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Directors Report of Tata Motors Ltd.

Mar 31, 2013

The Directors present their Sixty-Eighth Annual Report and the Audited Statement of Accounts for FY 2012-13.


(Rs. in crores)

Company Tata Motors Group (Standalone) (Consolidated)

FY 2012-13 FY 2011-12 FY 2012-13 FY 2011-12


Gross revenue 49,319.73 59,220.94 193,583.95 170,677.58

Net revenue (excluding excise duty) 44,765.72 54,306.56 188,817.63 165,654.49

Total expenditure 42,621.98 49,894.76 162,248.74 141,954.02

Operating profit 2,143.74 4,411.80 26,568.89 23,700.47

Other income 2,088.20 574.08 811.53 661.77

Profit before interest, depreciation, amortization, exceptional item and tax 4,231.94 4,985.88 27,380.42 24,362.24

Finance cost 1,387.76 1,218.62 3,553.34 2,982.22

Cash profit 2,844.18 3,767.26 23,827.08 21,380.02

Depreciation, amortization and product development / engineering expenses 2,243.38 1,840.99 9,590.89 7,014.61

Profit for the year before exceptional items and tax 600.80 1,926.27 14,236.19 14,365.41

Exceptional items - loss (net) 425.87 585.24 602.71 831.54

Profit before tax 174.93 1,341.03 13,633.48 13,533.87

Tax expense/(credit) (126.88) 98.80 3,770.99 (40.04)

Profit after tax 301.81 1,242.23 9,862.49 13,573.91

Share of minority interest and share of profit of associates (net) - - 30.12 (57.41)

Profit for the year 301.81 1,242.23 9,892.61 13,516.50


Profit for the year 301.81 1,242.23 9,892.61 13,516.50

Balance brought forward from previous year 1,663.91 2,078.92 18,195.96 6,461.49

Amount available for appropriations 1,965.72 3,321.15 28,088.57 19,977.99

Less: appropriations / (transfer from)

Debenture Redemption Reserve (130.00) 70.00 (130.00) 70.00

General Reserve 30.18 125.00 59.48 158.03

Other Reserves - - 63.14 65.38

Dividend (including dividend distribution tax) 722.75 1,462.24 756.14 1,488.62

Balance carried to Balance Sheet 1,342.79 1,663.91 27,339.81 18,195.96


Considering the Companys financial performance, the Directors recommended a dividend of Rs.2/- per share (100%) on the capital of 2,719,945,846 Ordinary Shares of Rs.2/- each [previous year: Rs.4/- per share (200%) of face value of Rs.2/- each] and Rs.2.10 per share (105%) on 481,959,620 A Ordinary Shares of Rs.2/- each [previous year: Rs.4.10 per share (205%) of face value of Rs.2/- each] fully paid-up and any further Ordinary Shares and/or A Ordinary Shares that may be allotted by the Company prior to August 1, 2013 (being the book closure date for the purpose of the said dividend entitlement) and will be paid on or after August 23, 2013. Based on the current paid- up capital, the said dividend, if approved by the Members, would involve a cash outflow of Rs.724 crores (previous year: Rs.1,464 crores) including dividend distribution tax, resulting in a payout of 240% (previous year: 118%) of the standalone profits for FY 2012-13 and 7% (previous year: 11%) of the consolidated profits of the Company.


FY 2012-13 was a challenging year for the economy - both globally and in India. The world economy grew by a mere 3.1% in 2012 as compared to 3.9% in the previous year. The domestic situation in India was influenced by these global trends and the ripple effect of a global slowdown was felt. After years of strong positive growth, the Indian economy slowed down to a GDP of 5% from 6.5% in the previous year.

The Tata Motors Group recorded a 13.4% growth in gross turnover from Rs.170,678 crores in the previous year to Rs.193,584 crores in FY 2012-13. This is the highest turnover recorded by the Group. The consolidated revenues (net of excise) for FY 2012-13 of Rs.188,818 crores grew by 14% over last year on the back of strong growth in volumes across products and markets at Jaguar Land Rover. The consolidated EBITDA margins for FY 2012-13 stood at 14.1%. Consequently, Profit Before Tax and Profit After Tax were Rs.13,633 crores and Rs.9,893 crores, respectively.

Tata Motors Limited recorded a gross turnover of Rs.49,320 crores, 16.7% lower from Rs.59,221 crores in the previous year. Weak macro economic factors leading to a continued slow-down in the Medium and Heavy Commercial Vehicles (M&HCV), stiff competition, mainly in Passenger Vehicles business, severely affected the standalone operations and profitability. Additionally, the need to increase marketing expenses to protect and grow market share has resulted in EBITDA margins reducing from 8.1% to 4.8% for FY 2012-13. The reduction of profits from operations was offset by dividend from subsidiary companies of Rs.1,584 crores (including dividend from JLR) as compared to Rs.114 crores for the previous year. The Profit Before Tax and Profit After Tax for the FY 2012- 13 were lower at Rs.175 crores and Rs.302 crores, respectvely, as compared to Rs.1,341 crores and Rs.1,242 crores in the previous year, respectively.

