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INTRODUCTION

The tea industry in India is about 172 years old. It occupies an important
place and plays a very useful part in the national economy. The industry
combines both agriculture and industry.
Tea plantations in India are mainly located in rural hills and backward
areas of North-eastern and Southern States. Major tea growing areas of the
country are concentrated in Assam, West Bengal, Tamil Nadu and Kerala. The
other areas where tea is grown to a small extent are Karnataka, Tripura,
Himachal Pradesh, Uttaranchal, Arunachal Pradesh, Manipur, Sikkim,
Nagaland, Meghalaya, Mizoram, and Bihar. The competitors to India in tea
export are Sri Lanka, Kenya, China, Indonesia and Vietnam.
There are basically two types of tea sales in India - through Auctions
and Private Sales, also called as ex- garden sales. In Auction sales, tea is
auctioned at auction centers through brokers to buyers who either sell it to
wholesalers / retailers or export to overseas markets.
Tea is generally placed in the restricted category of the EXIM policy.
Through special Import License tea can be imported by paying import duty.
Since August 1998, tea is being freely imported from the SAARC countries.
Under the EQU / EPZ units tea can be imported for re exports after value
addition.
The tea plantation industry is strictly guided by various statutory Orders
through the Acts of Parliament like - Tea Act, Essential Commodities Act,
Plantation Labour Act, Factories Act, PFA Act, Standards of Weights and
Measures act etc.
Quality control strictly conforms to IS 9723 and Prevention of Food &
Adulteration Act (PFA). Disposal of tea waste is done through the tea waste

control of 1959. Many gardens are now taking quality certifications under ISO
9002:
Some statistical facts about the Indian Tea Industry:
The total turnover of the industry is around Rs. 10,000 crores.
Since independence, tea production has grown over 2505, while land
area has grown by 60%.
Total net foreign exchange earned per annum is around Rs.1847 crores.
Industry is labour intensive and employs over 1.1 million workers and
generates income for 10 million people indirectly. Women constitute
40% of the workforce.
802 M.Kgs or about 82% of total production of 981 M.Kgs of tea went
for domestic consumption.

RECENT DEVELOPMENTS
Inspite of its importance, tea industry of India is going through a crisis
phase since 1990s. The industry has witnessed many structural changes during
recent years, which include emergence of small tea growers in place of large
plantation and introduction of bought leaf factories (BLF). The present crisis
has led to the closure of many tea estates (e.g., 20 estates in Kerala, 30 in West
Bengal, about 70 in Assam have close down since the late 1990s). In early
2005 the tea industry witnessed major companies withdrawing from production
and concentrating on the packaging/ retailing sector (e.g. Tata. Tea, HLL etc in
India).
In the market, the rising competition at domestic as well as international
front has deepened the crisis of tea industry of India. .
Shift in the composition of demand for tea in the importing countries has
had unfavorable effects on export earnings from tea in India. The international
market price of tea has declined from US $ 2.09 to US $ 2.03 per kg in between
2005 and 2006. Though countries like Sri Lanka, Kenya and Indonesia are
growing fast in their export and higher price realization, during the same
period. Export of tea from India to some of the major importing countries like
Russia, UK, and USA are showing a sharp decline.
Although, per capita consumption of tea in India is amongst the lowest
(64 grams), but in volume terms India is the largest consumer. Since 1970,
India has become the largest absolute consumer of tea after UK.

Larger

domestic demand has given a new direction to the tea industry in the recent
years.

Major causes of the crisis


Despite Indias historical success with the tea industry, in recent years,
the industry has faced serious competition in the international and national
market which has lead to the present crisis. Tea prices in India are being driven
down by many factors:
a) Decline in demand for Indian tea in the global market
b) Defects in auction system
c) Poor price realization
d) Defective market structure
e) Increase in cost of production

Recommendations for improvement


Despite being the largest producer and consumer of tea, the Indian
plantation sector lacks appropriate mapping of production and
consumption levels. Due to absence of accurate estimates the
formulation of long term industry wide action plans have been affected.
India has concentrated more on building up its large estates and has
given less attention to processing and improving the quality by proper
blending and marketingfor higher price realization of their products.
Unlike its key competitors, India does not have any powerful brand to
support its promotion drive in the international market.
Study done by the United Nations Food and Agriculture Organization
(FAO, 2001) has suggested the need for reducing the unit cost of
production through productivity gains, capacity building of small
growers, streamlining marketing channels, improving infrastructure,
tailoring

marketing

activities

to

individual

countrys

demand,

propagating health benefits of tea and promotion of organic tea using the
tea mark. This is exactly what the domestic tea companies should do for
their long term survival.
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Improvement of supply chain management inside the country and global


tea marketing network.
The tea industry in India has a legacy of corporate farming right from
the day of British rule. The current situation in the sector has given
ample reason for a rethink on whether corporate farming can really
boost agriculture
International brands like Liptons, Brooke Bond of HUL and Tetly tea of
Tata Tea; etc are the market leaders and have great power in price
determination in both domestic
and international market.

