Customer Centricity Innovation Entrepreneurship

Description
During in this such a breakdown, concerning customer centricity, innovation, entrepreneurship.

2013-14
ANNUAL
REPOR T
02 Overview | Brands | Manufacturing | Technology | Responsible business | Management report | Governance | Financials
2014
2013
2012
2011
£2,501 million
£1,479 million*
£1,674 million*
£1,115 million
Financial highlights
Proft before tax
Great new products delivered by world-class designers
and engineers using cutting-edge technology and
innovation, resulting in record sales in FY14.
2014
2013
2012
2011
£
1
9
,
3
8
6

m
illio
n

£
1
5
,7
8
4
m
illion

£13,512 million

£
9
,8
7
1
m
illio
n
434
375
Retail volumes (units ’000)
306
241
2014
2013
2012
2011
Average number of employees
2014
2013
2012
2011
27,953
24,913
20,887
17,255
2,010
2,167
1,974
1,382
Debt (£ million)
2014
2013
2012
2011
1,449
680
456
(354)
Net cash (debt) (£ million)
2014
2013
2012
2011
2,680
2,048
1,560
900
Product and other investment
(£ million)
2014
2013
2012
2011
£19,386 million
Revenue 2014
EBITDA (£ million)
2014
2013
2012
2011
3,393
2,339*
2,095*
1,502
*Restated – see page 82
3,459
2,847
2,430
1,028
Cash* (£ million)
2014
2013
2012
2011
*Includes short-term deposits
2014
2013
2012
2011
1,879
1,214*
1,460*
1,036
Proft after tax (£ million)
*Restated for adoption of IAS 19 (revised).
See note 2 of the consolidated fnancial statements
*Restated for adoption of IAS 19 (revised).
See note 2 of the consolidated fnancial statements
1,150
595
958
876
Free cash fow* (£ million)
2014
2013
2012
2011
*Free cash fow measured as net change in cash
and cash equivalents, less net cash in fnancing
activities and investments in short-term deposits
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Jaguars and Land Rovers line up at
Horse Guards Parade as part of the
Heritage Drive
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06 Overview | Brands | Manufacturing | Technology | Responsible business | Management report | Governance | Financials
Contents
02 OVERVIEW
02 Financial highlights
06 Contents
08 Chairman’s statement
10 CEO’s statement
12 Key milestones
14 Key awards
16 OUR BRANDS AND CARS
18 F-TYPE Coupé makes its debut
20 Jaguar announces all-new aluminium
architecture and C-X17 concept
22 Range Rover Sport launched in New York
26 Our vehicles
28 Jaguar Land Rover celebrates
The Queen’s Coronation
30 Jaguar Land Rover supports
sporting achievement
32 MANUFACTURING
34 Jaguar Land Rover committed to the UK
38 Global manufacturing footprint
40 TECHNOLOGY AND INNOVATION
42 Pushing the technology envelope
48 RESPONSIBLE BUSINESS
50 The UK’s Responsible Business
of the Year
56 Social responsibility initiatives integral
to our reputation
64 A growing, thriving, business
68 Caring for a diverse workforce
70 MANAGEMENT REPORT
72 CFO’s statement
74 Strategic report
90 Directors’ report
92 GOVERNANCE
94 Board of Directors
96 Executive Commitee members
98 Corporate governance
101 Independent auditor’s report
102 FINANCIAL STATEMENTS
104 Consolidated fnancial statements
108 Notes to the consolidated
fnancial statements
156 Parent Company fnancial statements
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he Tata Group’s core purpose is
to improve the quality of life of the
communities it serves globally,
through long-term stakeholder value
creation. We seek to differentiate
ourselves through customer-centricity, innovation,
entrepreneurship, trustworthiness and values-driven
business operations, while balancing the interests
of diverse stakeholders including shareholders,
employees and civil society.
These are values shared by Jaguar Land
Rover, a fagship asset for the Tata Group. The
Company continues to go from strength to strength
demonstrating the pioneering and entrepreneurial
spirit synonymous with our group of companies.
In the pursuit of excellence Jaguar Land Rover
has continued to innovate through its products,
technology and people. This commitment has seen
the Company continue to harness the growing global
demand for vehicles in the premium car segment
through the delivery of award-winning models.
As we move to the next fscal year, we must
continue to harness the collective strength of our
Group and recognise the invaluable contribution
made by our employees as we look to celebrate
even greater success in the future.
T
Cyrus Mistry
Chairman
Jaguar Land Rover Automotive plc
28 July 2014
Chairman’s
statement
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CEO’s
statement
aguar Land Rover delivered a solid
performance by focusing on what
matters most – creating great British
products by world-class designers
and engineers.
Solid fnancial accomplishments
We sold more than 430,000 vehicles, up 16%
year-on-year, with growth across all regions and
new records set in 38 markets.
As a result, revenue increased by 23% to
£19.4 billion and EBITDA by 45% to £3.4 billion,
representing an EBITDA margin of 17.5%. Pre-tax
profts rose 49% to £2.5 billion.
Innovative products
Our award-winning product portfolio underpins
the success of the Company. The Range Rover
Sport, Jaguar F-TYPE Coupé and our fagship, the
long wheelbase Range Rover, are transforming
our business. We also showcased the world’s frst
diesel hybrid SUV in Range Rover.
In responding to our global customers’ desires
and needs we introduced several new innovative
technologies, such as stop-start transmissions
across the entire range, All-Wheel Drive XF and
XJ Jaguar models and an active drive line and
nine-speed gearbox in the Range Rover Evoque.
We are pioneers in aluminium construction and
lightweight materials and continuously improve
aerodynamics, rolling resistance, crash safety and
connectivity technologies.
Investments in product, production and people
Furthermore, we laid the foundations to expand
our innovative product portfolio and announced an
all-new technically advanced aluminium intensive
vehicle architecture.
The majority of the operational investments were
directed to Solihull in preparation of the frst Jaguar
model to be produced there.
During 2013, we recruited 3,000 new employees,
many at the forefront of product creation and
delivery and more than 400 on our graduate and
apprentice programmes.
Acting responsible
At Jaguar Land Rover we recognise that our
commitment does not stop at delivering on the
commercial imperatives. Our dedication to the
environment and the communities in which we
operate is central to our business strategy. It led us
to be named Responsible Business of the Year by
Business in the Community – a moment that stands
out as a highlight of the year.