Jaguar Land Rover recorded a turnover of GB£ 15,784 million, a growth of 17% from GB£ 13,512 million in the previous year. Volume growth was driven not only by a full year of the Range Rover Evoque, but also by increasing sales of existing models. EBITDA growth also benefitted from a favourable market mix, operating exchange rates due to the strengthening US$ against the GB£ and the Euro. Further, cost efficiency improvements in material costs and manufacturing costs supported by increased production volume levels also attributed to improved results of operations. These resulted in a higher EBITDA and Profit Before Tax of GB£ 2,402 million and GB£ 1,675 million, respectively, as compared to GB£ 2,027 million and GB£ 1,507 million, respectively in the previous year. The effective tax rate was higher than the previous year, since last year it benefitted from recognition of previously unrecognised tax losses in the last year. The Profit After Tax for FY 2012-13 stood at GB£ 1,215 million as compared to GB£ 1,481 million last year (Jaguar Land Rovers figures as per IFRS).

Tata Motors Finance Limited, the Companys captive financing subsidiary, registered total revenue of Rs.2,890 crores higher by 43% in the previous year and reported a Profit After Tax of Rs.309 crores in FY 2012-13 (previous year: Rs.240 crores). Tata Motors Finance Limited proposed a dividend of 7% per equity share for FY 2012-13.

Tata Daewoo Commercial Vehicle Company Limited, South Korea registered revenues of KRW 823.9 billion (Rs.4,017 crores), a growth of 8% over the previous year. However, the positive impact of higher volumes and various cost control initiatives were negated by a provision of KRW 18.9 billion (Rs.92 crores) on account of a Court verdict in an ordinary wage suit filed by its Union employees resulting in a loss of KRW 9.2 billion (Rs.45 crores) (previous year: profit of Rs.8.74 crores).


The Tata Motors Group sales for the year stood at 11,91,968 vehicles, lower by 6% as compared to the previous year. Global sales of all Commercial Vehicles were 593,897 vehicles, while sales of Passenger Vehicles were at 598,071 vehicles.


The Company recorded sales of 765,557 vehicles, a decline of 11% over last year. Industry growth during the year was also muted at 1.1%, resulting in the Companys market share decreasing to 22% in the Indian automotive industry from 25.1% in the previous year. The Company exported 50,938 vehicles during the year, lower by 19%, as compared to the previous year.

Commercial Vehicles

Within the domestic market, the Company continued to strengthen its presence in Commercial Vehicles, with sales of 5,36,232 vehicles, an all time high for the Company, growing 1.1% from the previous year. T his represented a market leadership share of 59.5% in the domestic CV market which was mainly supported by steep growth in the LCV segment.

Some of the highlights for the year were:

- Sales in the LCV segment continued to drive performance, growing by a 21.8% during the year to 3,93,468 vehicles. Market share in the LCV segment expanded by 200 basis points registering a 62.2% market share in FY 2012-13. The Company has grown and consolidated its position in the LCV segment, leading to expansion of the market share, especially in the Ace Segment. Sales of the Tata ACE reached highest ever at over 3,25,000 during FY 2012-13. The Tata Ace family crossed 10,00,000 sales since its launch. During this year, the Company launched Tata Xenon, a stylish and rugged pick-up, offering both single cab and dual cab versions, with best in class looks, operating economies and fuel efficiency

- Slowdown in economic activity, sluggish infrastructure spending and weak macro outlook coupled with higher operating costs for transport operators, adversely impacted demand in the M&HCV industry. The M&HCV segment which is the harbinger for growth in the economy de-grew by 23.3% in the year. The Companys sales in the M&HCVs segment were 1,42,764 vehicles. The depressed market scenario combined with new player entry resulted in very high competitive intensity. Several new products and variants across the traditional, Prima and Construck range focusing on best in class performance, reliability and fuel efficiency, were introduced.

- The year also marked the roll-out of the two millionth truck from the Companys manufacturing facility at Jamshedpur. The plant manufactures the Companys entire range of M&HCV trucks, including the Tata Prima, both for civilian and defence applications. Many first of its class heavy trucks designed and built specifically to offer best in class performance, reliability and fuel efficiency were introduced viz - Tata LPT 3723 - the first 5 axle rigid truck in the country in the 10 x 4 configuration, the Tata Prima 3138.K Tipper, the Tata Prima 4938.S tractor and the Tata Prima 230 HP - LX range consisting of Tata Prima LX 4923.S, Tata Prima LX4023.S and Tata LPK 3118 tipper. Launches of buses such as MCV buses for intercity (AC - 45 Seater) and staff transportation (Non AC - 41 Seater), LP/ LPO Starbus Ultra with best in class features and fuel efficiency tailored to suit Indian conditions with highest capacity school bus in ICV platform in India (56 seats).

In January 2013, Tata Motors became the first company in India to introduce warranty period of four years on heavy trucks. The Company also introduced a Telematics and Fleet Management Service, branded "Tata FleetMan an intelligent vehicle and driver management solution.

