INTRODUCTION

Financial statement analysis is defined as the process of identifying

financial strength and weakness of the firm by properly establishing relationship

between the items of the balance sheet profit and loss account. Financial

statement are prepared to meet external reporting obligation and also for

decision making process. They play a dominant role in setting the framework of

managerial decisions. But the information provided in the financial statement of

immense use in making decision through analysis and interpretation of financial

statements

SIGNIFICANCE OF STUDY

Creating new idea

Creating new knowledge
Better decision making

Statement of the problem

A study on financial performance of Salibury I9ndco Tea factory

Limited In Gudalur. The financial statement analysis is very important t the

firm. To see financial position and proper working and for keep sound financial

position.

ORGANIZATIONAL PROFILE

1
Date of registration :04.02.1980

Date of starting :29.02.1980

Date of commencement of production:19.09.1983

Membership as on 30.11.2014 :1550 nos

Average coverage :3524 acres

Share capital structure

a. Members contribution :165.71

b. Government contribution :25.49
Total :231.20

Number of persons employed

a. Department staff :01
b. Society staff :17
c. Workers;
Permanent workers :57
EDF workers :96
Total :168
d. Indirect employment through members :4000
Tea gardens

SCOPE OF STUDY

The financial statement analyse is very important to the every firm to see the

financial position, fu8nd available, use of funds, proper working capital

management and for keep sound financial position. The researcher is interested

to study the financial performance of Salibury Tea factory in Gudalur

OBJETIVE OF THE STUDY

2
The main objective of the study is to analyse the over all financial performance

of the Salibury INDCO Tea factory . The specific objectives are as follows:

1. To analyse the performance of Tea industries in India

2. To analyse the liquidity and activity performance of the tea factory
3. To determine the profitability and solvency p-performance of the tea factory

Research methodology

The current study is analytical in nature. Analytical research studies are also

termed as formulate research studies. For this purpose the existing records are

examined and the unstructured interviewing took place

Limitation of the study

a. The study is limited with Salibury Tea factory of Gudalur

b. The analysis is mainly is mainly based on secondary data
c. The study is limited to period of 5 years

REVIEW OF LITERATURE

The researcher reviews the growing literature relating co-operate

environment to financial performance. The researcher seeks to identify

achievement and limitations of this literature and to highlight areas for further

research. Our planning interest is to assess the adequacy of the literature

informing co-operate managers ho, when, and where to make pro-environment

investment that will pay off with financial returns for long term share holders.

To do so, the researcher create a conceptual frame work that maps the influence

of regulators, public health scientists, environmental advocates, consumer

3
employees, and other interested parties upon corporate actions that effect the

environment.

Gudalur become a apart of Tamil Nadu only in 1956 and even now the

region has a large Malayalam speaking population. In the pre independent days,

the forest of Gudalur were controlled by chieftains from Nilambur in Kerala.

They hunted in the Teak and rosewood-rich forest.

Miller and Bahison (2009) state that the role of financial Reporting is to

reveal the truth honesty, opening, completely, clearly, unambiguously and with

sufficient frequency to be timely.

PERFORAMANCE OF THE TEA INDUSTRIES IN INDIA

Tea for health

Tea has always had pleasant association with relaxation, but now

scientific research from around the world suggest that tea may have significant

positive health benefits. It has long become clear that incidence of many

diseases in closely linked with dietary habits.

In some part of the world, especially in the US, Canada and most

European countries, a break period in a meeting is called coffee brake. In

4
other parts of the world, especially in India , Chaina, Japan and Korea, this type

of break is called a Tea break.

Epidemiological observation have clarified that the incidence of certain

diseases, most notably cancer and heart disease, is substantially blower in

countries with a culture of Tea Break than in countries with a practice of

coffee break. Modern scientific research is clarifying that this anecdotal

evidence is linked to health promoting effect of tea. For generations in tea

consuming countries the beneficial efforts of tea in fighting certain diseases

were advocated by grandmothers, a concept passed on to the next generation.

Because of the aroma and low cost , for generations teas derived from

leaves of the plants Camellia sinuses has been, next to water the most widely

consumed beverage in the world. Regarding serious research on tea and human

health, the first disease for examination has cancer, followed by Coronary

heart disease , two of the most feared diseases affecting the human population

world wide. The underlining mechanism for these preventive effects are now

becoming clear.

The history of tea

The history of tea processing corresponds intimately with the role that tea

played in Chinese society and the preferred methods of its consumption in

ancient Chinese society. The ancient Chinese , society first encountered the tea

plant in what is now Southern China and processed it as another medical herb

for use in Chinese hierology. The processing technique used to process fresh

5
tea leaves was to immediate steam the fresh tea leaves and dry them for

preservation, which is likely the most ancient Chinese from of tea leaf

processing.

