Exports

Focused efforts in select ASEAN and Africa markets helped international exports from India grow by 8.6% to 63,105 units in the fiscal year. The Company exported 55,079 commercial vehicles and 8,026 passenger vehicles, a growth of 9.6% and 2.3% respectively over last year. A CKD plant was setup in South Africa for the assembly of commercial vehicles. Another plant is being setup in Indonesia and is expected to start operations next year. The Company continues to have a special focus on expanding its global footprint and is targeting product actions specifically to cater to international geographies.

Jaguar Land Rover

Jaguar Land Rover sold 314,433 vehicles in FY 2011-12, an increase of 29.1% on the prior reporting period. At the brand level, wholesale volumes were 54,039 units for Jaguar and 260,394 units for Land Rover, growing 2.0% and 36.6%, over the previous year, respectively.

Retail volumes in key growth markets saw significant increases with China and the Asia Pacific region.

Some of the highlights of this year's performance were:

Tata Daewoo Commercial Vehicles Company Limited

Sales of Tata Daewoo Commercial Vehicle (TDCV) at 9,531 units were higher by 9% from last year. Tata Daewoo Sales Company which was established in FY 2010-11, to distribute TDCV products, has stabilized its operation during the year enabling TDCV to focus on key accounts and fleet customers.

Tata Hispano Motors Carrocera

Tata Hispano Motors Carrocera, S.A. (Tata Hispano) was deeply affected by the economic downturn in Europe, particularly in Spain. Sales for the year were at 368 units, down by 27% from last year. Tata Hispano's bid for and delivered a prestigious CNG series hybrid low floor bus order for EMT Madrid during the year, demonstrating its technological capability. The Company made a provision for investments in Tata Hispano, arising from continuous undeperformance impacted by challenging market conditions.

Tata Motors (Thailand) Limited

Tata Motors (Thailand) Limited (TMTL) was affected by floods in Thailand during the year, which negatively impacted supply chain partners and the overall demand scenario in Thailand. As a result, volumes of TMTL at 4,978 units in FY 2011-12, were down by 17.5% from last year. TMTL launched TDCV CNG tractors and Super Ace to boost volumes. The Nano is also currently being tested for sale in Thailand and has a potential to boost volumes.

Tata Motors (SA) (Proprietary) Limited

Tata Motors (SA) (Proprietary) Limited launched the Prima range of trucks in South Africa along with the TDCV range of tractor trailers and the Indigo Manza at the Johannesburg Motor Show with a view to increase the product offerings in South Africa.

The vehicle financing activity under the brand "Tata Motors Finance" of Tata Motors Finance Limited - a wholly-owned subsidiary company, posted improved financial results through higher disbursements, focus on controlling costs, improving quality of fresh acquisitions and micro-management of collections. Tata Motors Finance financed 2,30,588 vehicles during the year as compared to 1,60,781 vehicles in the previous year. Total disbursements of 10,505 crores grew by 32.8% compared to 7,908 crores in the previous year. The disbursals for commercial vehicles were 7,204 crores (1,20,032 units) in FY 2011-12 compared to 6,041 crores (94,446 units) for FY 2010-11. For passenger cars, disbursals were 3,301 crores (1,10,556 units) in FY 2011-12 compared to 1,867 crores (66,335 units) in FY 2010-11. Market share in terms of the Tata vehicle unit sales in India financed by Tata Motors Finance Limited increased from 21% to 23% in commercial vehicles and from 22% to 35% in passenger cars. Tata Motors Finance Limited implemented a strategy to manage non-performing assets (NPA), improve collection efficiencies and enhance the "Risk Scored Pricing Model" approach. This strategy along with a thrust on customer relations through a branch based reorganised field structure, improved operations and profitability, creating a robust platform to enable future growth.

For other overseas operations, the Company does not have a capital financing company but has arrangements with local consumer finance provides in key markets. Jaguar Land Rover has arrangements in place with FGA Capital, a joint venture with Fiat Auto and Credit Agricole for UK and European consumer finance, Chase Auto Finance for North America and similar arrangements with local providers in a number of other key markets. Tata Motors (Thailand) Limited has financing arrangements with Thanachart Bank.