This needs to be stopped and proper

investigation is needed to curb the wrong practices in the tea market by


introducing new laws to regulate the price movements.
It has been observed that the actual producer of tea has no direct link
with the ultimate consumer. Therefore, the producers do not understand
the market demand / choice of the customer, it is very important in
todays market economy for long term sustainability of the industry.
With the withdrawal of sales restriction, the growers can directly go to
the market by building their own brand. As the margin of profit is very
high at the present domestic retail market, Indian tea growers should
invest and take this opportunity for the promotion of their brand at the
retail market.
Fresh capital inflow is needed right at this moment for the tea industry
of India. Investment in new plantations and production machineries
must come immediately to compete in the international market.
one of the most important steps from the government part shall be to
introduce a stronger competition law to curb the misuse of corporate
buying power and promote social objectives at the garden level.

CURRENT SCENARIO OF THE INDIAN TEA INDUSTRY


Tea is normally classified based on the processing, leaf size and grade.
Fermentation is the major process and creates two major classifications:

Price Trend
Recently tea prices showed bouyancy, which started from 2006, after
depressed prices for almost a decade since 1999.A slump in global output,
decline in production due to poor monsoon rains, steady increase in domestic
demand, range-bound export volumes and low growth in production further
drove prices upwards in 2012.
However Indias tea production had picked up in the last quarter of 2012
and initial signs are pointing to better weather in 2010, signalling a possible
change in the price trend. Even if prices do not retrace too much, producers
may have to live with subdued prices during the year. It does appear that the
two-year run of rising tea prices is losing steam.

Chart 1: Trend in Domestic Tea Prices (source: ICRA Research)

2001
2008

2002
2009

2003
2010

2004
2011

2005
2012

2006

2007

Production, consumption and Exports


A secular increase in domestic consumption on the one hand and muted
increase in production on the other, has been the main factor supporting the
increase in tea prices from 2006 onwards. According to ICRAs estimates,
while the average growth in production during the period 2003-07 was just
1.9% or so, domestic consumption would have increased annually at around
3.5% during the same period. The steady increase in domestic demand, rangebound export volumes and low ICRA Rating Feature Indian Tea Industry:
Outlook Positive for the Short to Medium Term ICRA Rating Services Page 3
of 8 growth in production absorbed the pipeline stock over the years and left
virtually no carry-forward stock at the end of the 2007 season.
Production and consumption of Tea in India
Particulars

200

200

200

200

200

200

201

201

2013

PRODUCTION

4
854

5
838

6
878

7
893

8
946

9
982

0
945

2
981

696.7

802

*
828(E

(million Kg)
CONSUMPTION

673

693

714

735

757

771

786

(million kg)

* production from January to Sepetmber - Estimated figure


Source: ICRA Research

Exports
Exports play a vital role in maintaining the overall demand-supply
balance in the domestic market. Healthy export realisation is also crucial for
domestic realisations as un-remunerative prices in the export market may lead
to exporters dumping the produce in the domestic market, which in turn would
exert a downward pressure on domestic prices. Tea exports from India have
remained range bound over the period 1997-2011 with some year-to-year
fluctuations seen in between.
Export of Tea from India
YEAR

QUANTITY

Value

(Million Kg)
(Rs. Crores)
2011
199.05
1830.98
2012
218.73
2006.53
2010
178.75
1810.11
2011
203.12
2392.91
2012
131.2
1777.04
*Export from January to September

UNIT PRICE (Rs/kg)


91.99
91.73
101.26
117.81
135.42

Source: ICRA Research


Import of Tea from India
The continuous fall in prices of tea, coupled with high cost of production has
adversely affected the economy of the tea plantations resulting in some tea
gardens being abandoned or under lock out in various states. The teas being
imported are not necessarily inferior teas and the practice of blending with
Indian teas often serves the purpose of providing teas as per customers choice
and making them price-competitive in international markets.

