A

Project Report
on
PROFITABILITY ANALYSIS OF TATA MOTORS
Submitted in Partial Fulfilment for the Degree of
Bachelor of Business Administration

S.S. JAIN SUBODH P.G. (AUTONOMOUS) COLLEGE,

JAIPUR
(2019-20)

SUBMITTED By SUBMITTED To
Harsh Tank DR. Devendra Sharma
B.B.A. IV SEM.

1
 CERTIFICATE

This is to certify that the Project Report entitled “PROFITABILITY ANALYSIS” is a record
ofproject work done independently by MsHarsh Tank under my guidance andsupervision and
that it has not previously formed the basis for the award of any degree,fellowship or associate
ship.

DR. DEVENDRA SHARMA

S.S. Jain Subodh P.G. (Autonomous) College
Jaipur

2
 DECLARATION

I, Harsh Tank student of BBA Sem IV hereby declare that the project workpresented in this
report is my own work and has been carried out under the supervision ofDR. Devendra Sharma
of S.S Jain Subodh P.G(Autonomous) College. This work has notbeen previously submitted to
any other university for any examination.

HARSH TANK
S.S.Jain Subodh P.G.(Autonomous)College
Jaipur

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 ACKNOWLEDGEMENT

It is not often in life that you get a chance of appreciating and expressing your feelings inblack
and white to thank the people who have been a crucial part of your successes,
youraccomplishments, and your being what you are today. I take this opportunity to first of
allthank the Faculty at S.S. Jain Subodh P.G.(Autonomous)College, especially Dr.K.B.
Sharma,Principal, and Dr. CHITRA RATHOD, Head, Department of BBA for inculcating and
instilling me theknowledge, learning, will-power, values and the competitiveness and
professionalism requiredby me as a management student. II would like to give special thanks to
Dr.DR. DEVENDRA SHARMA (Faculty Guide) foreducating me silver lining in every dark
cloud. His enduring efforts, guidance, patienceand enthusiasm have given a sense of direction
and purposefulness to this project andultimately made it a success. II express my sincere and
heartiest thanks to everyone who has contributed towards thesuccessful completion of the
Project.Last but not the least; I would like to thank my family: my parents for supporting
mespiritually throughout my life.The errors and inconsistencies remain my own.

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HARSH TANK
CONTENTS
Chapter no. Description Page no.

1 Introduction
1.1 About the study 7
1.2 About the company 23
1.3 Review of literature 34

MAIN TERMS OF PROJECT

2
2.1 Research mythology
35
2.2Objective of study
36
2.3 Scope of study
36
3 ANALYSIS & INTERPRITATION
3.1 Gross profit
3.2 Net operating profit 37
3.3 Net profit 39
3.4 Return on assets 41
43
FINDINGS , SUGGESTIONS & CONCLUTION
4
3.1Findings
3.2 Suggestion
45
3.3 conclusion
46
47

5
 BIBLOGRAPHY 48
5 DATA OF TATA MOTERS
BALANCE SHEET 49
PROFIT AND LOSS 55
CASH FLOW 56

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 CHAPTER 1

 INTRODUCTION

Profitability is the primary goal of all business ventures. Without profitability the business will
not survive in the long run. So measuring current and past profitability and projecting future
profitability isvery important. Profitability is measured with income and expenses. Income is
money generated from the activities of the business. For example, if crops and livestock are
produced and sold, income is generated. However, money coming into the business from
activities like borrowing money does not create income. This is simply a cash transaction
between the business and the lender to generate cash for operating the business or buying assets.
Expenses are the cost of resources used up or consumed by the activities of the business. For
example, seed corn is an expense of a farm business because it is used up in the production
process. A resource such as a machine whose useful life is more than one year is used up over a
period of years. Repayment of a loan is not an expense; it is merely a cash transfer between the
business and the lender. Profitability is measured with an “income statement”. This is essentially
a listing of income and expenses during a period of time (usually a year) for the entire business.
An Income Statement is traditionally used to measure profitability of the business for the past
accounting period. However, a “pro forma income statement” measures projected profitability of
the business for the upcoming accounting period. A budget may be used when you want to
project profitability for a particular project or a portion of a business.
Horne and Wachowicz, (2000) Working capital is an important tool for growth andprofitability
for corporations. If the levels of working capital are not enough, it could leadto shortages and
problems with the day-to-day operations.
Lazard’s and Tryfonidis (2006) investigated the relationship of corporate profitabilityand
working capital management for firms listed at Athens Stock Exchange. Theyreported that there
is statistically significant relationship between profitability measuredby gross operating profit
And the Cash Conversion Cycle. Furthermore, Managers can create profit byCorrectly handling
the individual components of working capital to an optimal level. ShahShah and Sana (2006)
used Avery small sample of 7 oil and gas sector firms toinvestigate this relationship for period
2001-2005.The results suggested that managerscan generate positive return for the shareholders
by effectively managing working
capital.
Ganesan (2007) selected telecommunication equipment industry to study theeffectiveness of
working capital management. The sample included for his researchpaper included 443annual
financial statements of 349telecommunication equipmentcompanies covering the period 2001 to
2007. The statistical tests used includedcorrelation, regression analyses and Analysis of variance
(ANOVA). The results showedthose days of the working capital negatively affects the

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profitability of these firms but inreality it does not affect the transportability of firms in
telecommunication equipmentindustry.

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 1.1 Profitability Analysis from the View Point of Management

In order to pin-point the causes which are responsible for low / high profitability, a financial
manger should continuously evaluate the efficiency of a firm in terms of profit. The study of
increase or decrease in retained earnings, various reserve and surplus will enable the financial
manger to see whether the profitability has improved or not. An increase in the balance of these
items is an indication of improvement in profitability, where as a decrease indicates a decline in
profitability. Following ratios are calculated to analyse the profitability of GSRTC:

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10
 A. Gross Profit Ratio
Gross profit ratio is important for management because it highlights theefficiency of operation
and also indicates the average spread between theoperating cost and revenue. Any difference
position in this ratio is the result ofa change in the operating cost or revenue or both. The main
objective ofcomputing this ratio is to determine the efficiency with which operations arecarried
on.

 High and Low Gross Profit Ratio -

A business is rarely judged by its Gross Profit ratio, it is only a mild indicator of the overall
profitability of the company.

High – A high ratio may indicate high net sales with a constant cost of goods sold or it
may indicate a reduced COGS with constant net sales.

Low – A low ratio may indicate low net sales with a constant cost of goods sold or it may also
indicate an increased COGS with constant net sales.