Outlook
Jaguar Land Rover is well positioned for future
sustainable and proftable growth, both iconic
brands can grow and prosper.
Our strategic plans have the frm commitment
of our nurturing parent Tata Motors, encouraging
Jaguar Land Rover in an entrepreneurial spirit.
Every area of our business is focused on
“customer frst”; passionate and motivated to
inspire our customers with exceptional premium
products, delivering the highest standards of quality,
technology and customer service.
This is an exciting time for Jaguar and Land
Rover. With a generally positive macroeconomic
environment around the world, I am optimistic about
the possibilities for the future.
We have a pioneering spirit that drives
continuous improvement and creates signifcant
opportunities to attract new customers.
Overall, we are committed to delivering our
customers experiences they will love for life.
Dr Ralf Speth
Chief Executive Offcer
Jaguar Land Rover Automotive plc
28 July 2014
J
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Key milestones
APR
JUL
JUL
SEP
NOV
DEC
FEB
10 SEPTEMBER 2013
19 NOVEMBER 2013
5 DECEMBER 2013
17 FEBRUARY 2014
CORONATION FESTIVAL
As the only automotive
manufacturer to hold
Royal Warrants from all three
grantors, Jaguar Land Rover
was delighted to support the
Coronation Festival. The
unique event which celebrated
the 60th anniversary of the
coronation of Her Majesty The
Queen showcased the best of
British innovation excellence
and industry.
ALL NEW ALUMINIUM
ARCHITECTURE
SHOWCASED BY C-X17
CONCEPT CAR
Jaguar Land Rover announced
an investment approaching
£1.5 billion to introduce an
all-new technically advanced
aluminium vehicle architecture,
which was showcased by
the C-X17 concept car. The
Company went on to confrm
the frst new model to utilise
this innovative architecture will
be the Jaguar XE. Built at the
Solihull plant, this new model
will lead to the creation of
1,700 new jobs.
F-TYPE COUPÉ LAUNCH
The all-new Jaguar F-TYPE
Coupé range, led by the high-
performance F-TYPE R Coupé
model, made its global debut
at an exclusive VIP media and
consumer event on the eve of
the Los Angeles Auto Show.
BRAZIL
Jaguar Land Rover
announced it is to be the
frst British carmaker to open
a manufacturing facility in
Brazil following a landmark
agreement between the
Company and state authorities
to build a plant in the State of
Rio de Janeiro.
LAND ROVER CELEBRATE
25 YEARS OF DISCOVERY
Land Rover unveiled a new
Discovery XXV Special
Edition as a celebration of the
25th anniversary year of the
original launch of its versatile
family SUV. First launched
in Plymouth, UK in 1989, the
Discovery revolutionised the
4x4 landscape. Its combination
of contemporary design,
spacious and user-friendly
interiors, unfinching capability
and extreme versatility made it
an instant hit. With the release
of each new generation, the
Land Rover Discovery has
cemented its position as the
most capable, versatile SUV
in the world.
From launching critically acclaimed new cars to
supporting programmes with global impact, it was
an action-packed year for the Company.
30 APRIL 2013
3 JULY 2013
11 JULY 2013
RESPONSIBLE
BUSINESS OF THE YEAR
Jaguar Land Rover was
named Responsible Business
of the Year by Business
in the Community (BITC).
The Company received the
award in recognition of its
signifcant investment in UK
jobs and facilities, improving
its environmental performance
and increasing the skills and
education opportunities for
young people and existing
employees.
LAND ROVER
CELEBRATES 65 YEARS
Land Rover marked its 65th
anniversary with a celebration
of technology and innovation.
Around 150 heritage Land
Rovers attended a celebratory
event at Packington Estate,
the testing ground for the
original 1947-48 Land Rover
prototypes and Range Rover
development vehicles of the
1960s and 70s. These vehicles
showcase key milestones in
Land Rover’s 65-year history
and also some 4x4 world
frsts such as anti-lock brakes,
adjustable air suspension,
Electronic Traction Control,
Hill Descent Control, Terrain
Response
®
and Stop/Start
technologies.
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Key awards
THE GOLDEN STEERING WHEEL
The Jaguar F-TYPE was voted the winner of a
prestigious Golden Steering Wheel award by
readers of the respected German publications
Bild am Sonntag and Auto Bild. The F-TYPE
competed in the “coupé and cabriolet” category,
fnishing ahead of the Porsche Cayman and
BMW 4 Series Coupé.
F-TYPE CONTINUES TO RECEIVE
INTERNATIONAL ACCLAIM
Other notable awards for the F-TYPE include:
Sportscar of the 21st Century and Sports Car of the
Year from Sina.com and Motor Trend in China, Car
of the Year at the Middle East Motor Awards,
Convertible of the Year from Top Gear in the UK
and Best of the Best from Robb Report in the USA.
J.D. POWER SALES SATISFACTION
INDEX STUDY
Jaguar received the honour of the highest ranking
nameplate among luxury brands according to the
J.D. Power 2013 US Sales Satisfaction Index Study.
RANGE ROVER J.D. POWER
APEAL
Range Rover achieved the Highest Automotive
Performance, Execution and Layout (APEAL) score
of any model in the J.D. Power 2013 APEAL survey
– the frst time a model outside the large premium
car segment has ranked highest among all models
in the industry.
RANGE ROVER SPORT
SUV CROWNED
SUV of the Year by Top Gear magazine in the UK,
EVO in MENA, Car and Driver in China.
WOMEN’S LUXURY CAR
OF THE YEAR
The Women’s World Car of the Year is judged by
a panel of 17 female motoring writers from around
the world. Each vehicle considered for the award
is rated according to criteria that refect issues
that are important to women car buyers. Having
achieved the highest marks in the luxury car
section, the Range Rover went on to be named
their Car of the Year.
This year Jaguar Land Rover received more
than 220 awards for its strongest ever model
line up. Here are some highlights.
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Our brands
and cars
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XFR-S Sportbrake: supercar-baiting
performance with the versatility
of an estate
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he Jaguar F-TYPE Coupé, the most
dynamically capable, performance-
focused production Jaguar ever,
made its global motor show debuts
in both Los Angeles and Tokyo in
November 2013.
The F-TYPE Coupé model line-up is headlined
by the F-TYPE R Coupé, its 5.0-litre V8
supercharged engine enabling acceleration from
0-60mph in 4.0 seconds, and a top speed of 186mph
(electronically limited). F-TYPE S Coupé and
F-TYPE Coupé models complete the range, powered
by Jaguar’s 3.0-litre V6 supercharged engine.
The F-TYPE Coupé range complements the
existing 2013 “World Car Design of the Year”
award-winning F-TYPE Convertible model line-up of
F-TYPE, F-TYPE S and F-TYPE V8 S.
The F-TYPE Coupé embodies the uncompromised
design vision of the stunning Jaguar C-X16 concept
sports coupé that debuted at the 2011 Frankfurt
Motor Show, its dramatic cabin-rearward stance
being defned by three heartlines. The frst two
heartlines – shared with F-TYPE Convertible – form
the muscular front and rear wings, the third heartline
being the sweeping coupé roof profle which provides
an unbroken silhouette while emphasising the visual
drama of the tapered cabin sitting between powerful
rear haunches.
Jaguar’s expertise in aluminium technology has
enabled the design vision for the F-TYPE Coupé
to be delivered in a lightweight yet extremely strong
bodyshell. Its torsional rigidity provides the basis for
excellent dynamic attributes. The F-TYPE Coupé’s
body side is made from a single piece aluminium
pressing, probably the most extreme cold-formed
aluminium body side in the automotive industry,
eliminating the requirement for multiple panels and
cosmetic joints.
As well as the motor show debut, the F-TYPE
Coupé made a dramatic appearance on TV with
a new TV commercial, entitled “Rendezvous”,
directed by Oscar-winner Tom Hooper and starring
Sir Ben Kingsley, Tom Hiddleston and Mark Strong.
The advert is the latest offering in Jaguar’s “British
Villains” campaign which began with the introduction
of the F-TYPE Coupé in November 2013, and made
its world premiere during the coveted advertising slot
in the Super Bowl XLVIII North America broadcast
interval, receiving more than 11 million views online
(as of March 2014).
T
The most performance-focused Jaguar ever is
unveiled at Los Angeles and Tokyo motor shows.
mph 186
F-TYPE Coupé
makes its debut
Top speed of the F-TYPE Coupé
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The F-TYPE Coupé made its global
debut in November 2013 at the
Los Angeles and Tokyo motor shows
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Jaguar announces all-new
aluminium architecture
and C-X17 concept
Jaguar stretches the design possibilities of the
segment with stunning Frankfurt debut.
The C-X17 was created as a design
study to introduce Jaguar’s new
advanced aluminium architecture
The C-X17 was created as a design
study to intoduce Jaguar’s new
advanced aluminium architecture
Right:The luxurious cockpit of
the 2013 XJR, Jaguar’s fagship
sports saloon
he C-X17 was created as a
design study to introduce Jaguar’s
all-new advanced aluminium
architecture. This modular,
scalable architecture will allow
Jaguar to grow its product portfolio and target
high-growth areas of the premium market,
beginning with a new mid-sized C/D segment
sedan in 2015.
The C-X17 concept is one example of the
diversity of vehicles that could be produced
using the new architecture. The Jaguar
C-X17 stretched the design possibilities of
the segment by combining the character and
driving experience of a sports car with increased
presence and fexibility – all imbued with the
sleek lines, sporting design and luxurious
sophistication Jaguar is renowned for.
JAGUAR R PERFORMANCE CARS
In March 2014, the range was enhanced further
with the addition of the XFR-S Sportbrake, which
is the frst sports estate car to be produced by
Jaguar, with 550PS on tap and 1,675 litres of
rear load space. The XFR-S Sportbrake builds
on the already acclaimed XFR-S saloon –
boasting the same power fgures and levels of
agility – with increased versatility and practicality.
And for customers who value effciency, but still
want their XF to have a sporty appearance, the
XFR-Sport was introduced in the summer of
2014. Delivering competitive C0
2
emission
T
from 129g/km, the R-Sport is available in
both Saloon and Sportbrake guises.
2014 MODEL YEAR JAGUAR XJ
In August 2013, Jaguar announced the latest in
a long line of luxurious Jaguar sports saloons –
the 2014 model year Jaguar XJ – incorporating
enhanced rear cabin luxury features, comfort
and in-car technology to create a truly elegant
and contemporary luxury Jaguar.
The Jaguar XJ offers a comprehensive
range of engines – 2.0-litre turbocharged petrol,
3.0-litre V6 diesel and supercharged petrol and
four 5.0-litre V8 petrol powerplants – all of which
enhance customer choice in key global markets.
These engines, as well as the other XJ variants,
are mated to Jaguar’s eight-speed automatic
gearbox which offers a broad spread of ratios
for a perfectly balanced combination of smooth-
shifting, economy and driver control. In addition,
the Intelligent All-Wheel Drive System, which
monitors grip levels and driver input to provide
maximum traction at all time, is available on
the 14MY XJ (with 3.0-litre V6 petrol engine).
An even more spacious long wheelbase
version of the 14MY XJ was also introduced.
The long wheelbase models have enhanced
rear cabin luxury features which include “airline”
style reclining seats with massage function,
increased headroom, fold-out business tables
and a specially retuned rear suspension
set-up to enhance rear seat ride comfort.
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22 22
Range Rover
Sport launched
in New York
howcased at the New York
International Auto Show 2013 by
Daniel Craig, the Range Rover Sport
is the ultimate premium sports SUV
– the fastest, most agile and most
responsive Land Rover ever.
Developed alongside the highly acclaimed new
Range Rover, it offers the brand’s best-ever on-road
dynamics together with class-leading, genuine Land
Rover all-terrain capability. The new Range Rover Sport
presents customers with a more assertive and muscular
exterior, a more luxurious interior and the fexibility
provided by the option of occasional 5+2 seating.
Exploiting Land Rover’s breakthrough lightweight
suspension design and innovative dynamic chassis
technologies, the Sport’s all-new, frst-in-class
aluminium architecture achieves a weight saving of
up to 420kg against its predecessor. This enables
the vehicle to blend agile handling with exceptional
comfort, offering a unique mix of sporting luxury and
a dynamic, connected driving experience, along with
CO
2
emissions reduced to 194g/km.
A new British icon is unveiled by
another on the streets of Manhattan.
S
Daniel Craig lent his star power
to the unveiling of the Range Rover
Sport in New York
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Also available, Active Driveline is the world’s
frst “on demand” four-wheel drive system that
enhances agility and improves fuel effciency
by operating in front-wheel drive only during
steady-state driving at speeds above 22mph.
The new system monitors vehicle dynamics
and automatically reconnects four-wheel drive
(within 300 milliseconds) whenever it is needed.
For the 2014 model, the driver assistance
capabilities of the Evoque are signifcantly
enhanced by the introduction of features including:
Park Exit (to automatically exit parallel parking
bays), Perpendicular Park (to position the car
centrally in parking bays), Closing Vehicle Sensing
and Reverse Traffc Detection (to warn drivers
of oncoming traffc), Lane Departure Warning,
Traffc Sign Recognition and Wade Sensing.
The brand new Land Rover InControl
TM

