HARSH VAGAL SYBA-2377

RAMNARAIN RUIA AUTONOMOUS COLLEGE

Ramnarain Ruia Autonomous College, Matunga, Mumbai 400019

Class -SYBA Sem- III Commerce Assignment

PAPER CODE- RUACOM301 FINANCIAL MANAGEMENT YEAR- 2020-21

TOPIC- COMPANY STUDY OF MARUTI SUZUKI AND TATA MOTORS

NAME- HARSH VIVEK VAGAL Roll No-2377

Commerce Assignment for 2020-21

Year:
Class: SYBA

Semester: III

Paper Code: RUACOM301

Paper Title: FINANCIAL MANAGEMENT

Topic of Assignment STUDY OF COMPANIES

(MARUTI SUZUKI AND TATA
MOTORS)
ROLL NO- 2377 NAME- HARSH VIVEK VAGAL

Date: 22-10-2020

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INDEX

Ramnarain Ruia Autonomous College, Matunga, Mumbai 400019

Class SYBA Sem- III Commerce Assignment

PAPER CODE- RUACOM301 FINANCIAL MANAGEMENT YEAR- 2020-21

NAME- HARSH VIVEK VAGAL Roll No-2377

SR CONTENTS PG
NO. NO.
1 INTRODUCTION TO THE COMPANIES 3
2 VISION AND MISSION OF THE COMPANIES 5
3 FINANCIAL PLANS OF COMPANIES 6
4 CAPITALIZATION AND CAPITAL STRUCTURE OF 9
COMPANIES
5 COST OF CAPITAL OF COMPANIES (WACC) 12
6 FINANCIAL RATIOS AND PERFORMANCE OF 14
COMPANIES
7 SOURCES OF FUNDS OF COMPANIES 17
8 MERGES AND ACQUISITIONS OF COMPANIES 18
9 VENTUE CAPITAL OF COMPANIES 20
10 IMPACT OF COVID ON COMPANIES 20
11 INITATIVES TAKEN BY COMPAINES TO TACKLE 22
FINANCIAL PROBLEMS
12 FINANANCIAL POLICIES OF COMPANIES 24
13 CONCLUSION OF STUDY 24
14 BIBLOGRAPHY

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FINANCIAL MANAGEMENT
TATA MOTORS

1. Introduction to the company

WHAT IS TATA MOTORS?
All about Tata motors

Tata Motors Group (i.e. Tata Motors) is a 45 billion organisation. It is a leading global
automobile manufacturing company. Its wide range of portfolio includes a large range of
cars, sports vehicles, trucks, buses and defence vehicles. Tata Motors is one of India's largest
original equipment manufacturer offering an extensive range of integrated, smart and
electronic-mobility solutions.
So, tata motors as an automobile manufacturing company, was first established in year. As
per the years 2019-20 annual general reports of the company, the total number of its
permanent employees is 78906, the total vehicles produced and sold by tata motors are
961463 and the total number of sales and service points it has in India is 8400.
The total amount of the united states billion dollars 100 billion Tata group founded by
Jamsetji Tata in 1868, Tata Motors is listed among the world’s leading manufacturers of
automobiles. They believe in ‘Connecting aspirations’, by offering innovative mobility
solutions that are in favour with customers' aspirations. Tata motorsare is India’s one of the
largest automobile producer, and they are going to take the lead in giving shape to the Indian
commercial vehicle landscape, with the introduction of leading-edge powertrains and electric
solutions manufactured for power performances and users comfort at the least life-cycle
costs. Tata motors new passenger cars and utility vehicles are based on Impact Design and
offer a best blend of performance, driveability and connectivity.

Tata motors aims on connecting aspirations and their pipeline of tech products keeps them at
the top of the automobile market. Tata motors have six key mobility drivers that will lead
them in the future – modular architecture, complexity reduction in manufacturing, connected
& autonomous vehicles, clean drivelines, shared mobility, and low total cost of ownership.
Tata motors dependent brand and also sub brand TAMO is an incubating centre of innovation

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that would spark new mobility solutions with the help of new technologies, tata’s business
models and partnerships.
Tata motors mission - across their worldwide spread company – is to be passionate in
anticipating and providing the best vehicles and experiences that excite their global
consumers.
Tata Motors Group is a leading global automobile manufacturer company which is a multi-
national mixture of the Tata group, they offer a wide and diverse portfolio of cars, sports
utility vehicles, trucks, buses and defence vehicles. Tata motors have operations in India, the
United Kingdoms, South Korea, South Africa, China, Brazil, Austria, India and Slovakia
through a strong global network of subsidiaries, associate companies
and Joint Ventures, including Jaguar Land Rover in the UK and Tata Daewoo
in South Korea.
Tata motors limited has Commercial Vehicle offerings that include sub-1 tonne to 55-tonne
of gross vehicle weight trucks and small, medium and
large buses and coaches. Tata motors limited also has Passenger Vehicle offerings that
include the NEW FOREVER range that exemplifies the impact
2.0 design language across cars and utility vehicles and is developed
using pioneering technologies that are sustainable.
Tata Motors Limited is also playing a leading role in proactively developing the electric
mobility landscape in the country.
Tata motors limited has a JV with Fiat Group Automobiles to manufacture passenger
vehicles, engines and transmissions for the domestic market, and a
JV with Cummins Inc. United states of America for the design and manufacturing of diesel
engines
WHAT IS MARUTI SUZUKI?
All about Maruti Suzuki

Maruti Suzuki India Limited, also known as Maruti Udyog Limited, is an automobile manufacturer of
India. It is a 56-percentage owner of subsidiary of the Japanese automotive manufacturer SUZUKI
MOTOR CORPERATION. As of 2018, it had a market share of 53 Percentage of the Indian car
market. The company has it headquarter at New Delhi, India.