Passenger Vehicles

The domestic passenger car industry was affected mainly by weak sentiments, high cost of ownership, high interest rates, fuel prices and reduction in discretionary spends. Overall growth in Domestic Passenger vehicle industry was flat in FY 2012-13, within which Utility Vehicles recorded a robust growth of 51.5% on the back of new launches catering not only to the traditional rugged SUV customers but also to the customer preferring the more car-like soft roader utility vehicles and cars segment de-grew by 6.9%.

During the year, the Companys Passenger Vehicles sales were lower by 31.1% at 2,29,325 vehicles, registering an 8.9% market share. The Company sold 1,80,520 cars and 48,805 utility vehicles and vans, lower by 34.6% and 14.4% respectively, over the previous year. The Companys sales in the mid-size segment suffered as competitive activity intensified with multiple new launches in this segment. The Company has taken various initiatives to improve its product refreshes/launch programmes, operational efficiency, dealer effectiveness, working capital management and restructuring customer facing functions.

The Company sold 2,294 vehicles of Jaguar Land Rover brands during FY 2012-13. Network for these brands continued to grow with 17 operational outlets across 15 cities in the Country by the year end. The plant in Pune expanded its capacity and commenced operations to roll out locally built Jaguar XF in India from November 2012.

Some of the highlights of this years performance were:

- Launches of the Vista D90; and refreshed Tata Indica eV2, the most efficient car in its class with a mileage of 25 kmpl, with new exteriors and additional convenience features.

- Launched the Manza Club Class with first in class features like 6.5 infotainment screen with voice enabled GPS guidance system, infinity roof, premium Italian leather seating system and plush interiors.

- Launched the Tata Safari Storme with new interiors and improved performance - disc brake on all wheel and projector lens head lamp - first time in its class and Tata Aria Pure LX - a new variant with a bouquet of features, at a stunning price.

- Launched the Nano MY13 with features like music system with Bluetooth/USB, glove box, refreshed interiors, etc., in an array of colours.

The above launches of the Nano MY13, Manza, Vista D90 and the Safari Storme were in-line with the Companys objective of taking the brand to a higher level, while making it relevant for the younger buyer.

- Showcased the Vista Extreme, a concept that combines the package efficiency of a hatch with the usability of the modern urban Utility Vehicle.

- The Company continued to focus on building brand strengths, refreshing the products and enhancing sales and service experience. The Company also introduced a new look, stylish, tech savvy best in class flagship Passenger Vehicle showrooms, for superior customer experience at pilot dealership in Mumbai and Delhi and this initiative will now be replicated to other setups across the country.

A new leadership team in the Passenger Vehicle business was in place towards the latter half of the year with rich experience not only from the automotive but from other sectors as well. The Company is working on a customer-centric strategy for providing the best customer experience with focus on products, world class manufacturing practices, purchase experience and consistent quality of services. As a precursor to future launches, the Company would be shortly unveiling improved and enhanced vehicles across its key brands.


For Tata Motors, traditionally strong markets in South Asia such as Bangladesh and Sri Lanka also were affected by internal conflict, political unrest and regulatory changes. As a result, export sales of the Company de-grew by 19.3% to 50,938 vehicles. With a view to expand its International Business, the Company re-entered the market of Saudi Arabia to re-establish its business in the Kingdom and launched its brand at the Jakarta Auto Show to address the Indonesian market - a key growth market. The Company introduced a host of new products on existing and new platforms in existing and new markets and showcased its vehicles in major auto shows in strategically important markets.

The Company continued to outperform competition in terms of exports of Commercial Vehicles and enjoyed a total exports share of 57% in FY 2012-13, exporting 44,109 Commercial Vehicles. The Company exported 6,829 Passenger Vehicles. Aria witnessed growth in shipments led by a strong push into European markets. Indica grew due to strong fleet and entry level customer demand and Manza grew albeit over a low base, in South Africa. Other UVs - Safari, Sumo and Grande, showed growth led by the revival of demand in Nepal and Sub-Saharan Africa. Nano and Indigo were the only significant under-performers due to economic and political upheavals in key markets - Sri Lanka and Nigeria.

Some of the highlights of this years performance were:

- Inaugurated its first 3S (Sales, Service and Spares) setup in Yangon, Myanmar.

- Won a tender for supplying 449 vehicles to Kuwait Municipality, Prestigious order for supply of 715 Xenons from the US Army.

- Started Driver Training School in Bangladesh and Mechanic Training Centre in South Africa and Kenya.


Jaguar Land Rover has had a successful year of continued growth in all markets, despite uncertain trading conditions globally. Jaguar Land Rover sold 372,062 vehicles in FY 2012-13, an increase of 18.3% over the previous year. At the brand level, wholesale volumes were 57,812 vehicles for Jaguar and 314,250 vehicles for Land Rover, growing 7% and 20.7%, over the previous year, respectively. All market regions have grown, led by China where retail sales at 77,075 vehicles were up by 48% over previous year. Retail volumes in Europe were 80,994 vehicles, 18% increase over the previous year. UK retail volumes were 72,270 vehicles, a 20% increase, whilst the North American retail volumes were 62,959 vehicles, an increase of 9% over the previous year. Retail sales for the Asia Pacific region at 17,849 vehicles, were higher by 27% and for the rest of the world were 19% higher at 63,489 vehicles over the previous year.