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 B. Net operating profit ratio
The Net Operating Profit Ratio expresses the relationship between net operating profit
and net sales. As GSRTC is a service sector, net sales is replaced by net revenue
Moreover, in the present study, Net Operating profit is taken as the excess of gross profit
over non operating expenses and depreciation. In other words we can say profit before
interest and taxes (EBIT). This ratio helps to find out the profit arising out of the main
business. In other words this ratio helps to determine the efficiency with which affairs of
business are being managed. A high ratio indicates the improvement in the operational
efficiency of the business and vice versa

The operating profit margin ratio indicates how much profit a company makes after paying

for variable costsof production such as wages, raw materials, etc. It is also expressed as
a percentage of sales and then shows the efficiency of a companycontrolling the costs and
associated with business operations. Furthermore, it is the return achieved from standard
operations and does not include unique or one time transactions. Terms used to describe
operating profit margin ratios this include the following:

 Operating margin

 Operating income margin

 Return on sales (ROS)

 Operating profit margin

C. Return on Net Capital Employed Ratio

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This is the most important ratio for testing profitability of a business. It measures satisfactorily
the overall performance of a business in terms of profitability. This Ratio expresses the
relationship between profit earned and capital employed to earn it. The term ‘capital employed’
refers to long-term funds supplied by the creditors and owners of the firm. The term ‘return’
signifies operating profit before interest and taxes (EBIT).

 Return on Capital Employed (ROCE)

Return on Capital Employed (ROCE) is aprofitability ratio that helps determine the profit that a
company earns for the capital it employs. ROCE is measured by expressing Net Operating Profit
after Taxes (NOPAT) as a percentage of the total long-term capital employed. In other words,
ROCE can be defined as a rate of return earned by the business as a whole. Like ROE(equity),
calculates % return of equity shareholders, ROCE calculates % return of all the capital providers
together. If a business is financed completely by equity, ROE and ROCE will be same.

 RETURN ON CAPITAL EMPLOYED (ROCE) FORMULA AND ITS

CALCULATION

ROCE can be calculated using a simple formula. The calculation of ROCE is simple and can be
easily calculated using financial statements of a company i.e. Profit and Loss Account
and Balance Sheet. The NOPAT can be worked out from P/L a/c and average capital employed
from the balance sheet.
NOPAT

Return on Capital Average Capital

Employed = Employed

Average Capital Employed: Return on capital employed takes into consideration only the long-
term borrowed funds. Thus, current liabilities are not considered while calculating capital
employed. Capital employed is calculated as follows.

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 D. Net Profit Ratio
The net profit ratio indicates the ability of management to operate thebusiness with sufficient
success not only to recover from revenues of theperiod, all the expenses including depreciation
and interest, but also to leavea margin of reasonable compensation to the owners for providing
their capital at risk. In other words, this ratio is the overall measure of the firm’s ability toturn
each rupee of revenue into profit.The Net Profit Ratio expresses the relationship between net
profit and netsales. As GSRTC is a service sector, net sales is replaced by net revenue.orover, in
the present study, net profit is taken as the excess of net operatingprofit over interest charges and
there is no question for taxes due to heavy losses suffered by the GSRTC. It is the reserve of the
operating Expensesratio

 The net profit margin is equal to how much net income or profit is generated as a
percentage of revenue. Net profit margin is the ratio of net profits to revenues for a
company or business segment. Net profit margin is typically expressed as a percentage
but can also be represented in decimal form. The net profit margin illustrates how
much of each dollar in revenue collected by a company translates into profit. The net
profit margin factors in all business activities including:

 Total revenue
 All outgoing cash flow
 Additional income streams
 COGS or cost of goods sold and other operational expenses
 Debt payments including interest paid
 Investment income and income from secondary operations 
 One-time payments for unusual events such as lawsuits and taxes

E. Return On Equity

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This ratio indicates how profitable a company is by comparing its net income to its average
shareholders’ equity. The return on equity ratio (ROE) measures how much the shareholders
earned for their investment in the company. The higher the ratio percentage, the more efficient
management is in utilizing its equity base and the better return is to investors.

The Return On Equity ratio essentially measures the rate of return that the owners of common
stock of a company receive on their shareholdings. Return on equity signifies how good the
company is in generating returns on the investment it received from its shareholders.

Description: Mathematically, Return on Equity = Net Income or Profits/Shareholder’s Equity.

The denominator is essentially the difference of a company’s assets and liabilities. It is the
amount left over if an organisation decides to settle its liabilities at a given time.

F. Return On Assets
ratio indicates how profitable a company is relative to its total assets. The return on assets
(ROA) ratio illustrates how well management is employing the company’s total assets to make a
profit. The higher the return, the more efficient management is in utilizing its asset base. The
ROA ratio is calculated by comparing net income to average total assets, and is expressed as a
percentage.

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  Return on Assets Formula and Explanation
The return on assets is a cross-financial statement ratio. It makes use of “net income” derived
from the income statement and “total assets” obtained from the balance sheet.
The formula for return on assets is:

Net Income ÷ Average total assets

Take note that it is better to use average total assets instead of simply total assets. This is because
the net income represents activity for a period of time; however, total assets is measured as of a
certain date. To somehow fix this mismatch, the average of the beginning and ending balance of
total assets is used.

G. Effective Tax Rate

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This ratio is a measurement of a company's tax rate, which is calculated by comparing its income
tax expense to its pre-tax income. This amount will often differ from the company's stated
jurisdictional rate due to many accounting factors, including foreign exchange provisions. This
effective tax rate gives a good understanding of the tax rate the company faces.

 What is Effective Tax Rate?

The effective tax rate is the rate which would be paid by a taxpayer on his tax if it was charged at
a constant rate rather than progressive. Putting it other way, the effective tax rate is the average
rate at which a business or individual is taxed on the earned income. It is calculated as the total
tax paid divided by the taxable income. Investopedia explains effective tax rate as the net rate
paid by a taxpayer if all forms of taxes are included.

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  Why the profitability is important for a business

The success of a small business depends on its ability to continually earn profits. Profit equals a
company’s revenues minus expenses. Earning a profit is important to a small business because
profitability impacts whether a company can secure financing from a bank, attract investors to
fund its operations and grow its business. Companies cannot remain in business without turning
a profit. A business owner must understand the importance of profitability in business
management and develop strategies that give the company the best chance at remaining
profitable.

 Business Operations Expansion

Making a profit is essential for a business that desires to expand it operations. Earning profit
allows you to open other business locations, acquire another business, target other markets
and expand your operations into foreign territory. The purpose of business expansion is to
further increase your profits. Earning a profit is not the only factor that influences the
decision of whether to expand your business, however.

If you desire to grow your business, your management and back office team should be able to
take on additional responsibility. You should create a business plan for expansion and
analyze trends and economic factors that affect your business.

 Ability to Borrow Money

Many small businesses depend on debt financing to operate. Debt financing obligates a business
to repay the money borrowed to the creditor with interest. Debt financing for a small business
typically includes borrowing money from a bank. A company’s profitability plays an important
role in whether a bank lends the company money.

In addition to profit, a business owner’s credit score and collateral are determining factors in
lending decisions. A company that cannot turn a profit is typically seen as a risk for default by a
lender.