The Company has two state of the-art manufacturing facilities in Gurugram and Manesar in
Haryana, having production capacity ~1.5 million units per year. Highly efficient lean
manufacturing processes, together along with a skilled and motivated employee,
enables manufacturing of reliable and quality products by Maruti Suzuki ltd.
Suzuki Motor Gujarat Private Ltd, a subsidiary of State Machine Compile, was set up in
Hansalpur, Gujarat to cater to the increasing demand for the Company’s products and has
been operational since year 2018. Through this new facility, an additional and separate
annual production capacity of 0.5 million units has been made available, thereby taking the
combined production capability to ~2 million units. The Company has responsibility for the
sales and distribution of units produced at the State Machine Compiler facility in Gujarat

Maruti Suzuki India Limited (known as Maruti Udyog Limited) was established in year 1981on
February 24th. It was organized as a legal corporation beneath the provision of the Indian
Companies ACT, 1956 was marked as the rising demand of personal transportation by the lack of an
efficient public transport system. It is the India’s largest car manufacturing company accruing over 50
percentage of domestic car market. Suzuki Motor Corporation limited is the largest manufacture of
mini passenger vehicles of Japan. As per the Automotive Intelligence, Suzuki is eleventh largest

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vehicle manufacturing company in the world and fourth in Japan in terms of worldwide sales analysis.
The company offered different range of cars from passenger cars to sports cars. From the year 1982,
Maruti Udyog was a subsidiary of Suzuki Motor Corporation of Japan. They licensed and joint
venture agreement had been made between two companies on October 2nd, 1982.

Maruti Suzuki was also involved into various businesses like manufacturing, sales and purchasing of
motor vehicles and parts of automobiles. Other activities of Maruti Suzuki ltd were facilitation of pre-
owned car sales, fleet management and car financing and much more. They have 7th subsidiary
companies in India are Insurance Business Agency Ltd, Maruti Insurance Distribution Services
Limited, Maruti Insurance agency Solution Limited, Maruti Insurance Agency Network Ltd, Maruti
Insurance Agency services Limited , Maruti Insurance Agency Logistics Limited to all these were
affianced with promotion and selling motor insurance policies to motorcycle owners and car owners
and the seventh one True Value Solution Limited were in business of sales of certified pre-owned
motorcycles under the brand ‘Maruti True Value’. They have four manufacturing units in different
areas in Haryana.
2. VISION AND MISSION OF COMPANIES

A. VISION AND MISSION OF TATA MOTORS

MISSION OF TATA MOTORS TATA MOTORS innovates mobility solutions with

passion to enhance the quality of human life.

MISSION OF TATA MOTORS

By 2024, Tata motors would become the most aspirational Indian auto brand,
consistently winning, by
A. delivering superior financial returns
B. driving sustainable mobility solutions
C. exceeding customer expectations and ensuring their satisfaction
D. creating a highly engaged work force
Values of tata motors.
a. Integrity
b. Teamwork
c. Accountability
d. Customer Focus
e. Excellence
f. Speed
B. VISION AND MISSION OF MARUTI SUZUKI

VISION- To be The Leader in the Indian Automobile Industry, Creating Customer Delight
and Shareholder’s Wealth; A pride of India
MISSION OF MARUTI SUZUKI-

• CUSTOMER OBSESSION
• FAST FLEXIBLE & FIRST MOVER
• INNOVATION AND CREATIVITY

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• NETWORKING AND PARTNERSHIP

• OPENNESS AND LEARNING

These are the core values that Maruti Suzuki shows that company is customer focused
and also aims on meeting their market demand and also doing research so that they
can meet global demands or help satisfy the latent demand of the customers.

3. FINANCIAL PLANS OF COMPANIES

A. FINANCIAL PLAN OF TATA MOTORS

Designing, manufacturing and selling products (vehicles) requires substantial investments

(capital)in tangible and intangible assets like R&D, product design and engineering
technology. In addition, due to market challenges, Tata motors growth strategy may not
materialise, and product development cycles of tata motors limited can be lengthy and
prolonged. If the existing amount of tangible and intangible assets cross (surpluses) the value
of the business, it could have a material bad effect on Tata motors financial condition and the
results of operations. Focused action plans cover project charge+ Project Accelerate for JLR
and Turnaround 2.0 for Tata Motors Limited focus at improving operational, financial
performance and turnaround of the enterprise. Tata Motors strategy aims on delivering
positive free cash flow and create cost savings and profitability improvements by the
implementation of strategic programmes. Delivering growth in revenues/incomes and
profitability through strategic projects. Strategic Financial Operational Legal and compliance.
Tata Motors Finance plans to collect the capital to $1 billion through non-conventional
debentures by taking a cue from Tata group companies, Tata Motors Finance, the vehicle
financing arm of Tata Motors, plans to raise up to $1 billion from international markets by
way of issuing non-convertible debentures. With this, Tata motors finance limited will be the
third major automobile manufacturer from the Tata group of motors this calendar year to tap
the international market after the holding firm Tata Sons raised $1.5 billion and Tata Capital
Financial Services took the board’s permission to raise $1.5 billion. Tata Motors, India's
largest automobile manufacturer by revenues, plans to raise its capital--expenditure by Rs
10,000 crore a year as it is making an attempt to make a strong comeback in the domestic
market. The average yearly capex over the past 3 years had been around Rs 25k crore-30,000
crore, which is predicted to rise by Rs 40,000 crore in the next couple of years. While Tata
Motors ltd will look into its average annual capex increase by Rs 1,000 crore to Rs 4,000
crore, JLR, its wholly owned subsidiary, will IN. Informing the Bombay stock exchanges on
its proposed Rs 7.5k crore rights issue, Tata Motors ltd said that it will utilise the funds for
new products, worldwide expansion and invest in subsidiaries for future growth and
development in India and abroad. In a statement to the Bombay stalk exchange, the company

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said, "Considering the future growth and expansion plans of the company on a global basis, it
is expected that the total funds outlay will remain high in the near term for the India business
and JLR." The company also plans to launch over 100 new products or variants for the
domestic and international markets over the next three years through its ultra-range of light
trucks as well as expand the Prima range of medium and heavy trucks. "The Tata motors ltd
will launch eight improved vehicles in 5 key brands over the next 3 years and the products
offered on a new modular platform will come from 2016-17," said Tata Motors. Tata Motors
has been rising its R&D spend in domestic operations over the past few years, from 3.3
percent of total sales, to 6.3 percent of its total sales in FY-14. For JLR, the R&D has been
averaging around 6.6% of total sales. JLR continues to have a longer term capital expenditure
target of 10-12 percent of funds collected , which it believes is in line with other premium
competitors , but in the near and medium term, JLR expects its capital spending to be a
greater percentage of revenue in order to realis.