connected car system (available as an option)
incorporates two new features – InControl
TM

Remote and InControl
TM
Secure.
Land Rover InControl
TM
Remote allows owners
to trigger an SOS Emergency Call which, in the
event of an accident, automatically informs the
emergency services of the vehicle’s position.
Land Rover InControl
TM
Secure tracks the
vehicle in the event of a theft using advance
tracking technology. It raises a silent alarm at
a secure operating centre where a third-party
service provider will assist the relevant local
authorities in a timely recovery of the vehicle.
The system ensures the vehicle complies
with the Thatcham Category 6 standard.
The Range Rover Evoque has proven to
be hugely successful and the 2014 model
is destined to have even greater appeal.
LAND ROVER CELEBRATES
25 YEARS OF DISCOVERY WITH
EXCLUSIVE “XXV” SPECIAL
EDITION
Land Rover unveiled a new Discovery XXV Special
Edition as a celebration of the 25th anniversary year
of the original launch of its versatile family SUV.
First launched in 1989, the Discovery
revolutionised the 4x4 landscape, and over
one million Discovery models have been sold since.
Its combination of contemporary design, spacious
and user-friendly interiors, unfinching capability
and extreme versatility made it an instant hit.
With the release of each new generation, the
Land Rover Discovery has cemented its position
as the most capable, versatile SUV in the world.
Thanks to its formidable array of innovative
and award-winning technologies, from Terrain
Response
®
to Hill Descent Control, the Discovery
is as comfortable taking on everyday journeys
as it is tackling the world’s harshest terrain – as
numerous intercontinental expeditions have
proved. Over its 25 years it has been chosen as
the explorer’s choice to take on challenges and
adventures; Sir Ranulph Fiennes used an original
Discovery in his expedition to discover the Lost City
of Ubar, while the Discovery 3 was used on the
record-holding London-Cape Town drive in 2013.
Discovery models have also been used in
Land Rover’s own famous G4 Challenge
and Camel Trophy.
The Special Edition vehicle comes in a choice
of four exterior colours, has distinctive badging
and a sophisticated, premium interior lined with
Windsor leather.
MAJOR NEW TECHNOLOGIES
ENHANCE 2014 EVOQUE
One of the most successful Land Rover vehicles
ever made, the Range Rover Evoque, makes a
further leap forward with the introduction of a host
of new technologies, announced in August 2013.
These enhancements lower fuel consumption by up
to 11.4% and reduce CO
2
emissions by up to 9.5%
and bring a range of new comfort, convenience and
connectivity features.
Customers ordering vehicles from the 2014 range
beneft from newly available features, including:
a new nine-speed automatic transmission, new
driveline technologies, seven new driver assistance
features as well as detail design enhancements
inside and out. First shown at the Geneva Motor
Show in March, the ZF-9HP automatic transmission
is among the world’s frst nine-speed units ftted to
a passenger car. With a wide spread of ratios and
improved effciency, the new transmission delivers
improved economy, reduced emissions, enhanced
performance and greater comfort.
LAND ROVER SHOWCASED ITS
FIRST HYBRID RANGE ROVER
MODELS
Land Rover showcased its frst-ever hybrid models,
and the world’s frst premium diesel SUV hybrids,
the Range Rover Hybrid and Range Rover Sport
Hybrid. These models are set to deliver outstanding
fuel economy, signifcantly lower CO
2
emissions
and retain Land Rover’s renowned capability and
performance. The two all-aluminium models are
based on Land Rover’s Premium Lightweight
Architecture and share an identical powertrain.
The Range Rover hybrids proved their capability
during the “Silk Trail 2013” expedition in which
they travelled through France, Belgium, Germany,
Poland, Ukraine, Russia, Uzbekistan, Kyrgyzstan,
China and India.

