Tata Motors AR

Corporate Overview

Financial Statements

Statutory Reports

72nd Annual Report 2016-17

likely to be continued. Activity rebounded strongly in the United

States in second half of calendar 2016 compared to weaker first half.

However, output remained below potential in a number of other

advanced economies, notable in the European area. The picture of

emerging market and developing economies remained much more

diverse. The growth rate in China was a bit stronger than expected,

supported by continued policy stimulus. Activity was weaker than

expected in some Latin American countries such as Brazil, whereas,

activity in Russia was slightly better than expected, in part reflecting

firmer oil prices.

India’s economy has grown at a strong pace in recent years owing to

the implementation of critical structural reforms and lower external

vulnerabilities. It has grown by 7.1% in Fiscal 2017, compared to

7.9% in Fiscal 2016 primarily because of the temporary consumption

shock induced by cash shortages and payment disruptions from

demonetisation. Private investment continues to remain weak due

to over capacity. In order to propel the economy the government has

been trying to give a thrust to the investment by allocating a higher

sum towards gross fixed capital formation.

The

Tata Motors Group

registered a de-growth of 1.1% in income

from operations to

2,74,492 crores in Fiscal 2017 as compared to

2,77,661 crores in Fiscal 2016, due to negative translation impact

from Great British Pound (GB£) to Indian Rupee (

) of

27,686 crores

and de-growth in the M&HCV segment in India was offset by higher

wholesale volumes in Jaguar and Land Rover and growth in Passenger

Vehicle segment in India. The consolidated EBITDA margins for Fiscal

2017 stood at 13.4%. Consequently, Profit Before Tax (PBT ) and Profit

After Tax (PAT) [post share of profit of joint ventures and associates

(net)] were

9,315 crores and

7,557 crores, respectively.

Tata Motors Limited

recorded income from operations (including

joint operations) of

49,100 crores, 3.6% higher from

47,384

crores in the previous year. Muted demand of M&HCV and LCV

due to weak replacement demand, subdued freight demand from

industrial segment, which took a further hit post demonetization

and lower than expected pre-buying ahead of the implementation

of BS-IV, resulting in lower EBITDA margins of 3.5% in Fiscal 2017 as

against 7.1% in Fiscal 2016. Loss Before and After Tax (including joint

operations) for Fiscal 2017 were at

2,421 crores and

2,480 crores,

respectively, as compared to Loss Before and After Tax (including joint

operations) of

67 crores and

62 crores, respectively in Fiscal 2016. The

losses were primarily driven by less favourable market and model mix,

including higher marketing expenses, depreciation and amortization

and other operating cost.

Jaguar Land Rover

(JLR)

(as per IFRS) recorded revenues of GB£24.3

billion compared to GB£22.3 billion in Fiscal 2016, driven by higher

sales volumes and weaker GB£.

Consolidated EBITDA for Fiscal 2017 at GB£3.0 billion, was marginally

lower as compared to EBITDA of GB£3.1 billion for Fiscal 2016, as

the higher revenue was more than offset by higher marketing,

manufacturing and other operating expenses. EBIT was GB£1.5

billion in Fiscal 2017 lower than GB£1.8 billion in Fiscal 2016, due to

higher depreciation and amortization which were partially offset by

higher profits from the Chinese joint venture.

PBT in Fiscal 2017 was GB£1.6 billion in-line with the PBT of GB£1.6

billion in Fiscal 2016, the lower EBIT and unfavourable foreign

exchange revaluation was more than offset by a favourable

revaluation of commodity hedges and of GB£151 million further

recoveries relating too to Tianjin fire in this year compared to GB£157

million net charge than in Fiscal 2016.

In May 2016, JLR redeemed the remaining US$84 million (GB£57

million equivalent) of the 8.125% US$ bond maturing in 2021 by

exercising its call option, the majority of which was successfully

tendered and redeemed in March 2015. In January 2017, JLR issued

a €650 million 7-year bond with a coupon of 2.20% and a GB£300

million 4-year bond with a coupon of 2.75%. In addition, JLR

successfully undertook a consent solicitation in March 2017 to align

the terms of three of their older bonds to the terms of the Euro and

GB£ bonds issued in January 2017.

Tata Motors Finance Limited

(TMFL) (consolidated) (as per Indian

GAAP) the Company’s captive financing subsidiary, reported revenue

2,721 crores (Fiscal 2016

3,229 crores) and reported a Loss After

Tax

1,182 crores in Fiscal 2017, as compared to PAT

267 crores in

Fiscal 2016.

Tata Daewoo Commercial Vehicle Company Limited

South Korea

(TDCV), (as per Korean GAAP) registered revenues of KRW 1,032

billion in Fiscal 2017, a growth of 17.3% over Fiscal 2016 mainly due

to increase in domestic sales. The PAT was KRW 50 billion compared

to KRW 46 billion in Fiscal 2016. Higher domestic volume, better mix,

favourable exchange realizations and material cost reduction helped

in improving profits.

VEHICLE SALES AND MARKET SHARES

The

TataMotors Group

sales for this year stood at 11,57,808 vehicles,

up by 8.8% as compared to Fiscal 2016. Globally the Company sold

3,96,097 Commercial Vehicles and Passenger Vehicles were 7,61,711.

TATA MOTORS

Tata Motors recorded sales of 545,416 vehicles, a growth of 6.5% over

Fiscal 2016. In Fiscal 2016 Industry in India, grew by 8.3%, resulting

in the Company’s market share decreasing to 12.8% in Fiscal 2017

in the Indian Automotive Industry from 13.1% in the Fiscal 2016.

The Company’s exports on standalone basis grew by 10.6% to

64,221 vehicles in Fiscal 2017 as compared to 58,058 vehicles in

Fiscal 2016.

Commercial Vehicles

The domestic demand for Commercial Vehicles was volatile through

the year, as a result of Government and Regulatory announcements -