B. FINANCIAL PLAN OF MARUTI SUZUKI

INPUTS OF FINANCE

Financial Capital (capital invested in the business)

Rupees 461,415 million capital employed at the beginning of the year

Manufacture capital-
Two manufacturing facilities in The state of Haryana, and one manufacturing facility in state
of the state of Gujarat, managed by Suzuki Motor Gujarat limited
Key raw material = steel coils (210764 MT), non-ferrous castings (38888 MT) and paints
(10070 KL)

INTELLECTUAL CAPITAL
1. Two manufacturing facilities in state of Haryana, and one manufacturing facility in
state of Gujarat, managed by Suzuki Motor Gujarat
2. Key raw material= steel coils (210764 MT), non-ferrous castings (38888 MT) and
paints (10070 KL)

SOCIAL AND RELATIONSHIP CAPITAL

1. 519 Tier-1 suppliers of Maruti Suzuki
2. 4,306 sales outlets of Maruti Suzuki LTD
3. 3,864 service outlets Training and capacity building of value chain partners
4. ` 1,682 million spent on Corporate social responsibility

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HUMAN CAPITAL

15,945 regular employees

1. 602 regular employees joined in Suzuki motors
2. 985,518 hours of training
3. ` 33,839 million employee benefit expenses

NATURAL CAPITAL
6,084,948 energy consumed for manufacturing
1. ` Rupees 34.46 million spent on energy efficiency measures in Suzuki motors
2. Usage of solar power for manufacturing
3. Canal water used for manufacturing

FINANCIAL OUTCOMES OF MARUTI SUZUKI-2019-20.

Financial Capital OF SUZUKI MOTORS

RUPEES 484,370 million capital employed at
the end of year
Manufactured Capital
1,563,297 vehicles sold of (Maruti Suzuki motors)
• 2 new models – XL6 and S-Presso
• 6 facelift models – Vitara Brezza, Ignis, Dzire,
Alto 800, Eeco and Baleno
• 98 patents filed and 11 granted in 2109/20
• 53 designs filed and 60 registered
• 19 technical papers presented
• Product development cycle decreased
• Vehicle fuel economy, low emissions
Intellectual Capital
• Over 22 million customers touched through customer involvement activities
• Over 50,000 sales staff trained by MSM
• Over 160,000 service staff trained
• Social development programmes in 26 villages and rural areas
• 407,771 persons trained at Institutes of Driving Training
and Research and Road Safety Knowledge Centres
Social and Relationship Capital
• Cordial industrial relations
• Zero fatalities and zero Lost Time Injury Rate
• 636,851 suggestions from employees, leading to
` 2,479 million savings
Human Capital
• 120,187 MT metallic scrap recycled
• 429,485 tCO2e Scope 1 and 2 emissions
• 3,182 million litres of water recycled
• 12,713 MT hazardous waste co-processed
• Cumulative 1.16 million tCO2 emissions saved by using
alternative fuel-driven vehicles since 2005-06
Natural Capital • 120,187 MT metallic scrap recycled
• 429,485 tCO2e Scope 1 and 2 emissions
• 3,182 million litres of water recycled

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• 12,713 MT hazardous waste co-processed

• Cumulative 1.16 million tCO2 emissions saved by using alternative fuel-driven vehicles
since 2005-06
ECONOMIC VALUE RAISED MY MARUTI SUZUKI.
1. SUPPLIERS- Rupees 500,000 million involves the estimate value of components
procured from suppliers in 2019-20
2. EMPLOYEES- Rupees 33,839 million Includes the employee benefit expense
incurred in 2019-20
3. OUTBOND LOGISTICS- Rupees 25,000 million Includes the employee benefit
exponentiator incurred in 2019-20
4. DEALERS Rupees 160,000 million Includes the approximate capital revenue of
dealer partners on account of sales, servicing and income from other services in 2019-
20

4. CAPITALIZATION AND CAPITAL STRUCTURE OF COMPANIES

A. CAPITALIZATION AND CAPITAL STRUCTURE OF TATA MOTORS

Tata Motors Limited has used only 2 sources of finance to collect the funds for its assets and
working capital. Equity capital: Tata Motors Limited has been authorized to issue paid up
capital of rupees 638.07crores. The equity share revenue of the company in the year 2003-04
was rupees 353 crores. The company issued further equity shares in the year 2004-05, by
which it raised to rupees 361.79 crores and in the year 2006-2007 it is raised to rupees 382.87
crores. During years2007-2008 and 2008- 2009 there was no change in the equity capital.
After that, the company has increased its equity each year till the termination of the period.
The capitalization value is also raised over the years. This shows the company is getting
benefitted through the rise in equity share capital. The net worth of the company is calculated
and represented by the following table. NET WORTH= Equity share Capital+ Reserves &
Surpluses.
Net worth YEAR NET WORTH (In Crores)
2003-04 3593.60
2004-05 4111.39
2005-06 5537.07
The value of the equity shares of Tata Motors Limited presents an improving trend from year
2003-2004 to 2010-2011. From year2011-2012 it started falling. During 2011-2012 the
capitalization value of the Tata Motors Limited was Rupees 19367.66 crores and in year
2012-13 it was fallen down to rupees 19134.84 crores. This is due to increase in profits;
additional issue of shares and the debt balances of Profit & loss account is also written off.
Debt capital: The debt capital of the company comprises of both secured as well as
unsecured loans. The loans taken from secured sources are more than unsecured ones. This is
because the company made a humongous investment for growth and developments in the
year 2009-2010. Availing unsecured loans for the organization was not possible. These

