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Contemporary Corporate Reporting – Dilmah Ceylon Tea PLC

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Contemporary Corporate Reporting – Dilmah Ceylon Tea PLC

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Description

PART A

SCENARIO

You are a financial analyst, advising clients on investment decisions. A client is interested in investing £500,000 in your chosen company. The client requires you to produce a detailed report on this company clearly showing your recommendation on whether or not the investment should be made.

WHAT YOU MUST DO

You are required to critically analyze and evaluate the financial performance of your company. You should concentrate on the performance over the past two years, but it is expected that you will use up to five years’ performance as background information and to highlight trends.

You need to provide the client with a business report which includes your analysis and evaluation of the critical areas of your company. The report must conclude with your recommendation to the client as to whether or not the investment should be made.

You MUST include a copy of your company’s income statement and balance sheet for the latest year you are analyzing as an appendix to the report.

PART B

Consider how your company communicates its strategies, performance and corporate policies.

Using corporate impression management theories, critically evaluate the company’s narrative reporting of its performance.

You may choose one part of the annual report, for example the Chairman’s statement, for your evaluation.

You should include relevant extracts from the annual report to support your analysis, and make appropriate references to academic literature.

Additional information

Table of Contents

Part A
Introduction
Analysis
Recommendation & Conclusion

Part B
Corporate impression management
References
Annexures
Preview

Part A

Introduction

Dilmah Ceylon Tea PLC is a leading tea exporter in Sri Lanka. Incorporated in 1950, Dilmah Tea is a world-renowned Sri Lankan brand which is specialized in tea. The company currently exports more than 3000 products into around 100 countries around the world. Dilmah has around 554 employees working for them by 2021. The brand “Dilmah” is recognized both locally and internationally due to its quality offered and the unique flavors offered under their tea products. Further the company is well aware of their corporate social responsibility which has led them to follow a 100% carbon neutral production process. (Dilmah, 2021)
This report will analyze the financial performance of Dilmah over the last few years. The report will help the potential investors to identify whether its viable to invest in the company. The focus will be given to the financial results of the last two years since they indicate the recent performance of the company. The total analysis will be conducted based on the ratios and finally basing on the results recorded, the conclusion will be done with a recommendation on whether its viable to invest in Dilmah. For the comparison of the financial performance of the company, Bogawanthalawa Tea Estates PLC’s financial performance is benchmarked. Bogawanthalawa is another market leader in the Sri Lankan tea industry with both local and international market presence. (Bogawanthalawa, 2021)

Analysis

Profitability
Dilmah has a history of having a GP margin of 40%. However, during the last year, it has dropped by 6% due to adverse economic condition. Bogawanthalawa GP margin is way lower and even they have recorded a gross loss during the last year as well. In comparison Dilmah’s operating margins are better.

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