i) Freight and handling charges
in Rs. crores
  FY 13 FY 12 Change %
Freight and handling charges 2,261 1,704 32.7

Higher volumes of despatches along with increase in rates and change in destination mix led to 33% increase in freight and handling charges.

j) Royalty

in Rs. crores
  FY 13 FY 12 Change %
Royalty 1,152 912 26.3

Royalty charges in the Financial Year 2012-13 were higher due to increase in royalty rates and volume of both iron ore and coal.

k) Rates and Taxes

in Rs. crores
  FY 13 FY 12 Change %
Rates and taxes 423 372 13.7

Increase in rates and taxes were mainly due to provision for entry tax and increase in water tax charges.

l) Other expenses

in Rs. crores
  FY 13 FY 12 Change %
Other expenses 2,830 2,662 6.3

Increase in other expenses is primarily on account of increase in forex losses during the year, increase in repairs to buildings and increases in various other expense heads.

m) Finance cost and Net finance cost

in Rs. crores
  FY 13 FY 12 Change %
Finance cost 1,877 1,925 (2.5)
Net finance cost 1,546 1,062 45.6

While the gross finance cost for the Financial Year 2012-13 was slightly lower as compared to the previous year, the net finance cost was higher by 46% due to lower interest income and lower profit on sale of current investment during the year.

n) Exceptional items

in Rs. crores
  FY 13 FY 12 Change %
Exceptional items (675) 511 (232.1)

Exceptional items during the Financial Year 2012-13 includes a non-cash impairment provision of Rs. 687 crores with regard to Tata Steel's investment and advances to Tata Steel KZN Ltd. Exceptional items for the Financial Year 2011-12 represents profit on sale of investments in Tata Refractories Limited (now known as TRL Krosaki Refractories Limited).

o) Fixed assets

in Rs. crores
  FY 13 FY 12 Change %
Gross Block 47,254 39,532 19.5
Less: Impairment 137 133 3.0
Less: Depreciation 13,520 11,986 12.8
Net Block 33,597 27,413 12.6

The increase in fixed assets represents primarily the 2.9 mtpa expansion at Jamshedpur and Kalinganagar project at Odisha.

p) Investments

in Rs. crores
  FY 13 FY 12 Change %
Investments in subsidiary, JVs and associates 48,782 48,223 1.2
Other investments 1,203 856 40.5
Investment in mutual funds 434 1,204 (64.0)
Total investments 50,419 50,283 0.3

During the year the Company increased its investments in some of the subsidiaries which includes Jamshedpur Continuous Annealing and Processing Company Private Limited, The Tinplate Company of India Limited and Tata Sponge Iron Limited (which became a subsidiary during the year). Increase in other investments represents additional investments in equity shares of The Tata Power Company Limited and investments in debentures of Kalimati Investments Company Limited during the year.

q) Inventories

in Rs. crores
  FY 13 FY 12 Change %
Stores & Spares 1,473 923 59.6
Stock-in-trade 3,785 3,936 (3.8)
Total inventoriess 5,258 4,859 8.2

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. Decrease in inventories was primarily due to decrease in cost of imported coal partly offset by increase at Ferrro Alloys and Minerals division and increase in finished and semi-finished stock mainly in Flat products.

r) Sundry Debtors

in Rs. crores
  FY 13 FY 12 Change %
Gross Debtors 811 915 (11.4)
Less: Provision for doubtful debts 14 11 27.3
Net Debtors 797 904 (11.8)

Decrease in debtors is mainly on account of new debtors discounting scheme introduced from June, 2012. This was partly offset by increase in month-end export debtors.

s) Loans and advances

in Rs. crores
  FY 13 FY 12 Change %
Loans and advances 8,782 8,130 8.0

Increase in Loans and Advances is primarily on account of increase in advance against equity to Tata Steel Holdings (TSH) offset by provision for doubtful advances of Tata Steel KZN.

t) Cash flow and Net debt

Cash flow

in Rs. crores
  FY 13 FY 12 Change %
Net Cash flow from operating activities 11,069 10,424 6.2
Net Cash flow/(used) from investing activities (8,522) (2,859) 198.1
Net Cash flow/(used) from financing activities (4,282) (7,767) (44.9)
Net increase/(decrease) in cash & cash equivalents (1,735) (202) 758.9

Net cash flow from operating activities: The net cash generated from operating activities was Rs. 11,069 crores during the year ended on 31st March, 2013 as compared to Rs. 10,424 crores during April to March 2012. The cash operating profit before working capital changes and direct taxes during the Financial Year 2012-13 was Rs. 11,587 crores, as compared to Rs. 11,829 crores during the Financial Year 2011-12. Decrease in trade and other receivables and increase in trade payables were partly offset by increase in inventories in the current period resulting in the overall decrease in working capital.

Net cash from investing activities: The net cash outflow from investing activities amounted to Rs. 8,522 crores in the Financial Year 2012-13 as compared to an outflow of Rs. 2,859 crores during the Financial Year 2011-12. The outflow during the Financial Year 2012-13 broadly represents an incremental investment in subsidiaries (Rs. 2,124 crores) and capex (Rs. 7,509 crores) partly offset by the sale of current investment (Rs. 992 crores) and interest and dividend income received (Rs. 204 crores).