LAND ROVER EXTENDS APPEAL
AND EXCLUSIVITY OF RANGE
ROVER – THE WORLD’S FINEST
LUXURY SUV
Land Rover extended the customer appeal of its
family of luxury SUV vehicles with the launch of a
new long wheelbase Range Rover and the addition
of an exclusive specifcation – the Range Rover
Autobiography Black.
The frst long wheelbase Range Rover in 20
years caters for a growing group of consumers
looking for the ultimate SUV, and provides an
alternative to the traditional long wheelbase
saloon cars in this segment. Clever packaging has
increased rear legroom by 186mm for rear seat
passengers and boosted recline to 17 degrees with
the executive seating package to provide enhanced
comfort and space.
The new Range Rover Autobiography Black
made its debut at the Dubai Motor Show in early
November 2013. It represents the pinnacle of
desirability to bring even higher levels of refnement
to the world’s fnest luxury SUV. The interior has
been carefully crafted and tailored to meet customer
needs with subtle but distinctive exterior detailing
and is appointed and fnished with the highest
quality leathers and materials.
11.4%
Reduction in fuel consumption
with the 2014 Evoque
186mm
The increase in legroom in the
Range Rover Long Wheelbase
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Our vehicles
Jaguar Land Rover’s range has
won worldwide acclaim and success.
F-TYPE is a true Jaguar sports car, engineered for
high performance and responsive handling
XK is the refned Grand Tourer with
the heart and soul of a sports car
XJ redefnes what a luxury car should be. It is a
dramatic combination of beauty, luxury and power
XF delivers innovative design, refned
engineering and stunning performance...
....also available in sportbrake
DISCOVERY 4 With seven
seats and rugged design,
Discovery is always ready for
adventure
RANGE ROVER SPORT Agile and responsive,
the Range Rover Sport excels on-road and off-road
EVOQUE The premium compact SUV
that’s perfect for urban exploration
DEFENDER Combining supreme capability and
functionality, Defender is the archetypal
Land Rover
FREELANDER 2 A versatile town and country
SUV, with Land Rover DNA at its heart
RANGE ROVER
The ultimate luxury SUV
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28 Overview Brands | Manufacturing | Technology | Responsible business | Management report | Governance | Financials
BY APPOINTMENT TO
HM THE QUEEN
MANUFACTURERS OF
MOTOR VEHICLES
JAGUAR LAND ROVER LIMITED
COVENTRY
BY APPOINTMENT TO
HRH THE DUKE OF EDINBURGH
MANUFACTURERS OF
MOTOR VEHICLES
JAGUAR LAND ROVER LIMITED
COVENTRY
BY APPOINTMENT TO
HRH THE PRINCE OF WALES
MANUFACTURERS OF
MOTOR VEHICLES
JAGUAR LAND ROVER LIMITED
COVENTRY
Jaguar Land Rover
celebrates The
Queen’s Coronation
aguar Land Rover had a starring role
at a unique event held in London
showcasing the best of British
innovation, excellence and industry.
The Coronation Festival celebrated
the 60th anniversary of the coronation of Her
Majesty The Queen, and was held in the gardens
of Buckingham Palace between July 11th and 14th.
Members of the Royal Family visited the Jaguar
Land Rover displays during the preview day. The
Queen attended the Festival’s star-studded gala
that evening, performed against the backdrop of
Buckingham Palace.
The Coronation Festival, hosted by the Royal
Warrant Holders Association, brought together more
than 200 businesses that hold Royal Warrants as
suppliers of goods and services to the households
of HM The Queen, HRH The Duke of Edinburgh
and HRH The Prince of Wales. Jaguar Land Rover
is particularly proud to be the only automotive
manufacturer to hold all three Warrants.
As well as marking the long Royal association,
Jaguar Land Rover also celebrated 60 years of
technology and innovation at the Festival, with a
display of vehicles to represent the Company’s
past, present and future.
A highlight for many visitors was the 1953
Land Rover Royal Review Vehicle. This is one
of 10 specially converted Land Rovers used for
J
The Company takes centre stage at event showcasing
the best of British innovation, excellence and industry.
many public appearances during the six-month,
44,000 mile tour of the Commonwealth which
The Queen undertook soon after her Coronation.
Also representing the past was another Royal Review
Vehicle, a Range Rover from 1974, and a Jaguar
Mark VII, which Queen Elizabeth, The Queen Mother
used regularly between 1955 and 1972.
This trio were joined by two additional important
and historic vehicles: the frst pre-production Land
Rover Series 1 from 1948 (known as “HUE”, after
its number plate), and the oldest surviving open
Jaguar E-Type, built in 1961.
Representing the present was another Royal
vehicle, one of two Jaguar XJ Limousines - both
specially extended versions of the long wheelbase
Jaguar XJ, and fnished in Royal claret and
black livery.
This was joined by fve of the Company’s current
models: a red Jaguar F-TYPE convertible, a Jaguar XF
Sportbrake, a Range Rover Evoque, Range Rover and
Range Rover Sport.
Finally, the future was spectacularly represented
by the Jaguar C-X75, a prototype hybrid supercar
which combines the fuel effciency of a low-emissions
city car with a potential top speed of 220mph. Its
advanced technologies will be utilised in research
and development, innovative future products and
next-generation engineering for the Jaguar and
Land Rover brands.
Her Majesty The Queen at
the Coronation Festival
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30 Overview Brands | Manufacturing | Technology | Responsible business | Management report | Governance | Financials
Jaguar Land Rover
supports sporting
achievement
The Company continues its long-term
association with major sporting partners.
aguar has been a partner of Team
Sky from its inception in 2010, and
the team’s Jaguar XF Sportbrakes
have supported the riders since
the beginning of the Tour in 2012.
Acting as the team’s nerve centre on the road, the
XF Sportbrakes have been vital for keeping the
riders in the race, supplying them with food, water,
spare bikes and clothes for on the road, and as the
command centre for race strategy during racing.
In July 2013,Team Sky held the coveted leader’s
Yellow Jersey and race leader Chris Froome became
the second Brit to win the Tour de France after Sir
Bradley Wiggins a year earlier.
2014 will mark the fourth year of this highly
successful partnership, which is based on shared
values of performance, innovation and technology.
Jaguar will be developing its association as an
J
“Innovation Partner” with Team Sky through the
integration of design and engineering resources
to further enhance the team’s performances.
Land Rover was the proud Global Sponsor of
The British & Irish Lions Tour to Australia in 2013,
the year in which The Lions celebrated a 125-year
heritage. This sponsorship continues Land Rover’s
long-standing association with rugby which aims
to support all levels of the game. Not only does
Land Rover support the elite players, teams and
tournaments around the globe but they also invest
in the grass roots and are excited about what the
future holds for the sport.
Land Rover became one of two Series Main
Partners in the Extreme Sailing Series
TM
. Its three-year
global sponsorship of one of the world’s most exciting
sailing competitions was launched in April 2013 in
Qingdao, China, where the third event took place.
2013
The launch of a three-year global
sponsorship of the Extreme Sailing Series
TM
Chris Froome in the 2013 Tour de France
Above right: George Gregan, former Australia
captain, brings the Webb Ellis Cup to Sydney for
the second leg of the Rugby World Trophy Tour
Above left: Land Rover is one of two Series
Main Partners in the Extreme Sailing Series
TM
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Manufacturing
Overview | Brands Manufacturing Technology | Responsible business | Management report | Governance | Financials
The Range Rover
Sport is built at the Solihull
manufacturing plant
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Jaguar Land Rover
committed to the UK
The Company reaffrms its commitment to the UK with
continued investment in its manufacturing operations.
uring 2013, Jaguar Land Rover
reaffrmed its commitment to the UK
with the announcement of a further
£1.5 billion investment to introduce
an all-new, technically advanced
aluminium vehicle architecture. The investment,
which will see a strengthening of the Jaguar product
portfolio thanks to the addition of the Jaguar XE,
is set to create 1,700 new jobs at the Company’s
advanced manufacturing facility in Solihull.
SOLIHULL
In 2013, production of the Range Rover Sport
began at Solihull. The new model features an
advanced all-aluminium body structure and is
produced alongside the critically acclaimed new
Range Rover on three shifts, 24-hour production.
To support these new models Solihull benefted
