Form 6-K
Table of Contents

  

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the Month of November 2015

Commission File Number: 001-32294

 

 

 

LOGO

TATA MOTORS LIMITED

(Translation of registrant’s name into English)

 

 

BOMBAY HOUSE

24, HOMI MODY STREET,

MUMBAI 400 001, MAHARASHTRA, INDIA

Telephone # 91 22 6665 8282 Fax # 91 22 6665 7799

(Address of principal executive office)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  x            Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ¨            No   x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ¨            No   x

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing theinformation to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes  ¨            No   x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g 3-2(b): Not Applicable

 

 

 


Table of Contents

TABLE OF CONTENTS

 

Item 1:

   Form 6-K dated November 9, 2015 along with the Press Release.


Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorised.

 

Tata Motors Limited
By:   /s/ Hoshang K Sethna
Name:   Hoshang K Sethna
Title:   Company Secretary

Dated: November 9, 2015


Table of Contents

LOGO

JAGUAR LAND ROVER
Jaguar Land Rover Automotive PLC
Interim Report
For the three and six month period ended
30 September 2015
Company registered number: 06477691


Table of Contents

Contents

 

Management’s discussion and analysis of financial condition and results of operations

  

Market environment

     2   

Jaguar Land Rover retail volume performance

     3   

Revenue and profits

     4   

Cash flow, liquidity and capital resources

     4   

Material events

     5   

Borrowings

     5   

Acquisitions and disposals

     5   

Off-balance sheet financial arrangements

     5   

Business risks and mitigating factors

     5   

Employees

     5   

Board of Directors

     6   

Condensed consolidated financial statements

  

Consolidated Income Statement

     7   

Consolidated Statement of Comprehensive Income

     7   

Consolidated Balance Sheet

     8   

Consolidated Statement of Changes in Equity

     9   

Consolidated Cash Flow Statement

     10   

Notes

     11   

This report uses:

Group, Company, Jaguar Land Rover and JLR to refer to Jaguar Land Rover Automotive plc and its subsidiaries.

 

EBITDA    measured as earnings before tax and adding back depreciation, amortisation, finance income, finance expense, foreign exchange gains/(losses) on financing and unrealised derivatives, commodity gains/(losses) on unrealised derivatives, exceptional items and share of gains/(losses) from joint ventures.
EBITDA margin    measured as EBITDA as a percentage of revenue.
PBT    profit before tax.
PAT    profit after tax.
Net cash    measured as cash and cash equivalents and short term deposits less total borrowings (including secured and unsecured borrowings and factoring facilities, but excluding finance leases).
Free cash flow    measured as the net change in cash and cash equivalents, less net cash in financing activities, less movement in short term deposits.
Product and other investment    measured as cash outflows relating to tangible assets, intangible assets, expensed R&D and investment in joint ventures.
FY16    Year ending 31 March 2016.
FY15    Year ended 31 March 2015.
Q2    3 months ended 30 September.
China JV    Chery Jaguar Land Rover Joint Venture.


Table of Contents

Management’s discussion and analysis of financial condition and results of operations

Retail sales in Q2 FY16 were broadly in line with the prior year’s record second quarter. Strong demand in the UK (up 9% year-on-year), mainland Europe (up 34%) and North America (up 23%) – particularly for the new Land Rover Discovery Sport and Jaguar XE – helped offset weaker sales in China and emerging markets. However profitability was down primarily as a result of weaker China sales and mix and foreign exchange revaluation as well as an exceptional charge for the inventory impacted by the Tianjin Port explosion.

Key metrics for Q2 FY16, compared to Q2 FY15, are as follows:

 

  Retail volumes (including China JV) were 110,200 units, down 0.5%.

 

  Wholesale volumes (excluding China JV) were 111,160 units, up 6.9%.

 

  Revenues of £4,831 million, up £23 million.

 

  EBITDA of £589 million, down £344 million. EBITDA margin of 12.2%, down 7.2 ppt.

 

  PBT of £88 million before exceptional item, down £521 million.

 

  Exceptional charge of £245 million for the inventory impacted by the Tianjin Port explosion.

 

  After the exceptional item of £245 million, loss after tax was £92 million.

 

  Negative free cash flow: £225 million before financing costs and after Investment spending of £775 million.

 

  Cash and financial deposits: £2,960 million and an undrawn long-term 5 year credit facility of £1,870 million.

Market environment

Macroeconomic conditions remained mixed during the quarter. The economies of the UK and US continue to exhibit solid growth with low inflation whilst the European economy is picking up. The economic environment in China continues to be softer as GDP slipped below the government’s growth target and market conditions in developing economies, notably Russia and Brazil, remain weak.

The US Dollar strengthened against the Pound, despite the US Federal Reserve holding off on increasing interest rates, and the Chinese RMB strengthened against the Pound, to a lesser extent, following policy action which saw the RMB depreciate against the US Dollar. The Euro also strengthened against the Pound over the quarter reflecting the gradual economic recovery in the Eurozone and emerging market currencies, such as the Russian Rouble and Brazilian Real weakened. Commodity prices also softened during Q2 FY16 primarily reflecting weaker industrial demand from China.

Total automotive industry car volumes (units)

 

     Q2 FY16      Q2 FY15      Change (%)  

China

     4,438,300         4,522,100         (1.9 )% 

Europe (excluding UK)

     1,742,376         1,587,015         9.8

UK

     719,997         670,931         7.3

US

     4,509,500         4,245,300         6.2

All other markets

     3,422,914         3,705,572         (7.6 )% 

The total industry car volume data above has been compiled using relevant data available at the time of publishing this interim report, compiled from national automotive associations such as the Society of Motor Manufacturers and Traders in the UK and the ACEA in Europe, according to their segment definitions, which may differ from those used by JLR.

 

2


Table of Contents

Jaguar Land Rover retail volume performance

Total retail volumes were 110,200 units for the quarter, a decrease of 0.5% compared to Q2 FY15. Higher retail sales in the UK, North America and Europe were offset by lower sales in China and Other Overseas markets (which includes Russia and Brazil). The lower sales in China reflect continued softening demand and the timing of new model launches, such as the Jaguar XE which only went on sale in September 2015, and the new XJ and XF models available in early 2016, as well as the transition to localised production first with the Evoque, followed by the Discovery Sport from November 2015.

By brand, Land Rover retailed 87,554 units in Q2 FY16, down 3.9% compared to the same quarter last year, whilst Jaguar retailed 22,646 units, up 15.3%. Retail sales of the Discovery Sport continue to grow with Q2 FY16 volumes up 26.6% compared to sales of the Freelander (which it replaced) in the same period last year. Discovery, Range Rover Sport and Range Rover retail sales remained robust, albeit down slightly when compared to strong sales in the same quarter of last year. Evoque retail sales were down in the quarter, reflecting the transition to localised production in China and the start of production of the refreshed 16 Model Year Evoque (starting from August 2015).

Jaguar retail volumes grew significantly, up 15.3%, due to strong XE sales, offset partially by lower sales of the XF and XJ, ahead of the all new Jaguar XF (from August 2015) and a refreshed 16 Model Year Jaguar XJ (coming soon).

Wholesale volumes totalled 111,160 units (excluding China JV) in Q2 FY16, up 6.9% compared to Q2 FY15. This comprised 89,473 units for Land Rover (down 3.8%) and 21,687 units for Jaguar (up 22.0% reflecting the ramp up of the Jaguar XE).

Jaguar Land Rover retail volume performance in key regions and by model for Q2 FY16 compared to Q2 FY15 is detailed in the following tables (figures in units, and include China JV volumes).

 

     Q2 FY16      Q2 FY15      Change (%)  

China

     20,149         29,786         (32.4 )% 

Europe (excluding UK)

     23,113         17,227         34.2

UK

     24,180         22,151         9.2

North America

     21,743         17,616         23.4

All Other Markets

     21,015         24,001         (12.4 )% 
  

 

 

    

 

 

    

 

 

 

Total JLR

     110,200         110,781         (0.5 )% 
  

 

 

    

 

 

    

 

 

 

XE

     9,310         —           n/a   

XF

     7,598         11,217         (32.3 )% 

XJ

     2,715         4,365         (37.8 )% 

XK

     77         871         (91.2 )% 

F-TYPE

     2,946         3,194         (7.8 )% 
  

 

 

    

 

 

    

 

 

 

Jaguar

     22,646         19,647         15.3
  

 

 

    

 

 

    

 

 

 

Defender

     5,619         4,038         39.2

Freelander

     41         14,235         (99.7 )% 

Discovery Sport

     18,021         —           n/a   

Discovery

     10,344         10,717         (3.5 )% 

Range Rover Evoque

     21,744         29,224         (25.6 )% 

Range Rover Sport

     19,234         19,447         (1.1 )% 

Range Rover

     12,551         13,473         (6.8 )% 
  

 

 

    

 

 

    

 

 

 

Land Rover

     87,554         91,134         (3.9 )% 
  

 

 

    

 

 

    

 

 

 

Total JLR

     110,200         110,781         (0.5 )% 
  

 

 

    

 

 

    

 

 

 

 

3


Table of Contents

Revenue and profits

The Company generated revenue of £4,831 million in the three months to 30 September 2015, up £23 million, compared to revenue of £4,808 million earned in the same three month period last year. Revenue for the 6 months to 30 September 2015 was £9,833 million, down £328 million compared to the same period a year ago.