Jaguar Land Rover has a multifaceted strategy to position itself as a leading manufacturer of premium vehicles offering high-quality products tailored to specific markets. T he companys success is tied to its investment in product development and market expansion which drives the strategic focus on product design and quality.

Jaguar Land Rover operates three major production facilities and two advanced design and engineering facilities all in the United Kingdom. Jaguar Land Rover markets products in 178 countries, through a global network of 17 national sales companies (NSCs), 85 importers, 62 export partners and 2,485 franchise sales dealers, of which 689 are joint Jaguar and Land Rover dealers.

With the objective of increasing its marketing and dealer networks in emerging markets, Jaguar Land Rover established a National Sales company in China in 2010 to expand its presence and has plans to increase its network of dealers in China. Similar plans of increasing its dealer network are also underway in India. Jaguar Land Rover also aims to establish new manufacturing facilities, assembly points and suppliers in select markets. T he joint venture with Chery Automobiles, China as also an established manufacturing operation for some of its products and product development activities in India are examples of these initiatives.

Some of the highlights of this years performance were:

- Launch of the all new aluminum Range Rover in December 2012, with a world-wide roll-out in the last quarter of the year, recording sales of over 13,000 vehicles in the first four months. The Range Rover has already received over 10 global awards including WhatCar? Best Luxury Car.

- Launch of the all new aluminum Range Rover Sport in March 2013, with a world wide roll out in the first half of FY 2013-14.

- Expanded the Jaguar XF range with an all wheel drive version and a new Sportbrake and introduced a more fuel efficient, 2.0l XF with an 8 speed automatic gear box.

- Introduction of new variants of the Jaguar XF, the launch of the new Range Rover, as well as the continued strength of the Evoque, were key contributors to the overall success.

- Jaguar Land Rovers joint venture with Chery Automobiles, China has been formalised to develop, manufacture and sell certain Jaguar and Land Rover vehicles and jointly branded vehicles for the Chinese market.

- Continued investment in new state-of-the-art facility at Wolverhampton, UK, to manufacture new advanced low emission engines.

Jaguar Land Rover and Tata Motors participated in various international autoshows displaying its range of products, including at Geneva, New York, Detroit and Jakarta, wherein the displayed products won accolades and a positive response.


Tata Daewoo Commercial Vehicles Company Limited (TDCV) sold 10,100 vehicles- higher by 6% over the previous year. TDCV exported 4,700 vehicles in FY 2012-13, which is the highest ever in its history, registering a growth of 57.8% as compared to 2,979 vehicles exported in the previous year. However, in the domestic market, sales decreased by 17.6% to 5,400 vehicles as against 6,552 vehicles sold in the previous year, due to economic slowdown.


Tata Motors (Thailand) Ltd. (TMTL) sold 4,905 vehicles in FY 2012-13. These included Tata Xenon pickups, Super Ace and heavy commercial vehicles. During FY 2012-13, TMTL launched three additional variants of the pickup, tailor-made for the T hailand commercial vehicle market. In the single cab segment, which is used predominantly by the commercial users, Xenon continues to be ranked fourth amongst eight players in the segment.


Tata Motors (SA) (Proprietary) Limited (TMSA) sold 864 vehicles during FY 2012-13. During the year, TMSA introduced four new models of commercial vehicles and crossed a major milestone of rolling out its 1,000th vehicle since start of operations last year.


The vehicle financing activity under the brand "Tata Motors Finance" (TMF) of Tata Motors Finance Limited (TMFL) - a wholly owned subsidiary company, continued to show improved financial results inspite of challenging market conditions and rising costs of funds.

With the Companys increased focus on financing of small commercial vehicles, the total disbursements for the year were at Rs.11,180 crores - 6% higher than disbursements of Rs.10,505 crores in the previous year. A total of 2,51,936 vehicles were financed representing an increase of 9.3% over the previous year. The disbursals for commercial vehicle were Rs.8,816 crores (1,81,374 vehicles) in FY 2012-13 compared to Rs.7,204 crores (1,20,032 vehicles) for previous year. For passenger cars, disbursals were Rs.2,364 crores (70,562 vehicles) in FY 2012-13 compared to Rs.3,301 crores (1,10,556 vehicles) in the previous year. The overall market share in terms of the Tata vehicle unit sales in India financed by Tata Motors Finance increased from 27% to 33% - led by significant increase in commercial vehicle market share from 23% to 34%.

Tata Motors Finance Limited continued to expand its reach in the market place by growing its branch network and expanding its support to Tata Motors dealership network. Significant increase in its manpower resources as well as driving IT technology to improve productivity and output, ensures that Tata Motor Finance now reaches to over 75% of the dealers. With greater attention being placed on further enhancing customer experience through its "Office of the Customer" T MFL is confident of continuing to deliver profitable growth in the future.


