The market for commercial vehicles was adversely affected by the continued economic slow down, coupled with the effects of increase in sales tax for vehicles under the sales tax rationalisation as also the substantial increase in diesel prices.

The growth in passenger car market was also adversely affected due to which the company’s total income for the year ended March 31, 2001 dropped to Rs.8164.22 crores, as against Rs.8961.14 crores in the previous financial year.

The profit before interest, depreciation and amortisation was consequently lower at Rs.497.87 crores for the year as against Rs.785.77 crores for the previous financial year.

With a higher amortisation charge of Rs.54.74 crores and extraordinary charges of Rs.69.90 crores, as against an extraordinary gain of Rs.134.34 crores in the previous year, the company reported a loss of Rs.500.34 crores, against a profit after tax of Rs.71.20 crores in the previous year.

During the year, the company intensified its efforts in the areas of cost reduction, quality enhancement and manpower rationalisation, achieving a total cost saving of Rs.255 crores and an additional Rs.41 crores in gross interest outflow through tighter control on inventories and receivables.

The Indica V2 launched in January 2001 has been highly successful and the company believes that this would have a positive impact in the years ahead. The Tata Sumo regained its position as the largest selling multi-utility brand in the country. In the commercial vehicle market, the company launched a 25-tonne truck, which is now the largest selling in its category.

The company’s exports showed a growth of 19% over the previous year and accounted for 9% of the total sales turnover.

While the economic situation in the future cannot be predicted, the company is continuing its aggressive cost reduction programmes and new product offerings in the passenger and commercial vehicle markets.

In view of the losses incurred by the company, the board of directors have not recommended dividend for the year.

The Anual General Meeting (AGM) of the company will be held on August 14, 2001 to consider the accounts for 2000-01.