EBITDA decreased by £344 million to £589 million in Q2 FY16 compared to £933 million in Q2 FY15 due to lower China sales and mix, unfavourable revaluation of current assets and liabilities (primarily EUR payables) compared to a gain a year ago, and launch and other costs. EBITDA for the 6 months to 30 September 2015 was £1,410 million, down £610 million compared to the same 6 month period last year.

PBT for Q2 FY16 before exceptional items was £88 million, down £521 million from £609 million in Q2 FY15. The decrease in PBT was primarily driven by the lower EBITDA as well as higher depreciation and amortisation (£121 million higher), unfavourable revaluation of foreign currency debt and unrealised hedges as well as higher net finance expense. An exceptional charge of £245 million has been recognised for about 5,800 vehicles involved in the August Tianjin Port explosion. After this exceptional charge, losses before tax were £157 million. An insurance adjusting process is underway and insurance and any other recoveries will only be realised future periods.

PBT before exceptional items for the 6 months to 30 September 2015 was £726 million, down £807 million compared to the 6 months to 30 September 2014. PBT after the exceptional charge for the first half of the year was £481 million, down £1,052 million compared to the first half of the prior year.

Losses after tax for Q2 FY16 were £92 million, down £542 million compared to Q2 FY15. PAT for the 6 months to 30 September 2015 was £400 million, down £743 million compared to the same 6 month period a year ago.

EBITDA reconciliation

 

Three months ended 30 September (£ millions)    2015     2014  

EBITDA margin

     12.2     19.4

EBITDA

     589        933   

Adjustments:

    

Depreciation and amortisation

     (365     (244

Foreign exchange losses – financing

     (59     (53

Foreign exchange losses – unrealised derivatives

     (20     (24

Commodity losses - unrealised derivatives

     (35     (8

Finance income

     8        12   

Finance expense (net)

     (29     (1

Share of loss from joint ventures

     (1     (4

Other

     —          (2
  

 

 

   

 

 

 

Profit before tax (excluding exceptional charge)

     88        609   
  

 

 

   

 

 

 

Exceptional charge

     (245     —     
  

 

 

   

 

 

 

(Loss)/profit before tax

     (157     609   
  

 

 

   

 

 

 

Income tax credit/(expense)

     65        (159
  

 

 

   

 

 

 

(Loss)/profit after tax

     (92     450   
  

 

 

   

 

 

 

Cash flow, liquidity and capital resources

Free cash flow before financing for Q2 FY16 was negative £225 million, primarily reflecting capitalised investment spending of £700 million exceeding EBITDA of £589m and higher working capital. Total investment spending was £775 million including £75 million expensed in EBITDA.

After the negative free cash flow of £225 million and finance expense of £50 million, cash and financial deposits stood at £2,960 million as at 30 September 2015 (split £2,104 million of cash and cash equivalents and £856 million of bank deposits with maturities greater than 3 months). This includes an amount of £531 million held in subsidiaries of Jaguar Land Rover outside of the United Kingdom. The cash in some of these jurisdictions is subject to impediments to remitting cash to the UK other than through annual dividends.

As at 30 September 2015, the Company also has undrawn committed credit facilities totalling £1,870 million all maturing in July 2020. Jaguar Land Rover also had £95 million of undrawn shorter-term committed credit facilities.

 

4


Table of Contents

Material events

On 12 August 2015 a series of explosions caused widespread damage at the Port of Tianjin in China. Tianjin Port is one of three major locations in China through which Jaguar Land Rover imports vehicles and at the time of the explosion, approximately 5,800 vehicles were stored at various locations in Tianjin. Many of these vehicles were destroyed or damaged in the explosion and as a result an exceptional charge of £245 million has been recognised in the financial statements of the Company for Q2 FY16. The process for finalising an insurance claim may take some months to conclude, so insurance and other potential recoveries will only be recognised in future periods when paid or confirmed and have not been recognised in this period.

Borrowings

The following table shows details of the Company’s financing arrangements as at 30 September 2015.

 

(£ millions)    Facility
amount
     Outstanding      Undrawn      First call
date
 

Committed

           

£500m 8.250% Senior Notes due 2020*

     58         58         —           Mar-2016   

£400m 5.000% Senior Notes due 2022**

     400         400         —           n/a   

£400m 3.875% Senior Notes due 2023**

     400         400            n/a   

$410m 8.125% Senior Notes due 2021*

     55         55         —           May-2016   

$500m 5.625% Senior Notes due 2023*

     330         330         —           Feb-2018   

$700m 4.125% Senior Notes due 2018**

     462         462         —           n/a   

$500m 4.250% Senior Notes due 2019**

     330         330         —           n/a   

$500m 3.500% Senior Notes due 2020**

     330         330         —           n/a   

Revolving 5 year credit facility

     1,870         —           1,870         n/a   

Receivable factoring facilities***

     231         136         95         n/a   
  

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal

     4,466         2,501         1,965      
  

 

 

    

 

 

    

 

 

    

 

 

 

Prepaid costs

     —           (22      —        
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     4,466         2,479         1,965      
  

 

 

    

 

 

    

 

 

    

 

 

 

 

* The Notes are guaranteed on a senior unsecured basis by the guarantors Jaguar Land Rover Limited, Jaguar Land Rover Holdings Limited, Land Rover Exports Limited, JLR Nominee Company Limited and Jaguar Land Rover North America LLC.
** The Notes are guaranteed on a senior unsecured basis by the guarantors Jaguar Land Rover Limited and Jaguar Land Rover Holdings Limited.
*** The $350 million committed facility is drawn by Jaguar Land Rover Limited and guaranteed by Jaguar Land Rover Holdings Limited.

A bilateral $200 million uncommitted receivables factoring facility is also available which remained undrawn as at 30 September 2015.

Acquisitions and disposals

There were no material acquisitions or disposals in the period.

Off-balance sheet financial arrangements

The Company has no off-balance sheet financial arrangements other than commitments disclosed in the condensed consolidated financial statements.

Business risks and mitigating factors

As discussed on pages 76-81, and elsewhere, of the Annual Report 2014-15 of the Company, Jaguar Land Rover is exposed to various business risks including but not limited to the uncertainty of global economic conditions, fluctuations of currency exchange rates and raw material prices.

Employees

At the end of Q2 FY16, Jaguar Land Rover employed 36,960 people worldwide including agency personnel. This compared to 31,826 at the end of Q2 FY15.

