The increase (net of depreciation) in the tangible assets of 5,233.33 crores as at March 31, 2012, mainly represents establishment of new production capability for Evoque at Halewood, plant at Dharwad and other additions towards capacity/new product plans of the Company. The increase (net of amortization) in the intangible assets was 7,758.12 crores is mainly attributable to new product development projects.

Investments (Current + Non current) increased to 8,917.71 crores as at March 31, 2012 as compared to 2,544.26 crores as at March 31, 2011. The net increase of 6,373.45 crores is mainly attributable to surplus funds parked by Jaguar Land Rover in mutual funds of GB� 875 million (equivalent 7,133.40 crores).

Deferred tax assets have gone up to 4,539.33 crores as at March 31, 2012 from 632.34 crores as at March 31, 2011. The increase is consequent to recognition of credit for tax losses by Jaguar Land Rover.

Long term loans and advances includes MAT credit entitlement of 1,451.45 crores as at March 31, 2012 (1,158.16 crores as at March 31, 2011) and receivables towards vehicle financing by Tata Motors Finance Ltd 10,339.93 crores as at March 31, 2012, as compared to 6,791.35 crores as at March 31, 2011.

Short term loans and advances have increased mainly due to vehicle financing by 2,103.47 crores and 1,234.50 crores due to VAT and other entitlement from Government.

Current Assets increased to 64,461.47 crores as at March 31,2012 from 42,088.82 crores as at March 31, 2011.

As of March 31, 2012, inventories stood at 18,216.02 crores as compared to 14,070.51 crores as at March 31, 2011. The increase is mainly attributable to volumes. The increase in finished goods inventory was 3,024.97 crores which was in line with the volume growth and in terms of number of days of sales, represented 29 days inventory in FY 2011-12 as compared to 31 days in FY 2010-11.

Trade Receivables (net of allowance for doubtful debts) were 8,236.84 crores as at March 31, 2012, representing an increase of 1,711.19 crores, which was attributable to increase in sales. The allowances for doubtful debts were 326.21 crores as at March 31, 2012 against 236.77 crores as at March 31, 2011. In certain markets trade receivables have gone up mainly due to delays in payment by government owned transport companies. Cash and bank balances were 18,238.13 crores, as at March 31, 2012 compared to 11,409.60 crores as at March 31, 2011. The Company holds cash and bank balances in Indian Rupees, GB�, and Chinese Renminbi etc. It includes 1,070.91 crores as at March 31, 2012 held by a subsidiary that operates in a country where exchange control restrictions potentially restrict the balances being available for general use by Tata Motors Limited and other subsidiaries.

Other short term loans and advances increased from 8,023.92 crores as at March 31, 2011 to 11,337.22 crores as at March 31,2012. The increase is attributable to an increase in VAT, other taxes recoverable statutory deposits and other dues from government.

Consolidated Cash Flow

The following table sets forth selected items from consolidated cash flow statement:

Analysis:

1. Cash generated from operations before working capital changes was 22,432.34 crores as compared to 16,679.25 crores in the previous year, representing a strong increase in cash generated through consolidated operations. After considering the impact of working capital changes and net movement of vehicle financing portfolio, the net cash generated from operations was 20,152.26 crores as compared to 12,631.35 crores in the previous year. The following actors contributed to net increase in working capital for the year:-

   • Increase in vehicle financing receivables by 5,652.07 crores, consequent to increase in activity.
   • Increase in trade and other receivables amounting 1,006.86 crores mainly due to increase in sales volumes.
   • Increase in inventories amounting 2,718.98 crores (mainly in finished goods) due to higher volumes / activity.
   • Increases were partially offset by increase in trade and other payables by 8,187.91 crores consequent to manufacturing activity and net decrease in provisions of 109.14 crores.

2. The net cash outflow from investing activity increased during the current year to `20,542.85 crores from 7,285.59 crores for the last year.

   • Net cash used for capital expenditure was 13,782.85 crores during the year as against 8,112.77 crores for the last year. The capital expenditure relates mainly to capacity / expansion of facilities, quality and reliability projects and product development projects for new products.
   • The change in net investments mainly represents parking of surplus cash in mutual funds net 5,840.09 crores against 32.14 crores in the last year.

3. The net change in financing activity was inflow of 6,567.18 crores against net outflow 1,401.29 crores for last year.

   • During the last year, the Company raised 3,249.80 crores (net of expenses) by way of issue of shares through Qualified Institutional Placement.
   • During FY 2011-12, Jaguar Land Rover raised funds by issued of Senior Notes of GB�1,500 million resulting in increase in net change in borrowings during the year by 11,305.42 crores as compared to decrease of 1,177.27 crores during the last year.

