JAGUAR LAND ROVER
Jaguar Land Rover has had a successful year of continued growth in all markets, despite uncertain trading conditions globally. Jaguar Land Rover sold 372,062 vehicles in FY 2012-13, an increase of 18.3% over the previous year. At the brand level, wholesale volumes were 57,812 vehicles for Jaguar and 314,250 vehicles for Land Rover, growing 7% and 20.7%, over the previous year, respectively. All market regions have grown, led by China where retail sales at 77,075 vehicles were up by 48% over previous year. Retail volumes in Europe were 80,994 vehicles, 18% increase over the previous year. UK retail volumes were 72,270 vehicles, a 20% increase, whilst the North American retail volumes were 62,959 vehicles, an increase of 9% over the previous year. Retail sales for the Asia Pacific region at 17,849 vehicles, were higher by 27% and for the rest of the world were 19% higher at 63,489 vehicles over the previous year.
Jaguar Land Rover has a multifaceted strategy to position itself as a leading manufacturer of premium vehicles offering high-quality products tailored to specific markets. The company's success is tied to its investment in product development and market expansion which drives the strategic focus on product design and quality.
Jaguar Land Rover operates three major production facilities and two advanced design and engineering facilities all in the United Kingdom. Jaguar Land Rover markets products in 178 countries, through a global network of 17 national sales companies (NSCs), 85 importers, 62 export partners and 2,485 franchise sales dealers, of which 689 are joint Jaguar and Land Rover dealers.
With the objective of increasing its marketing and dealer networks in emerging markets, Jaguar Land Rover established a National Sales company in China in 2010 to expand its presence and has plans to increase its network of dealers in China. Similar plans of increasing its dealer network are also underway in India. Jaguar Land Rover also aims to establish new manufacturing facilities, assembly points and suppliers in select markets. The joint venture with Chery Automobiles, China as also an established manufacturing operation for some of its products and product development activities in India are examples of these initiatives.
Some of the highlights of this year's performance were:
- Launch of the all new aluminum Range Rover in December 2012, with a world-wide roll-out in the last quarter of the year, recording sales of over 13,000 vehicles in the first four months. The Range Rover has already received over 10 global awards including WhatCar? 'Best Luxury Car'.
- Launch of the all new aluminum Range Rover Sport in March 2013, with a world wide roll out in the first half of FY 2013-14.
- Expanded the Jaguar XF range with an all wheel drive version and a new Sportbrake and introduced a more fuel efficient, 2.0l XF with an 8 speed automatic gear box.
- Introduction of new variants of the Jaguar XF, the launch of the new Range Rover, as well as the continued strength of
the Evoque, were key contributors to the overall success.
- Jaguar Land Rover's joint venture with Chery Automobiles, China has been formalised to develop, manufacture and sell certain Jaguar and Land Rover vehicles and jointly branded vehicles for the Chinese market.
- Continued investment in new state-of-the-art facility at Wolverhampton, UK, to manufacture new advanced low emission engines.
Jaguar Land Rover and Tata Motors participated in various international autoshows displaying its range of products, including at Geneva, New York, Detroit and Jakarta, wherein the displayed products won accolades and a positive response.
TATA DAEWOO COMMERCIAL VEHICLES COMPANY LIMITED
Tata Daewoo Commercial Vehicles Company Limited (TDCV) sold 10,100 vehicles- higher by 6% over the previous year. TDCV exported 4,700 vehicles in FY 2012-13, which is the highest ever in its history, registering a growth of 57.8% as compared to 2,979 vehicles exported in the previous year. However, in the domestic market, sales decreased by 17.6% to 5,400 vehicles as against 6,552 vehicles sold in the previous year, due to economic slowdown.
TATA MOTORS (THAILAND) LIMITED
Tata Motors (Thailand) Ltd. (TMTL) sold 4,905 vehicles in FY 2012-13. These inclded Tata Xenon pickups, Super Ace and heavy commercial vehicles. During FY 2012-13, TMTL launched three additional variants of the pickup, tailor-made for the Thailand commercial vehicle market. In the single cab segment, which is used predominantly by the commercial users, Xenon continues to be ranked fourth amongst eight players in the segment.
TATA MOTORS (SA) (PROPRIETARY) LIMITED
Tata Motors (SA) (Proprietary) Limited (TMSA) sold 864 vehicles during FY 2012-13. During the year, TMSA introduced four new models of commercial vehicles and crossed a major milestone of rolling out its 1,000th vehicle since start of operations last year.
TATA MOTORS FINANCE LIMITED
The vehicle financing activity under the brand "Tata Motors Finance" (TMF) of Tata Motors Finance Limited (TMFL) – a wholly owned subsidiary company, continued to show improved financial results inspite of challenging market conditions and rising costs of funds.