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  Attract Investors Financing

Some small businesses choose to bring in private investors to secure funding for their operations.
A company that earns continual profits is seen as a potentially good investment option because
the investor believes there is a good chance to earn an attractive return on his investment.
Attracting investors depends on your ability to show the monetary benefits of investing in your
business. As a business owner, you should prepare to show potential investors your ability to
generate profits in previous years and your plans to continue to earn profits in the future.

 Hire More Employees

A part of growing a small business includes hiring additional employees who can handle the
growing responsibilities within the company. A small business that is profitable has a better
chance of affording to pay new employees’ salaries than a company that is struggling financially.
Hiring new employees is an important element of running a small business because employees
are typically given more responsibility in smaller companies. A business owner must allocate
resources to defining open job positions, developing a hiring process and creating training
programs.

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  Do layoffs have a significant effect on profitability?

layoffs were seen as an emergency strategy, the last resort in a downturn or crisis. Today,
however, layoffs are a standard tool for doing business. As the economy continues to heal and
job indicators improve, a number of firms have announced a fresh wave of layoffs
— Nordstrom, Sprint and American Express among them — citing the need to improve
profitability. Studies have shown that layoffs do not generally result in improved profits. And
yet, firms continue to keep the pink slips at the ready. 
It’s about the triumph of short-termism, says Wharton management professor Adam Cobb. “For
most firms, labor represents a fairly significant cost. So, if you think profit is not where you want
it to be, you say, ‘I can pull this lever and the costs will go down.’ There was a time when social
norms around laying off workers when the firm is performing relatively well would have made it
harder. Now it’s fairly normal activity.”
Layoffs “have been pretty constant over the years, and it seems to happen no matter what the
economy is doing,” says Wayne F. Cascio, a global leadership professor at the University of
Colorado Denver who has studied layoffs for decades. “When the economy is down, it’s always
the argument that we’ve got to cut costs,and when it’s doing well we often hear we need to
improve profitability, because it’s the best time to do it. The tune hasn’t changed.”

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  what is the technique to improve profitability?

 Prepare a strategic plan with 1-year, 3-year, and 5-year goals

Business takes time to develop, therefore, you need to create a strategy that has a five-year
outlook at the minimum. Each year needs to define how your business will grow over the years.
As your business grows over the years, it will become more complex, which means your
financial plan needs to grow with your business. This means your strategy needs to not
only define how you will make money but also how you profit the majority of the money you
generate. Constantly review your strategic plan so that you are aware if the results you produce
match your set goals.

 Create an “exit” strategy now

Even if you are building a generational business, you still need to determine how ownership will
be handed over to members of your family. An exit strategy makes the sale of your business or
transition of your business an easy initiative to accomplish. This takes out the stress of the
process, so you are not scrambling to make it happen when you are ready to exit from your
business.

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Listen to your employee’s complaints about tedious tasks

Your employee complaints are an opportunity for you to take a look at their workload to see if
they are focusing on the task that can help your business to grow or just busy work. If it is the
latter, you can outsource this work to other companies, so that your employees are strictly
focused on making money and maintaining the operations of your business.

 Give your customers what they want

When you give your customers exactly what they want, pricing is not an issue for them. When
the value is being delivered, that outweighs price, because the value is helping them produce
better results than they were previously experiencing. Also, when you give customers exactly
what they want, they become your biggest business advocates.

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 1.2 ABOUT THE COMPANY

 TATA MOTORS

o Introduction

Tata Motors is one of the leading automobile manufacturers in the world, providing
mobilitysolutions to over 175 countries. Our portfolio includes a wide range of cars, utility
vehicles, trucks, and buses. We have a strong global network of 134 subsidiaries, associate
companies and joint ventures, including the Jaguar Land Rover in the UK and the Tata Daewoo
in South Korea.
Tata Motors Limited (formerly TELCO, short for Tata Engineering andLocomotive Company) is
an Indian multinational automotive manufacturing companyheadquartered in Mumbai,
Maharashtra, India and a subsidiary of the Tata Group. Itsproducts include passenger cars,
trucks, vans, coaches, buses, construction equipmentand military vehicles. It is the world's 17th-
largest motor vehicle manufacturingcompany, fourth-largest truck manufacturer, and second-
largest bus manufacturer byvolume.
Founded in 1945 as a manufacturer of locomotives, the company manufacturedits first
commercial vehicle in 1954 in collaboration with Daimler-Benz AG, which end edin 1969. Tata
Motors entered the passenger vehicle market in 1991 with the launch ofthe Tata Sierra,
becoming the first Indian manufacturer to achieve the capability ofdeveloping a competitive
indigenous automobile. In 1998, Tata launched the first fullyindigenous Indian passenger car, the
Indica, and in 2008 launched the Tata Nano, theworld's most affordable car. Tata Motors
acquired the South Korean truck manufacturer Daewoo Commercial Vehicles Company in 2004
and purchased Jaguar Land Rover from Ford in 2008.
There key business

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JAGUAR LAND ROVER
JLR is Britain’s largest automobile manufacturer, housing two iconic British brands under the
Tata group. Jaguar’s heritage of elegant design, innovative engineering and groundbreaking
technology has excited and delighted the world for over 80 years. Land Rover is the world’s
favourite Sport Utility Vehicle (SUV) brand. Its pioneering spirit and industry-leading expertise
in all-terrain technologies put Land Rover at the forefront of future mobility. JLRJLR has two
major design and engineering sites, three vehicle manufacturing facilities, and an engine
manufacturing centre in the UK. It also has plants in China, Slovakia, Austria, Brazil and India,
with a new Battery Assembly Centre to be opened in the UK in 2020.JLR represents a
compelling combination of British design and engineering integrity. It designs, develops,
manufactures and sells Jaguar premium sports saloons, sports cars, luxury performance SUVs
and Land Rover premium all-terrain vehicles.