The Tata Motors Group employed 62,716 permanent employees (previous year: 58,618 employees) as of the year end out of which 56,393 employees were engaged in automotive operations. The increase over last year was mainly at Jaguar Land Rover in view of volume and product development activity. The Company employed 29,965 permanent employees (previous year: 29,217 employees) as of the year end. T he Tata Motors Group has generally enjoyed cordial relations with its employees and workers.

All employees in India belonging to the operative grades are members of labour unions except at Sanand and Dharwad plants. All the wage agreements have been renewed in a timely manner and are all valid and subsisting. Operatives and Unions support in implementation of reforms that impact quality, cost erosion and improvements in productivity across all locations is commendable.


Safety is an integral part of the Companys operations and is reviewed at the highest levels including the Board, Executive Committee, and the Safety, Health and Environment (SHE) Council. The Board constituted a SHE Committee and also adopted its charter during the year. The senior leadership is fully committed to the ultimate goal of zero injury to its employees and all those who work in our facilities. In its 3 year journey with DuPont, the organization is progressing aggressively with the vision of "Excellence in Safety". In association with DuPont 489 internal trainers have been developed and 2,058 employees are trained on leading safety efforts, safety management fundamentals, incident investigations, contractor safety management and safety. Defensive Driving Training was imparted to more than 8,000 employees and contractors who drive on business purpose or who are involved in operations.

A revised Safety & Health Policy has been cascaded which reflects an increased commitment towards our visitors, contractors and business partners. A structured review mechanism of safety performance is in place with Lead and Lag indicators, major incidents and High Potential Incidents (HIPO) announcements being made monthly to the senior management and leaders. The Lost Time Injury (LTI) rate for the year under review is lower at 0.68%, a reduction of 37% over the previous year. Improved governance in incident reporting with speedy investigations and corrections, and a collaborative functioning of Safety Committees across plants have led to an integrated organisation structure.

The Company, in a collaborative initiative with Castrol India Limited, is integrating safety expertise and knowledge in dealer workshops and a safety manual has been released with the objective of reducing potential risks and improve SHE practices.

This year has witnessed a significant improvement in Areas Beyond Factory Gates including warehouses, offices and channel partners, wherein structured audits, trainings and reporting have been initiated.

At Jaguar Land Rover, the health and safety management system is based on the UK Health and Safety Executives guidance for Health and Safety Management - HSG65. Jaguar Land Rovers Occupational Health Department achieved re-accreditation to the SEQOH Standard (Safe Effective Quality Occupational Health Standard) for its activities and management systems. Jaguar Land Rovers growth plans have resulted in an increased headcount and a larger number of contractors are involved in civil and engineering activities requiring extensive inputs from a health and safety perspective. This has been met with an incremental rise in Health and Safety training, induction programmes and continued focused events around skilled workers being recruited into relevant functions. The business has continued its programme of proactive health promotion events for employees and has launched several Wellbeing Centres to aid in worker assessment, rehabilitation and piloted electronic WellPoint kiosks to allow employees to monitor their own health data and seek further advice.

At TDCV, Korea, the accident rate and the safety index at 0.18% and 2.9 were lower than 0.48% and 2.40, respectively, for the previous year. At TMTL, Thailand, the performance has been improving with increased safety trainings and reduction in the number of incidents. At TMSA, South Africa, 5 LTIs were reported, Safety Management Systems were deployed and several initiatives taken to improve safety and working conditions.


During the year, the free cash flows for Tata Motors Group were Rs.3,342 crores, post spend on capex, design and development of Rs.18,720 crores. Tata Motors Groups borrowing as on March 31, 2013, stood at Rs. 53,591 crores (previous year: Rs. 47,149 crores). Cash and bank balances stood at Rs. 21,113 crores (previous year: Rs.18,238 crores).

Cash flows from operations were Rs.2,258 crores for standalone operations of the Company. Spend on capex, design and development were Rs.2,588 crores (net). The borrowings of the Company as on March 31, 2013 stood at Rs.16,799 crores (previous year: Rs.15,881 crores). Cash and bank balances stood at Rs.463 crores (previous year: Rs.1,841 crores).

During the year, the Company repaid the Zero Coupon Convertible Alternate Reference Securities (CARS) amounting to US$ 623.38 million, (Rs.3,493.83 crores) inclusive of a redemption premium of US$ 150.38 million. Consequent upon exercise of conversion option by the holders of 4% Foreign Currency Convertible Notes, aggregating Rs.342 crores (including Rs.141.62 crores in May 2013), the Company allotted 28,308,896 Ordinary Shares/ Shares represented by ADSs (including 11,789,695 Ordinary Shares/ Shares represented by ADSs in May 2013).

The Company also repaid Tranche 2 of Rs.446 crores of Secured, Rated, Credit Enhanced, Listed, 2% Coupon Non-Convertible Debentures (NCDs) inclusive of premium on redemption of Rs.96 crores. Further, the Company also repaid Rs.1,747 crores forming part of the public fixed deposit scheme launched in December 2008.

The Company issued rated, listed, unsecured, non-convertible debentures of Rs.2,100 crores. Further Rs.900 crores were issued in April and May 2013.

Due to significant reduction in volumes, the Company had to deploy short term funds to support critical long term finance needs. The Company is in the process of taking appropriate steps to increase the long term funds.