With the Company's increased focus on financing of small commercial vehicles, the total disbursements for the year were at Rs.11,180 crores - 6% higher than disbursements of Rs.10,505 crores in the previous year. A total of 2,51,936 vehicles were financed representing an increase of 9.3% over the previous year. The disbursals for commercial vehicle were Rs.8,816 crores (1,81,374 vehicles) in FY 2012-13 compared to Rs.7,204 crores (1,20,032 vehicles) for previous year. For passenger cars, disbursals were Rs.2,364 crores (70,562 vehicles) in FY 2012-13 compared to Rs.3,301 crores (1,10,556 vehicles) in the previous year. The overall market share in terms of the Tata vehicle unit sales in India financed by Tata Motors Finance increased from 27% to 33% - led by significant increase in commercial vehicle market share from 23% to 34%.
Tata Motors Finance Limited continued to expand its reach in the market place by growing its branch network and expanding its support to Tata Motors dealership network. Significant increase in its manpower resources as well as driving IT technology to improve productivity and output, ensures that Tata Motor Finance now reaches to over 75% of the dealers. With greater attention being placed on further enhancing customer experience through its "Office of the Customer", TMFL is confident of continuing to deliver profitable growth in the future.
The Tata Motors Group employed 62,716 permanent employees (previous year: 58,618 employees) as of the year end out of which 56,393 employees were engaged in automotive operations. The increase over last year was mainly at Jaguar Land Rover in view of volume and product development activity. The Company employed 29,965 permanent employees (previous year: 29,217 employees) as of the year end. The Tata Motors Group has generally enjoyed cordial relations with its employees and workers.
All employees in India belonging to the operative grades are members of labour unions except at Sanand and Dharwad plants. All the wage agreements have been renewed in a timely manner and are all valid and subsisting. Operatives and Unions support in implementation of reforms that impact quality, cost erosion and improvements in productivity across all locations is commendable.
SAFETY &HEALTH - PERFORMANCE &INITIATIVES
Safety is an integral part of the Company's operations and is reviewed at the highest levels including the Board, Executive Committee, and the Safety, Health and Environment (SHE) Council. The Board constituted a SHE Committee and also adopted its charter during the year. The senior leadership is fully committed to the ultimate goal of zero injury to its employees and all those who work in our facilities. In its 3 year journey with DuPont, the organization is progressing aggressively with the vision of "Excellence in Safety". In association with DuPont 489 internal trainers have been developed and 2,058 employees are trained on leading safety efforts, safety management fundamentals, incident investigations, contractor safety management and safety. Defensive Driving Training was imparted to more than 8,000 employees and contractors who drive on business purpose or who are involved in operations.
A revised Safety &Health Policy has been cascaded which reflects an increased commitment towards our visitors, contractors and business partners. A structured review mechanism of safety performance is in place with ''Lead and Lag'' indicators, major incidents and High Potential Incidents (HIPO) announcements being made monthly to the senior management and leaders. The Lost Time Injury (LTI) rate for the year under review is lower at 0.68%, a reduction of 37% over the previous year. Improved governance in incident reporting with speedy investigations and corrections, and a collaborative functioning of Safety Committees across plants have led to an integrated organisation structure.
The Company, in a collaborative initiative with Castrol India Limited, is integrating safety expertise and knowledge in dealer workshops and a safety manual has been released with the objective of reducing potential risks and improve SHE practices.
This year has witnessed a significant improvement in 'Areas Beyond Factory Gates' including warehouses, offices and channel partners, wherein structured audits, trainings and reporting have been initiated.
At Jaguar Land Rover, the health and safety management system is based on the UK Health and Safety Executive's guidance for Health and Safety Management - HSG65. Jaguar Land Rover's Occupational Health Department achieved re-accreditation to the SEQOH Standard (Safe Effective Quality Occupational Health Standard) for its activities and management systems. Jaguar Land Rover's growth plans have resulted in an increased headcount and a larger number of contractors are involved in civil and engineering activities requiring extensive inputs from a health and safety perspective. This has been met with an incremental rise in Health and Safety training, induction programmes and continued focused events around skilled workers being recruited into relevant functions. The business has continued its programme of proactive health promotion events for employees and has launched several Wellbeing Centres to aid in worker assessment, rehabilitation and piloted electronic 'WellPoint' kiosks to allow employees to monitor their own health data and seek further advice.
At TDCV, Korea, the accident rate and the safety index at 0.18% and 2.9 were lower than 0.48% and 2.40, respectively, for the previous year. At TMTL, Thailand, the performance has been improving with increased safety trainings and reduction in the number of incidents. At TMSA, South Africa, 5 LTIs were reported, Safety Management Systems were deployed and several initiatives taken to improve safety and working conditions.