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 o There GEOGRAPHICAL PRESENCE

KEY MANUFACTURING, DESIGN, R&D AND ENGINEERING FACILITIES

 TATA MOTORS LIMITED

TML, Jamshedpur, Jharkhand
TML, Pantnagar, Uttarakhand
TML, Dharwad, Karnataka
TML, Pune, Maharashtra
TML, Sanand, Gujarat
TML, Lucknow, Uttar Pradesh
Tata Marcopolo, Dharwad, Karnataka

 TATA DAEWOO
TDVC, Gunsan, South Korea

 JLR
JLR, Halewood, UK
JLR, Solihull, UK
JLR, Castle Bromwich, UK
JLR, Wolverhampton, UK (Engine
Manufacturing Centre)
JLR, Itatiaia, Rio de Janeiro, Brazil
JLR, Graz, Austria (Contract
manufacturing)
JLR, Changshu, China
JLR, Nitra, Slovakia
JLR, Pune, India
 CENTRES FOR INNOVATION
AND DESIGN

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Whitley, Global Headquarters, Engineering
& Design, UK
Coventry, Special Vehicle Operations
Technical Centre, UK
Gaydon, UK National Sales Centre, Design
and Engineering Centre and Test Centre UK
National Automotive Innovation Centre, UK
Jamshedpur, India
Pune, India
Gunsan, South Korea
Portland, US
Trilix, Italy

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OVERVIEW OF WORLD MARKET:

Indian Automotive Industry growth decades started in the 1970s. Between 1970and 1984 cars
were considered a luxury product; manufacturing was licensed,expansion was restricted;The
automotive sector in each country faces a range of varying factors particularto their individual
market conditions, and even the most pronounced growth markets inrecent years are now
experiencing contraction, including Brazil (-8.9%), Russia (-7.2%),India (-0.8%), Thailand (-
23%) and Argentina (-34.3%).These large assembly markets are also the most dominant in terms
of sales,where transaction prices remain high. The lure of additional profit through extendedretail
and service networks, and aftermarket / accessories opportunities highlight theneed for sector
participants to focus on both emerging areas as well as mature.The macroeconomic environment
in China has remained tepid headed into thefinal quarter of 2014, with talk of stimulus measures
to help revive the market. Giventhis context, the sustained growth in new light vehicle sales is
even more impressive,reaching 13.6 million units through August. MPVs continue to drive much
of themomentum, growing 47.5% year to date when compared to the first eight months of2013.

OVERVIEW OF INDIAN MARKET:

The automobile industry is one of the key drivers that boost the economic growthof the country.
Since the de-licensing of the sector in 1991 and the subsequent openingup of 100 percent FDI
through automatic route, Indian automobile sector has come along way. Today, almost every
global auto major has set up facilities in the country. TheThe world standing for the Indian
automobile sector, as per the Confederation of the
Indian industry is as follows:
 Largest three-wheeler market
 Second largest two-wheeler market
 Tenth largest passenger car market
 Fourth largest tractor market
 Fifth largest commercial vehicle market
 Fifth largest bus and truck segment

However, the year 2013-2014 has seen a decline in the industry’s otherwise smooth-running
growth. High inflation, soaring interest rates, low consumer sentiment and risingfuel prices along
with economic slowdown are the major reason for the downturn of theindustry.
MAJOR COMPANIES IN INDUSTRY:

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2 Mahindra & Mahindra
3 Ashok Leyland
4 General motors’ India
5 Bajaj auto
6 Force motor
7 Volkswagen group sales India private limited

 Audi Ag
 Skoda auto

8 Fiat automobiles
9 Premier automobiles limited
10 Tata motors limited

 Tata motors
 Jaguar cars & land rover

 Leaders of TATA

Chairman & Non-Executive Director. “Mr N Chandrasekaran”

CEO and Managing Director, Tata Motors. “Mr Guenter Butschek”

CEO, Jaguar Land Rover. “Prof Dr Ralf Speth”

Board of Directors

1. Mr Ratan N. Tata
2. Mr Natarajan Chandrasekaran
3. Mr Nasser Munjee
4. Mr O P Bhatt
5. Ms Hanne Sorensen
6. Mr Vinesh K Jairath
7. Prof Dr Ralf Spet

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 8. Ms Falguni S Nayar
9. Ms Vedika Bhandarkar
10. Mr Guenter Butschek
11. Mr Satish Borwankar

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 Competitions of Tata Motors

1. Maruti

2. Honda

3. Volkswagen

4. Toyota

5. Ford

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 6. Renault

7. Mahindra

8. Nissan

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 SWOT analysis of Tata Motors

SWOT analysis of Tata Motors analyses the brand/company with its strengths, weaknesses,
opportunities & threats. In Tata Motors SWOT Analysis, the strengths and weaknesses are the
internal factors whereas opportunities and threats are the external factors.
SWOT Analysis is a proven management framework which enables a brand like Tata Motors to
benchmark its business & performance as compared to the competitors and industry. Tata Motors
is one of the leading brands in the automobiles sector. The table below also lists the top Tata
Motors competitors and elaborates Tata Motors market segmentation, target group, positioning
& Unique Selling Proposition (USP).

Strengths in the SWOT analysis of Tata motors

1. The internationalization strategy so far has been to keep local managers in new

acquisitions, and to only transplant a couple of senior managers from India into the new
market. The benefit is that Tata has been able to exchange expertise. For example after the
Daewoo acquisition the Indian company leaned work discipline and how to get the
final product ‘right first time.’
2. The company has a strategy in place for the next stage of its expansion. Not only is it
focusing upon new products and acquisitions, but it also has a programme
of intensivemanagement development in place in order to establish its leaders for
tomorrow.
3. The company has had a successful alliance with Italian mass producer Fiat since 2006.
This has enhanced the product portfolio for Tata and Fiat in terms of production and
knowledge exchange. For example, the Fiat Palio Style was launched by Tata in 2007, and
the companies have an agreement to build a pick-up targeted at Central and South
America.

Weaknesses in the SWOT analysis of TATA Motors

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 1. The company’s passenger car products are based upon 3rd and 4th generation platforms,
which put Tata Motors Limited at a disadvantage with competing car manufacturers.
2. Despite buying the Jaguar and Land Rover brands; Tata has not got a foothold in the
luxury car segment in its domestic, Indian market. Is the brand associated with commercial
vehicles and low-cost passenger cars to the extent that it has isolated itself from lucrative
segments in a more aspiring India?
3. One weakness which is often not recognized is that in English the word ‘tat’ means
rubbish. Would the brand sensitive British consumer ever buy into such a brand? Maybe
not, but they would buy into Fiat, Jaguar and Land Rover

Opportunities  in the SWOT analysis of TATA Motors

1. In the summer of 2008 Tata Motor’s announced that it had successfully purchased the
Land Rover and Jaguar brands from Ford Motors for UK £2.3 million. Two of the World’s
luxury car brand have been added to its portfolio of brands, and will undoubtedly off the
company the chance to market vehicles in the luxury segments.
2. Tata Motors Limited acquired Daewoo Motor’s Commercial vehicle business in 2004 for
around USD $16 million.
3. Nano is the cheapest car in the World – retailing at little more than a motorbike. Whilst
the World is getting ready for greener alternatives to gas-guzzlers, is Nano the answer in
terms of concept or brand? Incidentally, the new Land Rover and Jaguar models will cost
up to 85 times more than a standard Nano!
4. The new global track platform is about to be launched from its Korean (previously
Daewoo) plant. Again, at a time when the World is looking for environmentally friendly
transport alternatives, is now the right time to move into this segment? The answer to this
question (and the one above) is that new and emerging industrial nations such as India,
South Korea and China will have a thirst for low-cost passenger and commercial vehicles.
These are the opportunities. However the company has put in place a very proactive
Corporate Social Responsibility (CSR) committee to address potential strategies that will
make is operations more sustainable.