Import of tea from India


YEAR

QUANTITY

Value (Rs. Crores)


(Million Kg)
2011
16.76
98.51
2012
23.81
119.41
2010
15.99
104.60
2011
20.28
161.97
2012
15.82
132.09
*Export from January to August

UNIT PRICE (Rs/kg)


58.79
50.15
65.43
79.90
83.50

Profitability of bulk tea players


An increase of around 28% in tea prices on an average in 2011 has
meant considerable increase in the profitability of bulk tea players in FY201112, given that around 65% of their costs are fixed in nature. Chart 6 brings out
the positive impact of increasing tea prices on the aggregate total income and
profitability indicators of some of the large bulk tea players in India, which
shows significant improvement over the past few years.

Chart 4: Trend in Aggregate Income and Profitability Indicators of Bulk


Tea

2009-

2010-

2011-

2012-

Demand-Supply Gap
For the Indian tea industry, the main driver of demand is the domestic
market, with domestic consumption now growing at an estimated 3.5%
annually, as against around 2.5% a decade earlier. At the current growth rate,
the domestic market would require an incremental 30 Mkg or so annually,
going forward.
As against that, tea supply has been growing at less than 2% p.a because
it is difficult to improve garden yield of tea even during favourable climatic
conditions, and new plantations need a long gestation period of at least 4-5
years. Therefore the demand-supply gap in India is likely to persist at least over
the medium term.

INDUSTRY OUTLOOK:
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The tea industry has every reason to look ahead in 2010 with great deal
of optimism and confidence, according to the Tea Market Annual Report
published by J Thomas and Company Private Limited, the world's oldest and
largest tea auctioneers.
With virtually no carry forward stock, and growing domestic demand to
act as buffer against the uncertainties of the global tea trade, price levels are
expected to remain attractive, the report observes.
Early cropping patterns indicate that demand supply equation is likely to
be more balance in 2010. Both Kenya and Sri Lanka production is expected to
exceed that of 2012 and indications are that the March crop in North India will
be higher than that of the last year following some much needed rainfall.
While the supply situation may be more comfortable than the previous
season, it is likely to be absorbed by the domestic market where quality
produce will continue to be in great demand, the reports states.
Exports
Indian exports at the end of 2012 stood at 191.5 million kg, compared to
203.1 million kg in 2011, a decline of 11.6 million kgs. The strong domestic
demand ensured that the exporters were often out priced, particularly in first
three quarters.
Lower orthodox production in North India was also another factor
contributing to the decline in exports. As a result, exports out of North India at
98.8 million kg recorded a decline of 17.4 million kg while exports out of
South India at 92.7 million kg recorded a rise of 5.8 million kg. The per unit
value increased from Rs 117.81 in 2011 to Rs 136.64 in 2012, a gain of Rs
18.83.
Exports to Iraq saw a significant increase during the year with an
additional 11.1 million kgs over 2011. Shipments to Russia grew by 4.2 million
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kg and to Afghanistan by 1.8 million kg. Exports to Egypt suffered a setback,


the shortfall being 9.6 million kg. Offtake by Iran, UAE, UK and the Continent
also declined during the period.

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COMPANY OVERVIEW
Jayshree Tea & Industries Limited
Incorporated as Jay Shree Tea Gardens in Oct.'45 with two tea estates,
the company changed its name to Jay Shree Tea and Industries (JSTI) in 1960.
It was promoted by B K Birla.
Started with an initial paid-up share capital of Rs 7.86 lac, it was raised
to Rs 39.05 lac in 1947 and thereafter only a rights equity issue was made
during 1960 in the ratio 1:5.
The company manages around 12 tea gardens in Assam, West Bengal,
Tamilnadu and Kerala. It has diversified over the years and manufactures
plywood in Andamans and superphosphates and sulphuric acid in West Bengal;
and has interest in shipping, real estate development, tubes and tyres. The
company is packing its tea from different tea estates, in polypouches and it is
sold under brand names -- Sadabahar, Shaandar and Sangam.
JSTI also acquired Maitrayee Tea Project at Chopra near Islampur with
192 acres under tea plantation to increase its presence in the area.
During 1999-2000, the company established a new factory named
'Aryaman Tea Estate' in Jalpaiguri Dist, which has commenced production
from Sep, 1999. The factory has the capacity of 7 lac kgs made tea per annum.
In June 2000, the B K Birla group's shareholding in Jay Shree Tea & Industries
has gone up to 44.61% from 40.15% following the completion of the
company's buy back offer for 12.30 lakh equity shares.
The company bought back 12.30 lac equity shares of Rs.10/- each at a
price of Rs.120/-per share in 2001-02 and subsequently the total Share Capital
as on March 2002 was Rs.10.67 crores. The tea processing factory which is
being set up at Ledo,Assam has commenced its commercial production with a
annual capacity of around 6 lac kg.
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As the Supreme Court has banned the falling of trees in Andaman &
Nicobar Islands,the company's Plywood Operation is still under suspension.
The 100% subsidiary company viz Shiva's Group Ltd was amalgamated with
the company with the prior approval from the shareholders w.e.f 25.02.2002.
It also proposes to set up an International Outsourced Call centre at
Kolkata. The company is proposing to delist its equity shares from Delhi Stock
exchange as there is no transactions.
On BSE, as on 22 April 2012:

