89
Notice
Directors’ Report
(69-103)
Management Discussion & Analysis
Corporate Governance
Secretarial Audit Report
Other expense
including those relating to manufacturing, launch,
freight and distribution, warranty, product development expense,
selling and fixed marketing, were GB£3,717 million in the year, an
increase of GB£642 million (21%) versus FY 2012-13. From FY 2013-
14 onwards EBITDA now includes mark to market of current assets
and liabilities and realised gains on matured FX and commodity
hedges for the full year in line with policy under IFRs accounting.
Development costs
of GB£1,266 million represent an increase
of GB£208 million (20%). This reflected the increased spend on
future model development for both brands. Of the total spending,
GB£1,030 million was capitalised (last year GB£ 860 million).
Profit before tax (PBT)
for FY 2013-14 was GB£2,501 million, an
increase of GB£827 million (49%) compared to FY 2012-13. PBT
performance reflects higher EBITDA plus gains of GB£137 million
arising frommark to market of unrealised FX options and commodity
hedges and revaluation of foreign currency loans. This compares to
a GB£47 million loss in FY 2012-13. PBT also captures depreciation
and amortization charges, up GB£253 million to GB£875 million
for FY 2013-14 given increased product development and facilities
investment. Higher net finance expense of GB£154 million includes
GB£62 million of one off costs incurred in the redemption of the
higher coupon GB£500 million and US$410 million 2018 notes
(at 8.125% and 7.75% coupon respectively) and a GB£47 million
reversal of gain on related bond call options. The bond redemption
was pre-financed by the successful issuances of US$700 million
4.125% 2018 notes and GB£400 million 5% 2022 notes. This served
to reduce JLR’s overall cost of debt in line with the improving credit
and market conditions.
Profit after tax,
at an effective rate of 25%, was GB£1,879 million.
Cash Flow
Net cash from operating activities was GB£3,422 million in FY 2013-
14, in line with profits plus positive working capital of GB£393 million
versus GB£382 million in prior period, less tax paid of GB£402 million
(GB£248 million in FY 2012-13). This compares to operating cash
flow of GB£2,429 million in FY 2012-13. JLR invested significantly
in the year, up GB£527 million to GB£2,444 million for the year.
This demonstrates JLR’s commitment to product development and
also capacity increases, including facilities in China and the UK. Net
cash used in financing activities was GB£498 million in FY 2013-14
compared to GB£178 million in FY 2012-13. In FY 2013-14 financing
activities included early redemption of GB£750 million equivalent
of higher coupon long term bonds through tender/exercise of
call option in Q4 pre-financed by the issuance of US$700 million
bond in December 2013 and GB£400 million bond in January
2014. Financing activities also included a dividend paid to parent
company of GB£150 million, GB£79 million of debt repayments, and
interest and fees of GB£269 million.
Financial performance of TMFL
During FY 2013-14, TMFL earned a total income of
`
3,026.47 crores,
against an income of
`
2,825.64 crores earned during the previous
year, reflecting an increase of 7.1%. The Profit Before Tax declined
by 65% to
`
155.33 crores (Previous year:
`
449.49 crores). The Profit
After Tax at
`
100.88 crores was 67% lower than that in the previous
year (
`
309.30 crores).The results for FY 2013-14 have been impacted
due to tightness in the financial market, stress in the business
environment and the consequent higher provision on account of
Non-Performing Assets.
Financial performance of TDCV (as per Korean GAAP)
During FY 2013-14, TDCV’s total revenue was KRW 884.08 billion
(
`
4,906.46 crores) higher by 7.3% compared to KRW 823.92 billion
(
`
4,024 crores) in FY 2012-13. TDCV reported Profit before Tax of
KRW 30.52 billion (
`
169.39 crores) as compared to Loss before tax
of KRW 10.44 billion (
`
51.00 crores) in FY 2012-13. After providing
for tax, the Profit for the year stood at KRW 23.49 billion (
`
130.37
crores), against loss of KRW 9.21 billion (
`
44.96 crores) in FY 2012-
13. In FY 2012-13 provision of KRW 18.9 Billion (
`
92.27 crores) was
made on account of court verdict in the Ordinary Wage Lawsuit
filed by the Union Employees of TDCV.
Financial performance of TTL
The consolidated revenue in FY 2013-14 was
`
2,394.73 crores, an
increase of 17.08% against
`
2,045.42 crores in the previous year.
The profit before tax was
`
337.57 crore as against
`
392.43 crore
in the previous year, recording a reduction of 14%. The profit after
tax stood at
`
273.22 crore as against
`
300.73 crore recording a
reduction of 9.2%.
Opportunities and Risks –
JLR and Tata Motors businesses constitute