The Tata Motors Group employed 58,618 permanent employees (previous year - 52,244 employees) as of the year end, out of which 53,011 employees were engaged in automotive operations. Tata Motors Limited employed 29,217 permanent employees (previous year - 26,214 employees) as of the year end. This increase supported the higher production and sales across the Group. The 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 labor unions except at our 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 & Health - Performance and Initiatives

The Leadership in Tata Motors is fully committed to the ultimate goal of employee safety. All employees at Tata Motors facilities are progressing with the vision of "Excellence in Safety". Safety reports are reviewed at the highest level including Board meetings. Tata Motors is working with DuPont for the improvement in safety culture towards setting up world- class safety standards and processes and building capability to improve and sustain a world-class safety culture. There has been an overall 41% improvement in safety performance across units during the year. This improvement has been recorded through the reduction of LTI -FR (Lost Time Injury Frequency Rate) which stood at 0.44 in FY 2011-12 as against 0.74 in FY 2010-11. Improvement of safety at offices, warehouses, depots and dealership workshops through the development of safety norms has set expectations on safety, setting up of Safety Committees and carrying out structured safety audits. Safety initiatives such as the "i-drive Safe" campaign for improving road and driving safety involving training of 2,500 drivers in defensive driving were undertaken. A host of initiatives on health and wellness were implemented with deployment of Health Index metrics across all plants in India.

The Pantnagar plant conferred with the prestigious 'Sword of Honour' by the British Safety Council, UK, is a reflection of the high standards of Health and Safety, performance and demonstration of Safety Leadership, in all phases of operations of the plant. The Passenger Car Business took safety management to the next level by aligning with British Safety Council Health & Standards and by achieving a 5 Star rating in the Audit with a score of 97.19% and 94.93% for Pune and Sanand plant, respectively.

Jaguar Land Rover's health and safety management system is based on the UK Health and Safety Executive's guidance for Health and Safety Management - HSG65, which sets a framework for the various aspects of a successful health and safety management system. All Jaguar Land Rover sites in the UK are accredited with OHSAS18001 and underwent an annual surveillance visit by the external assessors during 2011, which verified its continued compliance to this standard. The overall performance of Jaguar Land Rover's has been good with reduction in Lost Time Case rate. Jaguar Land Rover's Occupational Health Department also achieved accreditation to the SEQOHS standard (Safe Effective Quality Occupational Health Standard) for its activities and management systems within the Occupational Health facilities. An increase in headcount has led to a requirement for increasing the Health and Safety training and Induction programmes; with focused events around skilled workers being recruited into functions such as plant maintenance. The business has continued and built upon its programme of proactive health promotion events for employees throughout the year, covering a range of topics. A Health and Safety Week coinciding with the European Week of Safety took place across all Jaguar Land rover sites, comprising a series of specific events for its workforce.

Tata Daewoo Commercial Vehicles Co. Ltd, Korea recorded an incident rate of 0.48% for FY 2011-12, at par with the total industry rate. The Safety Index for FY 2011-12 was posted at 2.40, an improvement from 2.87 for FY 2010-11. TDCV also took a series of steps to improve their work environment for which it was declared as "Toxic free TATA DAEWOO." Tata Motors (Thailand) Limited reported an improved safety performance. Safety risk assessment is being reviewed for robustness, and safety training is being enhanced. Tata Motors (SA) (Pte) Ltd completed a baseline risk assessment and training of all its employees. The surveillance system was enhanced for improving security. Tata Hispano Motors Carrocera SA implemented many ergonomic projects to improve working conditions, making it a healthy, safe and productive work-place. Work-place environment is regularly monitored for upkeep and tracking of progress.

During the year, the free cash flows for Tata Motors Group were 4,601 crores, post spend on capex, design and development of 13,783 crores. Tata Motors Group's borrowing as on March 31, 2012 stood at 47,149 crores (previous year 32,811 crores). Cash and bank balances stood at 18,238 crores (previous year 11,410 crores).

Post spend on capex, design and development of 2,835 crores, the free cash flows were 818 crores for standalone operations of the Company. The borrowings of the Company as on March 31, 2012 stood at 15,881 crores (previous year 15,915 crores). Cash and bank balances stood at 1,841 crores (previous year 2,429 crores).

During the year, the Company raised Syndicated Foreign currency term loans of USD 500 million in accordance with the guidelines on External Commercial Borrowings (ECB) issued by the Reserve Bank of India in two tranches with tenors between four to seven years towards financing its general capital expenditure and investments in its overseas subsidiaries.

Tata Motors issued rated, listed, unsecured, non-convertible debentures of 500 crores with maturities of 5-7 years in May 2012, to optimize the loan maturity profile.

During the year, post spend on capex, design and development of GB£ 1,410 million (10,765 crores), the free cash flows were GB£ 1,062 million (8,318 crores), for Jaguar Land Rover. The borrowings of the Jaguar Land Rover as on March 31, 2012 stood at GB£ 1,848 million (15,065 crores) (previous year GB£ 1,260 million (9,007 crores)). Cash and bank balances stood at GB£ 2,563 million (20,891 crores) (previous year GB£ 1,028 million (7,349 crores)) resulting in negative net debt position.