1.3 LITERATURE REVIEW:

Horne and Wachowicz, (2000) Working capital is an important tool for growth and
profitability for corporations. If the levels of working capital are not enough, it could lead
to shortages and problems with the day-to-day operations. Lazard’s and Tryfonidis
(2006) investigated the relationship of corporate profitability and working capital
management for firms listed at Athens Stock Exchange. They reported that there is

33
 statistically significant relationship between profitability measured by gross operating
profit And the Cash Conversion Cycle. Furthermore, Managers can create profit by
correctly handling the individual components of working capital to an optimal level.Shah
and Sana (2006) used Avery small sample of 7 oil and gas sector firms to investigate this
relationship for period 2001-2005.The results suggested that managers can generate
positive return for the shareholders by effectively managing working capital.
Ganesan (2007) selected telecommunication equipment industry to study the
effectiveness of working capital management. The sample included for his research paper
included 443annual financial statements of 349telecommunication equipment companies
covering the period 2001 to 2007. The statistical tests used included correlation,
regression analyses and Analysis of variance (ANOVA). The results showed those days
of the working capital negatively affects the profitability of these firms but in reality it
does not affect the transportability of firms in telecommunication equipment industry.
Sen. M (2009) examined the ISE (Istanbul Stock Exchange) listed firms and checked out
the relationship with the working capital. According to them there is negative relationship
among variables. His research uncovered the importance of the finance directors who act
as moderators or catalysts to increase the productivity of the firm in other words they
positively affect the firm’s performance.

34
 CHAPTER 2
2.1 Research Methodology

Research methodology is a way to systematically solve the Research problem it may be

understand as a science of new research is done Scientifically.

 Type of Data

I used secondary data for the research analysis.

Our whole research is based on secondary data are those data which are already collected by the
researcher for some other purposes. It is collected through

Books
 Website ofthe firm.
 Officialrecords
 Internet

 Sample Size

I used annual reports (Balance Sheet) of last 5 years of the company to do the analysis of
liquidity position of the company.

 Research Design & Research Type

Research design is the frame work or blue print for collecting the information needed for the best
possible way. A research design is the logic frame work or plan for study the guides the
collection and analysis of the data.

I used analytical research for analysis

It includes analysis of the collected secondary data.

The main characteristics of this that the researcher has no control over the variables he can only
report what has happened or what ishappening. I used quantitative data for the study of the
research.

35
 2.2 OBJECTIVES OF THE STUDY:

 To study and evaluate the profit in relation to sales.

 To study the profitability in relation to investment.
 To study gross profit ratio of tata motors Ltd.
 To study net operating ratio of tata motors Ltd.
 To study netprofit ratioof tata motors Ltd.
 To study return on assets ratio of tata motorsLtd.

2.3 SCOPE OF THESTUDY

Scope of the study is restricted to gross profit of tata motors Ltd.

The Analysis has been done through the net profit ratiosanalysis.
The annual report was used for calculation of variousratios.
The study is based on historicaldata.

36
 CHAPTER 3
ANALYSIS& Interpretation

3.1 Gross profit ratio:-

Year Gross profit Net sales Gross profit

margin

2015 11834.66 35373.39 33.46

2016 12671.46 47088.44 26.91

2017 13837.45 54306.56 25.48

2018 12807.25 44765.72 28.61

2019 11237.34 34319.28 32.74

Average 12477.632 43170.678 29.414

37
 60000

50000

40000

30000

gross profit
net sales

20000

10000

2015 2016 2017 2018 2019

 INTERPRETATION :-

From the above table gross profit negativity of the company is sound, and
average gross profit of last 5 years is 29.414 . In the year 2015-16 the gross profit
of company is loses by 6.55. or in the year 2016-17 the average is decreases by
1.43. In the year 2017-18 the gross profit go high with 3.13. In the year 2018-19
the gross profit of tata company is go high with 4.13.
The average of the five years of gross profit is 29.414. The average is show the
growth of company.

38
 3.2 Net operating profit ratio

Year operating Net sales operating

profit profit margin
2015 4032.83 35373.39 11.4

2016 4665.14 47088.44 9.91

2017 4177.55 54306.56 7.69

2018 1717.98 44765.72 3.84

2019 -879.98 34319.28 -2.56

average 2742.904 43170.678 6.056

60000

50000

39
40000

30000
opreating profit
 20000

10000

0
 2015 2016 2017 2018 2019

-10000











 INTERPRETATION :-
From the above table NET OPERATING PROFIT is show the negativity of the
company, and average net operating profit of last 5 years is 6.056 . In the year
2015-16 the net operating profit of company is loses by2.3. or in the year 2016-
17 the average is decreases by1.41. In the year 2017-18 the net operating profit go
less with3.85. In the year 2018-19 the net operating profit of tata company is go
down with 6.40.
The average of the five years of net operating profit is 6.056 . The average is
show the company need to do improvement in the strategy.

3.3 Net Profit Ratio:-

40
 Year Net profit Net sales Net profit
margin
2015 2240.08 35373.39 6.33

2016 1811.82 47088.44 3.85

2017 1242.23 54306.56 2.29

2018 301.81 44765.72 0.67

2019 334.52 34319.28 0.97

average 1186.092 41370.678 2.834

60000

50000

40000

30000 EAT
net sales

20000

10000

0
2015 2016 2017 2018 2019

 INTERPRETATION :-
From the above table NET PROFIT is show the negativity of the
company, and average net profit of last 5 years is . In the year 2015-16 the net
profit of company is loses by 2.48. Or in the year 2016-17 the average is

41
 decreases by1.66. In the year 2017-18 the net profit go high with 1.62. In the year
2018-19 the net profit of tata company is go down with 0.30.
The average of the five years of net profit is 2.83 . The average is show the
company need to do improvement in the strategy.

42
 3.4 Return On Assets:-

Year Net profit Total asset Return on total

assets
2015 2240.08 31405.06 7.13

2016 1811.82 34651.49 5.29

2017 1242.23 30637.64 4.05

2018 301.81 33103.53 0.91

2019 334.52 33692.18 0.99

average 116.092 32697.98 3.674

40000

35000

30000

25000
net profit
20000 total asset
15000
43
10000

5000
 0 2015 2016 2017 2018 2019

4 INTERPRETATION :-
From the above table RETURN ON ASSETS is show the negativity of
the company, and average return on assets of last 5 years is 3.674. In the year
2015-16 the return on assets of company is loses by 1.84. Or in the year 2016-17
the average is decreases by 1.24. In the year 2017-18 the return on assets go high
with 3.14. In the year 2018-19 the return on assets of tata company is go high with
0.8.
The average of the five years of net profit is 3.674. The average is show the
company need to do improvement in the strategy.
.
CHAPTER 4
4.1 FINDINGS

 Gross profit is show the original or real profit of the industry. the gross
profit of the year 2015 is highest in the 5 years in the 2015 the gross profit
is 33.46 when we do comparison of other 4 years with 2015, the 2016 is
lesser 6.55 , 2017 is lesser 7.98 ,2018 is lesser 5.85, and 2019 is 0.72
lesser . so it is show the 2015 is take higher profit.