With the increase of teas use in Chinese hierology, production methods

changed , where the proceed green tea leaves were not immediately dried after

steaming. Rather the steamed tea leaves were first pulverized into a paste from,

with the paste then formed in modules and slowly dried into brick tea, a

technique well described by LuYu in his work. Theclassic of tea. Tender

leaves and leaf buds were generally not used, as older nature tea leaves were

preferred for tea production. The preferred of producing tea in brick from

possibly stems from the feet that it can be more easily transported and stored.

History of Tea Industry in India

Tea industry in India is about 180 days and occupies an integral place in

the economy in India. India has retained its leadership in the production of tea

in the world until 2005. India is also the largest consumer of tea in the world. In

India , tea industry is one of the oldest agro-based well-organized industries.

The tea industry see, actuating trends due to agricultural natural of the

operations, long gestation periods and unstable prices of tea, which are not

6
likely to undergo any changes in future, in the past , tea prices had shown brief

periods of boom followed by largest periods of depression. Tea industry in India

is facing a numeral problems like ageing tea bushes, high cost of production,

price fluctuation etc.. This situation can causes danger to the prospectus of tea

plantation in the region.

South India Tea

The quality of South Indian teas has its own distinctive characteristics. Teas

from the Nilagirs process delicate clavier along strength and brightness. The

producer of high range has its own specialty. The GT production from all the

southern states is turned to producing large percentage of fine grades. The

popularity of South Indian LTCs is attributed to good leaf appearance and

strong , bright and risk liquors.

In South, tea is produced throughout the year. In North India South India

production starts in the late march and ends in early tea is December, in

2006.south India produced 213 million kgs of tea according for about 23.71% of

the total production. It owns 73424 tea estates, which cover 120 thousand

hectors of land. The share of tea production in Tamil Nadu , Kerala, and

Kottayam and Idukki in Kerala. The problems and situations of small tea

growers are quite different from other big growers. The small tea growers

whose area under tea is up to 10.12 hectors or less are considered economically

poor for the following various reasons. .

7
 A very high percentage tea business are overage
Total ground area is not fully utilized
Non applicability of fertilizer and manner
Agricultural practices for tea cultivation have not been used properly.
No proper machinery is used at the time of green leaf processing.

To improve the quality of the small tea grows tea state government is south

took initiative in support of the success of co-operative factory and series of

co-operative factories are constructed.

Tea Market Review

The tea industry in India drives its importance by being one of the major

foreign exchange earners and for playing a vital role towards employment

generation as the industry is highly labour incentive. India is the second largest

producer of tea production. The market size of tea is estimated to be approx.

10000 crore with a penetration of more than 90% in the domestic market with

an expert of approx. 210 million by of tea ,in the world with China ranking at

the first position. The tea sector in the country is largely organized since 72% of

the area under tea cultivation and 74% of the total production comes from the

organized sector. Tea in India is grown over an area under tea cultivation in the

world. The Indian tea industry is having thousand of tea gardens spread across

various state of a India .

a. Market segmentation

Indian tea market is huge with large with large number of local and

regiona;l players with the passage of time and due to change in the consumption

8
pattern. There has been diversification and value addition in tea production. In

India , tea is consumed in two forms. While a major share of the market is of

loose tea suppliers , branded tea manufactures are also test increasing their

market share. The share of LTC tea constitute 80% of the tea market followed

by orthogonal Tea & Darjeeling Tea. Apart from the, there bare are also a

variety of flavored teas such as green tea , earl grey tea , jasmine tea, ginseng

oolon , masala chai etc..

b. Tea production to remain stable

Tea production is expected to inch up marginally higher than last year in

215-16 on account of better productivity from North India , India is a second

largest producer of tea in the world with a 25% of share of total production,

but the country country consumer 75-80% of its own production. Annual

production of tea in 2015 grew by 6.5% with a production of 1200 million

kgs as compared to 1126 million kgs in 2004. The production increased had

little impact on experts as the majority of this tea was CTC grade and

effectively all was consumed by the fast-growing domestic market.

c. Price realization
In India more than 50% sales of tea is routed through auction at various

auction located in North and South India. Tea generally moves directly from

factory either to auction countries for sales or for sales to national or

international buyers. Action buying is much more fragmented and there is

also a clear seasonality between whole sale and retail price. Export volium

also has an influence on the domestic availability and likes up domestic price

9
 further lots offered and quantity sold is inversely related with average price

realisation at auction .