Dividend Yield (%)


Market Cap (Rs Mn)
P/E

3.01
3312.63
6.45

EPS (Rs.)

63.72

Face Value (Rs.)


Volume

20
163258

14

Shareholding Pattern as in September 2012:


Description ( As On

No of

No of

% of

September 2012 )
Promoter

ShareHolders

Shares

Share

Indian Promoter

14

4498169

40.25

3685170

Total Promoter
Non Promoter

14

4498169

40.25

3685170

Mutual Funds / UTI

12

717585

6.42

716185

FI/Bank/Insurance

31

381238

3.41

FII

200000

1.79

200000

Other
Total Institutions

0
46

200000
1298823

1.79
11.62

200000
1271276

Bodies Corporate

821

1655678

14.82

1609689

NRIs/OCBs
Others

82
9658

42605
3679064

0.38
32.92

40195
2699777

Total Non-Institution

10561

5377347

48.12

4349661

Total Non Promoter

10607

6676170

59.75

5620937

Grand Total

10621

11174339

100

9306107

Demat

Institutions

Non-Institution

FINANCIAL STATEMENTS ANALYSIS


Financial Statement analysis means analysis and regrouping of data
contained in historical financial statements. It serves the essential function of
converting accounting data contained in financial statements in to useful
information which is always in scarce supply. After analysis of financial
statements, interpretation of analyzed information is done by decision maker to

15

forecast future profitability, financial strength and liquidity position of the


business.
TYPES OF ANALYSIS:
Financial statements are analysed to establish certain crucial
relationships which help us to take sound decisions. Accounts for the year
2010-2011 and 2011-2012 have been studied in this report.
Analysis consists of :

Financial Ratio Analysis


Common Size Statement
Time Series Analysis
FINANCIAL RATIO ANALYSIS
Ratio analysis is a very popular tool of financial analysis. Under this
system of analysis, financial statements have been analyzed by computing
accounting ratios. Ratios indicate how a business is performing and provide
indications of trends and patterns. They can be compared to the same ratios in
previous years' accounts and the accounts of other businesses operating in a
similar environment. The ratios can be looked at from three perspectives:
-

Creditors

Investors

Shareholders

There are various parameters upon which various types of different analysis is
done. They include:
1.

Liquidity Analysis.

2.

Profitability Analysis.

3.

Solvency Analysis.
16

4.

Efficiency Analysis.

LIQUIDITY RATIOS
Liquidity is the ability to convert assets into cash or to obtain cash. It is
important from the point of view of meeting the firms short term obligations.
Current Ratio
It is the ratio of the current assets to current liabilities of the company. It
is calculated to test the short term solvency of a business and its ability to meet
its short term commitments. Besides measuring liquidity, it also measures the
margin of safety available in case of uncertainty of flow of funds.
It provides a measure of degree to which current assets cover current
liabilities. The excess of current assets over current liabilities provides a
measure of safety margin available against uncertainty in realization of current
assets and flow of funds.
Quick ratio
An

indicator

of

company's

short-term

liquidity. The

quick

ratio measures a company's ability to meet its short-term obligations with its
most liquid assets. The higher the quick ratio, the better the position of
the company.
Quick Ratio= (Cash + Marketable securities + accounts receivable) /
Current Liabilities
Liquidity Ratios