At Jaguar Land Rover, post spend on capex, design and development of GB£ 1,846 million (Rs.16,814 crores), the free cash flows were GB£ 583 million (Rs.4,885 crores) for FY 2012-13. The borrowings of the Jaguar Land Rover as on March 31, 2013, stood at GB£ 2,167 million (Rs.17,791 crores) [previous year: GB£ 1,974million (Rs.16,206 crores)]. Cash and bank balances stood at GB£ 2,847million (Rs.23,373 crores) [previous year: GB£ 2,430 million (Rs.19,950 crores)] resulting in negative net debt position. Additionally, JLR has undrawn committed bank lines of GB£ 865 million (as per IFRS).

In January 2013, Jaguar Land Rover issued US$ 500 million Senior Notes due 2023, at a coupon of 5.625% per annum. This was an opportunistic fund raising which enabled Jaguar Land Rover to reinforce its market acceptance and demonstrated the continued confidence of the investors. This was a further step taken towards strengthening capital structure and enhancing the debt maturity profile.

TML Holdings Pte Ltd, Singapore, a 100% subsidiary of the Company, holding the investment in Jaguar Land Rover raised Senior Notes aggregating SG$ 350 million in May 2013.

Tata Motors Finance Limited raised Rs.100 crores by an issue of unsecured, non-convertible, subordinated perpetual debentures towards Tier 1 and Tier 2 Capital and Rs.90.40 crores by an issue of unsecured, non-convertible, subordinated debentures towards Tier 2 Capital in order to meet its growth strategy and improve its Capital Adequacy ratio.

With healthy profitability and cash flow generation, the Consolidated Net Automotive Debt to Equity Ratio stood at 0.24:1on March 31, 2013, as compared to 0.25:1 on March 31, 2012.

Tata Motors Group has undertaken and will continue to implement suitable steps for raising long term resources to match fund requirements and to optimise its loan maturity profile.

During the year, the Companys rating for foreign currency borrowings was revised upwards by Standard & Poors to "BB"/ Positive and was retained at existing levels by Moodys at "Ba3"/ Stable. For borrowings in the local currency, the outlook on the ratings was improved from "Stable" to "Positive" and the rating stood at "AA-"/Positive by Crisil and at "AA-"/Positive by ICRA. The Non Convertible Debentures are rated by CARE at "AA"

During the year, Jaguar Land Rovers rating for was revised upwards by Standard & Poors to " BB-"/Positive. As on March 2013, the other ratings stood "B1 "/Stable by Moodys and "BB-"/Stable by Fitch.

For Tata Motors Finance, CRISIL revised its rating outlook on long- term debt instruments and bank facilities to CRISIL AA - Positive from CRISIL AA - Stable. The ratings on the short-term debt instruments and bank facilities were reaffirmed at CRISIL A1+.


The Company has not accepted any public deposits during FY 2012-13. As on March 31, 2013, the Company had deposits aggregating Rs.314.14 crores from 11,338 investors. There were no overdues on account of principal or interest on public deposits other than the unclaimed deposits as at the year end.


The Company continues to leverage InformationTechnology (IT) as a key enabler of its strategy, business growth and competitiveness. IT provides employees, customers, suppliers, dealers and business partners with best in class technology solutions. IT leverages strong partnerships with product and services companies to support business growth and innovation.

The Company and JLR entered into a major long term outsourcing agreement with Tata Consultancy Services Ltd (TCS) after a rigorous two year long competitive process. This will harmonise and standardise the IT services, service level agreements and standards across the Tata Motors Group and lead to efficiencies in operations and lower IT costs.

Other major highlights of IT at group level are -

- The Companys unique CRM solution crossed 4,000 channel partner locations and 40,000 users interacting with customers, augumented by 1,000+ agent call centers.

- TDCV Korea implementing CRM, leveraging TML CRM capabilities.

- Tata Motors Indonesia implementing SAP and CRM leveraging base capabilities.

- JLR global expansion to China is being ably supported by IT capabilities.

- JLR SAP implementation is progressing smoothly, including implementation in NSCs in major markets.

- Developing key business capability enhancement initiatives like Analytics, Telematics, and Mobility solutions.

In addition, product development processes in the Company continue to grow on best of the breed tools and technology solutions, for enhancing product development capabilities, addressing quality and speed. Digital product validation processes have evolved to provide solutions in key areas:

- Enhanced Digital Manufacturing Planning capabilities.

- In-house developed productivity improvement tools like Digital Vault were rolled out.

- In-house Knowledge Based Engineering (KNEXT) applications spread and enhanced in various product design functions.

- State-of-the-art visualization capabilities in digital product engineering review process is implemented.

Tata Motors Group continue their collaboration in various Information Technology areas with synergies being explored for cross utilization of IT capabilities. The Group companies are working together in areas of ERP, outsourcing and technologies. Tata Technologies continues to be a strategic partner in strengthening Tata Motors Groups IT capabilities in process transformation through technology.