SALISBURY INDUSRIAL CO-OPERAYIVE TEA FACTORY

The Salisbury industrial co-operation tea factory ;limited at Gudalur

which engaged in the production of tea . they stand first in the manufacturing of

high quality tea. It was commencement of production on 16.09.1983. its under

the control of department of industrial and commerce of Tamil Nadu Govt.

The Salisbury industrial co-operative tea factory ltd, Gudalur. The

Nilagiris , was started with 55 members of small tea growers residing in the area

of operation of Gudalur Taluk to improve their socio-economic condition by

paying reasonable rate for the green tea leaves supplied by them and also to

uplift their slandered of life. The area of operation of the factory is confined to

the Gudalur and surrounding

SERVICE RENDED BY THE FACTORY

10
 According to seasonal needs , the factory is disbursing agricultural inputs

like fertilizer , plant production chemicals, pp equipments , green leaf

harvesting, machines etc.. to the members tea gardens along with latest

technique guidance on cultivation for proper usage and implementation of

harvesting quality Green Tea Leaf.

FOOD SAFETY STANTERED AUTHORITY OF INDIA(FSSAI)

The factory has o0btained food safety license NO.100112052000406

from the central licensing authority FSSAI Chennai.

HISTORY
The Nilagies was originally a summer retreat for the Europeans. John

Sullivan , who build stone house , his home in Ooty in 1823, was followed by

several other European. Later, when the Duke of Buckingham was Governor of

Madras he started the practice of moving the Govt of the hill of the summer .

tea was planted on an experimental earn from in the Ketti Vally in 1953, but the

first full scale efforts to plant tea in the Nilagiris were on Taishola and

Dunsandle Estates in 1859. In 1969, Glenmorgan become that first estate in

South India to pro9duce Green Tea. A full pledged regular training course for

planters with large garden as well as small growers , on the moderns as well as

small growers , on the modern aspects of crops husbandry and tea

manufactures.

HISTORY OF STUDY UNIT

11
 The early 1930s saw a steady increase in the area under tea cultivation in

the small tea growers sector. These small tea grower had to sup0ply their green

leaves only to private tea factories. There small tea growers faced problems

such as very low rtes for their leaves heavy rejection of leaves and manipulation

of qualities etc It was the scenario that promoted the government to from

INDCOSERVE, a guardian of small tea growers in the Nilagiris district.

The first industrial co-operative tea factory in India was established in

Yarkkandu village in the Nilagiris in the year 1958 with 120small tea grown

members in the order to develop their socio-economic condition. As this venture

was a great success it encouraged the formation of a more co-operative tea

factories in different area of the district , when ever there was concentration of

small growers .
When the number of factories were on the rise, it was felt necessary to

promote an apex organization of coordinate activities of all the INDCO tea

factories. Accordingly the Tamil Nadu is a small Tea Graven Industrial

Cooperative Tea Factory Federation Limited, briefly called the INDICOSERVE

was established in 1965. Today there are 15 industrial co-operation tea factories

under regular production covering about 32000 area of small holding and 2000

small tea growers. The total production of tea , both done and LTC , of their

factories is around it 16 million kgs per annum as against the installed

12
PRODUCTION PROCESS OF TEA
Products manufactured by the transaction of row materials. Production planning

and production control are two main aspects of production management.

Production planning is concerned with developing specific course of action for

the production system. The tea leaves have to undergo changes several physical

and bio-chemical charges before it can b render fix to consumption.

We know that there are four main type of tea-green, black, oolong and

white. They all look and taste differently, yet they all come from the same tea

plant. This plant is capable like anything with living issue of succumbing to

ordination.

VARIOUS STEPS INVOLVED IN PRODUCTION OF TEA

Although each type of tea has different taste, smell and visual appearance

, tea processing for all tea types consist of a very similar set of methods with

only minor variation without careful moistures and temperature control during

its manufacturing and life transfer.

The different steps are plucking, withering/wilting, disruption.

Ordination/fermentation, fixation/kill-green, sweltering/yellowing,

rolling/shaping, drying, airing/curing, sorting and grading, store band packing

FINANCIAL PERFOMANCE OF THE STUDY UNIT

In this section , to measure the overall financial performance of Salisbury
INDCO tea factory the researcher is analyse and interpret the collected data

13
using the technique like ratio analysis , trend analysis, comparative statement
and statistical tools are applied.
TABLE 1
CURRENT RATIO
YEAR CA CL CR
2011-12 30132908 29417660 1.02
2012-13 29398906 32565965 0.90
2013-14 29141899 39712434 0.73
2014-15 35599687 36108420 0.99
2015-16 39204813 31611740 1.24
MEAN 0.98
SD 0.19
CV(%) 19.00
Annual Report From 2011-12 to 2015-16