Jayshree Tea Limited


Mar-11
Mar-12

Current Assets/Current Liabilities


Quick Assets/Current Liabilities
Analysis:

17

1.76
0.71

3.61
0.94

Current Ratio: We notice that in case of Current Ratio Joonktollee Tea


and Jay Shree Tea have a high current ratio whereas McLeod Russels and
Rossell have a low ratio.
High ratio indicates that
the company may be high amount of receivable and large amount
inventory piled up which is a bad sign,
whereas it may also suggest that the company receives its payments
well before the expiry of the credit period as such indicating a strong
credit policy of the company.
Thus a right proportion of current assets and current liabilities are required
and the ideal ratio is said to be 2:1.
Quick Ratio:
Sometimes a company could be carrying heavy inventory as part of its
current assets, which might be obsolete or slow moving. Thus eliminating
inventory from current assets and then doing the liquidity test is measured by
this ratio. The ratio is regarded as an acid test of liquidity for a company. It
expresses the true 'working capital' relationship of its cash, accounts
receivables, prepaid and notes receivables available to meet the company's
current obligations. Again when we look at the acid test ratio it indicates the
actual indicator of the current position.

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PROFITABILITY RATIOS
Profitability ratios are probably the most important ratios studied by any
analyst. They are able to give a good overall picture of a company with respect
to its peers. The most important objectives for the business and, arguably
therefore, the most important ratios, are those concerned with profitability.
Net profit margin
Net profit margin divided by net revenues, often expressed as a
percentage. This number is an indication of how effective a company is at cost
control. The higher the net profit margin is, the more effective the company is
at converting revenue into actual profit. The net profit margin is a good way of
comparing companies in the same industry, since such companies are generally
subject to similar business conditions. However, the net profit margins are also
a good way to to compare companies in different industries in order to gauge
which industries are relatively more profitable. also called net margin
Net Profit
Margin

Net Profit
Turnover

Profit before Interest and Taxation


Turnover

Return on Capital Employed:


Net After Tax Profit divided by Net Worth, this is the 'final measure' of
profitability to evaluate overall return. This ratio measures return relative to
investment in the company. Put another way, Return on Net Worth indicates
how well a company leverages the investment in it. May appear higher for
startups and sole proprietorships due to owner compensation draws accounted
as net profit.

19

Jayshree Tea Limited


Mar-11

Mar-12

Return on Total Capital


Employed
Return on Assets
NP Ratio

0.055
0.011
0.042

0.014
0.003
0.016

Analysis
Net Profit Margin:
The Profit Margin of a company determines its ability to withstand
competition and adverse conditions like rising costs, falling prices or declining
sales in the future. The ratio measures the percentage of profits earned per
dollar of sales and thus is a measure of efficiency of the company
Return on Assets:
The Return on Assets of a company determines its ability to utitize the
Assets employed in the company efficiently and effectively to earn a good
return. The ratio measures the percentage of profits earned per dollar of Asset
and thus is a measure of efficiency of the company in generating profits on its
Assets.
LEVERAGE RATIOS
These ratios determine the financial leverage enjoyed by the firm and
also look at the short term solvency of the firm in terms of its interest paying
capacity. Long Term Debt / Equity ratios provide insight into the extent to
which nonequity capital is used to finance the assets of the firm.
Ratio = long term liabilities/ shareholders equity
The higher is the ratio, the higher the proportion of assets financed by nonshareholder parties. Which components to include in the numerator or

20

denominator of the ratios depend on how one defines liabilities and


shareholders equity.

Financial Leverage ratios

Jayshree Tea Limited


Mar-11

Total Debts to Assets


Capitalization Ratio
Debt-Equity Ratio
Interest Coverage Ratio

Mar-12
0.581
0.482
0.929
2.516

0.529
0.481
0.926
2.953

ANALYSIS:
Jay Shree Limited would fall on the higher end.
TURNOVER RATIOS
Fixed asset turnover is the ratio of sales (on the Profit and loss account)
to the value of fixed assets (on the balance sheet). It indicates how well the
business is using its fixed assets to generate sales.

Generally speaking, the higher the ratio, the better, because a high ratio
indicates the business has less money tied up in fixed assets for each dollar of
sales revenue. A declining ratio may indicate that the business is over-invested
in plant, equipment, or other fixed assets.

