Ratios

Interest Cover 13.22 11.54

Total Debt to Owners Fund 0.19 0.18

Financial Charges Coverage Ratio 13.81 11.96

Financial Charges Coverage Ratio

Post Tax10.04 12.82

Management Efficiency Ratios

Inventory Turnover Ratio 3.52 4.22

Debtors Turnover Ratio 27.67 23.96

Investments Turnover Ratio 3.52 4.22

Fixed Assets Turnover Ratio 9.12 10.93

Total Assets Turnover Ratio 0.98 0.89

Asset Turnover Ratio 0.96 0.97

Profit & Loss Account Ratios

Material Cost Composition 65.27 64.90

Expenses as Composition of Total

Sales11.20 13.31

Cash Flow Indicator Ratios

Dividend Payout Ratio Net Profit 49.13 31.12

Dividend Payout Ratio Cash Profit 45.96 30.03

Earning Retention Ratio 60.33 49.37

Cash Earning Retention Ratio 62.42 52.21

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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%)

Company’s 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 non-

branded 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.

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.

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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

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 firm’s ability to use fixed operating costs to magnify the effects of changes in sales on its EBIT while financial leverage is concerned with the firm’s ability to use fixed financial charges to magnify the effects of changes in EBIT on the firm’s 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 firm’s 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 firm’s 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-operating-

leverage-and-financial-leverage/44214/

http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/business-financial-

risk.asp

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