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Annual Results Financial year 2001-02 Press kit

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June 5, 2002

Tata Engineeering returns to profits in Quarter IV
Full year loss reduced dramatically

Quarter IV

Tata Engineering announced the results of performance for the quarter ended March 31, 2002, with a Profit Before Tax of Rs.106 crores, as against a Loss Before Tax of Rs.146 crores in the same period last year. The profit for the quarter represents a significant turnaround in the performance after seven quarters of loss. Revenues increased by 17% to Rs.3065 crores in the quarter, as compared to Rs.2619 crores in the same period last year. The Company also achieved further gains in market share in both commercial vehicles and passenger cars. The Indica project, in particular continued to improve in volumes and market share accompanied by a significant increase in the profitability of its operations.

2001-02

The Company’s revenues for the year ended March 31, 2002 improved by 9% to Rs.8918 crores, as compared to Rs.8164 crores in 2000-01. The Company continued its aggressive thrust in several areas such as cost reduction of Rs.332 crores, market share gains and prudent fiscal management, all of which enabled the Company to improve the Operating Profit to Rs.740 crores, an increase of 80% over Rs.411 crores in 2000-01. Operating margins improved to 8% in 2001-02 from 5% in 2000-01. As a result, the Loss after tax came down significantly to Rs.54 crores as against the Loss of Rs.500 crores in the previous year.

In the backdrop of a sluggish year for the Indian economy and the automobile industry, notable achievements by the Company were:

– Market share in the medium and heavy commercial segment increased to 68% with market share in the truck segment rising to 72%. Both were a 4-year record achieved in a market, which declined an overall 3%.

– The Indica V2 broke the record in the ‘B’ segment to remain the largest selling model in its segment for the last nine months of the year. Indica’s market share increased to 23% in its segment. In the passenger vehicle industry as a whole, the Company became the second largest player. The Indica operations generated a cash profit for the year in the third year of operation, with volumes of over 64,000 units.

– The Company set off an amount of Rs.1179 crores, mostly carried forward in the Balance Sheet as Deferred Revenue Expenditure, against its Securities Premium Account to reflect more appropriately its future operational performance. The proposal was approved by the shareholders and debenture holders and confirmed by the Bombay High Court subsequently.

In view of the Loss for the year, the Directors have not recommended a dividend.

The Annual General Meeting of the Company will be held on July 26, 2002 to consider the accounts of FY 2001-02.

AUDITED STATEMENT OF FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2002

Particulars
Nine months ended
Quarter ended March , 31
F Y
   
Dec 31, 2001
2002
2001
2001-02
2000-01
   
(Unaudited)
(Unaudited)
(Unaudited)
(Audited)
(Audited)
(A)            
1 Vehicle Sales:(in Nos.)          
  Commercial vehicles
53696
26991
28079
80687
82718
  Passenger Cars and Utility vehicles
57892
30718
20423
20423
71880
  Exports
8571
5356
3820
13927
15917
   
120159
63065
52322
183224
170515
2 Vehicle Production:(in Nos.)          
  Commercial vehicles
60480
29906
33010
90386
95060
  Passenger Cars and Utility vehicles
59099
33116
22819
92215
75971
   
119579
63022
55829
182601
171031
3 Export Turnover (at F.O.B. value) Rs. Crores
387.25
232.96
177.64
620.21
722.75
  US $ M
80.28
47.74
38.20
38.20
155.03
B)  
(Rupees Crores)
1 Net Sales/Income from operations
5832.13
3062.67
2618.57
8894.8
8077.81
2 Total Expenditure          
  (a) (Increase) / Decrease in stock in trade and work in progress
(29.02)
78.05
(116.42)
49.03
(56.57)
  (b) Consumption of Raw Materials & Components
3206.23
1510.24
1579.29
4716.47
4728.07
  (c) Staff Cost
441.51
250.13
174.59
691.64
608.15
  (d) Excise Duty
913.42
475.87
437.19
1389.29
1389.29
  (e) Other expenditure
852.15
456.14
437.62
1308.29
1094.56
  (f) Sub Total 2(a) to 2(e)
5384.29
2770.43
2512.27
8154.72
7666.35
3 Operating Profit [1-2]
447.84
292.24
106.30
740.08
411.46
4 Other Income
20.52
2.74
0.78
23.26
86.41
5 Interest          
  (a) Gross Interest
333.26
101.29
122.63
434.55
511.14
  (b) Capitalisation of Interest and other receipts
(32.00)
(20.32)
(13.95)
(52.32)
(67.56)
  (c) Net Interest
301.26
80.97
108.68
382.23
443.58
6 Amortisation of Deferred Revenue Expenditure
89.83
0.00
44.08
89.83
137.36
7 Depreciation
266.86
87.81
88.31
354.67
347.37
8 Profit before extraordinary/exceptional items [3+4-5-6-7]
(189.59)
126.20
(133.90)
(63.39)
(430.44)
9 Extraordinary/Exceptional Items
  (a) Provision/(Write back) for Contingencies
20.00
20.00
  (b) Power Cost relating to Previous years
0.08
48.99
  (c) Employee Sesheettion Cost
25.82
0.00
8.28
25.82
16.71
  (d) (Adjustment) / Profit on Sale of Undertaking
4.20
4.20
  (e) Sub Total 9(a) to 9(d)
25.82
20.00
12.56
45.82
69.90
10 Profit Before Tax [8-9]
(215.41)
106.20
(146.55)
(146.55)
(500.34)
11 Provision for Taxation / Deferred Tax Credit
55.48
55.48
12 (Loss)/Profit After Tax [10-11]
(215.41)
161.68
(146.55)
(53.73)
(500.34)
13 Paid-up Equity Share Capital (Face value of Rs. 10 each)
255.9
319.82
255.9
319.82
255.9
14 Reserves excluding Revaluation Reserve
2145.24
2997.88
15 Basic & Diluted EPS (not annualised) (Rupees)
(8.45)
5.96
(5.40)
(1.98)
(18.45)
16 Aggregate of Non-Promoter Shareholding          
  – Number of Shares
190241879
216785867
191006447
216785867
191006447
  – Percentage of shareholding
74.35%
67.79%
74.65%
67.79%
74.65%