 Net sales is show the sale of products in a year. The ideal ratio of net
operating profit ratio is 10 to 20 present. In the year 2015 the net operating
profit is 11.4 which is good for a company, in year 2016 the net operating
profit is 9.91 which is lesser 0.08 of ideal ratio, in year 2017 the ratio is
7.69 which is shod the worst situation of a company, in year 2018 the ratio
is 3.84 witch is 6.16% lesser than ideal ratio.

 The ideal ratio of net profit is 10%. In the year 2015 the net profit is 6.33
witch is less than. Or in the year 2016 the net profit is 3.83 it is less than
from the ideal ratio. In year 2017 the net profit is 2.29 and is 7.71 % less
from ideal ratio. In year 2019 the ratio is 0.97 which is the wrist ratio in 5
years.

 In the return on assets ratio the ideal ratio is 5% . in year 2015 the ratio of
return on assets is 7.31 witch is good for company, in 2016 the ratio is

44
 5.29 witch is .29% higher than ideal ratio, in 2017 the ratio is 4.05, or in
year 2018 the ratio is 0.91 which is show the worst situation of company ,
in year 2019 the ratio is 0.99 it is also very bad for a company because the
ratio is 4.1% less than ideal ratio.

4.2 Suggestion

 The gross profit of company is continues goes down . To improve in gross profit
the company have to take correct section for purchases and about the direct
Expenses.

 The net operating profit of company is acceptable but it is very below from the
ideal ratio for the improvement company have to take right decisions about its
sales and try to do proper utilisation of resources for dicrising the cost.

 Net profit is show the average of net income and revenue. Net profit of Tata
company is continuously goes down for sale that problem the company have to do
more investment and start the work full schemes for sell the large amount of
products.
 The ideal ratio of return on assets is high from the ratio of company for solve that
problem company have to take correct decision about it’s fixed and other assets
and also try to do increase net income

45
 4.3 CONCLUSION

 The sales revenue of the TATA motors ltd was high, but it was observed that the
gross profit margin of the company was not increasing as per or there was not
proportionate change in that as compare to SUGGESTION

 Operating profit which represents the profit earned from producing and selling
product was also low as compared to the sales volume of the company.
Therefore, the company needs to reduce its expenses to be able to pay its debts
and gain more earnings after taxes.

 Net profit margin which measures how profitable a company’s sales are after
deducting all expenses interest, taxes & preferred stock dividends declines from
6.33 to 0.97 during the given period, which implies lower level of profitability of
company.

 Earning taxes, which are available for common stockholders, were also low as
compared to the sales volume of the company. This is due to effect of high
expenses on the cost of goods sold and other expenses.

 Finally the company is loss making or rather we can say decreasing their
profitability but they have good future opportunities, it has took carefully at
controlling the costs of goods sold and reduce its expenses to avoid facing
difficult financial conditions in the future.

46
BIBLIOGRAPHY

Books: -
9. Jain Rita, Saxena Nishith (2017) - Research Methodology, RBSA Publication

10. Kothari, C.R. (2018) - Research Methodology, New Age Publication

11. Agarwal & Agarwal (2018) - Financial Management, RBD, Jaipur

12. Agarwal, M.R (2107)- Financial Management, Malik & Company, Jaipur

13. Sharma & Bhardwaj (2016) - Book-keeping & Accounting, RBD, Jaipur

Websites:-
www.tatamotors.com
https://www.owler.com/company/tatamotors
https://www.ukessays.com/essays/marketing/the-swot-analysis-on-tata-motors-marketing-
essay.php

47
 ANNEXURE

5.1 BALANCE SHEET OF TATA MOTORS

BALANCE SHEET OF MAR 19 MAR 18 MAR 17 MAR 16 MAR 15  

TATA MOTORS (in Rs.
Cr.)