21

Efficiency Ratio

Jayshree Tea Limited


Mar-11

Cash Turnover
Total Assets Turnover
Accounts Receivable

Mar-12
143.48
0.98

10.49
0.73

6.09

9.5

Turnover

Analysis:
This ratio is least in case of Jay Shree Tea which is also below the
industry average; this inefficiency increases the chance of default by the
debtors.
CROSS SECTIONAL ANALYSIS
In this analysis, the different financial variables of different companies
have been compared over a period of time of two years viz. 2006-2007 and
2007-2011. As such, it helps us to get some sort of trend of various financial
factors in the financial statements of a company.

22

Common Size Profit and Loss Account


Jayshree Tea Limited
Mar-11
Mar-12
3.54

Year
Share Capital
Reserves & Surplus
Net Worth
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
Gross Block
Less: Accum. Depreciation
Net Block
Capital Work in Progress
Investments
Current Assets, Loans & Advances
Inventories
Sundry Debtors
Cash and Bank Balance
Loans and Advances
Less: Current Liab. & Prov.
Current Liabilities
Provisions
Net Current Assets
Miscellaneous Expenses not w/o
Total Assets

3.47

48.29
51.83
41.19
6.98
48.17
100
76.49
26.76
49.74

48.45
51.92
39.63
8.45
48.08
100
72.69
25.72
46.97

0.84
31.91

0.64
30.77

16.09
21.59

12.17
9.15

0.92
11.3

8.28
8.84

21.9
7.71
20.29

8.2
7.01
23.23

0
100

0
100

Analysis
JayShree Tea the inventory as a percentage of total assets is highest among all
the companies which shows cautious and conservative approach.

23

COMMON SIZE INCOME STATEMENT


Jayshree Tea Limited
Year

Mar-11

Mar-12

INCOME :
Sales Turnover
Excise Duty
Other Income
Stock Adjustments
Total Income
EXPENDITURE :

100
1.67
3.95
3.8
106.07

100
2.25
8.4
-0.67
105.48

Raw Materials
Power & Fuel Cost
Other Mfgr Expenses
Employee Cost
Selling & Admn Expenses
Miscellaneous Expenses
PBDIT

44.73
5.79
22.76
7.45
7.27
8.41
9.65

32.3
7.52
30.76
9.28
10.22
5.31
10.1

Interest & Financial Charges

3.84

3.42

Depreciation
Profit Before Tax
Tax
Fringe benefit tax
Deferred Tax
Extra ordinary items
Profit after tax

1.6
4.21
0.02
0
0.9
-0.83
4.12

2.53
4.14
0.22
0
-0.26
2.6
1.58

Analysis
The 2011-12 and lowest for Jay Shree Ltd.
Trend Analysis
This is a time series analysis whereby a study is done in order to
interpret what has changed in the company over a year. This can be done by
comparing the balance sheet and profit and loss statement of the company for
two years.
Balance Sheet
24

Jayshree Tea Ltd.


%
SOURCES OF FUNDS:
Share Capital
Reserves Total
Total Shareholders Funds
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
APPLICATION OF FUNDS :
Gross Block
Less : Accumulated Depreciation
Net Block
Capital Work in Progress
Investments
Current Assets, Loans & Advances
Inventories
Sundry Debtors
Cash and Bank
Loans and Advances
Less : Current Liabilities and Provisions
Current Liabilities
Provisions
Net Current Assets
Miscellaneous Expenses not written off
Total Assets

25

0.047
0.022
0.024
0.066
-0.153
0.028
0.026
0.079
0.067
0.086
0.352
0.064
0.356
1.421
-0.887
0.312
1.74
0.128
-0.104
0.026

Income Statement
Jayshree Tea Limited
INCOME :
Sales Turnover
Excise Duty
Other Income
Stock Adjustments
Total Income
EXPENDITURE :
Raw Materials
Power & Fuel Cost
Employee Cost
Other Manufacturing Expenses
Selling and Administration Expenses
Miscellaneous Expenses
Operating Profit
Interest
Depreciation
Profit Before Tax
Tax
Fringe Benefit tax
Deferred Tax
Extraordinary Items
Adjusted Net Profit
SEGMENT REPORTING:

54.197
14.797
-27.502
-970.652
55.066
113.514
18.823
14.123
23.789
9.696
144.521
47.447
73.048
-2.453
56.84
-83.333
-626.389
-149.157
301.386