TABLE 2
LIQUID RATIO
YEAR CA CL CR
2011-12 15472439 29417660 0.53
2012-13 12958983 32565965 0.40
2013-14 14267092 39712434 0.36
2014-15 18503276 36108420 0.51
2015-16 10162715 31611740 0.57
MEAN 047
SD 0.09
CV(%) 19.00
Source Annual Report from 2011-12 to 2015-2016
FIGURE 1
LIQUIDTY RATIO

14
 1.4

1.24

1.2

1.02
0.99
1

0.9
RATIO IN PREPORTION

0.8
0.73
Current Ratio
Liquidty Ratio

0.6 0.57
0.53
0.51

0.4
0.4 0.36

0.2

0
2011-12 2012-13 2013-14 2014-15 2015-16

TABLE 3

FIXED ASSET RATIO

15
 YEAR FA LA FR
2011-12 31786562 25893458 1.23
2012-13 32413482 26938281 1.25
2013-14 37708436 44393437 0.85
2014-15 38613018 29068154 1.33
2015-16 39064919 35625191 1.10
MEAN 1.14
SD 0.18
CV(%) 16.00
Source : Anuual report from 2011-2012 to 2015-16

TABLE 4

DEBIT EQUITY RATIO

YEAR SH TLF DR
2011-12 19362877 6530581 2.96
2012-13 20486665 6451617 3.18
2013-14 25394296 18999141 1.34
2014-15 22345183 6722971 3.32
2015-16 23289032 12336159 1.89
MEAN 2.54
SD 0.87
CV(%) 34.00
Source : Annual report from 2011-12 to 2015-16

TABLE 5

PROPRIETORY RATIO

16
 YEAR SF TTA PR
2011-12 19362877 31786562 0.61
2012-13 2048665 32413482 0.63
2013-14 25394296 37708436 0.67
2014-15 22345183 38613018 0.58
2015-16 23245132 39064919 0.60
MEAN 0.62
SD 0.03
CV(%) 6.00
Source : Annual report from 2011-12 to 2015-16

TABLE 6

GROSS PROFIT RATIO

YEAR GROSS PROFIT SALES G.R

2011-12 10110957 228527955 4.42
2012-13 7127798 185567617 3.84
2013-14 10841085 181733626 5.97
2014-15 8117218 257404504 3.15
2015-16 9071836 240863101 3.77
MEAN 4.23
SD 1.07
CV(%) 25.00
Source : Annual report from 2011-12 to 2015-16

TABLE 7

NET PROFIT

17
 YEAR NET PROFIT SALES NP
2011-12 2467278.81 228527995.20 1.08
2012-13 134175594.17 185567617.12 7.23
2013-14 5372395.81 181733625.50 2.96
2014-15 648934.54 257404504.25 0.25
2015-16 561751.23 240863101.13 0.23
MEAN 2.35
SD 2.95
CV(%) 1.25

TABLE 8

CAPITAL TURNOVER RATIO

YEAR SALES CWE CTR

2011-12 228527955 29016626 8
2012-13 185567617 30061449 6
2013-14 181733626 49951567 4
2014-15 257404504 33089372 8
2015-16 240863101 40972302 6
MEAN 6.27
SD 1.73
CV(%) 28.00

TABLE 9

NET PROFIT

18
 YEAR NET PROFIT

2011-12 2467279

2012-13 13417594

2013-14 5372396

2014-15 648935

2015-16 561751

FIGURE 2

NET PROFIT

NET PROFIT
16000000

14000000
13417594
12000000

10000000
Series 1
8000000

6000000
5372396
4000000

2000000 2467279
648935 561751
0
2011-12 2012-13 2013-14 2014-15 2015-16

TABLE 10

GROSS PROFIT

19
 YEAR NET PROFIT
10110957
2011-12

2012-13 7127798

2013-14 10841085

2014-15 8117218

2015-16 9071836

FIGURE 3

GROSS PROFIT

GROSS PROFIT
12000000
10841085
10000000 10110957
9071836
8000000 8117218
7127798
6000000

4000000

2000000

0
2011-12 2012-13 2013-14 2014-15 2015-16

TABLE 11

IND NO:1186 THE SALISBURY INDUSTRIAL CO-OPERATIVE TEA

FACTORY LTD, GUDALUR -643212 THE NILAGIRLS
20
 TRADIN G & P/L A/c AS ON 31-03-2015

PARTICULAR AMOUNT PARTICULAR AMOUNT

Opening stock 127733785.46 Sales 257404504.25

Cost of PDN B/F 237899612.05 Closing stock 11877261.04

from manufacturing
account
Tea trade changes & 10966149.94
paid due
Gross Profit 8117217.84