from a £370 million investment in all-aluminium
production processes including a state-of-the-art
aluminium bodyshop – the largest of its kind in
the world – and upgrades to paint applications
technologies, trim assembly and warehousing.
The introduction of these models led to 800 new
people joining the Solihull team.
D
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omnisque ped quodit poribus que
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Wolverhampton
Castle Bromwich
Whitley
Solihull
Gaydon
Engineering, Design
and Test Facility
Vehicle Manufacturing
Halewood
Vehicle Manufacturing
Engine Manufacturing Centre,
production starts 2015
Vehicle Manufacturing
Global HQ,
Engineering and Design
1,700
The number of jobs announced at
Solihull in the fscal year
Solihull’s state-of-the-art aluminium
bodyshop – the largest of its kind in the world
– was visited by UKPMDavid Cameron
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HALEWOOD
Home to the award-winning Range Rover Evoque
and Land Rover Freelander 2, Jaguar Land Rover’s
Halewood plant on Merseyside in the North West of
England is currently operating 24-hour production
to support global demand for its products. In 2013,
Halewood celebrated two signifcant milestones:
it broke Jaguar Land Rover production volume
records for the second year running and celebrated
production of the millionth Jaguar Land Rover
vehicle at the site, a unique Range Rover Evoque,
subsequently donated to Cancer Research UK.
CASTLE BROMWICH
In addition to XJ and XF models, Castle Bromwich
is responsible for the all-aluminium construction
of the F-TYPE, and in May 2013 the frst F-TYPE
convertibles destined for customers rolled off its
production line. Jaguar Land Rover has invested
signifcantly in its Castle Bromwich manufacturing
facility to support the introduction of the convertible
and latterly the F-TYPE Coupé which made its
global debut at the Los Angeles Auto Show in 2013.
IN-HOUSE ENGINE MANUFACTURE
AT NEW UK FACILITY
Jaguar Land Rover’s state-of-the-art Engine
Manufacturing Centre is the frst new facility that
the Company has built from the ground up. Situated
at Wolverhampton in the heart of the UK, it is
ideally located between the Company’s three other
manufacturing sites at Halewood, Castle Bromwich
and Solihull. The plant will employ almost 1,400
people by the time it reaches full capacity and the
frst phase of recruitment commenced in January
2014. Representing an investment of more than
£500 million, the plant will manufacture Jaguar Land
Rover’s most advanced engines ever. Designed
and developed at the Product Development Centre
in Whitley, this new family of premium, lightweight,
low-friction, low-emission four cylinder petrol and
diesel engines will be manufactured for future
Jaguar Land Rover vehicles.
Overview | Brands Manufacturing Technology | Responsible business | Management report | Governance | Financials
Castle Bromwich has received
signifcant investment to
manufacture the Jaguar F-TYPE
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38
Global
manufacturing
footprint
Ambitious growth strategy includes plans for
new manufacturing facilities in China and Brazil.
aguar Land Rover has ambitious plans
to expand its manufacturing footprint
and increase production in markets
outside Britain.This has been realised
in China where Jaguar Land Rover’s
joint venture with Chery is on track to start building
customer vehicles at the end of 2014. Construction of
Chery Jaguar Land Rover’s world-class manufacturing
plant in Changshu is almost complete and represents
a total plant investment (50:50 with Chery) of 10.9
million RMB (£1.1 billion) and installed capacity is
circa 130,000 vehicles per year.
Chery Jaguar Land Rover currently employs
1,400 employees and this is expected to grow to
2,500 by the end of 2014. During 2013, joint venture
employees came to the UK to receive training in
Jaguar Land Rover’s lean manufacturing system
and quality production processes.
In December 2013, Jaguar Land Rover announced
it will open a manufacturing facility in Brazil following a
landmark agreement between the Company and state
J
Overview | Brands Manufacturing Technology | Responsible business | Management report | Governance | Financials
Chery Jaguar Land Rover in
Changshu, China, represents a
£1.1 billion investment
authorities to build a plant in the State of Rio de Janeiro.
Dr Ralf Speth, CEO of Jaguar Land Rover, said:
“Brazil and the surrounding regions are very important.
Customers there have an increasing appetite for
highly capable premium products.
This new programme will enable us to bring
exciting new vehicles to them, with outstanding
British design and engineering, creating a world-
class Jaguar Land Rover facility incorporating
leading premium manufacturing technologies.
We have established excellent working
relationships with the State of Rio de Janeiro,
the City of Itatiaia and the Rio de Janeiro State
Industrial Development Company and we look
forward to attracting new customers to our
business in this important market.”
Based in the City of Itatiaia, the new project
represents a total investment of R$750 million
(£240 million) by 2020 with the frst vehicles set
to come off the assembly line in 2016. Installed
capacity will be circa 24,000 vehicles per year.
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Technology
and innovation
The Range Rover Sport
is tested in the cold chamber
facility in Gaydon
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Pushing the
technology
envelope
aguar Land Rover’s engineering
team now covers every spectrum of
product development and uses the
best and latest tools and techniques.
We are developing new engines,
new materials, “green” technologies and new ways
for the driver to communicate with their vehicle. We
listen to our customers to get a better understanding
of their requirements. We are also developing more
unique technologies to continue our leadership of
lightweight construction and 4x4 capability.
Looking further to the future, the world population
is growing and more people will live in “megacities”.
This brings with it opportunities, as well as
challenges including pressure on transport
systems, fuel prices and the cost and scarcity
of natural resources.
In the future our cars will refect both these
challenges and opportunities. Jaguar Land Rover
sees fve key themes emerging, and it is these
that are leading our agenda for future product
development. Our cars will become smarter, more
connected, cleaner, more capable and desirable.
LIGHTWEIGHT
During 2013, Jaguar Land Rover showcased
three new vehicles that continued to demonstrate
leadership in aluminium. The Range Rover Sport
and Jaguar’s F-TYPE Convertible and Coupé.
The Company also confrmed a £1.5 billion
investment to introduce an all-new, technically
Jaguar Land Rover’s engineers are
getting a head start on the future.
J
advanced aluminium vehicle architecture at
the Company’s Solihull plant. This modular
and scalable vehicle architecture will be high-
strength, lightweight and Jaguar Land Rover’s
most aluminium intensive structure to date. It is
unique and brings considerable benefts in terms
of dynamics, safety and effciency.
POWERTRAIN
To support the development of our new Engine
Manufacturing Centre we have invested in our own
powertrain engineering capability, including a new
state-of-the-art facility at Whitley, to design and
engineer not just the frst of the new family of four-
cylinder petrol and diesel engines, but to create a
pipeline of new powertrains that will be produced in
the decades to come.
Jaguar Land Rover recently introduced the
world’s frst hybrid electric vehicle with a diesel
engine, bringing down fuel consumption to
6.4 l/100km which, only a few years ago, seemed
to be totally unachievable in a vehicle the size of
a Range Rover. We believe the hybrid drive will
penetrate the market for luxury vehicles, so this
is an important area of development.
Jaguar Land Rover will continue its efforts to
improve its fuel consumption and reduce emissions
to meet the needs of its customers and deliver on
its legislative obligations. Jaguar Land Rover will
increase its use of lightweight technologies, as
well as engine downsizing and hybridisation.
The Range Rover Sport demonstrates
Jaguar Land Rover’s leadership
in aluminium
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44
SMART CONNECTIVITY
Touchscreens, phones, “The Cloud”, telematics and
the connected world are going to transform the cars
we drive. Much of the development is driven by the
wider customer appetite for smartphone technology
and our development in this area is advancing quickly.
Jaguar Land Rover recently made a major step
forward by introducing its InControl Apps platform.
This operates apps on your smartphone via your
touchscreen and brings in additional functionality
to the head unit. This year, Jaguar Land Rover
