Tata Motors AR_2016-17

78 / 370

(` in Lakhs)
Percentile 10th 25th Median 75th 90th
289 372 410 553 681
(Data Source: Aon Hewitt – COO Compensation Benchmarking Study, July 2017 with
Revenues in excess of` 10,000 crores in FY 2016-17. The value represented above refers
to Cost to Company, which includes basic salary, all allowances, benefits valuations,
performance bonuses / commissions and Long term incentives.)
Note: A percentile is a measure used in statistics, indicating the value under which a
given percentage of observations in a group of observations fall. For example, the 25th
percentile is the value (or score) under which 25% of the observations may be found.
6. Pecuniary relationship directly or indirectlywith the Company,
or relationship with themanagerial personnel, if any:
Besides the remuneration paid/payable to Mr Borwankar, there
is no other pecuniary relationship with the Company or with the
managerial personnel of the Company.
7. Recognition or Awards:
Some of the significant Awards and Recognitions received by the
Company during the year are given below:
Plants :
Jamshedpur:
 World Class Quality Level II.
 Ranked 1st in the Industry category for environmental
initiatives by Jharkhand State Pollution Control Board.
 CII-GreenCo ‘Gold Rating’ Best Practices Award 2016 for its
Innovative Project on water conservation.
Pune:
 Excellent Energy Efficient Unit Award in the Automobile
Manufacturing category at the 17th National Awards for
Excellence in Energy Management organised by CII.
 First runner - up in the Automotive Sector, Mega Large Business
category at the Frost & Sullivan - IndiaManufacturing Excellence
Awards 2016.
Lucknow:
 The Srishti Good Green Governance Award 2016.
 Social Return on Investment Award by KPMG.
 Certification of GreenCo “Silver rating” during Green Co
Summit 2016 by CII.
 Apprentices’ Training Excellence Award by Govt. of UP.
III. OTHER INFORMATION
1. Reasons of loss or inadequate profits:
For Fiscal 2017 the Consolidated Revenue from operations
and Profit After Tax was `2,74,492 crores and `6,064 crores
respectively as against `2,77,661 crores and `11,101
crores respectively in the previous year. The Standalone
Revenue from operations and Profit/Loss After Tax was
`49,100 crores and (`2,480) crores respectively as against
`47,384 crores and (`62) crores respectively for the previous
year. The loss as calculated under Section 198 of the Act
for FY 2016-17 was ` 2,564 crores (previous year: loss
of `464 crores).
The Indian economic in Fiscal 2017, on a macro – economic
level stayed fairly robust and stable. Automotive Industry in
India, grew in Fiscal 2017 by 8.3% over the previous year, as
against the growth of 6.0% in the Company’s vehicles sales
resulting in the Company’s market share decreasing to 12.8%
in the Indian automotive industry from 13.1% in the previous
year. The Company was more severely impacted in view of
certain sectors performing more adversely, which impacted
segments in which the Company had larger volumes and higher
market shares. The volatile domestic demand for commercial
vehicles throughout the year, was a result of Government and
regulatory announcements - e.g. Goods and Service Tax (GST),
Demonetization, emissions change from BS-III to BS-IV etc. Within
the domestic market, the Company sold 324,175 commercial
vehicles, a marginal fall of 0.8% from Fiscal 2016. The Company’s
passenger vehicles sales were higher by 23.5% at 157,020 vehicles,
registering a 5.2% market share. The Company sold 137,175 cars
(higher by 28.4%) and 19,845 utility vehicles and vans, (lower by
2.2%).
Whilst the Company has significantly improved its income
from operations of `49,100 crores in Fiscal 2017, which is 3.6%
higher from `47,384 crores in the previous year, muted demand
of M&HCV and LCV due to demonetization, weak replacement
demand, subdued freight demand from industrial segment, and
lower than expected pre-buying ahead of the implementation
of BS-IV. This resulted in lower EBITDA margins of 3.5% as against
7.1% in the previous year.
2. Steps taken or proposed to be taken for improvement:
The Company has taken various initiatives, to maintain its
leadership, improve market share and financial performance. It
has been aggressively pursuing and implementing its strategies
to improve volumes and reduce costs through improving
operational efficiencies, timely launch of new products,
refreshing products, building brand strengths, improving dealer
effectiveness and restructuring customer facing functions
thereby enhancing sales and service experience and improved
working capital management. The Company has also expanded
its new look, stylish, tech savvy, best-in-class flagship passenger
vehicle showrooms, for superior customer experience.
Short term strategy: Based on the recommendation of the
NRC, the Board at its recently held meetings held on May 23,
2017 and May 31, 2017 critically reviewed the performance for
the financial year 2016-17 and have made major leadership and
organisational changes as also set the tone for a turnaround
plan with emphasis on the main business of the Company –
the domestic commercial vehicle business, by bringing focus
on sales and service, cost control, rigor in capital allocation with
careful calibration and rebuilding the credibility with customers,
dealers and investors.
Corporate Overview Financial Statements Statutory Reports
76 72nd Annual Report 2016-17