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secured loans are old loans and carry a higher interest as compared to unsecured loans. So,
their cost of capital is high. The rate of interest on unsecured loans is 9.5 percent and for
secured loans is 9.75-10.25 percent till 2009. But the company resorted to debt swapping
from the year 2010-11 and has the rate of interest on secured loans 15% and which lies
between 10-11percent on unsecured loans. Most of the secured loans are taken from banks
and the bank did charge higher rate of interest than the market rate. The sources of debt for
the company are mentioned as follows:
• Working capital loans from banks.
• Term loan from banks/Financial Institutions
• Loans from abroad
• Public deposits
The debt capital of Tata Motors Limited is represented by the following table. Debt Capital of
Tata Motors Limited YEAR DEBT CAPITAL (In Crores)
1. 2003-04 --1259.77
2. 004-05 --2495.42
3. 2005-06-- 2936.84
4. 2006-07 --4009.14
5. 2007-08 --6280.52
6. 2008-09 --13165.56
2009-10 --16625.9
CAPITALIZATION OF TATA MOTORS

B. CAPITALIZATION AND CAPITAL STRUCTUCTURE OF MARUTI

SUZUKI

CAPITALIZATION STRUCTURE OF MARUTI SUZUKI IN 2020

The Company's financial performance during 2019-20 as compared to the previous year

CONTENTS 2019-20 2018-19

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AGGRIGATE INCOME 790314 885813

PROFIT EXCLUDING TAX 70648 104656

TAX EXPENDITURE 14142 29650

PROFIT MARGIN TAX 56506 75006

RETAINED EARNINGS

BALANCE CAPITAL AT THE START OF THE YEAR 407016 363008

PROFIT FOR THE YEAR 56506 75006

OTHER COMPREHENSIVE REVENUE ARISING FROM REMEASUREMENT OF

518 284
DEFINED BENEFIT OBLIGATION

AMOUNT REQUIRED TO EMPLOYEE WELFARE FUND 750 772

INCOME ON EMPLOYEE WELFARE FUND 117 36

EXPENDITURE ON EMPLOYEE WELFARE FUND 132

AMOUNT TRANSFERRED TO SCIENTIFIC RESEARCH FUND 750 772

PAYMENT OF DIVIDEND ON EQUITY SHARES 24166 24166

CORPORATE DIVIDEND TAX EXPENSE 4968 4968

BALANCE AT THE END OF THE YEAR 432385 407016

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CAPITAL STRUCTURE OF MARUTI SUZUKI (UNTILL 2019)

5. COST OF CAPITAL OF COMPANIES (WACC)

A. COST OF CAPITAL(WACC) OF TATA MOTORS

COST OF CAPITAL OF TATA MOTORS Tata Motors WACC % As of today (2020-09-

17), Tata Motors's weighted average cost of capital is 10.08%. Tata Motors's ROIC % is -
8.49% (calculated using TTM income statement data). Weighted Average Cost of Capital
(WACC)Mathematically, WACC (cost of capital) represents the average cost of
various sources of the capital. An organization is financed using a combination of
the debt-bonds and the equity shares. A company may receive more capital from
one source in comparison to another, hence the weight assigned to each sources of
capital is different. In Financial decisions, WACC presents the minimum required rate
of return (to cover the cost of capital- the investment)the company m ust generat e

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from i t s proj ect s an d i nvest m ent s s o as t o generat e t h e ret ur ns for i t s

shareholders as they are the high risk takers in any publicly traded company. Mathematically,
WACC (cost of capital) is calculated as
WACC={(Kd(1−T)× W d)+(Ke× W e)+(Kp× W p)}Where,Kd= Cost of Debt T= Tax
RateWd= Weight of Debt Ke= Cost of Equity We= Weight of Equity Kp= Cost of
Preference Stock WP= Weight of Preference Stock Most of the business decisions
need capital.
All sizes of company want to generate and grow either into short or the long term. To
accomplish the growth, decisions need to be made as mergers, acquisitions, launch of new
product line, make or buy decisions etc. For e.g., if Dell’s Overall cost of capital is 12.
percent, it fundamentally indicates that Dell must generate are turn on an average of at
least 12.3 percent in order to satisfy its shareholders and capital contributors. Weighted
average cost of capital Calculation of Tata Motors The Weighted average cost of capital is
calculated by capital asset pricing model because CAP mis considered more modern than
the DDM and factors in market risk. The value of a security in the CAPM is determined
by the risk-free rate (most likely a government bond) plus the volatility of a security
multiplied by the market risk premium. The WACC of Tata Motors has calculated in the
table given below. As per to the table, the Weighted average cost of capital of TATA MOTORS
is8.49% which means the company must pay its investors an average of Rs.0.0849 in return
for every Rupee 1 in extra funding. The tax rate of 35% has reduced WACC from
9.05percent to8.49 percent

WACC of Tata Motors for 2020 Components of Capital Amount Weight Cost (cost of capital)
of Component
Equity20,170 weight-980.636682292 cost of component 0.1165
Debt11,510.410 weight-363317708 cost of component 0.0452
Total31,681. weight 391 cost of component -0.084857208
WACC8.49%
The tax for the tata motors is at 35%, this has been adjusted in the cost of loans. The
Equity portion of the company has been extracted from the 2020 Annual Report
Balance Sheet of the company.

B. COST OF CAPITALOF MARUTI SUZUKI

Maruti Suzuki India WACC PERCENTAGE Calculation

The weighted average cost of capital (THE COST OF CAPITAL- MARUTI SUZUKI) is the
rate that an organization is expected to pay on average to all its security holders to finance the
company’s assets. The WACC (cost of capital) referred to as the firm's cost of capital. In
general, a company's assets are financed by debt and equity. The cost of capital is the average
of the costs of these sources of financing, each of which is weighted by its respective use in
the given situation. By taking a WACC, we can calculate how much interest the company has
to pay for every dollar it finances.