announced the frst wave of supported third-party
applications for this innovative platform. This allows
our customers to access the branded third-party apps
they are familiar with safely and conveniently in their
vehicles.
Further applications will be introduced to the
InControl Apps portfolio throughout 2014 and beyond,
providing customers with an enhanced experience
throughout their vehicle ownership.
The launch of InControl Apps is also an important
frst step in reducing driver distraction. To further
develop capabilities in this area, Jaguar Land Rover
is working with MIT AgeLab, DENSO and Touchstone
Evaluations on methods to measure the demands
made on drivers. This will help to develop new
systems that will minimise distraction.
Jaguar Land Rover’s InControl Apps
platformoperates apps on your
smartphone via your vehicle’s touchscreen
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THE FUTURE OF
COLLABORATIVE INNOVATION
Jaguar Land Rover has invested in a new UK
advanced research facility, the National Automotive
Innovation Centre.
This £100 million centre will provide dedicated
facilities for an expanded Jaguar Land Rover
Advanced Research team. It is designed to create a
large-scale collaborative research environment, and
will support a 1,000-strong team of researchers from
Jaguar Land Rover, our suppliers and academia.
Jaguar Land Rover is also working with academia
to enhance the tools used in product development.
Ten years ago the Company took the decision
to invest in virtual tools. Focused on advancing
simulation and virtual engineering capabilities to
help us work faster and smarter, and deliver the
high-quality products our customers want.
These virtual engineering technologies helped
achieve more robust results than traditional and
physical engineering design and testing. Every
Jaguar Land Rover vehicle undergoes at least four
iterations of improvement before we build a physical
prototype. These virtual technologies are being
developed further through initiatives undertaken
with leading universities.
We are also extending our global research
network. Jaguar Land Rover will enhance its
research of future infotainment technologies
with the opening of a new Technology R&D
centre in Portland, Oregon in 2014.
This new facility will help us develop our
collaboration with companies such as Intel
to infuence the technological direction these
companies are taking. It’s about partnerships to
infuence technological direction and the goal is to
deliver new compelling experiences to customers
more quickly.
We have a partnership with Apple for the same
reason – and we intend to support Apple CarPlay
in future Jaguar and Land Rover cars.
These partnerships will ensure we are well
placed to deliver what our customers want in an
ever-changing world.
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Larger than life: up close with
technology at Gaydon’s Virtual
Innovation Centre
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48
Responsible
business
Jaguar Land Rover has installed the UK’s
largest roof mounted Solar PVarray at its
advanced engine manufacturing centre
in Wolverhampton. Generating 5.8MWh,
they are expected to provide 30%of the
centre’s eventual energy needs
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The UK’s Responsible
Business of the Year
ENVIRONMENTAL
INNOVATION STRATEGY
In July 2013, Jaguar Land Rover was named
Responsible Business of the Year by Business in
the Community (BITC). The Company received the
award in recognition of its signifcant investment
in UK research, jobs and facilities, improving its
overall environmental performance and increasing
the skills and education opportunities for young
people and existing employees.
Jaguar Land Rover’s approach to environmental
and social responsibility is at the forefront of the
Company’s thinking. Focusing on environmental and
social impacts, from products and manufacturing to
our whole supply chain, ensures that we grow our
business responsibly while responding to global trends,
stakeholder needs and ensuring positive relationships
with local communities. We call this Environmental
Innovation and it refects a holistic approach to
Responsible Business at Jaguar Land Rover.
We have set ambitious targets for 2020 and to help
us achieve these, the Company’s 2020 Roadmap
sets out the path we need to follow guided by “Our
commitment to environment and society policy” which
embeds responsible business principles at all levels of
our business.
Our key 2020 Environmental Innovation targets include:
• External recognition as a leading, global
responsible brand.
• Transformation in business thinking to leverage
long-term value in sustainability.
• Sustainable products – innovating to reduce
environmental impacts, including CO
2
emissions,
over the product life cycle.
• Leadership in sustainable business operations,
targeting zero waste to landfll and carbon neutral
manufacturing operations.
• Global Corporate Social Responsibility (CSR)
– using our global reach, resources and
partnerships to create opportunities for
12 million people.
RECOGNISING OUR EFFORTS
Our continued focus on Environmental Innovation
has been recognised externally and awarded. Having
received the Platinum Big Tick Award for outstanding
responsible business approach by Business in the
Community (BITC) in April 2013, Jaguar Land Rover
then progressed to the highly acclaimed “Responsible
Business of the Year” award in July.
The development of Jaguar Land Rover’s vehicle
manufacturing sites has also been acknowledged
with the “Excellence in Environmental Management”
award. This was given for the various environmental
improvements put in place, with a particular focus
on Solihull’s production operations.
The “Inspiring Tomorrow’s Engineers” programme
won BITC’s national Education Award 2013 in
recognition of the positive impact its long-term school
partnerships are having on increasing employability
skills and promoting engineering careers to
young people.
It is this recognition that shows Jaguar Land Rover is
taking signifcant strides to create a company that is not
just recognised for its world-class production of vehicles
but for its commitment and willingness to operate as a
responsible business.
WHOLE-LIFE PLANNING
From the moment we develop a vehicle concept, we
consider all the product and manufacturing attributes that
help us reduce the overall environmental impact, plan to
use less natural resources and create less waste.
We are reducing the environmental and social
impacts of our vehicles at every stage, from product
design to the end of the vehicle’s life.
The greatest opportunity for us to infuence the
overall impact is at the design stage, and it is here
we concentrate on fnding ways to reduce emissions
as well as use more sustainable materials. Up to 70%
of emissions in our vehicles’ life cycle occur during
use by our customers and we focus on reducing
these emissions through a process of vehicle
lightweighting, powertrain effciencies, aerodynamics
and technology innovations like intelligent stop/start.
Jaguar Land Rover’s approach to environmental
and social responsibility is at the forefront of the
Company’s thinking.
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The Jaguar Primary School Challenge
programme engaged more than 12,500
young people aged 5-11 in 2013
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In 2009, we set ourselves an ambitious target
to reduce our European feet average tailpipe
CO
2
emissions by 25% by 2015, based on 2007
levels. We are on track to meet that target, having
achieved 24% by the end of 2013.
We design vehicles that use resources effciently
and can be disposed of and recycled at the end of
their life. We are also exploring hybrid and electric
vehicle technologies that could dramatically reduce
vehicles emissions in the future.
We use Life Cycle Assessment (LCA) to quantify
the environmental impact of raw material use,
production and manufacturing, the customer’s
vehicle use, and its disposal at end of life. Once
calculated the impact is stated in terms of carbon
dioxide equivalent (CO
2
e), so that the different
impacts can be easily compared and analysed.
We have in-house capacity to complete full LCAs
for all new vehicles. We follow the international
standards ISO 14040, 14044 and 14062 and we
gained third-party certifcation from the Vehicle
Certifcation Agency for full vehicle LCAs. We have
completed life cycle assessments for six vehicles
including the Jaguar XJ, Range Rover Evoque and
the Range Rover and Range Rover Sport.
Our aim is to educate our customers in the impact
of cars throughout their life cycle. This will become
increasingly important as the signifcance of each
life cycle stage changes with the introduction of
hybrid and electric vehicle technologies.
Reduction in feet average tailpipe
CO
2
emissions since 2007