 

5


Table of Contents

Board of Directors

The following table provides information with respect to members of the Board of Directors of Jaguar Land Rover:

 

Name   Position   Year appointed as Director,
Chief Executive Officer
Cyrus P Mistry   Chairman and Director   2012
Andrew M. Robb   Director   2009
Dr. Ralf D. Speth   Chief Executive Officer and Director   2010
Nasser Mukhtar Munjee   Director   2012
Chandrasekaran Ramakrishnan   Director   2013

 

6


Table of Contents

Condensed Consolidated Income Statement

For the three and six months ended 30 September 2015 (unaudited)

 

          Three months ended     Six months ended  
          30 September     30 September     30 September     30 September  
          2015     2014     2015     2014  

(£ millions)

   Note    (unaudited)     (unaudited)     (unaudited)     (unaudited)  

Revenue

        4,831        4,808        9,833        10,161   

Material cost of sales excluding exceptional item

        (2,916     (2,904     (5,822     (6,203

Exceptional item

   2      (245     —          (245     —     

Material and other cost of sales

        (3,161     (2,904     (6,067     (6,203

Employee cost

        (539     (463     (1,091     (892

Other expenses

        (1,052     (939     (2,088     (1,866

Net impact of commodity derivatives

        (46     (7     (73     8   

Development costs capitalised

   3      306        274        621        547   

Other income

        33        32        129        56   

Depreciation and amortisation

        (365     (244     (683     (478

Foreign exchange (loss)/gain

        (142     45        (64     192   

Finance income

   4      8        12        18        23   

Finance expense (net)

   4      (29     (1     (47     (5

Share of loss from equity accounted investees

        (1     (4     (7     (10
     

 

 

   

 

 

   

 

 

   

 

 

 

(Loss)/profit before tax

        (157     609        481        1,533   

Income tax credit/ (expense) excluding tax on exceptional item

        4        (159     (142     (390

Tax on exceptional item

   9      61        —          61        —     

Income tax credit/(expense)

   9      65        (159     (81     (390
     

 

 

   

 

 

   

 

 

   

 

 

 

(Loss)/profit for the period

        (92     450        400        1,143   
     

 

 

   

 

 

   

 

 

   

 

 

 

Condensed Consolidated Statement of Comprehensive Income

For the three and six months ended 30 September 2015 (unaudited)

 

     Three months ended     Six months ended  
     30 September     30 September     30 September     30 September  
     2015     2014     2015     2014  

(£ millions)

   (unaudited)     (unaudited)     (unaudited)     (unaudited)  

(Loss)/profit for the period

     (92     450        400        1,143   

Items that will not be reclassified subsequently to profit or loss:

        

Remeasurement of defined benefit obligation

     261        (80     435        (194

Income tax related to items that will not be reclassified

     (52     16        (87     39   
  

 

 

   

 

 

   

 

 

   

 

 

 
     209        (64     348        (155
  

 

 

   

 

 

   

 

 

   

 

 

 

Items that may be reclassified subsequently to profit or loss:

        

(Loss)/gain on effective cash flow hedges

     (136     (475     669        (412

Cash flow hedges reclassified to foreign exchange gain in profit or loss

     15        (69     118        (158

Currency translation differences

     2        11        (14     —     

Income tax related to items that may be reclassified

     25        109        (157     114   
  

 

 

   

 

 

   

 

 

   

 

 

 
     (94     (424     616        (456
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income / (expense) net of tax

     115        (488     964        (611
  

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income / (expense) attributable to shareholders

     23        (38     1,364        532   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7


Table of Contents

Condensed Consolidated Balance Sheet

 

          30 September 2015      31 March 2015  

As at (£ millions)

   Note    (unaudited)      (audited)  

Non-current assets

        

Equity accounted investees

        259         280   

Other financial assets

        127         49   

Property, plant and equipment

        4,878         4,474   

Intangible assets

        5,239         4,952   

Other assets

        71         26   

Deferred tax assets

        407         372   
     

 

 

    

 

 

 

Total non-current assets

        10,981         10,153   
     

 

 

    

 

 

 

Current assets

        

Cash and cash equivalents

        2,104         3,208   

Short term deposits

        856         1,055   

Trade receivables

        974         1,112   

Other financial assets

   6      245         214   

Inventories

   7      2,799         2,416   

Other current assets

   8      393         396   

Current tax assets

        60         9   
     

 

 

    

 

 

 

Total current assets

        7,431         8,410   
     

 

 

    

 

 

 

Total assets

        18,412         18,563   
     

 

 

    

 

 

 

Current liabilities

        

Accounts payable

        4,785         5,450   

Short term borrowings

   14      136         156   

Other financial liabilities

   11      696         923   

Provisions

   12      471         485   

Other current liabilities

   13      351         374   

Current tax liabilities

        36         69   
     

 

 

    

 

 

 

Total current liabilities

        6,475         7,457   
     

 

 

    

 

 

 

Non-current liabilities

        

Long term debt

   14      2,345         2,381   

Other financial liabilities

   11      470         842   

Provisions

   12      615         639   

Retirement benefit obligation

   17      572         887   

Other non-current liabilities

        139         118   

Deferred tax liabilities

        542         199   
     

 

 

    

 

 

 

Total non-current liabilities

        4,683         5,066   
     

 

 

    

 

 

 

Total liabilities

        11,158         12,523   
     

 

 

    

 

 

 

Equity attributable to shareholders

        

Ordinary shares

        1,501         1,501   

Capital redemption reserve

        167         167   

Reserves

   15      5,586         4,372   
     

 

 

    

 

 

 

Equity attributable to shareholders

        7,254         6,040   
     

 

 

    

 

 

 

Total liabilities and equity

        18,412         18,563   
     

 

 

    

 

 

 

These condensed consolidated interim financial statements were approved by the board of directors.

Company registered number: 6477691

 

8


Table of Contents

Condensed Consolidated Statement of Changes in Equity

 

(£ millions)

   Ordinary share
capital
     Capital redemption
reserve
     Other reserves     Total equity  

Balance at 1 April 2015 (audited)

     1,501         167         4,372        6,040   

Profit for the period

     —           —           400        400   

Other comprehensive income for the period

     —           —           964        964   
  

 

 

    

 

 

    

 

 

   

 

 

 

Total comprehensive income

     —           —           1,364        1,364   
  

 

 

    

 

 

    

 

 

   

 

 

 

Dividend paid

     —           —           (150     (150
  

 

 

    

 

 

    

 

 

   

 

 

 

Balance at 30 September 2015 (unaudited)

     1,501         167         5,586        7,254   
  

 

 

    

 

 

    

 

 

   

 

 

 

(£ millions)

   Ordinary share
capital
     Capital redemption
reserve
     Other reserves     Total equity  

Balance at 1 April 2014 (audited)

     1,501         167         4,196        5,864   

Profit for the period

     —           —           1,143        1,143   

Other comprehensive expense for the period

     —           —           (611     (611
  

 

 

    

 

 

    

 

 

   

 

 

 

Total comprehensive income

     —           —           532        532   
  

 

 

    

 

 

    

 

 

   

 

 

 

Dividend paid

     —           —           (150     (150
  

 

 

    

 

 

    

 

 

   

 

 

 

Balance at 30 September 2014 (unaudited)

     1,501         167         4,578        6,246   
  

 

 

    

 

 

    

 

 

   

 

 

 

 

9


Table of Contents

Condensed Consolidated Cash Flow Statement

For the three and six months ended 30 September 2015 (unaudited)

 

     Three months ended     Six months ended  
     30 September     30 September     30 September     30 September  
     2015     2014     2015     2014  

(£ millions)

   (unaudited)     (unaudited)     (unaudited)     (unaudited)  

Cash flows from operating activities

        

(Loss)/profit for the period

     (92     450        400        1,143   

Adjustments for:

        

Depreciation and amortisation

     365        244        683        478   

Loss on sale of assets

     —          —          3        1   

Foreign exchange gain on loans

     59        53        (40     26   

Income tax (credit)/expense

     (65     159        81        390   

Finance expense (net)

     29        1        47        5   

Finance income

     (8     (12     (18     (23

Foreign exchange loss/(gain) on derivatives

     20        24        (51     —     

Foreign exchange loss/(gain) on short term deposits

     (5     (11     13        (20

Share of loss from equity accounted investees

     1        4        7        10   

Exceptional item

     245        —          245        —     

Other non-cash adjustments

     (1     —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from operating activities before changes in assets and liabilities

     548        912        1,370        2,010   
  

 

 

   

 

 

   

 

 

   

 

 

 

Trade receivables

     (68     61        138        84   

Other financial assets

     9        —          7        (12

Other current assets

     14        153        (2     119   

Inventories

     (50     (148     (628     (102

Other non-current assets

     (12     (9     (14     (9

Accounts payable

     (61     160        (613     (254

Other current liabilities

     18        98        (18     31   

Other financial liabilities

     59        7        118        (4

Other non-current liabilities and retirement benefit obligations

     78        34        141        80   

Provisions

     (21     (8     (49     38   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash generated from operations

     514        1,260        450        1,981   
  

 

 

   

 

 

   

 

 

   

 

 

 

Income tax paid

     (48     (71     (105     (172
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash generated from operating activities

     466        1,189        345        1,809   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows used in investing activities

        

Investment in joint ventures

     —          —          —          (72

Movements in other restricted deposits

     —          (1     4        1   

Investment in short term deposits

     (680     (789     (1,488     (1,505

Redemption of short term deposits

     1,065        741        1,674        1,232   

Movements in short term deposits

     385        (48     186        (273

Purchases of property, plant and equipment

     (378     (367     (727     (655

Proceeds from sale of property, plant and equipment

     —          1        —          1   

Cash paid for intangible assets

     (322     (335     (685     (604

Finance income received

     9        10        20        22   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (306     (740     (1,202     (1,580
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash flows from financing activities

        

Finance expenses and fees paid

     (50     (41     (75     (67

Proceeds from issuance of short term borrowings

     —          —          6        —     

Repayment of short term borrowings

     (25     (11     (25     (6

Payments of lease obligations

     (2     (2     (3     (3

Dividends paid

     —          —          (150     (150
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (77     (54     (247     (226
  

 

 

   

 

 

   

 

 

   

 

 

 

Net change in cash and cash equivalents

     83        395        (1,104     3   

Cash and cash equivalents at beginning of period

     2,021        1,868        3,208        2,260   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

     2,104        2,263        2,104        2,263   
  

 

 

   

 

 

   

 

 

   

 

 

 

 

10


Table of Contents

Notes (forming part of the condensed consolidated financial statements)

 

1 Accounting policies

Basis of preparation

The information for the three and six months ended 30 September 2015 is unaudited and does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The condensed consolidated interim financial statements of Jaguar Land Rover Automotive plc have been prepared in accordance with International Accounting Standard 34, “Interim Financial Reporting” under IFRS as adopted by the European Union (‘EU’).

The condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments held at fair value. These financial instrument valuations are classified as level 2 fair value measurements, as defined by IFRS 13, being those derived from inputs other than quoted prices which are observable. There have been no changes in the valuation techniques used or transfers between fair value levels from those set out in the annual consolidated financial statements for the year ended 31 March 2015.

The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 March 2015, which were prepared in accordance with IFRS as adopted by the EU. There were no differences between those financial statements and the financial statements for the group prepared under IFRS as adopted by the International Accounting Standards Board.

The condensed consolidated interim financial statements have been prepared on the going concern basis as set out within the directors’ statement of responsibilities section of the group’s annual report for the year ended 31 March 2015.

The accounting policies applied are consistent with those of the annual consolidated financial statements for the year ended 31 March 2015, as described in those financial statements.

 

2 Exceptional item

A provision against the carrying value of inventory of £245 million has been recorded following the group’s assessment of the physical condition of the vehicles involved in the Tianjin explosion in August 2015. The process for finalising an insurance claim may take some months to conclude, so insurance and other potential recoveries will only be recognised in future periods when paid or confirmed and have not been recognised in this period.

Due to the size of the provision recorded the charge together with the associated tax impact has been disclosed as an exceptional item.

 

3 Research and development

 

     Three months ended      Six months ended  
     30 September      30 September      30 September      30 September  
     2015      2014      2015      2014  

(£ millions)

   (unaudited)      (unaudited)      (unaudited)      (unaudited)  

Total research and development costs incurred

     381         336         760         662   

Research and development expensed

     (75      (62      (139      (115
  

 

 

    

 

 

    

 

 

    

 

 

 

Development costs capitalised

     306         274         621         547   
  

 

 

    

 

 

    

 

 

    

 

 

 

Interest capitalised

     16         29         36         59   

Research and development expenditure credit

     (18      (13      (36      (26
  

 

 

    

 

 

    

 

 

    

 

 

 

Total internally developed intangible additions

     304         290         621         580   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

11


Table of Contents

Notes (continued)

 

4 Finance income and expense

Recognised in net income

 

     Three months ended      Six months ended  
     30 September      30 September      30 September      30 September  
     2015      2014      2015      2014  

(£ millions)

   (unaudited)      (unaudited)      (unaudited)      (unaudited)  

Finance income

     8         12         18         23   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total finance income

     8         12         18         23   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total interest expense on financial liabilities measured at amortised cost

     (40      (33      (74      (71

Unwind of discount on provisions

     (5      2         (10      6   

Interest capitalised

     16         30         37         60   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total finance expense (net)

     (29      (1      (47      (5
  

 

 

    

 

 

    

 

 

    

 

 

 

The capitalisation rate used to calculate borrowing costs eligible for capitalisation was 4.6% (six months ended 30 September 2014: 6.0%).

 

5 Allowances for trade and other receivables

Changes in the allowances for trade and other receivables are as follows:

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

At beginning of period

     11         8   

Change in allowance during the period

     —           3   

Written off

     (1      —     
  

 

 

    

 

 

 

At end of period

     10         11   
  

 

 

    

 

 

 

 

6 Other financial assets - current

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Advances and other receivables recoverable in cash

     7         19   

Derivative financial instruments

     214         176   

Accrued income

     9         5   

Other

     15         14   
  

 

 

    

 

 

 

Total current other financial assets

     245         214   
  

 

 

    

 

 

 

 

7 Inventories

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Raw materials and consumables

     89         80   

Work in progress

     379         298   

Finished goods

     2,331         2,038   
  

 

 

    

 

 

 

Total inventories

     2,799         2,416   
  

 

 

    

 

 

 

 

8 Other current assets

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Recoverable VAT

     205         221   

Prepaid expenses

     120         106   

Other

     68         69   
  

 

 

    

 

 

 

Total current other assets

     393         396   
  

 

 

    

 

 

 

 

12


Table of Contents

Notes (continued)

 

9 Taxation

Recognised in the income statement

The income tax for the three and six month periods ended 30 September 2015 and 30 September 2014 is charged at the estimated effective tax rate expected to apply for the applicable financial year ends.

The income tax credit/(expense) for the three and six month periods ended 30 September 2015 includes a tax credit on the exceptional item as highlighted in note 2 of £61 million.

 

10 Capital expenditure

Capital expenditure in the period was £704 million (6 month period to 30 September 2014: £755 million) on fixed assets and £705 million (6 month period to 30 September 2014: £641 million) was capitalised as intangible engineering assets (excluding the R&D tax credit). There were no impairments, material disposals or changes in use of assets.

 

11 Other financial liabilities

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Current

     

Finance lease obligations

     6         4   

Interest accrued

     22         25   

Derivative financial instruments

     402         697   

Liability for vehicles sold under a repurchase arrangement

     260         197   

Other payables

     6         —     
  

 

 

    

 

 

 
     696         923   
  

 

 

    

 

 

 

Non-current

     

Finance lease obligations

     4         9   

Derivative financial instruments

     465         832   

Other payables

     1         1   
  

 

 

    

 

 

 
     470         842   
  

 

 

    

 

 

 

 

12 Provisions

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Current

     

Product warranty

     409         426   

Legal and product liability

     52         50   

Provisions for residual risk

     5         4   

Provision for environmental liability

     5         5   
  

 

 

    

 

 

 

Total current provisions

     471         485   
  

 

 

    

 

 

 

Non-current

     

Product warranty

     572         585   

Provision for residual risk

     12         16   

Provision for environmental liability

     26         26   

Other employee benefits obligations

     5         12   
  

 

 

    

 

 

 

Total non-current provisions

     615         639   
  

 

 

    

 

 

 

 

13


Table of Contents

Notes (continued)

 

12 Provisions (continued)

 

     Six months ended      Year ended  
     30 September 2015      31 March 2015  

(£ millions)

   (unaudited)      (audited)  

Product warranty

     

Opening balance

     1,011         881   

Provision made during the period

     200         562   

Provision used during the period

     (237      (430

Impact of discounting

     10         17   

Foreign currency translation

     (3      (19
  

 

 

    

 

 

 

Closing balance

     981         1,011   
  

 

 

    

 

 

 

Legal and product liability

     

Opening balance

     50         49   

Provision made during the period

     18         18   

Provision used during the period

     (15      (17

Foreign currency translation

     (1      —     
  

 

 

    

 

 

 

Closing balance

     52         50   
  

 

 

    

 

 

 

Residual risk

     

Opening balance

     20         15   

Provision made during the period

     2         5   

Provision used during the period

     (5      —     

Foreign currency translation

     —           —     
  

 

 

    

 

 

 

Closing balance

     17         20   
  

 

 

    

 

 

 

Environmental liability

     

Opening balance

     31         21   

Provision made during the period

     1         10   

Provision used during the period

     (1      —     
  

 

 

    

 

 

 

Closing balance

     31         31   
  

 

 

    

 

 

 

Product warranty provision

The group offers warranty cover in respect of manufacturing defects, which become apparent within one to five years after purchase, dependent on the market in which the purchase occurred.

Legal and product liability provision

A legal and product liability provision is maintained in respect of known litigation which impacts the group. The provision primarily relates to motor accident claims, consumer complaints, dealer terminations, employment cases and personal injury claims.