WACC = E / (E +D) * Cost of Equity + D / (E + D) * Cost of Debt * (1 - Tax Rate)

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Because it costs money to raise capital. A firm that generates higher Return on invested
capital percentage than it costs the company to collect the funds needed for that investment is
revenue excess returns. A company that predicts to continue generating optimistic excess
returns on new investments in the future will see its value increase as growth increases,
whereas a firm that earns returns that don’t match up to its WACC will destroy value as it
grows.
As of today, Maruti Suzuki India's weighted average cost of capital is NOT
APPLICABLE. Maruti Suzuki India's ROIC % is 1.49%

6. FINANCIAL RATIOS AND PERFORMANCE OF COMPANIES

KEY FINANCIAL FIGURES OF TATA MOTORS (2019)

Performance report of Tata Motors

The Tata Motors Group registered a growth of 3.3 percentage in its revenue from operations to
rupees ,3,01,938 crores in FY 2019-20 as compared to Rs,2,92,341 crores in FY 2019-20. This was
because of the better sales performance in the business in India and due to good translation impact
from Great Britain Pound to Indian rupees of rupees,14,517 crores. revenues before other income,
interest and tax, was rupees,3,774 crores in FY 2019-20 compared to Rupees,11,788 crores in FY
2019-20. The decrease was primarily driven by the performance of Jaguar Land Rover business,
including high depreciation and amortization and fixed marketing expenditure / selling price. The
Company’s net loss was Rupees,28,826 crores in FY 2019-20 as compared to a profit of Rupees,8,989
crores in FY 2018-19. In FY 2018-19, the Company has taken impairment change of Rs,27,838 crores
for Jaguar Land Rover, due to poor sales and profit change in the market conditions, especially in
China and technology disruptions. Tata Motors Limited had marked revenue collected from
operations (including joint operations) of rupees,69,203 crores in FY 2018-19, 17.9percentages
higher from Rupees,58,690 crores in FY 2017-18. Growth in demand of Medium and Heavy Vehicle
of tata motors and Vehicles, new product offerings in passenger cars and Utility Vehicles, resulted
in increase in EBITDA margins to 7.4 percentage in FY 2018-19 as in opposition to 4.1% in FY 2017-
18. Profit Before and After Tax for FY 2018-19 were at Rupees,2,399 crores and rupees,2,021 crores,
respectively as compared to Loss Before and After Tax (involving joint operations) of Rs,947 crores
and Rs,1,035 crores respectively for FY 2017-18.Jaguar Land Rover, has marked revenue of

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GBRs,24.2 billion in FY 2018-19 in comparison to GBRs,25.8 billion in FY 2017-18, down by 6. broadly

in line with the decline in wholesales (excluding CJLR) which were down 6.9% percentages merrily as
a result of the challenging conditions in China. Consolidated EBITDA for FY 2018-19 was GBRs,2.0
billion, is less compared GBRs,2.8 billion for FY 2017-18, due to lower wholesales, higher incentive
and warranty costs, partially offset by Project Charge cost efficiencies and favourable realized
foreign exchange. The Loss Before Interest and Tax was GBRs,180 million in FY 2018-19 compared to
EBIT of GBRs,971 million in FY 2017-18, due to the lower EBITDA, higher depreciation and
amortization and lower profits from the Chinas joint venture. The Loss Before Tax excluding
exceptional items in FY 2018-19 was GBRs,(358) million compared to Profit Before Tax excluding
exceptional items of GBRs,1.1 billion in FY 2017-18, primarily showing the lower EBIT, higher
interest costs and unfavourable revaluation of hedges and foreign currency debt in FY 2018-19
compared to favourable revaluation in the prior year. Exceptional charges summoned up to Rs,3.3
billion for FY 2018-19, including a Rs,3.1 billion asset impairment in Q3 and a further Rupees 149
million for employee separation charges in Q4. Tata Motors recorded sales of 6,79,288 vehicles, a
growth of 16. over FY 2017-18, higher than the Indian Auto Industry grew by 5.9%. The Company’s
market’s percentage hare increased to 15.5% in FY 2018-19 from 14. in FY 2017-18. The company’s
exports on standalone basis were marginally higher by 1.4% to 5 percentage 3,140 vehicles in FY
2018-19 as compared to 52,404 vehicles in FY 2017-18

B. FINANCIAL RATIOS AND PERFORMANCE OF MARUTI SUZUKI

(comparing the latest data- 2018-19 vs 2019-20)

FINANCIAL CAPITAL
The Company’s growth strategy, along with disciplined allocation of capital, has led to
sustained financial returns.

2019 2018

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Capital employed (million) 484,370 461,415

Net sales (million) 716,904 830,265
PAT margin (PERCENTAGE) 7.9 9.0
Book value per share (RUPEES) 1,603 1,527
ROCE (PERCENTAGE) 14.9 23.8
MANUFACTURE CAPITAL
The Company utilises state-of-the-art facilities and highly efficient green manufacturing
processes to manufacture reliable and
quality products. 2019 2018
MOTORS sold 1,563,297 1,862,449
INTELLECTUAL CAPITAL
With the product and technology licences received from Suzuki motors Ltd, the Company is
capable of offering relevant products in the Indian market.
New models 2 2
Facelift models 6 2
R&D spend (` million) 7,639 7,128
Patents applied/granted 98/11 100/12
Design filed/registered 53/60 35/54
R&D engineers 1,845 1,600

HUMAN CAPITAL
The Company is aimed on developing the skills, competencies, health, safety and wellbeing
of its human resources, so that they may be optimally leveraged for value creation across
other capitals.
2019 2018
Fatalities Nil Nil
Lost Time Injury Rate Nil Nil
Employee benefit expenditure 33,839 32,549
Aggregate person-hours of training provided to
employees 985,518 1,420,57

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FINANCIAL RESULTS OF MARUTI SUZUKI LAST 5 YEAR SUMMARY OF

PERFORMANCE OF MARUTI SUZUKI MOTORS

Particulars 2019-20
Total revenue - 790,314
Profit before tax - 70,648
Tax expense -14,142
Profit after tax - 56,506
Retained Earnings
Balance at the beginning of the YR 407,016
Profit for the year - 56,506
Other comprehensive income arising
from remeasurement of defined
benefit obligation* -(518)
Amount transferred to employee
welfare fund - - (750)
Income on employee welfare fund - (117)
Expenses on employee welfare fund -132
Amount transferred to scientific
research fund -(750)
Payment of dividend on equity shares (24,166)
Corporate dividend tax paid (4,968)
Balance at the end of the year 432