24%
The assembly line at Solihull is an
example of Jaguar Land Rover’s
highly effcient manufacturing process
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OPERATIONAL REDUCTIONS
(ENERGY, WASTE AND WATER)
Our operations form an important part of our
products’ life cycle and minimising the impact
from our operations is a key element of our
Environmental Innovation strategy. This is
especially important as we increase manufacturing
capacity globally to meet growing demand.
In 2009, we set an ambitious goal to reduce the
environmental footprint from our manufacturing
operations, focusing on CO
2
emissions, waste to
landfll and water use.
We made signifcant achievements by driving
though a number of initiatives including investment
in renewable technologies, continued lean
manufacturing solutions and employee engagement.
For every vehicle produced up to March 2014,
against the Environmental Innovation baseline year
of 2007, we have achieved the following reductions:
• 30% (from 21% the previous year) in operational
CO
2
despite signifcant project work to expand
our facilities.
• 29% (from 17% the previous year) in water
consumption.
• 75% (per previous year) in waste sent to landfll.
Our 2020 Environmental Innovation target is
leadership in sustainable business operations.
This focuses on driving carbon neutrality within
our manufacturing operation, zero waste and
treating waste as a resource as well as closed loop
recycling processes. For example, our advanced
new engine manufacturing facility in Wolverhampton
has been designed with sustainability embedded
throughout, and we have at design stage achieved
an “excellent” rating from the BREEAM assessment
for sustainable buildings. The building has been
designed to minimise energy demand through the
use of insulated cladding, to maximise daylight
through the roof design, and to harness natural
ventilation through the use of automatic louvres.
CARBON OFFSET PROGRAMME
Some emissions are unavoidable. Therefore, while
low carbon technology is still developing, we are
committed to offsetting these CO
2
emissions by
investing in sustainable development projects to
deliver benefts in other ways.
We offset 100% of our UK manufacturing
assembly emissions and customers can also
choose to offset their own vehicle emissions,
via our programme partner ClimateCare.
For manufacturing this equates to over 1.5 million
tonnes of CO
2
since 2007 and we have invested in
carbon reduction/sustainable development projects,
in 18 countries, from renewable energy to clean
water provision.
As part of our 2020 Environmental Innovation
targets, offset funding will be directed to large-scale,
high-impact “carbon for development” projects like
the award-winning “carbon-for-water” LifeStraw™
project. These projects have multiple benefts for
people and the environment. LifeStraw™ uses the
distribution of water flters in the Busia region of
western Kenya to replace the use of frewood to
boil water. These units provide clean and safe
water, reducing the incidence of water-borne
diseases, creating opportunities for recipients
to attend school or pursue commercial interests.
Not using frewood reduces local deforestation
rates, reduces smoke inhalation and provides a
saving in household expenditure.
Projects like LifeStraw™ are key to our target of
creating opportunities for 12 million people by 2020.
Reduction in operational CO
2
30%
Jaguar Land Rover supports the
distribution of Lifestraw clean water
flters in Kenya, through the purchase
of voluntary carbon offsets; creating
opportunities for over one million
people and offsetting 600,000 tonnes of
manufacturing assembly CO
2
emissions
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Social responsibility
initiatives integral
to our reputation
Jaguar Land Rover makes a positive impact on
society by building excellent community relations
and supporting local initiatives.
aguar Land Rover believes that being
a responsible business is fundamental
to preserving the strong reputation
of our brands, securing our licence
to operate, delivering proftable
growth, and retaining the trust of our stakeholders.
Jaguar Land Rover strives to create and maintain
excellent relations with local and regional communities
where the Company designs and manufactures.
Employee involvement is the cornerstone of business
commitment to the social and economic regeneration
of communities and Jaguar Land Rover is dedicated
to this principle, from board member to “shop
foor” employee.
A POSITIVE IMPACT ON LOCAL
AND GLOBAL COMMUNITIES
Jaguar Land Rover’s business is growing and with
it our ability to make a long-term difference to the
world in which we operate. Making a positive impact
on the community takes real commitment and
Jaguar Land Rover invests considerable resources
in delivering a range of activities to address key
issues that affect Jaguar Land Rover and the
wider community.
In March 2014, Jaguar Land Rover announced
a new, global Corporate Social Responsibility
programme (CSR) to create opportunities for 12
million people by 2020, as part of our Environmental
Innovation targets.
We will create opportunities by leveraging our
global reach, resources, and working in partnership
with specialist organisations to deliver long-term
positive changes for people in four key areas:
• Education
• Design, Technology and Talent
• Humanitarian and Health
• Environment and Conservation.
J
The programme was developed as a framework
and informed using the London Benchmarking Group
model. It builds on existing award-winning education,
humanitarian and environmental programmes, as well
as new projects that tackle local issues in the
four areas above.
EDUCATION: INSPIRING
TOMORROW’S ENGINEERS
At Jaguar Land Rover we actively encourage future
generations to seek a career in the automotive
industry. It is critical that we encourage talented
young people to become the next generation of
engineers and technologists to sustain the business
over the long term.
The Company’s “Inspiring Tomorrow’s Engineers”
(ITE) programme is designed to work in collaboration
with schools and colleges to promote learning
and engagement on STEM (science, technology,
engineering and maths) subjects. Part of the
programme involves dedicated Education Business
Partnership Centres (EBPCs), located close to our
key manufacturing plants and engineering centres.
Jaguar Land Rover also engages young people, in
particular female students, interested in engineering,
technology and manufacturing careers, by offering
a unique insight into the world of work. The “Young
Women in the Know” and “Girls in the Know” courses
have been developed in partnership with Birmingham
Metropolitan College to change outdated perceptions
of engineering to encourage more young women
to join the industry.
Jaguar Land Rover’s leading education
programmes “Jaguar Maths in Motion”, the “Jaguar
Primary School Challenge” and the “Land Rover 4x4
in Schools Challenge”, are designed to apply science,
technology, engineering and maths to practical,
complex projects that refect the type of challenge
our engineers encounter on a daily basis.
Jaguar Land Rover encourages young
people to consider the automotive industry
by offering a unique insight into the world
of work, through programmes such
as “Young Girls in the Know”
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Our existing staff are also encouraged to participate
in the Advanced Skills Accreditation Scheme,
based on an education programme developed
by Jaguar Land Rover in partnership with leading
English universities, offering engineers the chance
to develop the future skills that will be needed to
create world-leading new products and technologies
over the next decades.
DESIGN, TECHNOLOGY AND
TALENT: THE NEXT GENERATION
Design and innovation are cornerstones of
Jaguar Land Rover’s leading approach to vehicle
development. We recognise the need to nurture
these skills and encourage the best innovative talent
to be part of our industry by offering collaborative
scholarships and grass roots projects for
disadvantaged people around the world.
Over 226,000 5-19 year olds, participated in Jaguar
Land Rover’s education programmes in 2013
226,000
“Young women in the Know”; students
participate in a week-long programme of
events meeting female employees, to fnd out
about their education and career histories
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HUMANITARIAN AND HEALTH:
REACHING VULNERABLE PEOPLE
In January 2014, Land Rover renewed its Global
Humanitarian Partnership with the International
Federation of Red Cross and Red Crescent
Societies (IFRC) for a further fve years, building
on the success of a partnership frst forged with the
Red Cross in 1954.
Since then its worldwide achievements include
the loan and donation of 119 vehicles and the
provision of direct help to more than 800,000
people. Globally more than one million people have
also benefted indirectly from Land Rover’s support
for the IFRC.
CONSERVATION AND
ENVIRONMENT: BORN FREE
In November 2013, Land Rover agreed a new
sponsorship with the Born Free Foundation, one
of the world’s foremost wildlife charities, continuing
its successful Global Conservation Partnership
frst forged in 2002 and confrming Born Free
as its primary global conservation partner. Land
Rover vehicles will be deployed by the Born Free
Foundation in Kenya, India and South Africa where
they support the charity’s vital feldwork.
Additional support will assist conservation and wild
animal welfare initiatives in other parts of the world.
The frst such project got under way in February
2014 with an epic 4,900-mile journey to return
Simba, a mistreated lion from Europe to the Born
Free Foundation-supported Lilongwe Wildlife Centre
in Malawi. The Born Free Foundation has also
helped to erect natural fences (bomas) in Kenya’s
Amboseli National Park, protecting some 2,500
people and 32,500 animals.
EMPLOYEE VOLUNTEERING
Jaguar Land Rover encourages its employees to
engage with the local community in projects close to
its sites in the West Midlands and Merseyside. The
Company works with local authorities and community
groups to identify initiatives which need support.
Our projects focus on regeneration, education, young
people, charity work and the environment. Each
employee can spend up to 16 hours of work time on
approved team or individual volunteering projects
per year, which can lead to personal development
opportunities including leadership and project
management skills.
Team projects can involve physical improvements
of local community facilities such as redecoration of
community centres and creating sensory gardens.
Individuals volunteer for civic duties such as school
governors and Justices of the Peace, while others
are Jaguar Land Rover STEM (science, technology,
engineering and maths) Ambassadors, and act as
personal mentors to children or adults.
Employees also support their on-site Education
Business Partnership Centre by helping develop
curriculum work, delivering presentations to groups or
undertaking work experience placements.
Many employees volunteer to assist students with
reading, maths, business- and engineering-related
subjects. For example, with Lyndon School, located one
mile from the Solihull plant, Barr’s Hill School, located
close to Jaguar Land Rover’s Advanced Engineering
Centre in Coventry and Greenwood Academy, opposite
the Castle Bromwich plant in Birmingham.
Careers outreach events such as Big Bang
Young Scientist & Engineer Fair, helped us
engage over 328,000 students in 2013
328,000
Land Rover supports Born Free
Foundation’s lion-proof boma project
in Kenya
Top right: Simba the Lion on his way to
the Lilongwe Wildlife Centre
Top left: Land Rover and IFRC will work
together to deliver a diverse range of
humanitarian and health initiatives. In
the UK, vulnerable people living alone in
isolated communities face real diffculties,
particularly after a stay in hospital. The
partnership created opportunities to
provide day-to-day, practical help for
people in need
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NEED IMAGE
EDUCATION

