Jaguar Land Rover
In Fiscal 2017, Jaguar Land Rover achieved record retail sales of 604,009 units in Fiscal 2017 a growth of 15.8% as compared to Fiscal 2016, primarily driven by the introduction of the Jaguar F-PACE and continued strong demand for the Land Rover Discovery Sport. The retail sales were higher year-on-year in China by 32%, North America by 24%, the UK 16% and the Europe 13% in Fiscal 2017. However, retail sales were down by 6% in other overseas markets, which include Brazil, Russia and South Africa.
Some of the key highlights of Fiscal 2017:
- Retail sales of the new Jaguar F-PACE commenced in May 2016 (Winner of World Car of the Year and World Car Design of the Year).
- The Jaguar XE commenced sales in the US in May 2016.
- The Range Rover Evoque convertible commenced sales in June 2016.
- Production of the new long wheel base Jaguar XFL commenced at the Chinese joint venture and went on sale locally in September 2016.
- The all new Land Rover Discovery was unveiled in September 2016, with sales commencing in February 2017.
- The new Range Rover Velar was revealed to the public in March 2017 and is the 4th Range Rover model positioned between the Range Rover Evoque and the Range Rover Sport.
- The Jaguar I-PACE concept, JLR's first battery electric vehicle, was unveiled in November 2016, with sales commencing in 2018.
- JLR opened it's first wholly owned international manufacturing plant in Brazil in June 2016.
- Production of JLR's in-house 4 cylinder Ingenium petrol engine commenced in September 2016 at the Engine Manufacturing Centre in Wolverhampton in the UK and is now available in the Jaguar XE, XF, F-PACE, Land Rover Discovery Sport and Range Rover Evoque. The Ingenium Petrol Engine will also be available in the new Range Rover Velar from launch.
- Construction of the manufacturing plant at Nitra in Slovakia began in September 2016 and the all new Discovery would be the first vehicle to be produced at the new plant from 2018.
- Jaguar XF won the Auto Express Golden Steering Wheel award for best saloon car of 2016.
- JLR launched it's InMotion Ventures business unit in April 2016, established to develop innovative solutions aimed at overcoming future travel and transport challenges. Investments to date include US$1 million into GoKid (a ride sharing service for schools) and SPLT (a ride sharing/car pooling platform for commuters).
Tata Daewoo Commercial Vehicle Company Limited
Tata Daewoo Commercial Vehicle Company Limited (TDCV) sold 10,317 commercial vehicles, higher by 13.2% over Fiscal 2016, mainly due to increase in domestic sales. TDCV continued the strong performance, in the domestic market in-spite of increased competition by selling 8,795 commercial vehicles, registering a growth of 25.0% compared to sales of 7,036 commercial vehicles in Fiscal 2016. The market share for both HCV and MCV Segments put together was 29.6% as compared to 31.0% in Fiscal 2016. The export market scenario was very challenging in Fiscal 2017. Factors like persistently low oil prices, local currency depreciation against the US dollar, continuing statutory regulations to reduce imports, the slowdown in Chinese economy impacting commodity exporting countries and increased dealer inventory, adversely impacted TDCV's exports in major markets, such as Gulf Corporation Council, Russia, Algeria, Vietnam and South Africa. The export sales were 1,522 commercial vehicles, 26.8% lower compared to 2,080 commercial vehicles in Fiscal 2016.
Tata Motors (Thailand) Limited
Tata Motors (Thailand) Limited (TMTL) sold 1,332 units in Fiscal 2017, as compared to 1,312 units in Fiscal 2016. The Thai Automobile Industry has witnessed a flat growth in Fiscal 2017 after 3 straight years of decline.
TMTL has taken the opportunity to refresh its products, services and network, as well as, expand the range of offerings to the Thailand Customers. Fiscal 2017 saw the launch of Super Ace Mint in Q2 of Fiscal 2017 and Ultra Trucks in later part of the year. Initial response for Ultra Truck was encouraging. During the year, TMTL exported 317 vehicles to Malaysia against specific order from PoS Malaysia. TMTL is exploring similar opportunities in other parts of South East Asia and neighbouring continents.
Tata Motors (SA) (Pty) Limited
Tata Motors (SA) (Pty) Ltd (TMSA) sold 697 chassis in the South African market in Fiscal 2017 compared to 765 chassis in Fiscal 2016 and exported 6 chassis to Mozambique during Fiscal 2017. TMSA is in the process of introducing a new range of Ultra truck and few more new models of Prima in South Africa and is exploring options to export vehicles to other African countries.
Tata Motors Finance Limited
Tata Motors Finance Limited (TMFL) is the vehicle financing arm under the brand "Tata Motors Finance."