The objective of this segment is to establish principles for reporting


financial information, about the different types of products and services an
enterprise produces and the different geographical areas in which it operates.
Such information helps users of financial statements:
(a) Better understand the performance of the enterprise;
(b) Better assess the risks and returns of the enterprise; and
(c) Make more informed judgements about the enterprise as a whole.
Many enterprises provide groups of products and services or operate in
geographical areas that are subject to differing rates of profitability,
opportunities for growth, future prospects, and risks.
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Information about

different types of products and services of an enterprise and its operations in


different geographical areas - often called segment information - is relevant to
assessing the risks and returns of a diversified or multi-locational enterprise but
may not be determinable from the aggregated data. Therefore, reporting of
segment information is widely regarded as necessary for meeting the needs of
users of financial statements.
JAY SHREE TEA & INDUSTRIES LIMITED
Based on the guiding principles given in Accounting Standards on
Segment Reporting (AS-17) as prescribed by the Companies Accounting
Standard Rules 2006, the Companys primary business segments are tea,
chemicals & fertilisers business.

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(A)

Segment wise Information for the year ended 31st March, 2012
PRIMARY SEGMENT
1 Segment Revenue (Net
31.03.2012
Sales/Income from each segment)
Tea
2,81,10,82
Chemicals & Fertilisers
1,36,14,19
Infotech

Others
2,81,60
Less : Inter-segmental Revenue
86,95
Total
4,19,19,66
2 Segment Results {Profit / (Loss)
before Tax & Interest}
a) Tea
42,37,65
b) Chemicals & Fertilisers
(3,11,92)
c) Infotech

d) Others
1,00,96
Total
40,26,69
Less : Interest (Net)
10,37,51
Add : Unallocable Income net of
(13,23,10)
unallocable expenditure
Total Profit / (Loss)
16,66,08
before Tax
3 Segment Assets (Including revaluation reserve) &
Segment Liabilities
Assets
Liabilities Assets
a) Tea
1,92,35,75
31,24,60
1,60,57,59
b) Chemicals & Fertilisers
67,70,27
49,62,14
33,59,88
c) Infotech

4,85,07
d) Others
1,19,39
61,69
1,11,12
e) Unallocable
1,56,59,35
21,19,87
1,60,16,83
Total
4,17,84,76
1,02,68,30
3,60,30,49

Capital Exp.

(B

(Rs. in 000)
31.03.2011
2,03,99,41
65,92,61
1,03,05
2,40,97
64,46
2,72,71,58
5,73,95
5,86,30
(1,11,09)
60,81
11,09,97
7,54,31
6,38,87
9,94,53

Liabilities
29,86,39
9,56,23
48,44
57,35
11,87,07
52,35,48

Capital Exp.

a) Tea
b) Chemicals &

Depreciation
Depreciation
10,93,78
5,55,58 11,71,28
5,61,38
41,17
50,90
45,80
48,67

Fertilisers
c) Infotech
d) Others
e) Unallocable
Total

5,35
2,80,31
14,20,61

Secondary Segment

1,67
73,58
6,81,73

13,01

1,31,26
13,61,3

49,09
1,31
67,28
7,27,73

Domestic

5
Export

Total

3,50,22,55

68,97,11

4,19,19,66

)
Segment Revenue

28

(2,18,57,18)

(54,14,40) (2,72,71,58
)

Segment Assets
4,14,39,13
(3,56,76,72)

3,45,63 4,17,84,76
(3,53,77) (3,60,30,49
)

Capital Expenditure
Note

14,20,61
(13,61,35)

()

14,20,61
(13,61,35)

CONCLUSION
Though there has been a recovery in the prices of tea and exports have
also started looking up, with the emerging trends in the globalized economy,
markets can no longer be protected. The high cost of production is still a matter
of concern for the Indian tea industry. The Indian tea industry would have to
gear itself up to counter the new forces unleashed by globalization.
Budget 2011-12 gave the extension of concessional import duty on
imported plantation machinery, like tea bagging machines, till March 31, 2012
will help the industry in value adding and hiking exports in the long run.
Oversupply of tea and less demand has contributed to market imbalance
in India. Strategies have to be devised to improve the demand side, as so much
effort has been put in improving supply efficiency in the past.
Only financially sound tea producers would perhaps be able to take the
risk of delayed marketing and avail any possible opportunity arising out of
future upward price movement in the market.

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REFERENCES
Jay Shree tea & Industries Ltd. Annual Report 11-12
www.money.livemint.com
www.bseindia..com
www.moneycontrol.com
www.capitaline.com

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