During the year, the free cash flows for Tata Motors Group were Rs.3,342 crores, post spend on capex, design and development of Rs.18,720 crores. Tata Motors Group's borrowing as on March 31, 2013, stood at Rs. 53,591 crores (previous year: Rs. 47,149 crores). Cash and bank balances stood at Rs. 21,113 crores (previous year: Rs.18,238 crores).
Cash flows from operations were Rs.2,258 crores for standalone operations of the Company. Spend on capex, design and development were Rs.2,588 crores (net). The borrowings of the Company as on March 31, 2013 stood at Rs.16,799 crores (previous year: Rs.15,881 crores). Cash and bank balances stood at Rs.463 crores (previous year: Rs.1,841 crores).
During the year, the Company repaid the Zero Coupon Convertible Alternate Reference Securities (CARS) amounting to US$ 623.38 million, (Rs.3,493.83 crores) inclusive of a redemption premium of US$ 150.38 million. Consequent upon exercise of conversion option by the holders of 4% Foreign Currency Convertible Notes, aggregating Rs.342 crores (including Rs.141.62 crores in May 2013), the Company allotted 28,308,896 Ordinary Shares/Shares represented by ADSs (including 11,789,695 Ordinary Shares/ Shares represented by ADSs in May 2013).
The Company also repaid Tranche 2 of Rs.446 crores of Secured, Rated, Credit Enhanced, Listed, 2% Coupon Non-Convertible Debentures (NCDs) inclusive of premium on redemption of Rs.96 crores. Further, the Company also repaid Rs.1,747 crores forming part of the public fixed deposit scheme launched in December 2008.
The Company issued rated, listed, unsecured, non-convertible debentures of Rs.2,100 crores. Further Rs.900 crores were issued in April and May 2013.
Due to significant reduction in volumes, the Company had to deploy short term funds to support critical long term finance needs. The Company is in the process of taking appropriate steps
to increase the long term funds.
At Jaguar Land Rover, post spend on capex, design and development of GB£ 1,846 million (Rs.16,814 crores), the free cash flows were GB£ 583 million (Rs.4,885 crores) for FY 2012-13.
The borrowings of the Jaguar Land Rover as on March 31, 2013, stood at GB£ 2,167 million (Rs.17,791 crores) [previous year: GB£ 1,974 million (Rs.16,206 crores)]. Cash and bank balances stood at GB£ 2,847million (Rs.23,373 crores) [previous year: GB£ 2,430 million (Rs.19,950 crores)] resulting in negative net debt position.
Additionally, JLR has undrawn committed bank lines of GB£ 865 million (as per IFRS).
In January 2013, Jaguar Land Rover issued US$ 500 million Senior Notes due 2023, at a coupon of 5.625% per annum. This was an opportunistic fund raising which enabled Jaguar Land Rover to
reinforce its market acceptance and demonstrated the continued confidence of the investors. This was a further step taken towards strengthening capital structure and enhancing the debt maturity profile.
TML Holdings Pte Ltd, Singapore, a 100% subsidiary of the Company, holding the investment in Jaguar Land Rover raised Senior Notes aggregating SG$ 350 million in May 2013.
Tata Motors Finance Limited raised Rs.100 crores by an issue of unsecured, non-convertible, subordinated perpetual debentures towards Tier 1 and Tier 2 Capital and Rs.90.40 crores by an issue
of unsecured, non-convertible, subordinated debentures towards Tier 2 Capital in order to meet its growth strategy and improve its Capital Adequacy ratio.
With healthy profitability and cash flow generation, the Consolidated Net Automotive Debt to Equity Ratio stood at 0.24:1 on March 31, 2013, as compared to 0.25:1 on March 31, 2012.
Tata Motors Group has undertaken and will continue to implement suitable steps for raising long term resources to match fund requirements and to optimise its loan maturity profile.
During the year, the Company's rating for foreign currency borrowings was revised upwards by Standard &Poors to "BB"/Positive and was retained at existing levels by Moodys at "Ba3"/
Stable. For borrowings in the local currency, the outlook on the ratings was improved from "Stable" to "Positive" and the rating stood at "AA-"/Positive by Crisil and at "AA-"/Positive by ICRA. The Non Convertible Debentures are rated by CARE at "AA".
During the year, Jaguar Land Rover's rating for was revised upwards by Standard &Poors to "BB-"/Positive. As on March 2013, the other ratings stood "B1"/Stable by Moodys and "BB-"/Stable by Fitch.
For Tata Motors Finance, CRISIL revised its rating outlook on long-term debt instruments and bank facilities to 'CRISIL AA - Positive' from 'CRISIL AA - Stable'. The ratings on the short-term debt instruments and bank facilities were reaffirmed at 'CRISIL A1+'.