  12 mths 12 mths 12 mths 12 mths 12 mths  

EQUITIES AND  
LIABILITIES

SHAREHOLDER'S  
FUNDS

Equity Share Capital 679.22 679.22 679.22 679.18 643.78  

TOTAL SHARE CAPITAL 679.22 679.22 679.22 679.18 643.78  

Reserves and Surplus 21,483.3 19,491.76 20,483.39 22,582.93 14,195.94  

0

TOTAL RESERVES AND 21,483.3 19,491.76 20,483.39 22,582.93 14,218.81  

SURPLUS 0

TOTAL SHAREHOLDERS 22,162.5 20,170.98 21,162.61 23,262.11 14,862.59  

FUNDS 2

NON-CURRENT  
LIABILITIES

48
Long Term Borrowings 13,919.8 13,155.91 13,686.09 10,599.96 12,318.96  
1

Deferred Tax Liabilities [Net] 205.86 154.61 147.58 71.39 0.00  

Other Long Term Liabilities 399.04 502.37 1,451.47 3,289.91 286.80  

Long Term Provisions 1,281.59 1,009.48 892.18 750.89 2,104.19  

TOTAL NON-CURRENT 15,806.3 14,822.37 16,177.32 14,712.15 14,709.95  

LIABILITIES 0

CURRENT LIABILITIES  

Short Term Borrowings 3,617.72 3,099.87 5,158.52 3,654.72 7,762.01  

Trade Payables 10,408.8 9,411.05 7,082.95 5,141.17 8,852.65  

3

Other Current Liabilities 7,765.57 10,845.11 8,819.71 9,455.58 3,142.88  

Short Term Provisions 1,148.69 862.92 477.17 450.27 613.09  

TOTAL CURRENT 22,940.8 24,218.95 21,538.35 18,701.74 20,370.63  

LIABILITIES 1

TOTAL CAPITAL AND 60,909.6 59,212.30 58,878.28 56,676.00 49,943.17  

LIABILITIES 3

ASSETS  

NON-CURRENT ASSETS  

49
Tangible Assets 18,316.6 18,192.52 17,897.12 17,573.25 12,260.50  
1

Intangible Assets 3,970.22 3,411.23 2,875.80 3,502.56 3,522.73  

Capital Work-In-Progress 2,146.96 1,371.45 1,902.61 1,557.95 1,349.95  

FIXED ASSETS 28,573.4 26,800.35 28,043.91 26,762.34 21,824.02  

2

Non-Current Investments 15,434.1 14,260.79 14,858.39 15,217.48 16,966.95  

9

Deferred Tax Assets [Net] 0.00 0.00 0.00 0.00 0.00  

Long Term Loans And 143.13 143.96 391.46 252.93 2,403.56  

Advances

Other Non-Current Assets 3,529.59 3,035.54 2,827.44 2,581.56 175.67  

TOTAL NON-CURRENT 47,680.3 44,240.64 46,121.20 44,814.31 41,370.20  

ASSETS 3

CURRENT ASSETS  

Current Investments 1,433.18 1,820.87 2,437.42 1,745.84 20.22  

Inventories 4,662.00 6,352.04 5,553.01 5,117.92 4,802.08  

Trade Receivables 3,250.64 3,479.81 2,128.00 2,045.58 1,114.48  

Cash And Cash Equivalents 1,306.61 795.42 326.61 788.42 944.75  

50
Short Term Loans And 200.08 140.27 215.96 484.44 1,574.41  
Advances

OtherCurrentAssets 2,376.79 2,383.25 2,096.08 1,679.49 117.03  

TOTAL CURRENT 13,229.3 14,971.66 12,757.08 11,861.69 8,572.97  

ASSETS 0

TOTAL ASSETS 60,909.6 59,212.30 58,878.28 56,676.00 49,943.17  

3

OTHER ADDITIONAL  
INFORMATION

CONTINGENT  
LIABILITIES,
COMMITMENTS

Contingent Liabilities 7,246.04 5,269.63 4,787.17 0.00 9,882.65  

CIF VALUE OF IMPORTS  

Raw Materials 0.00 0.00 0.00 0.00 1,254.57  

Stores, Spares And Loose 0.00 0.00 0.00 0.00 211.49  

Tools

Trade/Other Goods 0.00 0.00 0.00 0.00 211.49  

Capital Goods 0.00 0.00 0.00 0.00 387.62  

EXPENDITURE IN  
FOREIGN EXCHANGE

51
Expenditure In Foreign 0.00 3,079.76 0.00 0.00 1,170.88  
Currency

REMITTANCES IN  
FOREIGN CURRENCIES
FOR DIVIDENDS

Dividend Remittance In -- -- -- -- 337.83  

Foreign Currency

EARNINGS IN FOREIGN  
EXCHANGE

FOB Value Of Goods -- -- -- -- 3,980.18  

Other Earnings -- 5,422.47 -- -- 1,600.52  

BONUS DETAILS  

Bonus Equity Share Capital 111.29 111.29 111.29 111.29 111.29  

NON-CURRENT  
INVESTMENTS

Non-Current Investments -- -- 218.18 144.34 275.36  

Quoted Market Value

Non-Current Investments -- 310.19 310.19 310.19 16,613.45  

Unquoted Book Value

CURRENT  
INVESTMENTS

52
Current Investments Quoted -- 303.84 -- -- --  
Market Value

Current Investments -- 1,517.03 2,437.42 1,745.84 20.22

Unquoted Book Value

PROFITABILITY RATIOS  

PBDIT Margin (%) 10.82 8.27 5.84 10.15 1.77  

PBIT Margin (%) 6.35 2.99 -1.00 4.71 -5.39  

PBT Margin (%) 3.46 -1.60 -5.31 0.36 -  

10.95

Net Profit Margin (%) 2.91 -1.75 -5.48 -0.14 -  

13.05

Return on Networth / Equity (%) 9.11 -5.13 - -0.26 -  

11.4 31.93
8

Return on Capital Employed (%) 11.57 5.04 -1.19 5.31 -  

16.02

Return on Assets (%) 3.31 -1.74 -4.12 -0.10 -9.48  

Total Debt/Equity (X) 0.79 0.81 0.89 0.61 1.35  

53
 Asset Turnover Ratio (%) 113.61 99.35 75.2 75.59 72.67
6

5.2 Statement of Profit and Loss

(` in crores)
Year Year
Not ended ended
es March 31, March 31,
2019 2018
Revenue from
operations
Revenue 68,764.88 58,234.33
Other operating 437.88 455.48
revenue
I. Total revenue from 32 69,202.76 58,689.81
operations
II. Other Income 33 2,554.66 2,492.48
III Total Income (I+II) 71,757.42 61,182.29
.
IV. Expenses
(a) Cost of materials 43,748.77 37,080.45
consumed
(b) 6,722.32 4,762.41
Purchasesofproductsfor
sale
(c)Changesininventoriesoffinishedgoods,work-in- 144.69 842.05
progressandproductsforsale
(d) Excise duty 32(2 - 793.28
)
(e) Employee benefits 34 4,273.10 3,966.73
expense
(f) Finance costs 35 1,793.57 1,744.43

54
 (g) Foreign exchange 215.22 17.14
loss (net)
(h) Depreciation and amortisation expense 3,098.64 3,101.89
(i) Product development/Engineering expenses 571.76 474.98
(j) Other expenses 36 9,680.46 9,234.27
(k) Amount transferred to capital and other accounts 37 (1,093.11) (855.08)
Total Expenses (IV) 69,155.42 61,162.55
V. Profit before exceptional items and tax (III-IV) 2,602.00 19.74
VI. Exceptional items
(a) Employee 4.23 3.68
separation cost
(b) Write off/provision of capital work-in-progress and intangibles 38 180.66 962.98
under development (net) (a)
( c) Provision for impairment of investments in 241.86 -
subsidiary companies
(d) Profit on sale of investment in a subsidiary 38 (332.95) -
company (b)
(e) Others 38 109.27 -
( c)
VI Profit/(loss) before tax 2,398.93 (946.92)
I. (V-VI)
VI Tax expense/(credit) 29
II. (net)
(a) Current tax (including Minimum Alternate 294.66 92.63
Tax)
(b) Deferred tax 83.67 (4.70)
Total tax expense 378.33 87.93
IX. Profit/(loss) for the year from continuing 2,020.60 (1,034.85)
operations (VII-VIII)
X. Other comprehensive income/(loss):
(A) (i) Items that will not be reclassified to profit and loss:
(a) Remeasurement gains and (losses) on defined benefit (67.14) 18.24
obligations (net)
(b) Equity instruments at fair value through other 55.44 44.04
comprehensive income
(ii)Incometax(expense)/creditrelatingtoitemsthatwillnotberecla 18.07 (6.27)
ssifiedtoprofitorloss
(B)(i)Itemsthatwillbereclassifiedtoprofitorloss- (45.72) (19.56)
gainsand(losses)incashflowhedges
(ii)Incometax(expense)/creditrelatingtoitemsthatwillbereclassi 15.92 6.77
fiedtoprofitorloss
Total other comprehensive income/(loss), net of (23.43) 43.22
taxes
XI. Total comprehensive income/(loss) for the year 1,997.17 (991.63)
(IX+X)
XI Earnings per equity 40
I. share (EPS)
(A) Ordinary shares (face value of ` 2 each) :
(i) Basic ` 5.94 (3.05)
(ii) Diluted ` 5.94 (3.05)
(B) ‘A’ Ordinary shares (face value of ` 2 each) :
(i) Basic ` 6.04 (3.05)
(ii) Diluted ` 6.04 (3.05)
See accompanying notes to financial statements
In terms of our report Forandonbehalfofth
attached eBoard
For B S R & Co. LLP NCHANDRASEKARA N MUNJEE GUENTER
N[DIN:00121863] [DIN:00010180] BUTSCHEK [DIN:
07427375]
Chartered Accountants Chairman CEO and Managing
Director