Residual risk provision

In certain markets, the group is responsible for the residual risk arising on vehicles sold by dealers on leasing arrangements. The provision is based on the latest available market expectations of future residual value trends. The timing of the outflows will be at the end of the lease arrangements – being typically up to three years.

Environmental risk provision

This provision relates to various environmental remediation costs such as asbestos removal and land clean up. The timing of when these costs will be incurred is not known with certainty.

 

13 Other current liabilities

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Liabilities for advances received

     164         183   

Deferred revenue

     65         54   

VAT

     71         88   

Others

     51         49   
  

 

 

    

 

 

 

Total current other liabilities

     351         374   
  

 

 

    

 

 

 

 

14


Table of Contents

Notes (continued)

 

14 Interest bearing loans and borrowings

 

     30 September 2015      31 March 2015  

As at (£ millions)

   (unaudited)      (audited)  

Short term borrowings

     

Bank loans

     136         156   
  

 

 

    

 

 

 

Short term borrowings

     136         156   
  

 

 

    

 

 

 

Long term borrowings

     

EURO MTF listed debt

     2,345         2,381   
  

 

 

    

 

 

 

Long term borrowings

     2,345         2,381   
  

 

 

    

 

 

 

Finance lease obligations

     10         13   
  

 

 

    

 

 

 

Total debt

     2,491         2,550   
  

 

 

    

 

 

 

 

15 Other reserves

The movement of reserves is as follows:

 

(£ millions)

   Translation
reserve
     Hedging
reserve
     Retained
earnings
     Total reserves  

Balance at 1 April 2015 (audited)

     (362      (910      5,644         4,372   

Profit for the period

     —           —           400         400   

Remeasurement of defined benefit obligation

     —           —           435         435   

Gain on effective cash flow hedges

     —           669         —           669   

Currency translation differences

     (14      —           —           (14

Income tax related to items recognised in other comprehensive income

     —           (133      (87      (220

Cash flow hedges reclassified to foreign exchange in profit or loss

     —           118         —           118   

Income tax related to items reclassified to profit or loss

     —           (24      —           (24

Dividend paid

     —           —           (150      (150
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at 30 September 2015 (unaudited)

     (376      (280      6,242         5,586   
  

 

 

    

 

 

    

 

 

    

 

 

 

(£ millions)

   Translation
reserve
     Hedging
reserve
     Retained
earnings
     Total reserves  

Balance at 1 April 2014 (audited)

     (383      539         4,040         4,196   

Profit for the period

     —           —           1,143         1,143   

Remeasurement of defined benefit obligation

     —           —           (194      (194

Gain on effective cash flow hedges

     —           (412      —           (412

Currency translation differences

     —           —           —           —     

Income tax related to items recognised in other comprehensive income

     —           81         39         120   

Cash flow hedges reclassified to foreign exchange in profit or loss

     —           (158      —           (158

Income tax related to items reclassified to profit or loss

     —           33         —           33   

Dividend paid

     —           —           (150      (150
  

 

 

    

 

 

    

 

 

    

 

 

 

Balance at 30 September 2014 (unaudited)

     (383      83         4,878         4,578   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

15


Table of Contents

Notes (continued)

 

16 Dividends

During the three months ended 30 September 2015, no ordinary share dividend was proposed and paid (three months to 30 September 2014: £nil).

During the six months ended 30 September 2015, an ordinary share dividend of £150 million was proposed and paid (six months to 30 September 2014: £150 million).

 

17 Employee benefits

Jaguar Land Rover Limited has pension arrangements providing employees with defined benefits related to pay and service as set out in the rules of each fund. The following table sets out the disclosure pertaining to employee benefits of Jaguar Land Rover Limited and overseas subsidiaries which operate defined benefit pension plans.

 

     Six months ended      Year ended  
     30 September 2015      31 March 2015  

(£ millions)

   (unaudited)      (audited)  

Change in defined benefit obligation

     

Defined benefit obligation, beginning of the period

     7,883         6,053   

Service cost

     112         168   

Interest cost

     132         274   

Actuarial (gains) / losses arising from:

     

- Changes in demographic assumptions

     (36      (20

- Changes in financial assumptions

     (828      1,454   

- Experience adjustments

     96         101   

Prior service costs

     —           1   

Foreign currency translation

     —           —     

Member contributions

     1         2   

Benefits paid

     (79      (149

Other adjustments

     —           (1
  

 

 

    

 

 

 

Defined benefit obligation at end of period

     7,281         7,883   
  

 

 

    

 

 

 

Change in plan assets

     

Fair value of plan assets at beginning of the period

     6,997         5,382   

Interest income

     116         246   

Remeasurement (loss) / gain on the return of plan assets, excluding amounts included in interest income

     (328      1,178   

Administrative expenses

     (4      (8

Foreign currency translation

     —           1   

Employer’s contributions

     12         346   

Members contributions

     1         2   

Benefits paid

     (79      (149

Other adjustments

     —           (1
  

 

 

    

 

 

 

Fair value of plan assets at end of period

     6,715         6,997   
  

 

 

    

 

 

 

Amount recognised in the balance sheet consist of

     

Present value of defined benefit obligations

     (7,281      (7,883

Fair value of plan assets

     6,715         6,997   

Restriction on asset and onerous obligation

     (6      (1
  

 

 

    

 

 

 

Net liability

     (572      (887
  

 

 

    

 

 

 

Non-current liabilities

     (572      (887
  

 

 

    

 

 

 

 

16


Table of Contents

Notes (continued)

 

17 Employee benefits (continued)

 

The range of assumptions used in accounting for the pension plans in both periods is set out below:

 

     Six months ended
30 September 2015
(unaudited)
    Year ended
31 March 2015
(audited)
 

Discount rate

     3.9     3.4

Expected rate of increase in compensation level of covered employees

     3.6     3.6

Inflation increase

     3.1     3.1

For the valuation at 30 September 2015 and 31 March 2015, the mortality assumptions used are the SAPS base table, in particular S1NxA tables and the Light table for members of the Jaguar Executive Pension Plan. A scaling factor of 115 percent has been used for the Jaguar Pension Plan, 110 percent for the Land Rover Pension Scheme, and 105 percent for males and 90 percent for females for Jaguar Executive Pension Plan. There is an allowance for future improvements in line with the CMI (2014) projections and an allowance for long-term improvements of 1.25 percent per annum.

 

18 Commitments and contingencies

In the normal course of business, the group faces claims and assertions by various parties. The group assesses such claims and assertions and monitors the legal environment on an on-going basis, with the assistance of external legal counsel wherever necessary. The group records a liability for any claims where a potential loss is probable and capable of being estimated and discloses such matters in its financial statements, if material. For potential losses that are considered possible, but not probable, the group provides a disclosure in the financial statements but does not record a liability in its accounts unless the loss becomes probable.

The following is a description of claims and assertions where a potential loss is possible, but not probable. Management believe that none of the contingencies described below, either individually or in aggregate, would have a material adverse effect on the group’s financial condition, results of operations, or cash flows.

Litigation

The group is involved in legal proceedings, both as plaintiff and as defendant and there are claims of £15 million (31 March 2015: £11 million) against the Company which management have not recognised as they are not considered probable. The majority of these claims pertain to motor accident claims and consumer complaints. Some of the cases also relate to replacement of parts of vehicles and/or compensation for deficiency in the services by the group or its dealers.

Other taxes and dues

The group had no significant tax matters in dispute at 30 September 2015 or 31 March 2015 where a potential loss was considered possible.

During the year ended 31 March 2015, the group’s Brazilian subsidiary received a demand for £27 million in relation to additional indirect taxes (PIS and COFINS) claimed as being due on local vehicle and parts sales made in 2010. The matter is currently being contested before the Brazilian appellate authorities. Professional legal opinions obtained in Brazil fully support that the basis of the tax authority’s assertion is incorrect and, as a result, the likelihood of any settlement ultimately having to be made is considered remote.

Commitments

The group has entered into various contracts with vendors and contractors for the acquisition of plant and machinery, equipment and various civil contracts of capital nature aggregating £805 million (31 March 2015: £814 million) and £32 million (31 March 2015: £nil) relating to the acquisition of intangible assets.

The group has entered into various contracts with vendors and contractors which include obligations aggregating £630 million (31 March 2015: £642 million) to purchase minimum or fixed quantities of material.

Inventory of £nil (31 March 2015: £nil) and trade receivables with a carrying amount of £136 million (31 March 2015: £156 million) and property, plant and equipment with a carrying amount of £nil (31 March 2015: £nil) and restricted cash with a carrying amount of £nil (31 March 2015: £nil) are pledged as collateral/security against the borrowings and commitments.

