Financial – TACPL

Financial Stability and Strategic Growth

At Transoceanic Agro Comm Private Limited (TACPL), financial stability is the cornerstone of our operations. With a legacy of prudent risk management, our strategic shift from import-heavy transactions to a more domestically focused model has significantly reduced our finance costs and foreign exchange risks. Our robust liquidity position, marked by INR 134 crore in free funds as of March 31, 2022, ensures we can comfortably meet all external liabilities.

We continue to optimize our working capital, enhance cash flow through timely payment discounts, and secure receivables with a comprehensive debtors insurance policy. These measures, combined with our conservative debt approach and strategic investments, position us for sustained growth and long-term financial success.

Strong Liquidity Position

Cash Reserves: INR 48 crore in Current Account

Fixed Deposits: INR 39 crore in Free Fixed Deposits

Mutual Fund Investments: INR 4 crore invested in diversified Mutual Funds

Un-availed Credit Lines: INR 43 crore of un-availed Cash Credit Limits

Reduced Finance Costs

Shift in Business Model: Transition from import-heavy operations to a domestic-focused model, reducing reliance on Import Letters of Credit (LCs).

Lower LC Utilization: Significant decrease in LC usage, leading to a substantial reduction in finance costs.

Efficient Working Capital Management: Improved cash flow due to shorter debtor collection periods (reduced from 20-30 days to 5-10 days).

Robust Risk Management

Hedging Strategies: Comprehensive financial hedging of foreign exchange exposures to mitigate risks associated with currency fluctuations.

Back-to-Back Trading Model: Alignment of purchases and sales through a back-to-back order system, securing inventory and minimizing market risk.

Secured Payment Collections

Debtors Insurance Policy: Implementation of a Debtors Insurance Policy through New India Assurance Company Limited, ensuring full recourse on receivables.

Credit Management: Stringent customer onboarding process with creditworthiness checks, including cash advance payments for customers with lower credit ratings.

Financial Resilience

Free Working Capital Limits: Built a substantial buffer in working capital fund-based limits, typically keeping these limits unutilized, offering a cushion for unforeseen needs.

Stable Operating Margins: Despite adjustments in credit terms and business model, operating margins have remained stable, underscoring the company’s financial resilience.

Strategic Reinvestment

Investment in Core Operations: Continuous reinvestment in core trading activities to enhance operational efficiency and maintain market leadership.

Focus on Domestic Market: Re-alignment towards domestic sourcing has not only reduced financial risks but also enhanced profitability by lowering costs related to import logistics and foreign exchange.

Debt Management

Low Leverage: Conservative approach to borrowing with minimal reliance on external debt, ensuring a strong balance sheet.

Adequate Coverage of External Liabilities: Total free funds of INR 134 crore against external liabilities of INR 146 crore, reflecting a robust financial position.

Long-Term Financial Planning

Sustainability Focus: Long-term financial strategies are focused on sustaining growth while maintaining financial prudence and liquidity.

Contingency Planning: Adequate provisions and reserves for contingencies, ensuring the company’s ability to navigate economic fluctuations.

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