Tata Tea Limited 30 January 2006 Tata Tea Limited Registered Office: 1 Bishop Lefroy Road Kolkata-700020 Audited Financial Results for three months ended December 31, 2005 Rs in crores Three months ended Nine months ended Previous December 31 December 31 Year ended 2005 2004 2005 2004 31st March,2005 Income from Operations 278.47 239.62 770.13 680.28 899.63 Total Expenditure 225.62 198.29 605.50 542.75 756.25 (a) (Increase)/Decrease in stock 20.56 (0.95) (11.64) (54.97) (29.33) (b) Purchase for trading/Consumption of Raw Materials 70.70 56.78 211.60 174.73 227.21 (c) Staff Costs 42.40 61.75 141.96 196.78 253.93 (d) Other Expenditure 91.96 80.71 263.58 226.21 304.44 Profit before Interest and Depreciation 52.85 41.33 164.63 137.53 143.38 Interest (Net) 2.83 2.49 7.25 7.00 8.47 Gross Profit after Interest but before Depreciation and Taxation 50.02 38.84 157.38 130.53 134.91 Depreciation 4.35 5.26 14.24 15.98 21.99 Profit before Tax from Operations 45.67 33.58 143.14 114.55 112.92 Income from Investments/Other Income (Net) 3.27 2.35 33.50 21.47 50.42 Profit before Tax and exceptional items 48.94 35.93 176.64 136.02 163.34 Exceptional Income/(Expenditure)(Net) 20.22 - 27.48 - (1.19) Profit on amalgamation- Refer Note-2 1.53 - - - 0.00 Profit before Tax 70.69 35.93 204.12 136.02 162.15 Provision for Taxation (a) Normal 9.80 8.47 37.50 34.00 38.76 (b) Deferred (2.02) 0.02 (2.49) (1.07) (5.53) (c) Fringe Benefit Tax 0.50 - 1.50 - - Profit after Tax 62.41 27.44 167.61 103.09 128.92 Paid up Equity Share Capital(face value of Rs 10 each) 56.22 56.22 56.22 56.22 56.22 Reserves excluding Revaluation Reserves - - - - 970.89 Earnings per share(Not annualised) - Rs 10.92 4.88 29.81 18.34 22.93 Aggregate of Non Promoter Shareholdings -Number of Shares 39,941,538 39,649,644 39,941,538 39,649,644 39,751,538 -Percentage of Share holding 71.05% 70.53% 71.05% 70.53% 70.71% Notes: 1. Income from operations for the quarter ended December 31, 2005 increased by 16% compared to the same period in the previous year. This increase mainly reflects growth in branded sales by 8% and inclusion of an erstwhile wholly owned Indian subsidiary, Tata Tetley, consequent to its amalgamation with the Company. Profit before tax and exceptional items increased more than proportionately by 36% also reflecting the impact of restructuring plantation operations. After exceptional items Profit before tax increased by 97% and Profit after tax by 127% compared to the same period in the preceding year. 2. The amalgamation of Tata Tetley Ltd with the company became effective from April 1 2005 with the filing of the orders of the Hon'ble High courts of Kerala and Calcutta with the Registrar of Companies on January 23, 2006. Consequently the results for the quarter include the performance of the amalgamating Company for the nine months period ended December 31, 2005, in the following manner: - The relevant turnover of Rs 16 crores and Profit before tax of Rs 0.80 crores for the quarter ended December 31, 2005, has been included on a line by line basis in the quarterly results. - The profit before tax of Rs 1.53 crores, for the six months ended 30th September 2005 has been disclosed as a separate line item in the quarterly results, the net of tax impact of which has been excluded for computing the quarterly Earnings per share. During the said period, the relevant turnover was Rs 29 crores. 3. Exceptional item during the current quarter comprises of net profit on sale of the Company's undertaking comprising of certain estates in South India to its subsidiary Tata Coffee Ltd on a commercial arms length basis (Rs 30.51 crores) and is net of expenditure on account of amortization of amounts expended on Employee Separation Scheme (Rs 1.79 crores) and provision for commercial taxes in respect of earlier years(Rs 8.50 crores). 4. In view of the seasonality of the cropping pattern in the North India Plantation operations and in accordance with the accounting practice consistently followed in the past for quarterly and half yearly results, stock of teas in the North India plantation operations as on December 31, 2005 has been valued at the lower of estimated cost of production (full year production and expenditure) and net realizable value. 5. Particulars of complaints received from investors during the quarter, complaints resolved and those pending are as follows:- Particulars of complaints Numbers Outstanding as on September 30, 2005 Nil Received during the quarter 4 Resolved during the quarter 4 Outstanding as on December 31, 2005 Nil 6. Previous period's figures have been regrouped, to the extent necessary, to conform to current period's figures. 7. The aforementioned results were reviewed by the Audit Committee of the Board on January 25, 2006 and subsequently taken on record by the Board of Directors at its meeting held on January 30, 2006. Audit of these results has been completed by the Auditors. R.K. Krishna Kumar (Vice Chairman) Mumbai: January 30, 2006 Segment wise Revenue, Results and Capital Employed, under Clause 41 of the listing agreement for three months ended December 31, 2005 Rs/crores Three months ended Nine months ended Year ended December 31 December 31 March 31 2005 2004 2005 2004 2005 1 Segment Revenue (a)Tea 277.95 236.66 768.33 666.41 884.29 (b)Others 0.52 0.82 1.70 10.04 12.55 278.47 237.48 770.03 676.45 896.84 Less: Inter Segment Revenue - - - - - Net Segment Revenue 278.47 237.48 770.03 676.45 896.84 2 Segment Results (a)Tea 59.78 44.28 185.58 146.72 151.34 (b)Others 0.57 0.38 (0.75) (0.90) (0.87) 60.35 44.66 184.83 145.82 150.47 Less: Interest(net) 2.83 2.49 7.25 7.00 8.47 Profit on amalgamation 1.53 - - - - Add : Unallocable income net of unallocable expenditure 11.64 (6.24) 26.54 (2.80) 20.15 Total Profit before Tax 70.69 35.93 204.12 136.02 162.15 3 Segment Capital Employed (a)Tea 346.50 444.73 346.50 444.73 398.67 (b)Others - 3.66 - 3.66 2.46 Notes: 1 The definitions of the internal business segmentation and the activities encompassed therein are as follows: Tea : Cultivation & manufacture of black tea and instant tea,tea buying / blending and sale of tea in bulk or value added form. Others : Cultivation & production of coffee, other minor crops, trading in commodities etc. 2 The segment wise revenue, results and capital employed figures relate to the respective amounts directly identifiable to each of the segments. Unallocable expenditure includes expenses incurred on common services at the corporate level and relate to the Company as a whole. Unallocable income includes income from investments and exceptional items. R K Krishna Kumar Mumbai: January 30,2006 (Vice Chairman) Unaudited Consolidated Financial Results (Provisional) for the three months ended December 31, 2005 Rs in crores Three months ended Nine months ended Previous December 31 December 31 Year ended 2005 2004 2005 2004 March 31, 2005 Income from Operations 811.70 806.14 2307.20 2268.13 3059.13 Income from Investments (Net) 0.32 0.97 21.96 14.15 17.40 Total Income 812.02 807.11 2329.16 2282.28 3076.53 Total Expenditure 670.08 646.07 1865.81 1831.33 2519.39 Profit before Interest and Depreciation 141.94 161.04 463.35 450.95 557.14 Interest (Net) 28.30 29.98 78.69 94.53 122.76 Gross Profit after Interest but before Depreciation and Taxation 113.64 131.06 384.66 356.42 434.38 Depreciation 18.69 19.88 54.82 58.32 77.85 Profit before Tax and Exceptional Items 94.95 111.18 329.84 298.10 356.53 Exceptional Income / (Expenditure) (Net) (12.26) 8.39 9.65 8.79 (42.81) Profit before Tax 82.69 119.57 339.49 306.89 313.72 Provision for Taxation 22.30 30.28 93.28 88.18 93.85 Profit after Tax 60.39 89.29 246.21 218.71 219.87 Share of Profit/(Loss) in Associated Undertakings 2.10 0.43 9.68 4.72 9.79 Minority Interest 2.41 7.34 8.22 9.99 16.02 Reversal of share of loss of earlier years in respect of an Associate Company divested during the year - - 1.83 Group Consolidated Profit 60.08 82.38 247.67 213.44 215.47 Paid up Equity Share value of Rs 10 each) 56.22 56.22 56.22 56.22 56.22 Earnings per share (Not annualised) Basic Earnings per share - Rs 10.69 14.65 44.05 37.97 38.33 Diluted Earnings per share - Rs 9.94 13.28 41.46 35.59 36.74 Notes: 1. The Consolidated Total Income for the quarter at Rs 812.02 crores was 1% higher than the corresponding quarter of the previous year. The Group Consolidated Net Profit (post exceptional items)at Rs 60.08 crores was lower than the same period previous year due to lower profitability of subsidiary companies in the current quarter. However, for the nine months period ended December 31, 2005, Group Consolidated Net Profit (post exceptional items) at Rs 247.67 crores was 16% higher than the same period of the previous year. 2. Exceptional items during the quarter represents amortization of amounts expended on Employee Separation Scheme in the Holding Company and an Indian subsidiary (Rs 2.09 crores), expenses arising in relation to the sale of the Holding Company's undertaking comprising of certain estates in South India to an Indian Subsidiary (Rs 1.67 crores) and provision for commercial taxes in respect of earlier years (Rs 8.50 crores). Net profit on sale of estates to the Indian Subsidiary has been eliminated. 3. Under Indian GAAP, The Tetley Group's (the Company's 98.58% UK subsidiary) turnover was Rs 532.08 crores for the third quarter of its Financial Year 2005/06 as against Rs 522.24 crores for the corresponding quarter of the preceding year. The Profit before Tax at Rs 43.94 crores and the Profit after Tax at Rs 30.31 crores was however lower compared to the corresponding quarter of the previous year which were Rs 67.46 crores and Rs 49.75 crores, respectively, mainly due to higher spends on promotional activities, non- recurring expenses and foreign currency translation impact. 4. In respect of Rallis India Ltd, an associate company, the previous year's figure for the period ended December 31, 2004 included six months results as the nine month results were not available at the time of publishing the accounts. 5. During the nine month period, The Tetley Group (the Company's 98.58% UK subsidiary) has changed its accounting policy for pension costs to comply with the requirements of FRS 17 which has become mandatory. Consequent to this change an amount of Rs 100.54 crores (£12.9 m), representing an estimate of the scheme deficit under FRS17, has been charged against opening reserves. Exceptional items during the nine months ended December 31, 2005 includes a curtailment gain of Rs 15.24 crores (£ 1.9 mn) consequent to closure of The Tetley GB defined benefit scheme. 6. Previous period's figures have been regrouped, to the extent necessary, to conform to current period's figures. 7. The aforementioned results were reviewed by the Audit Committee of the Board on January 25, 2006 and subsequently taken on record by the Board of Directors at its meeting held on January 30, 2006. R.K. Krishna Kumar (Vice Chairman) Mumbai: January 30, 2006 This information is provided by RNS The company news service from the London Stock Exchange