There are guarantees provided in the ordinary course of business of £nil (31 March 2015: £nil).

 

17


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Notes (continued)

 

19 Capital Management

The group’s objectives when managing capital are to ensure the going concern operation of its entities and to maintain an efficient capital structure to reduce the cost of capital, support the corporate strategy and to meet shareholder expectations.

The group’s policy is to borrow primarily through capital market debt issues to meet anticipated funding requirements and maintain sufficient liquidity. The group also maintains certain undrawn committed credit facilities to provide additional liquidity. These borrowings, together with cash generated from operations, are loaned internally or contributed as equity to certain subsidiaries as required. Surplus cash in subsidiaries is pooled (where practicable) and invested to satisfy security, liquidity and yield requirements.

The capital structure is governed according to group policies approved by the Board and is monitored by various metrics such as debt to Adjusted EBITDA and Adjusted EBITDA to interest ratios, as per the debt covenants and rating agency guidance. Funding requirements are reviewed periodically with any debt issuances and capital distributions approved by the Board.

The following table summarises the capital of the group:

 

As at (£ millions)

   30 September 2015
(unaudited)
     31 March 2015
(audited)
 

Short term debt

     142         160   

Long term debt

     2,349         2,390   
  

 

 

    

 

 

 

Total debt*

     2,491         2,550   
  

 

 

    

 

 

 

Equity

     7,254         6,040   
  

 

 

    

 

 

 

Total capital (debt and equity)

     9,745         8,590   
  

 

 

    

 

 

 

 

* Total debt includes finance lease obligations of £10 million (31 March 2015: £13 million).

 

20 Related party transactions

The group’s related parties principally consist of Tata Sons Limited., subsidiaries, associates and joint ventures of Tata Sons Limited which includes Tata Motors Limited (the ultimate parent company), subsidiaries, associates and joint ventures of Tata Motors Limited. The group routinely enters into transactions with these related parties in the ordinary course of business including transactions for sale and purchase of products with its associates and joint ventures. Transactions and balances with the group’s own subsidiaries are eliminated on consolidation.

The following table summarises related party transactions and balances not eliminated in the consolidated condensed interim financial statements.

 

Six months ended 30 September (£ millions)

   With joint
ventures
of the
group
     2015
(unaudited)
With Tata
Sons Limited
and its
subsidiaries
and joint
ventures
     With
immediate or
ultimate
parent and its
subsidiaries
and joint
ventures
     With joint
ventures
of the
group
     2014
(unaudited)
With Tata
Sons Limited
and its
subsidiaries
and joint
ventures
     With
immediate or
ultimate
parent and its
subsidiaries
and joint
ventures
 

Sale of products

     153         —           21         7         —           35   

Purchase of goods

     —           —           45         —           —           —     

Services received

     7         69         50         —           42         39   

Services rendered

     20         —           —           8         —           —     

Trade and other receivables

     56         —           32         25         —           25   

Accounts payable

     —           7         32         —           21         22   

Dividend paid

     —           —           150         —           —           150   

Compensation of key management personnel

 

Six months ended 30 September (£ millions)

   2015
(unaudited)
     2014
(unaudited)
 

Key management personnel remuneration

     7         13   

 

18


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LOGO

JAGUAR LAND ROVER
JAGUAR LAND ROVER
RESULTS FOR THE QUARTER ENDED 30 SEPTEMBER 2015
6 NOVEMBER 2015


Table of Contents

LOGO

DISCLAIMER JAGUAR LAND ROVER
Statements in this presentation describing the objectives, projections, estimates and expectations of Jaguar Land Rover Automotive plc and its direct and indirect subsidiaries (the “Company”, “Group” or “JLR”) may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Company’s operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws and other statutes and incidental factors.
- Q2 FY16 represents the 3 month period from 1 July 2015 to 30 September 2015
- Q2 FY15 represents the 3 month period from 1 July 2014 to 30 September 2014
Consolidated results of Jaguar Land Rover Automotive plc and its subsidiaries contained in the presentation are unaudited and presented under IFRS as approved in the EU.
Retail volume data includes and wholesale volume excludes sales from unconsolidated Chinese joint venture.
-2-


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PARTICIPANTS JAGUAR LAND ROVER
Kenneth Gregor
CFO Jaguar Land Rover
Bennett Birgbauer
Treasurer Jaguar Land Rover
C. Ramakrishnan
Group CFO Tata Motors
-3-


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AGENDA JAGUAR LAND ROVER
Financial performance for the quarter 5
Other developments 16
October 2015 retail volumes 18
Closing Q&A 21
-4-