Financial Performance on a standalone basis

The revenue (net of excise duty) increased to 54,306.56 crores in FY 2011-12, as compared to 47,088.44 crores, representing an increase of 15.3%. The total number of vehicles sold during the year increased by 10.7% to 926,353 vehicles from 836,629 vehicles. The domestic volumes increased by 10.9% to 863,248 vehicles from 778,540 vehicles in FY 2010-11, while export volumes showed an improvement of 8.6% to 63,105 vehicles from 58,089 vehicles in FY 2010-11. Gross revenue from sale of vehicles, including export and other incentives, increased 16.0% to 54,154.01 crores from 46,692.88 crores in FY 2010-11. Sale of spare parts for vehicles increased by 8.2% to 2,910.61 crores from 2,689.85 crores in FY 2010-11.

The operating margin decreased mainly due to increase in raw material cost and fixed marketing expenses. The Profit after tax of 1,242.23 crores was lower by 31.4% compared to 1,811.82 crores in FY 2010-11. The analysis of performance is given below:-

Cost of material consumed in terms of % of net revenue increased by 80 basis points, mainly on account of cost increase in input prices (partly relatable to change in environment norms from BS II to BS III) and adverse product mix. Despite increase in commodity prices during the year, the Company was able to contain the material cost through vigorous cost reduction programs.

Employee Cost increased by 17.3% to 2,691.45 crores from 2,294.02 crores in FY 2010-11. The increase is mainly attributable to normal yearly increases, promotions, wage agreements (where applicable) and increase in head count. In terms of % to net revenue, the employee cost has marginally increased from 4.9% to 5.0%. The Company continues to focus on measures to manage employee cost on a long term basis.

Manufacturing and Other Expenses were 8,405.51 crores (6,738.35 crores for FY 2010-11) and were 15.5% of net revenue in FY 2011-12 compared to 14.3% in FY 2010-11. The increase is primarily due to inflation, volumes, freight cost and publicity expenses to promote the new products / variants.

Profit before Exceptional Item, Depreciation, Interest and Tax was 4,985.88 crores in FY 2011-12, as compared to 5,229.34 crores in FY 2010-11. The decrease is mainly due to lower other income and lower operating margin.

Depreciation and amortization (including product development / engineering expenses written off) increased by 22.6% to 1,840.99 crores from 1,502.00 crores in FY 2010-11. The increase reflects, impact on account of additions to fixed assets towards plant and facilities for expansion and new products introduction. Further, there has been an increase in amortization relating to capitalization of product development cost for products launched in the year.

Finance costs decreased to 1,218.62 crores from 1,383.70 crores in FY 2010-11. The Company has achieved a reduction in the weighted average borrowing cost and discounting charges.

Exceptional Items

1. During FY 2011-12, the Company provided 130 crores for the loan given to a subsidiary, consequent to impairment at the subsidiary triggered by continuous underperformance, mainly attributed by challenging market conditions in which the subsidiary operates.
2. There was an adverse exchange fluctuation of INR versus all major currencies. After accounting for deferral and amortization as permitted by the Accounting Standard AS-11, a net exchange loss including on revaluation of foreign currency borrowings, deposits and loans, was 455.24 crores for the year (last year's 147.12 crores represents amortization).

Profit before Tax (PBT) of 1,341.03 crores represented 2.5% of net revenue in FY 2011-12 as compared to PBT of 2,196.52 crores representing 4.7% of net revenue in FY 2010-11. The reduction of PBT was mainly attributable to lower operating margin, reduction in other income, increase in depreciation and amortization, and exceptional items as explained above.

Tax expenses decreased to 98.80 crores from 384.70 crores in FY 2010-11. The effective tax rate for FY 2011-12 is 7.4% of PBT as compared to 17.5% for FY 2010-11. The reduction in effective tax rate is due to impact of tax treatment of exchange differences and higher proportion of tax benefits as compared to PBT.

Profit After Tax (PAT) of the Company decreased by 31.4% to 1,242.23 crores from 1,811.82 crores in FY 2010-11. Basic Earnings Per Share (EPS) decreased to 3.90 as compared to 6.06 in the previous year for Ordinary Shares and 4.00 as compared to 6.16 for 'A' Ordinary Shares in the previous year. The lower EPS reflects the lower PAT over a higher equity base in FY 2011-12 as compared to FY 2010-11.

Standalone Balance Sheet

Shareholders' fund was 19.626.01 crores and 20,013.30 crores as at March 31, 2012 and 2011, respectively.

Reserves decreased from 19,375.59 crores as at March 31, 2011 to 18,991.26 crores as at March 31, 2012. The PAT for the year was 1,242.23 crores and the proposed dividend and tax thereon was 1,463.72 crores.