269716765.29 269716765.29

Interest paid & Due 3307761.00 Gross Profit as per 8117217.84

trading A/C
Establishment & 5256463.26
Contingencies
Depreciation charges 79396.45 Gross profit as per 2413.00
trading A/c
Bonus Provisions 611257.00 Miss.Income recived 3189498.10
and accured
Gratuity Provision 2372117.00 Contra liabilities 684040.00
released
Contra liability 13630.60
created
Expenditure over 742999.70
income of lorry
Expenditure over 1014815.20
income of lorry
Expenditure over 307394.45
income of jeep
Net profit 648934.37

Total 11377769.03 Total 1137769.03

TABLE 11

21
 IND NO:1186 THE SALISBURY INDUSTRIAL CO-OPERATIVE TEA
FACTORY LTD, GUDALUR -643212 THE NILAGIRLS

BALANCESHEET AS ON 31-03-2015

PARTICULAR AMOUNT PARTICULAR AMOUNT

Share cpl fund Fixed Asset 38613017.51

(i)Share CPL 22184900.00 Investment 22778931.72

(ii)Thrift deposit 160283.08 Current asset 35599687.11

Grand and subsidies 4021218.00 Contra asset 2055515.87

Loan & Fund 175609.44

Sunday Creditors 19013629.08

Provision & 17094790.81

Outstanding
Depreciation 27144909.72

Contra liabilities 2055515.87

Net Profit 648934.37

Total 99047152.21 Total 99047152.21

22
 TABLE 11

IND NO:1186 THE SALISBURY INDUSTRIAL CO-OPERATIVE TEA

FACTORY LTD, GUDALUR -643212 THE NILAGIRLS

TRADIN G & P/L A/c AS ON 31-03-2016

PARTICULAR AMOUNT PARTICULAR AMOUNT

Opening stock 11877261.04 Sales 240863101.13
Tea trade income 28000.00
Cost of PDN B/F 225750984.31 Closing stock 17036947.02
from manufacturing
account
Tea trade changes & 11479967.31
paid due
Gross Profit 9071835

2581800480.15 258180048.15

Interest paid & Due 10410874.00 Gross Profit as per 9071835.54

trading A/C
Establishment & 5768847.50 10722.00
Contingencies
Depreciation charges 56694.25 Gross profit as per 6765.55
trading A/c
Bonus Provisions 618769.00 Miss.Income recived 4313484.76
and accured
Gratuity Provision 1993500.00 Contra liabilities 51684.36
released
Contra liability 1093438.7800
created
Expenditure over 924226.80
income of lorry
Expenditure over 1084456.60
income of lorry
Expenditure over 341934.05
income of jeep
Net profit 561751.23

Total 13454492.31 Total 13454492.31

23
 TABLE 11

IND NO:1186 THE SALISBURY INDUSTRIAL CO-OPERATIVE TEA

FACTORY LTD, GUDALUR -643212 THE NILAGIRLS

BALANCESHEET AS ON 31-03-2016

PARTICULAR AMOUNT PARTICULAR AMOUNT

Share cpl fund 23123600.00 Fixed Asset 3964918.76

(i)Share CPL 165432.48 Investment 23209980.17

(ii)Thrift deposit 5347111.00 Current asset 39204813.05

Grand and subsidies 6510455.24 Contra asset 3097270.29

Loan & Fund 5825703.48

Sunday Creditors 13334784.11

Provision & 18276956.18

Outstanding
Depreciation 28333918.26

Contra liabilities 3097270.29

Net Profit 561751.23

Total 104576982.24 Total 104576982.24

24
 FINDINGS

Stock turnover ratio shows that the firm is very good in inventory

management
There is increase in trend for gross profit during the year 2014-15
There is increase in trend for total asset
Inventory holding period ratio shows that the firms does not hold the

inventories for a long period, because of their good inventory

management system

25
 SUGESSIONS

The tea factory should adopt new technology to improve their current

ratio level.
The performance of factory is good in the year 2015.
The industrial need to use optimum available resources and opportunity

for better future.

the factory required proper financial planning for the future development

26
 CONCLUSION

The study should be concluded that the financial performance . If INDCO

Salisbury factory, during the 3 years was in good on performance they never

occur losses . To make financial performance more effective and improving the

profitability of the firm. More centralization should given on the factors , like

controlling the operating expenses of the firm and reducing the dependence on

creditors . These are very much helpful for improve the financial performance

27