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JAGUAR LAND ROVER
FINANCIAL PERFORMANCE
Q2 FY16
-5-


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Q2 FY16 FINANCIAL RESULTS
REFLECTS CHINA MIX, FX REVAL AND EXCEPTIONAL ITEM JAGUAR LAND ROVER
Retail volumes 110,200, down slightly 0.5%, with Jaguar up 15.3% and Land Rover down 3.9%.
Revenue £4,831m, up slightly £23m.
EBITDA £589m (12.2% margin) and PBT £88m before an exceptional charge of £245m for the Tianjin port explosion, compared to EBITDA of £933m and PBT of £609m previous year.
After the exceptional charge, loss after tax was £92m.
Free cash flow £(225)m after investment of £775m.
Cash and deposits £2,960m and 5 year undrawn revolving credit facility £1,870m.
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KEY FINANCIAL METRICS JAGUAR LAND ROVER
Quarter ended 30 September
6 months ended 30 September
(£ millions, unless stated) 2015 2014 Change 2015 2014 Change
Retail volumes (‘000 units)* 110.2 110.8 (0.6) 225.1 226.4 (1.3)
Wholesale volumes (‘000 units)* 111.2 104.0 7.2 221.8 219.1 2.7
Revenues 4,831 4,808 23 9,833 10,161 (328)
EBITDA ** 589 933 (344) 1,410 2,020 (610)
EBITDA % 12.2% 19.4% (7.2 ppt) 14.3% 19.9% (5.6 ppt)
Profit before tax and exceptional item 88 609 (521) 726 1,533 (807)
Exceptional item (245) - (245) (245) - (245)
Profit/(loss) before tax and after exceptional item (157) 609 (766) 481 1,533 (1,052)
Profit/(loss) after tax and exceptional item (92) 450 (542) 400 1,143 (743)
Free cash flow (before financing) (225) 497 (722) (1,043) 502 (1,545)
Cash 2,960 3,753 (793) 2,960 3,753 (793)
*Retail volume data includes and wholesale volume excludes sales from unconsolidated Chinese joint venture
**EBITDA defined to include the revaluation of current assets and liabilities and realised FX and commodity hedges but excludes the revaluation of foreign currency debt, exceptional item and unrealised FX and commodity hedges
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RETAIL VOLUMES BY GEOGRAPHY Q2 FY16
US, UK AND EUROPE UP; CHINA AND OVERSEAS DOWN JAGUAR LAND ROVER
Units in ‘000 UK Up 9% 22.2 17.4 4.8
Q2 FY15 24.2 16.1 8.1
Q2 FY16 North America Up 23% 17.6 13.7 3.9
Q2 FY15 21.7 18.0 3.7
Q2 FY16 China Down (32)% 29.8 24.1 5.7
Q2 FY15 20.1 5.1* 12.5 2.6
Q2 FY16 Q2 FY16
Overseas, 19% UK, 22% North America, 20% China Region, 18%
Europe (ex. Russia), 21% 110,200 Units Europe Up 34% 17.2 15.0 2.3
Q2 FY15 23.1 17.9 5.2
Q2 FY16 Overseas Down (12)% 24.0 21.0 3.0
Q2 FY15 21.0 17.9 3.1
Q2 FY16 Q2 FY15
Overseas, 22%
UK, 20%
North America, 16%
China Region, 27%
Europe (ex. Russia), 16%
110,781 Units
* Total volumes includes sales from Chery Jaguar Land Rover – 5,084 units
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RETAIL VOLUMES BY CARLINE Q2 FY16
STRONG SALES OF NEW XE AND DISCOVERY SPORT JAGUAR LAND ROVER
Units in ‘000
Jaguar - Q2 FY15 vs Q2 FY16
Up 15%
F-TYPE
XK
XJ
XF
XE
0.9
-
19.6
3.2
4.4
11.2
Q2 FY15
0.1
22.6
2.9 2.7 7.6 9.3
Q2 FY16
Land Rover - Q2 FY15 vs Q2 FY16
Down (4)%
91.1
13.5
19.4
29.2
10.7
-
14.2
4.0
Q2 FY15
87.6
12.6
19.2
21.7
10.3
18.0
5.6
Q2 FY16
Range Rover
Range Rover
Sport
Range Rover
Evoque
Discovery
Discovery
Sport
Freelander
Defender
* Total volumes includes sales from Chery Jaguar Land Rover – 5,084 units
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Q2 FY16 PROFITS YEAR ON YEAR JAGUAR LAND ROVER
Revenue of £4,831m, up slightly £23m – higher wholesale volumes with strong sales in UK, US and Europe (particularly Discovery Sport and XE), offset by softer sales in China.
EBITDA of £589m (12.2% margin), down £344m from Q2 FY15, comprising:
Less favourable sales mix offset partially by higher wholesale volume.
Higher manufacturing and launch costs.
Unfavourable FX revaluation, primarily Euro payables (£80m).
PBT £88m, down £521m before exceptional item, reflecting:
Lower EBITDA.
Higher depreciation and amortisation (up £121m) and finance expense (up £30m).
Unfavourable revaluation of foreign currency debt and mark to market of unrealised FX and commodity hedges not eligible for hedge accounting under IAS 39 (up £29m).
After the exceptional charge of £245m for the Tianjin explosion, loss before tax of £157m and after tax of £92m.
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TIANJIN PORT EXPLOSION JAGUAR LAND ROVER
Circa 5,800 cars with a consolidated inventory value of £245m stored at the port in August.
Many of these vehicles were destroyed or damaged.
One-time exceptional charge of £245m booked in Q2 FY16.
Insurance and other potential recoveries may take some months to conclude, so will only be recognized in future periods when paid or confirmed and have not been recognized in this period.
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DIESEL TECHNOLOGY JAGUAR LAND ROVER
Jaguar Land Rover does not use any emissions defeat devices or software.
Diesel technology is a key enabler to fulfil CO2 and other emission targets worldwide.
All our EU6 diesel engines, including our new Ingenium engines, use emissions after-treatment based on Selective Catalytic Reduction (SCR) to support meeting emissions targets worldwide.
Jaguar Land Rover supports a move to Worldwide Harmonized Light Vehicles Test Procedure (WLTP), including the planned introduction of real driving emissions (RDE) in 2017.
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INCOME STATEMENT JAGUAR LAND ROVER
Quarter ended 30 September 6 months ended 30 September
(£ millions, unless stated) 2015 2014 Change 2015 2014 Change
Revenues 4,831 4,808 23 9,833 10,161 (328)
Material and other cost of sales (2,916) (2,904) (12) (5,822) (6,203) 381
Employee costs (539) (463) (76) (1,091) (892) (199)
Other (expense) /Income(1) (1,093) (782) (311) (2,131) (1,593) (538)
Product development costs capitalised 306 274 32 621 547 74
EBITDA 589 933 (344) 1,410 2,020 (610)
Depreciation and amortisation (365) (244) (121) (683) (478) (205)
Debt/unrealised hedges MTM(2) (114) (85) (29) 35 (15) 50
Net finance (expense) / income and other (21) 9 (30) (29) 16 (45)
Share of profit / (loss) from Joint Venture (1) (4) 3 (7) (10) 3
Profit before tax and exceptional item 88 609 (521) 726 1,533 (807)
Exceptional item (245) - (245) (245) - (245)
Profit / (loss) before tax after exceptional item (157) 609 (766) 481 1,533 (1,052)
Income tax expense 65 (159) 224 (81) (390) 309
Profit / (loss) after tax and exceptional item (92) 450 (542) 400 1,143 (743)
1) Includes mark to market of current assets and liabilities and realised gains/losses on matured FX and commodity hedges
2) Includes mark to market of unrealised FX options (time value) and commodity hedges and revaluation of foreign currency debt
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CONSOLIDATED CASH FLOW
INVESTMENT LARGELY FUNDED BY EBITDA JAGUAR LAND ROVER
Quarter ended 30 September 6 months ended 30 September
(£ millions, unless stated) 2015 2014 Change 2015 2014 Change
EBITDA 589 933 (344) 1,410 2,020 (610)
Working capital changes and other (75) 327 (402) (960) (39) (921)
Tax paid (48) (71) 23 (105) (172) 67
Cash flow from operations 466 1,189 (723) 345 1,809 (1,464)
Investment in fixed and intangible assets (700) (701) 1 (1,412) (1,330) (82)
Other (including finance income) 9 9 - 24 23 1
Free cash flow (before financing) (225) 497 (722) (1,043) 502 (1,545)
Changes in debt (27) (13) (14) (22) (9) (13)
Finance expenses and fees (50) (41) (9) (75) (67) (8)
Dividends paid - - - (150) (150) -
Net change in cash & financial deposits (302) 443 (745) (1,290) 276 (1,566)
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FINANCING STRUCTURE
STRONG LIQUIDITY JAGUAR LAND ROVER
Quarter ended 30 September
(£ millions, unless stated) 2015 2014 Change
Cash and cash equivalents 2,104 2,263 (159)
Financial deposits 856 1,490 (634)
Cash and financial deposits 2,960 3,753 (793)
Undrawn 5 years revolving credit facilities 1,870 1,325 545
Total liquidity 4,830 5,078 (248)
Total equity 7,254 6,246 1,008
Total debt2 (2,491) (2,048) (443)
Net cash 469 1,705 (1,236)
Total debt/EBITDA1 0.7x 0.5x 0.2x
Total debt/equity 0.3x 0.3x 0.0x
1) EBITDA stated on a rolling 12 month basis
2) Total debt includes outstanding bonds, short term financing and finance leases
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RECENT AND UPCOMING PRODUCT PIPELINE
EXCITING NEW PRODUCTS TO DRIVE GROWTH JAGUAR LAND ROVER
Discovery Sport – launched Feb 15 XE – Launched May 15 (US in 2016) Evoque 16MY – Launched Aug 15
All new lightweight XF – Launched Sep 15 XJ 16MY – Launching Q3 FY16 F-PACE – Launching in 2016
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THE NEW JAGUAR F-PACE
UNVEILED AT FRANKFURT MOTORSHOW - ON SALE IN 2016 JAGUAR LAND ROVER
-17 -


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RETAIL VOLUMES BY GEOGRAPHY
OCTOBER SALES 41,553 units up 24% JAGUAR LAND ROVER
Units in ‘000
UK
Up 40%
5.7
4.5
1.2
Oct FY15
8.0
6.1
1.9
Oct FY16
North America
Up 74%
5.2
4.1
1.1
Oct FY15
9.0
7.9
1.1
Oct FY16
China
Up 9%
7.5
6.1
1.4
Oct FY15
8.1
1.9*
4.8
1.4
Oct FY16
Oct FY16
Overseas, 19%
UK, 19%
North America, 22%
China Region, 20%
Europe (ex. Russia), 21%
41,553 Units
Europe
Up 24%
7.0
6.2
0.8
Oct FY15
8.6
6.7
1.9
Oct FY16
Overseas
Down (5)%
8.2
7.3
1.0
Oct FY15
7.8
6.6
1.2
Oct FY16
Oct FY15
Overseas, 25%
UK, 17%
North America, 15%
China Region, 22%
Europe (ex. Russia), 21%
33,512 Units
* Total volumes includes sales from Chery Jaguar Land Rover – 1,859 units
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RETAIL VOLUMES BY CARLINE
OCTOBER SALES 41,553 units up 24% JAGUAR LAND ROVER
Units in ‘000
Jaguar - Oct FY15 vs Oct FY16
Up 39%
F-TYPE
XK
XJ
XF
XE
0.2
-
5.4
0.9
1.2
3.1
Oct FY15
0.0
7.5
0.9
0.9
2.2
3.5
Oct FY16
Land Rover - Oct FY15 vs Oct FY16
Up 21%
28.1
4.4
5.3
9.4
3.1
0.0
4.2
1.7
Oct FY15
0.0
34.1
5.4
7.5
7.7
4.4
7.2
2.0
Oct FY16
Range Rover
Range Rover
Sport
Range Rover
Evoque
Discovery
Discovery
Sport
Freelander
Defender
* Total volumes includes sales from Chery Jaguar Land Rover – 1,859 units
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LOOKING AHEAD
NEW PRODUCTS EXPECTED TO DRIVE GROWTH JAGUAR LAND ROVER
Jaguar Land Rover remains focused on:
Building on the successful launches of the new Discovery Sport, the new Jaguar XE, all new Jaguar XF and 16 Model Year Evoque.
Launching the 16 Model Year Jaguar XJ in Q3 FY16, the Evoque Convertible by Q4 FY16, and the Jaguar F-PACE soon after in 2016.
These new products are expected to drive profitable volume growth in 2015/16 and position the company to deliver a solid second half. Although, as previously indicated, EBITDA margins for fiscal 2015/16 are expected to be lower than the high levels in 2014/15 reflecting model mix and launch costs associated with new products, launch and reporting effects of the China JV and more mixed economic conditions particularly in China.
JLR plans to continue to execute its successful growth strategy, investing in more new products, powertrains, technologies and manufacturing capacity in the UK and overseas.
Generating strong operating cash flow to support our continuing investment in the Business estimated at £3.5bn or more in FY16.
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JAGUAR LAND ROVER
Q&A
KENNETH GREGOR
CFO, JAGUAR LAND ROVER
- 21 -