7. SOURCES OF FUNDS OF COMPANINES

A. SOURCES OF FUNDS OF TATA MOTORS
SOURSES OF FUNDS OF TATA MOTORS.

TATA MOTORS (NYSE: TTM) reported $44.2 billion in total revenues for 2019. There
were 2 key components of this revenue figure:
1. Jaguar Land Rover (JLR) segment – 77percentage of total revenues
2. Tata Motors and other brands segment – 23percentage of total revenues
expect growth in total revenues for Tata Motors was 2.5% to reach $45.3 billion in 2019.
Total Revenue:

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• Tata Motors had a Total revenue rise of $3 billion from year 2016 to 2018 while recording
$44.23 billion of revenue in FY 2018-19. The increase was due to Tata and other brand
segments contributing more than 80 percentage to the increase.
• Travis estimates the JLR to remain flat for 2019 while Tata and other brand segment to continue
pushing the growth and record overall revenue of $45.35 billion

Jaguar Land Rover:

• Jaguar Land Rover consistently holds a bulk of the company’s revenues, with an average
revenue share of 78.9% in the last 3 years.
• The growth has remained flat in the past years with a significant raise of just $0.5 billion from
2016 to 2018. In 2019 Trefis predicts the growth to constantly remain flat as the segment would
contribute about $34 billion to funds , as a no deal Brexit looms for the United Kingdom.
• The segment’s percentage contribution to Total revenue is decreasing due to the growth picked
up by Tata’s domestic brand.
• TATA MOTORS REVENUE GRAPH TILL 2019

B. SOURCES OF FUNDS of Maruti Suzuki

8. MERGES AND ACQUISITIONS OF COMPANIES

MERGES AND ACQUISITIONS OF TATA MOTORS

In June 2008, Indian company Tata Motors limited announced that it had completed
the acquisition of the two iconic British brands – Jaguar and Land Rover from the
United states based Ford Motors for united states dollars 2.3 billion. Tata Motors
stood to acquire on several fronts from the deal. One, the acquisition would help the
company acquire a global mark and get into the high-end premier segment of the
global automobile market. After the acquisition, Tata Motors would own the world’s
cheapest car – the united states dollar 2,500 Nano, and luxury marquees as the

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Jaguar and Land Rover. Though there was initial scepticism over an Indian company
owning the luxury brands, ownership was not considered a major issue at all.
According to market analysts, some of the issues that could trouble Tata Motors
were economic slowdown in European and American markets, funding risks, currency
risks etc.

In less than three years after its acquisition, Jaguar Land Rover has metamorphosed
from a millstone around Tata Motors’ neck into its crowning jewel. In the June 2010
quarter, JLR division accounted for nearly 70 percentage of the company’s net profit
and over 60 percentage of its capital earned on the consolidated basis. This was
more than what the market has expected, and the stock is up by nearly
150percentages in the past two trading sessions.

JLR benefited from an improvement in its pricing power and a good exchange rate in
the United states dollar and the euro. The two worked in tandem and resulted in a
sharp 60 percent jump in JLR revenue per unit to around £38,000 in June 2010
quarter compared to the £23,800 a year ago. With the raw material costs remaining
benign, it led to a sharp improvement in the division’s operating margin and its
reported net profit of £221 million (`1,613.3 crore) in the 1st quarter as against a net
loss of £64 million (`467 crore) a year ago.

B. MERGES AND ACQUISITION OF MARUTI SUZUKI

Japan’s one of the leading car maker Suzuki Motor Corp is all set to consolidate its car
production into India by having India's top car maker , Maruti Udyog Limited.
Suzuki and Maruti Udyog set up Maruti Suzuki Automobiles India Ltd in April 2010, with
the Japanese car mini car maker putting up thirty percent and the subsidiary seventy percent
of its revenue, in order to build up Suzuki's 2nd auto assembly plant in the country .MUL
holds seventy per cent stake in MSAIL while SMC, Japan, holds the remaining
THIRTY per cent. MUL will buy out the entire thirty per cent stake held by SMC in MSAIL.
This was decided by MUL’s Board of Directors at a meeting today. In the original
arrangement finalized in September 2004, MSAIL was set up as a subsidiary too pirate the
new motor plant in Manesar. The new car plant at Manesar is coming up at an investment of
Rupees. 15,242 million. The capacity of the plant would initially be 100,000 cars per annum,
with a plan to scale it up to 250,000 cars per year by 2008-09.The new car plant would begin
commercial production on schedule, by the end of 2006.This merger will add value for
shareholders and eliminate all potential issues relating to inter-company transactions. ” It will
retain all the benefits of the earlier arrangement and enable them management to aim on
critical issues of business operation," MUL Chairman S Nakanishi said after the Board
approved the proposal. The Competition Commission of India has approved the proposed
amalgamation of Maruti Suzuki India Limited (MSI) and Suzuki Powertrain India Ltd
(SPIL). Suzuki Motor Corporation holds seventy per cent stake in Suzuki Powertrain, while
the rest is held by Maruti Suzuki. The control the activities carried on by Maruti Suzuki India
and SPIL before and after the proposed combination remains with Suzuki Motor Corporation,
therefore, the proposed combination isn’t likely to give rise to any adverse competition
concern in India, the order added. After merger, Suzuki Motor Company’s stake in Maruti
Suzuki LTD will go up to 56.2 per cent from 54.2 per cent due to a share swap agreement

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with the Indian domestic car market leader to acquire SPIL. The shares of Maruti Suzuki
closed at Rupees 1,133.05 on the Bombay stalk exchange up 1.15 per cent from previous
close.