5.3 Cash flow statement

(` in crores)

55
 Yearended Yearended
March31,20 March31,20
19 18
Cash flows from operating activities:
Profit/(loss) for the year 2,020.60 (1,034.85)
Adjustments for:
Depreciation and amortisation expense 3,098.64 3,101.89
Allowances/ (reversal) for trade and other receivables 170.90 (109.19)
Inventory write down/(reversal) (net) 42.13 162.87
Provision for impairment of investments in subsidiary companies 241.86 -
Write off/Provision of capital work-in-progress and intangibles under 180.66 962.98
development (net)
Exceptional item- others 109.27 -
Share-based payments 8.44 -
Marked-to-market on investments measured at Fair value through profit (1.90) (2.03)
or loss
Loss on sale of assets (net) (including assets scrapped / written off) 223.94 689.17
Profit on sale of investment in a subsidiary company (332.95) -
Profit on sale of investments at FVTPL (net) (69.27) (103.17)
Gain on fair value of below market interest loans (13.37) (6.02)
Tax expense 378.33 87.93
Finance costs 1,793.57 1,744.43
Interest income (335.87) (397.71)
Dividend income (1,526.25) (1,054.69)
Foreign exchange loss (net) 178.26 49.24
4,146.39 5,125.70
Cashflowsfromoperatingactivitiesbeforechangesinfollowingassetsandlia 6,166.99 4,090.85
bilities
Trade receivables 164.50 (1,217.44)
Loans and advances and other financial assets (276.11) (1,091.81)
Other current and non-current assets 204.77 429.86
Inventories 966.00 (277.80)
Trade payables and acceptances (725.29) 2,763.65
Other current and non-current liabilities 323.95 (138.51)
Other financial liabilities (892.00) (957.23)
Provisions 542.04 540.78
Cashgeneratedfromoperations 6,474.85 4,142.35
Income taxes paid (net) (182.22) (8.41)
Net cash from operatin gactivities 6,292.63 4,133.94
Cash flows from investing activities:
Payments for property, plant and equipments (2,790.45) (1,378.58)
Payments for other intangible assets (1,993.03) (1,444.37)
Proceeds from sale of property, plant and equipments 30.25 28.15
Investments in Mutual Fund purchased (net) 413.74 1,025.59

56
 Investments in subsidiary companies (837.98) (300.00)
Purchase of business from a subsidiary company (0.10) -
Investments in joint ventures - (2.50)
Loan given to joint ventures (3.75) -
Loan to subsidiary companies (0.50) -
Investment in other companies - (41.63)
Sale of Investment in a subsidiary company 532.96 -

(` in crores)
Yearended Yearended
March31,20 March31,20
19 18
Sale of Investment in other companies 5.18 -
(Increase)/Decrease in short term inter corporate deposit (2.00) 60.00
Deposits with financial institution (500.00) -
Deposits/restricted deposits with banks (827.72) (768.67)
Realisation of deposits/restricted deposits with banks 257.08 657.71
Interest received 327.16 399.34
Dividend received 1,568.61 1,054.69
Net cash used in investing activities (3,820.55) (710.27)
Cash flows from financing activities
Proceeds from issue of shares held in abeyance - 0.00*
Proceeds from long-term borrowings 3,119.71 1,621.80
Repayment of long-term borrowings (3,823.69) (587.10)
Proceeds from short-term borrowings 6,274.19 3,644.70
Repayment of short-term borrowings (5,153.61) (6,823.28)
Net change in other short-term borrowings (with maturity up to three (588.97) 1,139.44
months)
Dividend paid (including dividend distribution tax) (2.63) (2.75)
Interestpaid[includingdiscountingchargespaid,`449.04crores(March31,2018` (2,354.70) (2,098.44)
478.28crores)]
Net cash used in financing activities (2,529.70) (3,105.63)
Net increase/(decrease) in cash and cash equivalents (57.62) 318.04
Cash and cash equivalents as at April 1, (opening balance) 546.82 228.94
Exchange fluctuation on foreign currency bank balances (1.80) (0.16)
Cash and cash equivalents as at March 31, (closing balance) 487.40 546.82
Non-cash transactions:
Liabilitytowardsproperty,plantandequipmentandotherintangibleassetspurchasedoncre 438.19 258.04
dit/deferredcredit
Increase/
(decrease)inliabilitiesarisingfromfinancingactivitiesonaccountofnon-
cashtransactions:
Exchange differences 341.51 25.66
Amortisation / EIR adjustments of prepaid borrowings 3.21 13.73

57
 * less than ` 50,000/-

58
  Employeebenefits

Defined Benefit Plan

Pension and post retirement medical plans

Thefollowingtablesetsoutthefundedandunfundedstatusandtheamountsrecognisedinthefinancialstate
mentsforthepension
andthepostretirementmedicalplansinrespectofTataMotorsandjointoperations:

(` in crores)
Pension Benefits Post retirement medical
Benefits
As As As As
at March at March at March at March
31, 2019 31, 2018 31, 2019 31, 2018
Change in defined benefit obligations
:
Defined benefit obligation, beginning 898.18 860.35 138.55 169.31
of the year
Current service cost 59.49 56.64 6.76 8.89
Interest cost 66.56 60.26 10.33 12.01
Remeasurement a (gains) / losses
Actuarial(gains)/lossesarisingfromc 0.28 (11.28) - (11.17)
hangesin demographicassumptions

Actuarial(gains)/lossesarisingfromchan 15.70 25.21 9.91 (2.65)

gesin financial assumptions
Actuarial(gains)/lossesarisingfromc 55.64 8.70 (14.62) (28.24)
hangesin experienceadjustments
Transfer in/(out) of liability 6.88 1.58 2.30 -
Benefits paid from plan assets (59.37) (105.49) - -
Benefits paid directly by employer (5.54) (5.34) (9.00) (9.60)
Past service cost- plan amendments 0.39 7.55 - -
Defined benefit obligation, end of the 1,038.21 898.18 144.23 138.55
year

Change in plan assets:

59
 Fair value of plan assets, beginning of 799.73 738.53 - -
the year
Interest income 63.23 55.42 - -
Remeasurements gains / (losses)
Return on plan assets, (0.23) (0.59) - -
(excluding amount included in
net Interest expense)
Employer’s contributions 105.36 110.28 - -
Transfer in/(out) of assets 5.89 1.58 - -
Benefits paid (59.37) (105.49) - -
Fair value of plan assets, end of the 914.61 799.73 - -
year

60