Financial Daily from THE HINDU group of publications
Friday, Apr 19, 2002
Ford unveils progress report
CHENNAI, April 18
FORD India Ltd hopes to be profitable from an accounting standpoint in 2004 and profitable on a cumulative basis by 2008.
This is set out in Ford India's first corporate assessment report. Since March 2001, its business structure has improved and it has moved towards becoming cash- positive for the year.
According to the report, in the financial year ended March 2001, the company achieved sales of over Rs 1,065 crore and recorded a loss of over Rs 100 crore. The loss is mainly due to depreciation and amortisation, which is typical for a newer capital-intensive company, and is in line with the company's overall strategy, according to the report.
Ford India's Managing Director and President, Mr David E. Friedman, and Mr Vinay Piparsania, Vice-President - External Affairs, handed over a copy today of the assessment report titled "Moving Forward" to the Tamil Nadu Chief Minister, Ms Jayalalithaa.
Mr Friedman later told Business Line that Ford Motor Company undertakes such a corporate assessment on a global scale and Ford India was the first to do a country-specific exercise.
The purpose of the assessment was to find out Ford India's impact on the community and its stakeholders.
He said that earlier, companies were required to only assess their financial bottomline, but now, society and customers could have a requirement and expectation of a company that went beyond just reporting on the financials.
The self-assessment exercise identified the strengths, weaknesses and emerging issues in each of the company's stakeholder relationships.
Ford Motor Co and two London-based consultancies - The Corporate Citizenship Company and SustainAbility - assisted the assessment.
According to the report, Ford India paid Rs 364 crore in taxes during April 2000 to March 2001, of which 91 per cent was to the Central Government, eight per cent to the State Government and one per cent to the local Government.
"We have completed all statutory documentation and no breaches of economic or social legislation have taken place." The report says that Ford India's operations create substantial "value added", measured as the net income from customers after paying supplies for goods and services purchased. This amount is available for distribution among the other stakeholders.
During 2000-01, Ford India distributed more "value added" - Rs 493 crore - than was actually created - Rs 413 crore.
The report said that Ford India complied with all of Ford Motor Company's global ethical standards.
For instance, till date, there have been no instances of bribery or fraudulent accounting at Ford, it said.
Ford India paid total salary of Rs 19.8 crore and total health care and staff welfare costs of Rs 65 lakh during 2000-01, to its 895 employees, 14 per cent of whom were women.
During 2000-01, it purchased goods and services worth Rs 652 crore, almost three quarters of which were sourced in India.
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