The Tata Motors Group continues to innovate, with a view to enhance the market share and aims at products, which cater to the changing needs of the customer for both fleet owners and individual customers. Besides new product developments covered above, some of the key initiatives on Environment friendly technologies include:

- Fuel efficiency improvement through development of advanced oil formulation.

- Fuel efficiency improvement initiatives on 4 cylinder and 6 cylinder engines of LCV, M&HCVs through various engine measures such as Exhaust Gas Recirculation (EGR), common rail including latest software features in engine management system.

- 1.2 L Bi-fuel CNG engine development for passenger car.

- Bi-fuel CNG and Gasoline 273 MPFI engine for Nano.

- Demonstrated a Mild Hybrid technology on Nano with advance engineering functions for enhancing the CO2 emission.

- Nano Diesel variant is being developed with Electric Power Assist Steering (EPAS) for enhancing the ease of driving and good fuel economy.

- Vista has been made compliant to the Euro V emission requirement with better drivability and higher technology features.

- CNG variant of the Indigo CS is ready for launch in the market.


Tata Motors announces consolidated financial results on a quarterly basis. As required under the Listing Agreement with the Stock Exchanges, Consolidated Financial Statements of the Tata Motors Group are attached.

Pursuant to the provisions of Section 212(8) of the Companies Act, 1956 (the Act), the Ministry of Corporate Affairs vide its General Circular No 2/2011 dated February 8, 2011, has granted a general exemption subject to certain conditions to holding companies from complying with the provisions of Section 212 of the Act, which requires the attaching of the Balance Sheet, Profit & Loss Account and other documents of its subsidiary companies to its Balance Sheet. Accordingly, the said documents are not being included in this Annual Report. The main financial summaries of the subsidiary companies are provided under the section Subsidiary Companies: Financial Highlights for FY 2012-13 in the Annual Report. The Company will make available the said annual accounts and related detailed information of the subsidiary companies upon the request by any member of the Company or its subsidiary companies. These accounts will also be kept open for inspection by any member at the Registered Office of the Company and the subsidiary companies.


Tata Motors had 64 (direct and indirect) subsidiaries (10 in India and 54 abroad) as on March 31, 2013, as disclosed in the accounts. During the year, the following changes have taken place in subsidiary companies:

Subsidiary companies formed/acquired

- Jaguar Land Rover India Limited - an indirect subsidiary of Jaguar Land Rover Automotive PLC

- PT Tata Motors Distribusi Indonesia - a wholly owned subsidiary of PT Tata Motors Indonesia Companies ceasing to be subsidiary companies

- Tata Engineering Services (Pte) Ltd. - struck off from the Register of Accounting and Corporate Regulatory Authority (ACRA).

- Miljobil Greenland AS, upon liquidation of TMETCs shareholding Name changes

- Jaguar Cars Limited to Jaguar Land Rover Limited

- Jaguar Land Rover PLC to Jaguar Land Rover Automotive Plc

Besides the above, Jaguar Land Rover continued to integrate / restructure legal entities for manufacturing and for exporting globallly as combined brand legal entities. Other than the above, there has been no material change in the nature of the business of the subsidiary companies.


As at March 31, 2013, Tata Motors had 8 associate companies and 4 Joint Ventures as disclosed in the accounts.


Details of energy conservation and research and development activities undertaken by the Tata Motors alongwith the information in accordance with the provisions of Section 217(1)(e) of the Companies Act, 1956, read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, are given as an Annexure to the Directors Report.


Mr Ratan N Tata stepped down as the Chairman and Director of the Company on December 28, 2012, in accordance with the Policy for Retirement Age of Non-Executive Directorsadopted by the Company. Mr Tata who was appointed on the Companys Board in 1981 and later as the Executive Chairman in 1988, had through his bold vision and strategic leadership and commitment to the Company transformed it from a domestic truck company to a complete automobile company with path breaking products such as the Indica and the Nano. Thereafter it was his understanding of the global dimensions and dynamics of the automobile business and his vision that led to the Company deciding to takeover Jaguar Land Rover in the UK. The transformation of Jaguar Land Rover through the change in its culture and the approach to its business led by Mr Tata has resulted in transforming Jaguar Land Rover into a profitable and successful company.

Mr Tata was on the Board for more than 30 years and was the Chairman of the Executive Committee of the Board and a member of the Remuneration and Nominations Committees. The Directors place on record the immeasurable debt the Company owes to Mr Tata for the visionary leadership, strategic direction and stewardship so liberally given to the Company and in recognition of his immense contribution and great service to the Company, the Board conferred upon Mr Tata the title of Chairman Emeritus. The traditions and values that he strove to imbibe will remain the guiding principles for this Company in the coming years.