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JAGUAR LAND ROVER
Thank You
Kenneth Gregor
CFO, Jaguar Land Rover
C. Ramakrishnan
Group CFO, Tata Motors
Bennett Birgbauer
Treasurer, Jaguar Land Rover
Jaguar Land Rover Investor Relations
investor@jaguarlandrover.com
Tata Motors Investor Relations
Ir_tml@tatamotors.com
Jaguar Land Rover
Abbey Road, Whitley, Coventry
CV3 4LF
Jaguarlandrover.com
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JAGUAR LAND ROVER
ADDITIONAL SLIDES
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PRODUCT AND OTHER INVESTMENT
CAPITAL EXPENDITURE TO GROW THE BUSINESS JAGUAR LAND ROVER
Quarter ended 30 September
6 months ended 30 September
(£ millions, unless stated)
2015 2014 Change
2015 2014 Change
R&D expense
Capitalised 306 274 32 621 547 74
Expensed 75 62 13 139 115 24
Total R&D expense 381 336 45 760 662 98
Investment in tangible and other intangible assets
394 427 (33) 791 783 8
Total product and other investment
775 763 12 1,551 1,445 106
Capital investment as % of revenue
16% 16% 0.2 ppt 16% 14% 1.6 ppt
Of which capitalised
700 701 (1) 1,412 1,330 82
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WHOLESALE VOLUMES BY GEOGRAPHY Q2 FY16
STRONG SALES OF NEW XE AND DISCOVERY SPORT JAGUAR LAND ROVER
Units in ‘000
Jaguar - Q2 FY15 vs Q2 FY16
Up 22%
F-TYPE
XK
XJ
XF
XE
2.7
0.6
3.9
17.8
10.6
Q2 FY15
2.8
0.0
1.6
21.7
4.9
12.4
Q2 FY16
Land Rover - Q2 FY15 vs Q2 FY16
Up 4%
86.2
13.1
18.0
27.7
10.4
-
12.8
4.2
Q2 FY15
0.6
89.5
13.6
21.1
17.3
11.3
20.3
5.3
Q2 FY16
Range Rover
Range Rover Sport
Range Rover Evoque
Discovery
Discovery Sport
Freelander
Defender
* Total volumes excludes sales from Chery Jaguar Land Rover – 5,585 units
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WHOLESALE VOLUMES BY CARLINE Q2 FY16
US, UK, EUROPE, OVERSEAS UP; CHINA DOWN JAGUAR LAND ROVER
Units in ‘000
UK Up 30%
21.2 16.8 4.4
Q2 FY15
27.5 19.4 8.1
Q2 FY16
North America Up 65%
15.4 12.7 2.7
Q2 FY15
25.4 23.0 2.4
Q2 FY16
China Down (47)%
28.0 22.5 5.5
Q2 FY15
15.0 12.4 2.6
Q2 FY16
Q2 FY16
Overseas, 21%
UK, 25%
North America, 23%
China Region, 13%
Europe (ex. Russia), 18%
111,160 Units
Europe Up 20%
16.7 14.5 2.2
Q2 FY15
20.0 14.5 5.6
Q2 FY16
Overseas
Up 3%
22.7 19.7 3.0
Q2 FY15
23.3 20.2 3.0
Q2 FY16
Q2 FY15
UK, 20%
North America, 15%
China Region, 27%
Overseas, 22%
Europe (ex. Russia), 16%
103,975 Units
* Total volumes excludes sales from Chery Jaguar Land Rover – 5,585 units
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RETAIL VOLUMES BY CARLINE - YTD
STRONG SALES OF NEW XE AND DISCOVERY SPORT JAGUAR LAND ROVER
Units in ‘000
Jaguar - H1 FY15 vs H1 FY16
Up 4%
F-TYPE
XK
XJ
XF
XE
1.8
39.2
6.5
8.8
22.1
H1 FY15
0.2
40.8
6.1
5.8
16.4
12.2
H1 FY16
Land Rover - H1 FY15 vs H1 FY16
Down (2)%
187.2
26.2
40.0
61.4
21.0
-
30.5
8.0
H1 FY15
0.2
184.4
27.2
40.3
49.2
21.5
35.0
11.0
H1 FY16
Range Rover
Range Rover Sport
Range Rover Evoque
Discovery
Discovery Sport
Freelander
Defender
* Total volumes includes sales from Chery Jaguar Land Rover – 10,388 units
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RETAIL VOLUMES BY GEOGRAPHY – YTD
US, UK, EUROPE UP; CHINA, OVERSEAS DOWN JAGUAR LAND ROVER
Units in ‘000
UK Up 14%
41.0 31.9 9.1
H1 FY15
46.9 33.9 13.0
H1 FY16
North America
Up 18%
36.2 28.3 7.9
H1 FY15
42.7 35.1 7.6
H1 FY16
China
Down (33)%
62.7 51.1 11.6
H1 FY15
42.1 10.4* 25.9 5.8
H1 FY16
H1 FY16
Overseas, 18%
UK, 21%
North America, 19%
China Region, 19%
Europe (ex. Russia), 23%
225,105 Units
Europe
Up 30%
39.8 35.2 4.7
H1 FY15
52.0 43.2 8.7
H1 FY16
Overseas
Down (11)%
46.6 40.7 5.9
H1 FY15
41.4 35.8 5.6
H1 FY16
H1 FY15
Overseas, 21%
UK, 18%
North America, 16%
China Region, 28%
Europe (ex. Russia), 18%
226,377 Units
* Total volumes includes sales from Chery Jaguar Land Rover – 10,388 units
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WHOLESALE VOLUMES BY CARLINE – YTD
STRONG SALES OF NEW XE AND DISCOVERY SPORT JAGUAR LAND ROVER
Units in ‘000
Jaguar - H1 FY15 vs H1 FY16
Up 15%
F-TYPE
XK
XJ
XF
XE
1.8
37.4
6.5
8.3
20.8
H1 FY15
0.1
42.9
6.6
4.8
13.8
17.6
H1 FY16
Land Rover - H1 FY15 vs H1 FY16
Down (2)%
181.8
26.9
37.6
59.4
20.5
-
29.1
8.3
H1 FY15
1.1
178.9
27.4
40.7
40.1
21.7
36.7
11.3
H1 FY16
Range Rover
Range Rover Sport
Range Rover Evoque
Discovery
Discovery Sport
Freelander
Defender
* Total volumes excludes sales from Chery Jaguar Land Rover – 9,389 units
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Table of Contents

LOGO

WHOLESALE VOLUMES BY GEOGRAPHY – YTD
US, UK, EUROPE UP; CHINA, OVERSEAS DOWN JAGUAR LAND ROVER
Units in ‘000
UK Up 23%
39.5 31.0 8.5
H1 FY15
48.7 34.0 14.7
H1 FY16
North America Up 42%
33.5 27.3 6.2
H1 FY15
47.5 40.5 7.0
H1 FY16
China Down (50)%
62.1 49.8 12.3
H1 FY15
30.9 25.8 5.2
H1 FY16
H1 FY16
Overseas, 19%
UK, 22%
North America, 21%
China Region, 14%
Europe (ex. Russia), 24%
221,808 Units
Europe Up 39%
37.6 33.1 4.5
H1 FY15
52.1 41.8 10.3
H1 FY16
Overseas Down (9)%
46.5 40.6 5.9
H1 FY15
42.5 36.9 5.7
H1 FY16
H1 FY15
Overseas, 21%
UK, 18%
North America, 15%
China Region, 28%
Europe (ex. Russia), 17%
219,131 Units
* Total volumes excludes sales from Chery Jaguar Land Rover – 9,389 units
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