Assignment 4

Segment Analysis

 Partial reporting is the reporting of a company's operating components in its financial

statements.
 It aims to provide investors and debtors with information about the financial results and
status of the company's most important components of operations.
 Under GAAP, the operating component performs business functions where it can generate
revenue and expenditure.
 Category reporting is mandatory for listed companies but not for private companies.
 If two or more components have similar products, services, processes, customers,
distribution channels, and control conditions, combine their results.
 Report the part if it calculates at least 10% of total income, profit, or loss, or 10% of total
business assets.
 If the total revenue of the segments you have selected based on previous terms is less than
75% of the total revenue of the business, continue to add segments until you reach that
number.
 Companies can add more segments than the minimum, but if the total exceeds 10,
companies should consider reducing the price.

The objectives of Segment reporting are:

 For better information on the organization's performance and evaluation of its results.
 Provide information to stakeholders about the key units of the organization to analyze and
make investment decisions.
 Make financial statements clear and easy to understand. Making better decisions by
considering a business with a number of ideas.
 To better understand the risks and rewards of the organization. Determining which units are
most profitable or those that are cost-effective.

In the following ways, segmental reporting is significant for the organization, its investors, and its
stakeholders:

 It gives investors detailed information about the units, their profitability, and so on. They are
capable of analyzing and deciding on the organization's investment. 
 It aids the organization in making better decisions because expansion or diversification plans
are made based on the segment's results. 
 It assists creditors in determining credit terms based on a segment-by-segment analysis. 
 It assists management in deciding whether to expand or sell the segment.
Ind AS 108 set the requirements relating to segment reporting. The reporting is required for each
period for which a statement of profit and loss is presented. These requirements have been elaborated
in the consolidated balance sheet. Their compliance by Tata Motord is examined one-by-one and
presented in a segmental profitability report.

 The Financial Services segment complies on one parameter only: ‘10% of Revenue’.
 Retail segment complies on one parameter only: ‘10% of Revenue’.
 Communication segment complies on one parameter only: ‘10% of Revenue’.
 Energy, Utilities, Resources and Services segment complies on one parameter only: ‘10% of
Revenue’.
The criteria of 10% of Revenue doesn’t match the other segments. The data for the other two criteria
was not found so we were unable to do further analysis. They might have matched other criteria as
well due to which they have shown these segments.

According to the reporting of the company the highest revenue generating segment of the company is
the Jaguar Land Rover segment which is 78.08% in Absolute Proportional Comparison for the year
ended 2021 and 80.28% again in Absolute comparison for 2020 of the total revenue of the company
and it is the same as compared to the last year in context of contribution in the total sales.  
The highest amount of income from operation is generated by the Jaguar Land Rover for the year
2021 being around 133%. Total assets employed to a particular segment of the company shows that
highest assets employed is for JLR being around 68% and lowest for passenger’s vehicle being close
to 6%.
According to the operating margin the highest income generating segment is Jaguar Land Rover being
close to 3%, then vehicle financing and other segments generate.