85
Notice
Directors’ Report
(69-103)
Management Discussion & Analysis
Corporate Governance
Secretarial Audit Report
Cost of materials consumed (including change in stock):
(
`
in crores)
FY 2013-14
FY 2012-13
Consumption of raw materials and
components
20,492.87
27,244.28
Purchase of product for sale
5,049.82
5,864.45
Change in Stock-in-trade, finished goods
and Work-in-progress
371.72
(143.60)
Total
25,914.41 32,965.13
% of revenue
75.6% 73.6%
The increase in terms of % to revenue was mainly due to adverse
product mix and higher Variable Marketing Expenses (netted off in
revenue)
Employee Cost:
There was marginal increase to
`
2,877.69 crores
from
`
2,837.00 crores in FY 2012-13 (1.4% over last year). The
increase was mainly attributable to normal yearly increases,
promotions, and wage agreements. The Company has taken steps
to contain the manpower cost, by reduction in head count both
permanent and temporary. However, due to lower volumes, the
employee cost to revenue has increased from 6.3% to 8.4%.
Manufacturing and Other Expenses:
These expenses relate to
manufacturing, operations and incidental expenses other than raw
materials and employee cost. This expenditure mainly included
job work charges, advertisement & publicity and other selling and
administrative costs. The expenses were
`
6,987.53 crores during
current fiscal, as compared to
`
7,783.32 crores for FY 2012-13,
representing 20.3% of revenue for FY 2013-14 (17.4% for FY 2012-13).
There been decrease in expenses in terms of absolute terms on
account of lower volumes and cost reduction initiative taken by
the Company. However, due to lower volumes, these costs were
under absorbed.
Amount capitalised represents
expenditure transferred to capital
and other accounts allocated out of employee cost and other
expenses incurred in connectionwith product development projects
and other capital items. The expenditure transferred to capital and
other accounts increased to
`
1,009.11 crores from
`
953.80 crores of
FY 2012-13, and mainly related to ongoing product development
for new products and variants.
Other Income
was
`
3,833.03 crores (
`
2,088.20 crores for FY 2012-
13). For FY 2013-14, it includes dividends from subsidiary companies
of
`
1,573.98 crores (including dividend from JLR), as compared
to
`
1,583.58 crores for FY 2012-13. During the year, the Company
has divested its investments in certain foreign subsidiaries to TML
Holdings Pte Ltd, Singapore, a wholly owned subsidiary resulting
in a profit of
`
1,966.12 crores. Other income also includes interest
income of
`
178.02 crores as compared to
`
383.64 crores for FY
2012-13. (The dividend from subsidiary companies and profit on
divestment are eliminated in the consolidated income statement,
being income from subsidiaries).
Profit before Exceptional Item, Depreciation, Interest and Tax
(PBDIT)
was
`
3,350.62 crores in FY 2013-14, compared to
`
4,222.27
crores in FY 2012-13. Lower volumes and adverse product mix,
resulted in negative operating profit. This was offset by dividend
from subsidiaries and profit from divestment of investments in
certain foreign subsidiaries.
Depreciation
and
Amortization
(including
product
development / engineering expenses written off)
increased
by
`
255.66crores (11.4% increase over last year) to
`
2,499.04crores
from
`
2,243.38 crores in FY 2012-13.
a)
Depreciation increased by
`
36.25 crores, reflecting impact
of additions to fixed assets towards plant and facilities for
expansion and new products introduction.
b)
Amortization increased by
`
216.43 crores related to product
development projects capitalized for products launched in
recent years.
Finance Costs
decreased marginally to
`
1,337.52 crores from
`
1,387.76 crores in FY 2012-13.
Exceptional Items
a)
During FY 2013-14, the Company further provided
`
202
crores for the cost associated with the closure of operations
of subsidiary company, Hispano Carrocera SA.
b)
As per the accounting policy followed by the Company the
exchange gain / loss on foreign currency long term monetary