TMFL's total disbursements (including refinance) increased by 3.5% at Rs. 9,298 crores in Fiscal 2017 as compared to Rs. 8,985 crores in Fiscal 2016. TMFL financed a total 1,18,883 vehicles reflecting an increase of 6.0% over 1,12,114 vehicles financed in Fiscal 2016. Disbursements for commercial vehicles decreased by 4.8% and were at Rs. 7,127 crores (77,898 units) as compared to Rs. 7,485 crores (75,970 units) of Fiscal 2016 mainly due to lower disbursements in the M&HV segment. Disbursements of passenger vehicles increased by 14.3% to Rs. 1,542 crores (34,126 units) from a level of Rs. 1,350 crores (33,185 units). Disbursements achieved under refinance (through TMFSL, a 100% Subsidiary of TMFL) were at Rs. 628 crores (6,859 vehicles) as compared to Rs. 150 crores (2,959 vehicles) during Fiscal 2016.
TMFL has increased its reach by opening limited services branches (called Spoke and Collections branches) exclusively in Tier 2 & 3 towns, which has helped in reducing the turn around time to improve customer satisfaction. TMFL had 261 branches at the end of Fiscal 2017. The book size of TMFL's corporate lending business, which includes providing finance to TML's Dealers and Vendors, increased by 21.4% from Rs. 947 crores in Fiscal 2016 to Rs. 1,150 crores in Fiscal 2017.
As a part of restructuring and consolidation of financial services, the Scheme of Arrangement between TMFL and Sheba Properties Limited (Sheba), wholly owned subsidiary of TMFL, became effective on May 9, 2017. Based on the restructuring plan, TMFL has transferred its New Vehicle Finance (NVF) business to Sheba on January 31, 2017 (appointed date for transfer of assets of NVF Business).
MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY
There are no material changes affecting the financial position of the Company subsequent to the close of the Fiscal 2017 till the date of this Report.
SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS
There are no significant material orders passed by the Regulators or Courts or Tribunal, which would impact the going concern status of the Company and its future operation. However, Members attention is drawn to the Statement on Contingent Liabilities and commitments in the Notes forming part of the Financial Statements.
RISK MANAGEMENT
The Risk Management Committee (RMC) comprising of four Independent Directors, has been entrusted with responsibility to assist the Board in (a) overseeing the Company's risk management process and controls, risk tolerance and capital liquidity and funding (b) setting strategic plans and objectives for risk management and review of risk assessment of the Company (c) review the Company's risk appetite and strategy relating to key risks, including credit risk, liquidity and funding risk, market risk, product risk and reputational risk, as well as the guidelines, policies and processes for monitoring and mitigating such risks.
The Committee operates as per its Charter approved by the Board and within the broad guidelines laid down in it. The Company has a Risk Management Policy in accordance with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 ("SEBI Listing Regulations"). It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.
The Board takes responsibility for the overall process of risk management in the organisation. Through Enterprise Risk Management programme, business units and corporate functions address opportunities and the attendant risks through an institutionalized approach aligned to the Company's objectives. This is facilitated by internal audit. The business risk is managed through cross functional involvement and communication across businesses. The results of the risk assessment are thoroughly discussed with the Senior Management before being presented to RMC.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENT
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of this Report.
HUMAN RESOURCES
The Tata Motors Group employed 79,558 permanent employees (Fiscal 2016: 76,598 employees) as of Fiscal 2017 and the Company employed 26,035 permanent employees (Fiscal 2016: 26,569 employees) as of Fiscal 2017. The Tata Motors Group has generally enjoyed cordial relations with its employees and workers.
The Company has labour unions for operative / worker grade employees at all the plants across India, except the Dharwad Plant. The labour union at Sanand Plant has recently been registered and the first settlement is yet to be done. The Company has generally enjoyed cordial relations with its employees and unions at its factories and offices and has received union support in the Company's implementation of reforms that impact safety, quality, cost erosion and productivity improvements across all locations. Employee wages are being paid in accordance with wage agreements that have varying terms (typically three to four years) at different locations.
With an objective of improving Organizational Effectiveness, the Company decided to undertake a structure change exercise with key guiding principles of Empowerment to the Business Units with clear accountability for business results, strong functional leadership and oversight for an effective maker-checker concept, improved and speedier decision making, agility and quick responsiveness to market, and strong cross functional alignment to drive quick issue resolution. A new product line organization has been created with complete Profit & Loss responsibility.
Organisational restructuring has delayered the organization to 5 managerial levels below ExCom. This has made the organization lean and agile. The Company has also rationalized span of control of key roles, providing scope for career development and have significantly increased customer facing roles in both the BUs to enhance customer centricity in the organization. Transactional roles have been identified across functions for transition to shared services, and therefore focus on core activities.
Volumetric study has been performed to identify optimum manpower at each level, bringing the organizational spread closer to global standards. This, combined with the Job Evaluation exercise and Management Audit helped in establishing clear job descriptions for each role and identifying the right talent for the roles.
The Executive Committee conducted a thorough assessment of potential candidates for the top 2/3 levels in the organisation. The assessment results were used for placement of the candidates, which was followed up with 'on boarding' workshops and Astronaut Trainings to prepare the management teams for the new responsibilities.
In order to create a mind-set free of job titles and hierarchy, the concept of designations has been abolished and individuals will carry the title of their functional role. After market benchmarking, revised Compensation & Policies have been rolled-out. The new terms and conditions of employment has been shared with the employees through individual letters by respective managers.
For a smooth transition, a transition team has been developed to lead the change management process, supported by continuous communications from the leadership team.