Higher volume of despatches along with increase in rates and change in destination mix led to 33% increase in freight and handling charges at Tata Steel, India. TSE registered an 8% decrease (in GBP terms) in the freight and handling cost due to lower deliveries as compared to previous year (increases due to exchange rate impact on translation). Increase in 'Others' primarily reflects higher freight and handling activity by TMILL at ISL Dubai.

g) Other expenditure

Increase in Tata Steel, India was mainly due to higher forex losses on revaluation of loans, increase in royalty, stores consumed and conversion charges. Expenditure in TSE increased 3% in GBP terms primarily due to higher conversion cost (higher increase in rupee terms due to exchange rate impact on translation).

h) Finance costs and net finance cost

In Tata Steel, India, while the gross finance cost for the Financial Year 2012-13 was slightly lower as compared to previous year, the net finance cost was higher by 46% due to lower interest income and lower profit on sale of current investments during the year. Net Finance cost in TSE was lower primarily due to reduction in interest payable relating to revolving credit facility (RCF) and senior facility agreement (SFA).

i) Exceptional items

The exceptional items in the Financial Year 2012-13 includes the non-cash provision for impairment in TSE (Rs. 7,354 crores), TSTH (Rs. 518 crores), TSGMH (Rs. 132 crores), Tata Steel KZN (Rs. 307 crores) and Tata Metaliks (Rs. 45 crores) partly offset by profit on sale of non-current investment by Kalimati Investments Company Limited (Rs. 966 crores). Exceptional in the Financial Year 2011-12 includes profit on sale of investment in Tata Refractories Limited (Rs. 442 crores) and profit on sale of stake in Riversdale Mining Limited (Rs. 2,920 crores).

j) Stores and spares stock

In Tata Steel, India, increase in stores and spares were primarily due to increase in mechanical and electrical spares stock to support 3 million tonnes expansion activities at Jamshedpur.

k) Stock-in-trade

The overall finished and semi-finished inventory decreased over March 2012, primarily at TSE on account of lower stocks by 163k tonnes. Reduction in raw material inventory at TSE was primarily on account of lower cost of raw materials whereas in Tata Steel, India, raw material inventories were lower primarily due to decrease in imported coal cost.

l) Sundry debtors

Decrease in debtors at Tata Steel, India is mainly on account of new debtors discounting scheme introduced from June 2012, partly offset by increase in month-end export debtors. TSE debtors decreased primarily reflecting the utilisation of securitisation arrangements with Tata Steel Global Proco.

m) Cash flow and net debt

Cash flow

Net cash flow from operating activities: The Group generated Rs. 13,324 crores from operations during the Financial Year 2012-13 as compared to Rs. 11,385 crores in the Financial Year 2011-12. The cash generated from operations prior to the changes in working capital and tax payments in the current period was Rs. 12,764 crores against Rs. 13,779 crores in the previous year. Cash from operations was higher than last year due to decrease in working capital by Rs. 3,129 crores in the current year as against a decrease of Rs. 1,072 crores in the previous year.

Net cash from investing activities: A sum of Rs. 12,321 crores was applied in the current year towards investing activities including capex of Rs. 15,472 crores partly offset by sales of current and noncurrent investments.

Net cash from financing activities: Cash used in financing activities (equity raised/loans availed net of repayments and interest payments) in the current year is Rs. 2,045 crores as compared to Rs. 8,462 crores during the previous year.

Net decrease in cash and cash equivalent was Rs. 1,042 crores, excluding Rs. 198 crores effect of exchange rate on translation of foreign currency cash and bank balances, in the Financial Year 2012-13 resulting in a cash and cash equivalent balance of Rs. 9,695 crores as on 31st March, 2013 for the Group.

Net debt

Net debt at Rs. 55,422 crores at 31st March, 2013 was higher than March 2012 by Rs. 7,764 crores due to increase in the gross debt level as well as reduction in cash and bank balances. Gross debt was higher mainly due to increase in the fresh drawals net of repayments during the period and exchange rate impact on revaluation.