9. VENTURE CAPITAL OF COMPANIES

A. VENTURE CAPITAL OF TATA GROUP

The Tata Group has invested in number of different sectors of the economy through several
decades, such as telecom, software, groceries or fashion. The behemoth has infiltrated a
number of different markets. As the Chairman Emeritus of the Tata Group, Ratan
Tata has been proving that his patterns of investment and funding have not only shown but
also have performed extremely well but the investments have also emerged as giants in their
respective sector. For instance, when he invested in cab aggregator ‘Ola’, its share prices rose
from Rupees 15,87,392 to Rupees 29,44,805 in 2015. Hence, an investment from the Tatas
gives a boost to start-ups in publicity, acquiring funds, and brands
Here is a list of start-ups companies Ratan Tata- the CHAIRMAN of tata group has made
investment over years:

Tata Motors,
Curefit, Paytm, Ola, Repos Energy, Clima Cell, Abra, CarDekho, HolaChef, Firstcry,
Lenskart, NestAway, Urban Ladder, UrbanClap, GOQii, Xiaomi, Lybrate, Infinite, Analytics,
Cashkaro, Dogspot, Bluestone, Zivame, Generic, Aadhaar

B. VENTURE CAOITAL OF MARUTI SUZUKI

The country’s largest car-maker Maruti Suzuki India Ltd. will make a capital investment of
about Rs3,500 crore this fiscal as it gears up to strengthen its market leadership.
The company, which accounts for nearly 40% of volumes of parent Suzuki Motor Corp., said
it will now be responsible for the export markets of Africa, the Middle East and neighbouring
countries of the group and would consider setting up plant overseas. The capital investment
proposed this year is approximately Rs3,500 crore. And this will only increase as Suzuki
motors go ahead. Addressing shareholders in the company’s annual report for 2012-13, he
said, the company was continuing with all its planned investments to increase production
capacity and introduce new products from time to time.

10. IMPACT OF COVID ON FINANCIAL PLANS OF COMPANIES

A. IMPACT OF COVID ON TATA MOTORS

The ongoing COVID-19 pandemic has led to a significant global economic downturn. Tata
motors is exposed to changes in the global economic and geopolitical environment such as

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trade tensions and Brexit. The COVID-19 (novel corona virus) pandemic and the resulting
business disruption in several geographies where tata motors has been operating have a
material a bad impact on their working operations, liquidity, business, financial conditions
and accounts and credit ratings. Changes in the external environment could also have a
significant effect on the global demand for our vehicles/motors as well as our global sourcing
strategy and supply chain resilience. Tata motors is continuing to closely monitor, and risk
assess global developments, implementing mitigation plans where appropriate. Tata also
continues to maintain our international manufacturing record and a balanced retail sales
profile across their key sales places. Operations at plants have resumed with robust protocol
and guidelines in place across
the Company to ensure effective social distancing, hygiene and health monitoring. Tata
motors is being nimble and agile to start delivering as soon as
the demand comes back Global economic growth in developed and emerging markets
presents opportunities to increase sales. Global growth and rising incomes create
opportunities both in new and existing geographical markets as well as new and existing
segments. We are seeing encouraging recovery in China post the lockdown eases and expect
other geographies to follow the same pattern.

B. IMPACT OF COVID ON MARUTI SUZUKI

In order to manage the dynamic and extraordinary situation caused by the COVID-19
pandemic (unexpected corona outbreak), the Company has taken different measures to ensure
the health and wellbeing of all the people in the value chain as well as measures to strengthen
business continuity. The Maruti Suzuki has followed extremely stringent engineering and
administrative control measures, which are over and above the Government stipulated
guidelines to prevent the spread of COVID-19. The Company is extensively using AI
technologies to proactively identify and prevent the entry of suspected people into the
plant/office premises. Also, standard operating procedures were made and shared with
business partners. (The reduced sales volume might put the finances of supplier and dealer
partners under pressure; thus, the Company is jointly taking several cost optimisations
measures to improve cash flow. Additionally, the Company is facilitating the suppliers and
dealers to get access to attractive financing schemes for managing their working capital.
Revenues in the quarter plummeted 80 percentage year-on-year to Rupees 3,677 crore,
missing predictions as volumes sold were only 76,599 vehicles compared with despatches of
around rupees 1.3-1.5 lakh units a month in normal times. The management committee said
that the production in the quarter had been equivalent to just about 2 weeks of regular
functioning. Maruti Suzuki India (MSIL) on reported a net loss for the three months to June
as the lockdown imposed in the wake of the pandemic disrupted business. This is the
carmaker’s first quarterly loss since its listing 17 years ago in 2003. The net loss of Rs 249

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crore, versus a net profit of Rs 1,435.5 crore a year ago, is however, below Bloomberg
consensus estimates of rupees 340.63 crore. Revenues in the quarter plummeted 80% year-
on-year to Rs 3,677 crore, missing estimates as volumes sold were only 76,599 vehicles
compared with despatches of around 1.3-1.5 lakh units a month in normal times. The lower
sales severely impacted the Ebitda (earnings before interest, tax, depreciation and
amortisation) margins which came in at a negative 23.47% and a negative ebbtide of Rs
863.04 crore. The Maruti management said production in the quarter had been equivalent to
just about two weeks of regular working. “It was an unprecedented quarter in the company’s
history wherein a HUGE part of the quarter had zero production and zero sales in compliance
with a pandemic stipulated by the Indian government

dasda

11. INITATIVE TAKEN BY COMPANIES TO TACLE THE FINANCIAL

PROBLEMS.

A. INITATIVES TOOK BY TATA MOTORS

Tata Power, set up in year 1915, held its 100th annual general meeting on June 18, 2019.
While it should have been an event to celebrate, with net loan of Rupees 47,552 crore in
FY19 and a net debt-to-EBITDA ratio of 7, there was not much to celebrate. When
shareholders asked Tata Group Chairman N. Chandrasekaran what he was doing to reduce
the company's liabilities, he looked visibly irritated. TATA GROUP working on a solution;
it's not that the company are not trying hard," he said. In the first nine months of FY2020,
Tata Power repaid Rupees 2,257 crores loan. But for Chandrasekaran, who completes 3 years
as the head of the Tata group on February 21, that is little relief. The gross debt of 11 major
indebted listed companies in the group – other than financing companies and holding Tata
Sons - stood rupees 2.46 lakh crore in FY19 compared to Rs 2.22 lakh crore in FY18 and Rs
2.1 lakh crore in FY17. Debt pressure is increasing on marquee Tata companies such as Tata
Steel and Tata Motors. In the first nine months of FY2020, Tata Steel's net debt 10.2 per cent
to Rupees 1,04,628 crore, while that of Tata Motors' automotive business (other than lending
subsidiary Tata Motors Finance) surged 59.8 per cent to rupees 45,376 crore. While the steel
business has been dogged by difficulties in Europe, the auto business faces headwinds in
India and China and slowdown in demand for its diesel cars, which account for a vast chunk
of its United kingdoms and European business.
.
Debt Reduction Plans

