Tongani Tea Annual Reports, Balance Sheet and Financials

Tongani Tea Company Limited Balance Sheet (Rs in Hundreds)

Tongani Tea Company Limited Profit & Loss Statement (Rs in Hundreds)

 Tongani Tea Company Limited Consolidated Cash Flow Statement (Rs in Hundreds)

Here is a summary of the Cash Flow Statement for the years 2024 and 2023:

Cash Flow from Operating Activities

The company generated a net profit after tax of ₹14,766.96 hundred in 2024, down from ₹16,463.59 hundred in 2023. Key adjustments to this profit included:

Depreciation and amortization expenses (₹27,966.31 hundred) and finance costs (₹58,106.14 hundred), both significant non-cash expenses, added back to the operating cash flow.

Interest received (₹-32,753.95 hundred) reduced the cash inflow, as it reflects income generated from interest rather than operating activities.

There were also adjustments for gains/losses on asset and investment disposals, with a small loss from asset disposal (₹737.76 hundred) and a gain from the disposal of investments (₹-85.19 hundred).

After these adjustments, the operating profit before working capital changes stood at ₹69,464.66 hundred. Changes in working capital included:

Increase in trade payables (₹68,991.70 hundred), which contributed positively to cash flow.

Decrease in inventories (₹11,270.97 hundred) also added to the cash inflow.

There was a decrease in other financial assets (₹-19,304.50 hundred), which negatively affected cash flow.

As a result, the net cash generated from operating activities was ₹1,49,765.26 hundred, a significant improvement from ₹61,011.30 hundred in 2023, primarily due to favorable changes in working capital.

Cash Flow from Investing Activities

Investing activities resulted in a net cash outflow of ₹-1,64,575.06 hundred in 2024, compared to an outflow of ₹-47,676.98 hundred in 2023. Key transactions included:

Purchase of fixed assets (₹-1,99,253.50 hundred), indicating significant capital expenditures, which was the major outflow.

Proceeds from the sale of assets (₹1,393.30 hundred) and investments (₹585.19 hundred) provided some cash inflow.

Interest received (₹32,753.95 hundred) contributed positively to cash flow but was outweighed by the outflows related to capital investments.

Overall, the heavy investment in fixed assets led to a substantial cash outflow from investing activities in 2024.

Cash Flow from Financing Activities

Financing activities showed a net cash inflow of ₹20,502.61 hundred in 2024, compared to an inflow of ₹3,694.60 hundred in 2023. Major inflows included:

Proceeds from unsecured borrowings (₹50,000.00 hundred) and secured current borrowings (₹40,990.71 hundred) from banks.

Unsecured loans recovered (₹17,800.00 hundred), providing additional cash inflow.

Key outflows included:

Repayment of secured non-current borrowings (₹-20,893.21 hundred), which reduced cash inflow.

Interest and finance charges (₹-58,106.14 hundred) and dividends paid (₹-9,288.75 hundred), which contributed to cash outflows.

Despite the outflows from interest and repayments, the company had a positive net cash inflow from financing activities due to the borrowings and loans recovered.

Net Increase/Decrease in Cash and Cash Equivalents

The company experienced a net increase in cash and cash equivalents of ₹5,692.81 hundred in 2024, compared to ₹17,028.92 hundred in 2023. This increase was primarily due to strong operating cash flows and financing inflows, despite the significant outflows from investing activities.

At the start of the year, the company had ₹24,116.10 hundred in cash and cash equivalents, which increased to ₹29,808.91 hundred by the end of 2024.

Financial Ratios of Tongani Tea Company Limited

 Here is a summary of the financial and operational metrics for Tongani Tea Company Limited for the year 2024 and 2023:

Current Ratio

The current ratio measures the company’s ability to meet its short-term liabilities with its short-term assets. In 2024, the ratio decreased to 1.2 from 1.52 in 2023. A ratio above 1 indicates that the company can cover its short-term liabilities, but the decline suggests a slight weakening of liquidity, with fewer current assets relative to liabilities.

Debt-Equity Ratio

The debt-equity ratio indicates the proportion of debt used in relation to shareholders ' equity. The ratio increased from 0.49 in 2023 to 0.54 in 2024, reflecting a higher reliance on debt financing. While this shows an increase in leverage, it remains at a manageable level, indicating moderate financial risk.

Debt Service Coverage Ratio (DSCR)

The DSCR measures the company’s ability to service its debt obligations. The ratio remained nearly unchanged, at 0.14 in 2024 versus 0.15 in 2023. A DSCR below 1 indicates that the company is not generating sufficient income to fully cover its debt payments, which could point to challenges in debt management.

Return on Equity (ROE)

The ROE remained stable at 0.01 for both years, indicating low profitability in relation to the equity capital. This suggests the company is generating minimal returns for its shareholders, highlighting the need for improved profitability.

Inventory Turnover Ratio

The inventory turnover ratio increased from 8.36 in 2023 to 9.48 in 2024, indicating that the company is managing its inventory more efficiently. A higher ratio suggests faster sales and better inventory management, which can positively impact cash flow.

Trade Receivables Turnover Ratio

The trade receivables turnover ratio surged from 92.5 in 2023 to 156.25 in 2024, reflecting a significant improvement in the company 's ability to collect payments from customers. This sharp increase suggests faster collection of receivables, leading to improved cash flow.

Trade Payable Turnover Ratio

The trade payable turnover ratio decreased from 2.94 in 2023 to 2.42 in 2024, indicating that the company is taking longer to pay its suppliers. While this could ease immediate cash flow pressures, it might affect supplier relationships if the delay continues.

Net Capital Turnover Ratio

The net capital turnover ratio jumped from 3.15 in 2023 to 7.02 in 2024, suggesting the company is using its working capital much more efficiently to generate revenue. This indicates improved operational efficiency and better utilization of capital.

Net Profit Ratio

The net profit ratio remained steady at 0.02 for both years, indicating stable profitability. This ratio reflects the company’s ability to convert sales into profit, but the low figure suggests room for improvement in profit margins.

Return on Capital Employed (ROCE)

The ROCE remained consistent at 0.05, indicating that the company is maintaining stable returns on the capital it employs. This suggests that the company is making efficient use of its capital, though the return is relatively modest.

Return on Investment (ROI)

The ROI was stable at 0.01 for both years, showing minimal returns on investments. This ratio suggests that the company is not generating significant income from its investments, indicating the need for more profitable investment strategies.