Net cash from financing activities: The net cash outflow from financing activities was Rs. 4,282 crores during the Financial Year 2012-13 as compared to an outflow of Rs. 7,767 crores during the Financial Year 2011-12. The outflow during the year was primarily due to repayment of borrowings net of fresh drawal (Rs. 1,093 crores) and interest and dividend payments (Rs. 2,808 crores).

Net debt

in Rs. crores
  FY 13 FY 12 Change %
Gross Debt 27,508 26,172 5.1
Less: Cash and Bank balances 2,221 3,950 (43.8)
Less: Current investments 434 1,204 (64.0)
Net Debt 24,853 21,018 18.2

During the year, the increase in gross debt is primarily on account of increase in fresh drawals, partly offset by repayments of CARS. Current investments and cash balances were lower by Rs. 2,499 crores as compared to 31st March, 2012, contributing to the 18% increase in net debts.

2. Tata Steel Group

Tata Steel Group posted a consolidated loss after tax (after minority interest and share of profit of associates) of Rs. 7,058 crores against a profit of Rs. 5,390 crores in the previous year primarily due to a non-cash impairment provision of Rs. 8,356 crores during the Financial Year 2012-13 and continuing weak market conditions in Europe that impacted the operating performance of the European operations.

a) Net sales and other operating income

in Rs. crores
  FY 13 FY 12 Change %
Tata Steel 38,199 33,933 12.6
Tata Steel Europe 78,012 82,153 (5.0)
NatSteel Holding 9,393 8,600 9.2
Tata Steel Thailand 4,436 4,110 7.9
Others 28,255 22,566 25.2
Eliminations & adjustments (23,583) (18,462) 27.7
Group Total 1,34,712 1,32,900 1.4

Tata Steel, India recorded a turnover growth of 13% primarily on account of higher volumes as well as better prices. Turnover of Tata Steel Europe was 5% lower than previous year (15% lower in GBP terms) on account of lower realisations (by 8%) and lower volumes (by 7%) reflecting weak market conditions. Turnover of NSH and TSTH reduced by 4% reflecting lower prices (increase in rupee terms on account of exchange rate impact).

b) Purchase of finished, semi-finished and other products

in Rs. crores
  FY 13 FY 12 Change %
Tata Steel 453 210 115.7
Tata Steel Europe 7,633 10,274 (25.7)
NatSteel Holding 7,050 6,595 6.9
Tata Steel Thailand 2,700 2,826 (4.5)
Others 4,267 5,367 (20.5)
Eliminations & adjustments (3,629) (4,199) (13.6)
Group Total 18,474 21,073 (12.3)

Purchases at the Indian operations increased primarily on account of higher purchases to support project activities at Kalinganagar. Purchases at TSE reduced due to lower production. Excluding exchange translation impact, purchases at NSH and TSTH decreased by 6% and 15% respectively, on account of lower costs. Decrease in 'Others' primarily reflects lower purchases at TSPDL.

c) Raw materials consumed

in Rs. crores
  FY 13 FY 12 Change %
Tata Steel 9,877 8,014 23.2
Tata Steel Europe 29,674 35,853 (17.2)
NatSteel Holding 93 116 (19.8)
Tata Steel Thailand 246 514 (52.1)
Others 17,449 12,502 39.6
Eliminations & adjustments (16,696) (11,541) 44.7
Group Total 40,643 45,458 (10.6)

The increase in raw material consumed at Tata Steel India is primarily due to higher production volume as well as rates, higher consumption of purchased coke and increase in freight and handling on own material. Consumption at TSE reduced by 26% (in GBP terms) primarily due to lower production volumes. Reduction in TSTH is primarily on account of lower cost of materials.

d) Payments to and provisions for employees

in Rs. crores
  FY 13 FY 12 Change %
Tata Steel 3,609 3,047 18.4
Tata Steel Europe 13,762 12,885 6.8
NatSteel Holding 664 563 17.9
Tata Steel Thailand 131 114 14.9
Others 752 620 21.3
Eliminations & adjustments
Group Total 18,918 17,229 9.8

The increase in Tata Steel India, was on account of normal salary increases and consequential increase in retiral provisions. The wage cost at TSE was lower by 4% in GBP terms due to restructuring activities at Long products and the impact of the curtailment gain on the BSPS (but reflects increases on account of exchange rate impact on translation).

e) Purchase of power

in Rs. crores
  FY 13 FY 12 Change %
Tata Steel 2,321 1,804 28.7
Tata Steel Europe 1,995 2,046 (2.5)
NatSteel Holding 418 392 6.6
Tata Steel Thailand 432 341 26.7
Others 558 414 34.8
Eliminations & adjustments (170) (82) 107.3
Group Total 5,554 4,915 13.0

Increase in power purchase cost at Tata Steel, India was primarily on account of increase in cost for own usage due to higher rate and volume to support higher production levels as well as higher purchases for outside sales. Reduction in TSE reflects lower consumption. Increase in TSTH is primarily due to higher usage. Increase in 'Others' is mainly on account of higher consumption at TSKZN due to increased production.

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