Notes:

  1. Figures for the previous periods have been regrouped wherever necessary.

  2. The profits for the quarter/year include the following:

    1. Additional provisions for certain employee benefit schemes amounting Rs 73.80 crores.

    2. Write back of Rs.87.37 crores being excess provision relating to previous years ,no longer required.

    3. Provisions for Contingencies of Rs.20 crores representing provision for possible diminution in value of a commitment for a future trade investment.

  3. As per the Accounting Standard 22 – “Accounting for Taxes on Income” issued by the Institute of Chartered Accountants of India which has become mandatory with effect from April 1, 2001, the Deferred tax provision relating to previous years amounting to Rs.302 crores has been adjusted to the Reserves as on April 1, 2001. Further, the Company has recognised Deferred tax credit of Rs. 55.48 crores for the year.

  4. The Shareholders of the Company at the Extraordinary General Meeting held on March 27, 2002 and the High Court of Judicature at Mumbai vide its order dated May 2, 2002 have approved the utilisation of the Securities Premium Account in accordance with the provisions of Section 78 read with Section 100 of the Companies Act, 1956 towards adjustment of Miscellaneous Expenditure(to the extent not written off) of Rs.950.05 crores, Capital Work in Progress of Rs. 197.61 crores and Diminution in value of investment of Rs.31.25 crores. Consequent to the above,

    1. The amounts as stated above are adjusted against to Securities Premium Account.

    2. The charge to the Profit and loss account by way of amortisation of deferred revenue expenditure is lower for the quarter by Rs.51.98 crores.

  5. As per the terms of issue out of 8,94,96,473 Rights-convertible and Non-convertible Debentures, allotted on December 6, 2002 amounting to Rs.672 crores , 6,39,26,052 debentures were converted into ordinary shares on March 31, 2002 resulting in an increase in the paid-up share capital of Rs. 63.92 crores. Further , these Debentures have 2,55,70425.90 attached warrants against which the holders are entitled to apply for one ordinary share of Rs 10 per warrant at a premium of Rs 110 at any time after June 5, 2003 but before September 30, 2004.

  6. Status on utilisation of proceeds of issue of the Rights-convertible and Non-convertible Debentures : –

    Particulars
    Utilisations planned as per the terms of issue over the years 2001-02 to 2003-04
    Rs. crores
    Actual amount spent out of the proceeds upto 31st March 2002
    Rs. crores
    (a) Capital expenditure, Product development expenditure and strategic investment
    780
    186
    (b) Prepayment/Repayment of borrowings
    527
    485
    Total
    1307*
    671
    * This is to be funded by the proceeds of Rights Issue to the extent of Rs 979 crores (including the Warrants proceeds of Rs 307 crores) and the balance of Rs 328 crores through internal accruals of the Company over the years 2001-02 to 2003-04.

  7. The Company is exclusively engaged in the business of automobile products consisting of all types of commercial and passenger vehicles. These ,in the context of Accounting Standard 17 on Segment Reporting ,issued by the Institute of Chartered Accountants of India, are considered to constitute one single segment.

  8. The above results have been taken on record in the Board Meeting of date.

Tata Motors Limited

RATAN N TATA
Chairman

Mumbai, June 5, 2002

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