In May 2011, Jaguar Land Rover PLC issued GB£ 1,000 million equivalent Senior Notes (Notes). The Notes include, GB£ 500 million Senior Notes due 2018, at a coupon of 8.125% per annum, USD 410 million Senior Notes due 2018, at a coupon of 7.75% per annum and USD 410 million Senior Notes due 2021 at a coupon of 8.125% per annum. This facility gave Jaguar Land Rover an access to long tenor funding while also diversifying its sources of funding.

In March 2012, Jaguar Land Rover issued GB£ 500 million Senior Notes due 2020, at a coupon of 8.25% per annum, with a yield of 8.375% per annum. This was an opportunistic fund raising which enabled Jagaur Land Rover to reinforce its market acceptance and demonstrated the confidence of the investors, while continuing to support steps taken towards strengthening capital structure and enhancing the debt maturity profile.

During the year, Jaguar Land Rover established 3-5 year committed Revolving Credit Facility amounting to GB£710 million. These lines, which have been availed from 13 banks, can be drawn as per requirement and is a step to further strengthen the capital structure.

Tata Motors Finance Limited raised 155 crores by an issue of unsecured, non-convertible, subordinated perpetual debentures towards Tier 2 Capital to meet its growth strategy and improve its Capital Adequacy ratio.

With healthy profitability and cash flow generation, Tata Motors was able to further de-leverage its Balance sheet. The Consolidated Net Automotive Debt to Equity Ratio stood at 0.25:1 on March 31, 2012 compared to 0.56:1 on March 31, 2011.

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

The Company's rating for foreign currency borrowings stood at "BB-"/Stable by Standard and Poor and "Ba3"/Stable by Moodys. For borrowings in the local currency, the rating stood at "AA-" by Crisil and at "AA-" by ICRA. During FY 2011-12, CARE revised the rating upwards by 1 notch to "AA". Post March 2012, Crisil and ICRA have changed the outlook on the ratings from "Stable" to "Positive".

As on March 2012, Jagaur Land Rover's rating stood at "B+"/ Positive by Standard & Poor, "B1"/Stable by Moodys and "BB-"/ Stable by Fitch. Post March 2012, Standard & Poor has upgraded the rating to "BB-" retaining the Positive Outlook.

As on March 2012, Tata Motors Finance rating stood at "AA-" by Crisil and "AA-" by ICRA. Post March 2012, Crisil and ICRA have changed the outlook on the ratings of Tata Motors Finance Limited from "Stable" to "Positive".

The Company has not accepted any public deposits during FY 2011-12. As on March 31, 2012, the Company had deposits aggregating 2,061 crores from 1,64,022 investors. There were no overdues on account of principal or interest on public deposits other than the unclaimed deposits as at the year end.

Information Technology supported business growth and competitiveness by delivering strategic programs and services as identified in the Tata Motors' IT Strategy.

Its commitment to customers is reflected in investments in the benchmark CRM (Customer Relationship Management) solutions. This is being used by over 3,200 channel partners and 37,000 users to handle customer needs. Customer interactions are backed by the Tata Motor's Call Center which augments key business processes across pre-sales, sales and service areas. The Center handled 30 million calls in FY 2011-12, with a consistent under 0.5 Second response time. We focused on deploying portals for targeted customer segments like key customers, loyalty customers, spares retailers, mechanics, State Transport Undertakings (STUs) and defence. We are also taking CRM to international markets in a planned manner.

Tata Motors is expanding the usage of information through analytics across the organization. eCommerce with our suppliers through SAP Supplier Relationship Management (SRM) Solutions continues to see greater usage. The Company strengthened the usage of IT in manufacturing, supply chain, quality and workforce management deployed benchmark ITIL (Information Technology Infrastructure Library) processes, to improve the effectiveness of its IT services. Major highlights of the year are:

Digital Product Development Systems Initiatives

Engineering Research Centre's product development processes continue to imbibe best of the breed tools and technology solutions, for enhancing product development capabilities, addressing quality and time. Digital product validation processes have been given focused thrust in addressing sheet metal material variability.

Jaguar Land Rover continues to operate its globally diverse and complicated legacy IT architectures with high levels of service and resilience with notably few outages affecting business operations.

Jaguar Land Rover's IT strategy includes modernisation and replacement of old unsupported technologies; consolidation of diverse technology platforms and suppliers; integration of business processes through SAP ERP and creating business value through innovation IT solutions like mobility. Major highlights of the year are:

Tata Daewoo Commercial Vehicles Company Limited embarked on CRM Solution deployment leveraging Tata Motors CRM. Tata Motors (SA) (Proprietary) Limited IT set-up became operational including SAP while Tata Hispano Motors Carrocera (SA) started its SAP deployment. Tata Motors is integrating its WAN with subsidiaries for seamless operations.

Tata Motors Group companies 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 Group's IT capabilities in process transformation through technology.