Mr Sam M Palia, Non Executive, Independent Director of the Company since May 2006, on completing the age of 75 years on April 25, 2013, retired as per the Policy for Retirement Age of Non-Executive Directors adopted by the Company. Besides being a Board member, Mr Palia was also an active member of the Audit Committee and Nominations Committee and Chairman of the Investors Grievance Committee and Ethics and Compliance Committee. Mr Palia was also designated as the Audit Committee financial expert as required under the Sarbanes Oxley Act and NYSE Listing Agreement. Mr Palia had by his counsel and guidance, significantly contributed to deliberations at the Board and Committee meetings. The Board also placed on record its appreciation for the contributions made and the role played by Mr Palia as an independent director of the Company Mr Ranendra Sen, Non Executive, Independent Director of the Company since June 2010, resigned from the Board of Directors of the Company with effect from October 16, 2012, due to personal reasons. The Board placed on record its appreciation of the contributions made by Mr Sen during his tenure on the Companys Board as an independent director of the Company Mr Cyrus P Mistry was appointed as the Chairman of the Company with effect from December 28, 2012, consequent upon Mr Ratan N Tatas retirement. Tata Steel had vide their letter dated March 28, 2013, nominated Mr Cyrus P Mistry as the Steel Director pursuant to Article 127 of the Companys Articles of Association in place of Mr Ratan N Tata.

Mr Karl J Slym and Ms Falguni S Nayar were appointed as an Additional Directors w.e.f. September 13, 2012 and May 29, 2013, respectively. In accordance with Section 260 of the Companies Act, 1956 (the Act) and Article 132 of the Companys Articles of Association, they will cease to hold office at the forthcoming Annual General Meeting and are eligible for appointment. Mr Slym was also appointed as the Managing Director of the Company for a period of 5 years with effect from September 13, 2012, subject to the approval of the Members and the Central Government. An abstract and memorandum of interest under Section 302 of the Act, has been sent to the Members of the Company.

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr Nusli N Wadia and Dr Raghunath A Mashelkar are liable to retire by rotation and are eligible for re- appointment. Attention of the Members is invited to the relevant items in the Notice of the Annual General Meeting and the Explanatory Statement thereto.


A separate section on Corporate Governance forming part of the Directors Report and the certificate from the Practicing Company Secretary confirming compliance of Corporate Governance norms as stipulated in Clause 49 of the Listing Agreement with the Indian Stock Exchanges is included in the Annual Report.


The Information on employees who were in receipt of remuneration of not less than Rs.60 lakhs during the year or Rs.5 lakhs per month during any part of the said year as required under Section 217(2A) of the Companies Act, 1956 and the Rules made thereunder is provided in the Annexure forming part of the Report. In terms of Section 219(1)(b)(iv) of the Act, the Report and Accounts are being sent to the shareholders excluding the aforesaid Annexure. Any member interested in obtaining a copy of the same may write to the Company Secretary.


A separate section on initiatives taken by the Tata Motors Group to fulfil its Corporate Social Responsibilities is included in the Annual Report.


Vide its Circular dated August 13, 2012, Securities and Exchange Board of India (SEBI) mandated the inclusion of Business Responsibility Report (BRR) as a part of the Annual Report for top 100 listed entities based on their market capitalisation on BSE Limited and National Stock Exchange of India Limited, as on March 31, 2012. The said reporting requirement is in line with the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business (NVGs) notified by Ministry of Corporate Affairs, Government of India, in July, 2011. Pursuant to the above, the Stock Exchanges amended the Listing Agreement by inclusion of Clause 55 providing a suggested framework of a BRR, describing initiatives taken by the Company from an environmental, social and governance perspective. In line with the press release and FAQs dated May 10, 2013, issued by SEBI, the Companys BRR is hosted on its website www.tatamotors. com. Any shareholder interested in obtaining a physical copy of the same may write to the Company Secretary at the Registered Office of the Company


M/s Deloitte Haskins & Sells (DHS), Registration No. 117366W, who are the Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting. It is proposed to re-appoint them to examine and audit the accounts of the Company for the FY 2013-14. DHS have, under Section 224(1) of the Act, furnished a certificate of their eligibility for re-appointment.

Cost Audit

As per the requirement of the Central Government and pursuant to Section 233B of the Act, the audit of the cost accounts relating to motor vehicles is carried out every year. Pursuant to the approval of Ministry of Corporate Affairs, M/s Mani and Company having registration No. 00004 were appointed as the Cost Auditors for auditing the Companys cost accounts relating to the Companys products for FY 2012-13. An application has been made to the Central Government seeking their approval, for the appointment of M/s Mani and Company for auditing the Companys cost accounts relating to the Companys products for FY 2013-14.

The cost audit report and compliance report for FY 2011 -12 were filed by the Company on December 28, 2012, well within the prescribed due date of February 28, 2013. The cost audit report and compliance report for FY 2012-13 is expected to be filed within the prescribed time.


Pursuant to Section 217 (2AA) of the Act, the Directors, based on the representation received from the Operating Management, confirm that:-

- in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

- they have, in the selection of the accounting policies, consulted the Statutory Auditors and have applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

- they have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

- they have prepared the annual accounts on a going concern basis.


The Directors wish to convey their appreciation to all of the Companys employees for their enormous personal efforts as well as their collective contribution to the Companys performance. The Directors would also like to thank the employee unions, shareholders, fixed deposit holders, customers, dealers, suppliers, bankers, Government and all the other business associates for the continuous support given by them to the Company and their confidence in its management.

On behalf of the Board of Directors



Mumbai, May 29, 2013

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