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• Chairman N. Chandrasekaran recently said that India cannot continue on funding the
increasing losses in the united kingdom business. He said that the Port Talbot steelworks in
Wales, one of the biggest in Europe, needs to be "self-sustaining". Up to 3,000 jobs were cut
previous year in Europe. The target is to generate more internal capital. The company has
reduced capital expenditure plan to Rupees 8,300 crore from Rupees 12,000 crore and
refinanced euro 1.75 billion of European loan
• Jaguar Land Rover plans to reduces 500 jobs at the united kingdom factory to maximise
production. Tata Sons infused Rs 6,500 crore into Tata Motors and raised promoter stake by
four per cent to 42.39 per cent to build investor confidence
• Coastal Gujarat Power is in talks with Gujarat, Maharashtra, Haryana, Rajasthan and Punjab
governments to amend purchase agreements. Only the Gujarat government has approved a
revision. Tata Power divested its stake in Tata Communication and is selling the defence
business. It is divesting international assets in South Africa and Zambia, besides investments
in shipping business and coal companies. It plans to raise $1 billion from divestment in the
next one year to repay debt. It wants to deleverage the renewable portfolio
• Tata Chemicals repaid Rupees 250 crore NCDs in July 2019 and the term loan of Rs 439
crore in October through internal accruals. It plans to service its debt from operational cash
flow
• Indian Hotels is pursuing an asset light approach. It increases rupees 250 crore last fiscal
through monetisation of assets and will continue to unlock value and monetise non-core
assets

B. INITATIVES TAKEN BY MARUTI SUZUKI

Management of COVID-19-related risks to ensure human health and safety and
continuity of operations by MARUTI SUZUKI LTD.
• Established top-level steering committee chaired by MD & CEO to drive systems and
processes to avoid the spread of COVID-19- virus
• to strictly follow extremely stringent engineering and administrative control solutions and
remedies which are over and above the Govt stipulated guidelines to prevent the spread of
COVID-19-virus
• Standard operating processes to restart plants and machineries after a long shutdown to
avoid any untoward as safety
• Use of AI technology to proactively recognise and avoid the entry of suspected people into
the plant/office premises
• Continuous education of the employees to observe high amount of self-discipline and safety
precautions to minimise the risk of infection of covid-19
• For business continuity, the Company is pursuing work from home wherever possible for its
employees
• To make suppliers and dealers prepared in effectively managing the risks related to
COVID-19, most of the best practices followed by the Company were deployed based on
applicability. The Company also collaborated with them to recognise
measures to look into the risks specific to their operations. Essentials checks and balances put
in place to make sure adherence to risk mitigation measures
• ensuring the safety of customers inside the showroom/shops, the entire customer

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Venture has been redesigned to make sure minimal physical touchpoints and maximising
the use of the digital interfaces wherever possible to ensure contactless operations. Extensive
usage of Company’s flagship ‘Service on Wheels’ programme to provide motor repair
services at the customer’s doorstep
• optimise digital interfaces as and when possible to make sure business continuity
• Taking nearby local communities into confidence by explaining the abundant precautionary
measures taken by the Company to prevent the risk of infection

12. FINANCIAL POLICIES

FINANCIAL PLOICY OF TATA MOTORS
Any dividend declared by Tata Motors Limited for any financial year is based on the profits
available for distribution as reported in the standalone statutory financial statements of Tata
Motors Limited (without joint operations) prepared in accordance with Generally Accepted
Accounting Principles in India, or Ind AS.
FINANCIAL POLICY OF MARUTI SUZUKI
The board of directors have considered the financial position of the Company as at March 31,
2019 and the projected cash flows and financial performance of the Company for at least
twelve months from the date of approval of these financial statements as well as planned cost
and cash improvement actions, and believe that the plan for sustained profitability remains on
course.
The board of directors have taken actions to ensure that appropriate long-term cash resources
are in place at the date of signing the accounts to fund the Company''s operations.

13. CONSLUSION OF STUDY

After completing a study of financial management in automobile company (four wheelers) it
is found that TATA Motors and Maruti Suzuki India Limited are both working on negative
working capital. The companies are unable to pay their short-term liability in time, the
production slows down due to scarcity of raw materials because of negative working capital.
But after this study, it has been found that negative working capital is not always so bad.
According to this study, it has been suggested that the companies should regularly check it
inventories and accounts, cash payable and free cash flow from time to time for good
interpretation. The overall working capital management and profitability of the company are
good but not highly satisfactorily. But being big automobile players, both companies can take
advantage of their market position to borrow loans from the market, which can be later paid
by the revenue received. Also, financial analysis of TATA Motors and Maruti Suzuki show
that Maruti Suzuki is winning the competition by a huge margin. This might be because of
the old architecture of TATA Motors. Also, Maruti Suzuki has been able to complete its
mission “Developing cars fast and selling them for less” very efficiently by playing in mass
production. Hence, this helps in reducing their product rates. It is suggested that TATA
motors should apply new strategies in their organization to increase the income ratio.
Profitability of Maruti Suzuki is high in the market. This is because of the consumer base
they have and their market reputation. Maruti Suzuki’s consumers are loyal to them because
the services which are provided to them. TATA motors should also generate customer-

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oriented plans to improve their market reputation and consumer base. Conclusions that can be
drawn from this analysis are that having a negative working capital is not as bad as it looks
but it should be avoided.

13. BIBLOGRAPHY

www.economictimes.indiatimes.com
www.financialexpress.com
www.techcircle.in
www.livemint.com
www.thehindubusinessline.com
www.searchenginereports.net
www.economictimes.indiatimes.com
www.moneycontrol.com
www.financialexpress.com
www.tatamotors.com
https://www.tatamotors.com/investors/annual-reports/
https://www.marutisuzuki.com/corporate/investors/company-reports

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