DESIGN, TECHNOLOGYANDTALENT
HUMANITARIAN AND HEALTH
ENVIRONMENTANDCONSERVATION
UK CHINA

UK
UK USA
KENYA ITALY SOUTH AFRICA
KENYA
THE PROGRAMME USES A MODEL INFORMED BY THE LONDON BENCHMARKING GROUP
TO ENSURE THE OUTCOMES OF EACH PROJECT ARE MEASURABLE

23
PROJECTSTODATE
16
OPERATINGIN
SOFAR
A WORLDWIDE PROGRAMME OF
INITIATIVES BUILT AROUND
LOCAL NEEDS FOR
Inspiring and educating the
workforce of the future
Inspiringtommorrow’s
engineers, inspiring and
educating the workforce
of the future
OURGLOBALRESOURCES OURVEHICLESAND EXPERTISE
Buildingthe confidence
andemployment prospects
of vulnerble young– with
Hitz Rugby
Transforminga passionfor
technology intocareers –
through advanced
apprenticeships
Offeringa better quality of
life andmore time for
education– by supplying
safe water to more than
700,000 people
Protectinglivelihoods –
by helping communities and
wildlife live side-by-side with
the Born Free Foundation
Helpingyoungpeople return
toeducationandovercome
trauma by rebuilding the
earthquake-hit Hope School
Helpingunderprivilgedand
disabledyoungpeople
harness their creative talents
– through the PSArts Project
Protecting and enhancing nature’s
resources for future generations
Improving the wellbeing of poor and
marginalised communities
Promoting innovation, nuturing talent,
enabling creativity
INFORMED AND DELIVERED IN
COLLABORATION WITH EXPERTS
CREATING OPPORTUNITIES WHICH
EMPOWER AND ENABLE COMMUNITIES
TO DELIVER:
Utilising our infrastructure and facilities
in key markets around the world as a
platformto deliver vital initiatives
Lending our class-leading design and
engineering expertise, and the unique
capabilities of our vehicles, to
mobilise changes
OURPEOPLE
Harnessing the skills of our
passionate workforce via employee
volunteer schemes
Offeringdignity and
independence tohomeless
people – by distributing food,
clothing, medicine and mental
health support
Creatinga better chance of
life – by supplying mosquito
nets to cut malaria rates by
more than 75%
LEVERAGING JAGUAR LAND ROVER’S KEY ASSETS
ENSURING POSITIVE AND LASTING CHANGE
LONG-TERM
VALUE,
HELPINGOUR
COMMUNITIES
TOTHRIVE
WE ARE PROUD TO
BE A RESPONSIBLE
BUSINESS
“ PART OF BEING A RESPONSIBLE
BUSINESS IS CREATING THE RIGHT
OPPORTUNITIES FOR PEOPLE TO
MAKE A POSITIVE CHANGE”
OUR BUSINESS IS GROWING
AND WITH IT, OUR ABILITY
TO MAKE A LONG-TERM
DIFFERENCE TO THE WORLD
IN WHICH WE OPERATE
OUR NEW GLOBAL CORPORATE SOCIAL RESPONSIBILITY PROGRAMME IS CREATING OPPORTUNITIES FOR
12
MILLION
PEOPLE
IN OUR LOCAL AND GLOBAL
COMMUNITIES BY 2020
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aguar Land Rover’s worldwide
workforce grew to an average of
27,953 in FY14 (a 12% increase
from 24,913 in FY13). The
growth has supported product
programme development, increased volumes and
internationalisation. Through training and induction
programmes across the business, new employees
were quickly integrated and able to make a
valued contribution.

Implemention of the HR vision and people strategy
is critical to Jaguar Land Rover’s business goals into
2020 and beyond. As part of our people strategy
there are a number of key goals including building
organisation and people capability to future-proof
our business and enhance the talent management
process to deliver leadership and functional
capability, which drives individual development,
succession planning, diversity and talent pipeline.
We continue to focus on leadership development,
growing inspiring leaders who deliver business
excellence and encourage a culture where the
customer comes frst.
A growing,
thriving,
business
A larger workforce has supported increased
product development and bigger volumes.
J
Overview | Brands | Manufacturing | Technology Responsible business Management report | Governance | Financials
Average employee numbers
2014
2013
2012
2011
27,953
24,913
20,887
17,255
A COMMITTED LOYAL
WORKFORCE
Jaguar Land Rover’s employees are proud to work
for the Company and are passionate about its
products. There are many long-serving employees
and staff turnover is low (2.3% for staff areas FY14
and 1.3% in production in calendar year 2013).
Employee engagement is also strong, averaging
78% as measured according to our Pulse Survey,
and comparing favourably against top 25%
benchmarks of 76%. Engagement is reinforced
through regular communication and a commitment
to working in partnership with employees and their
representatives to deal with challenges.
SHAPING THE LEADERS OF
THE FUTURE
This year, we have increased investment in
learning and development to ensure employees
are equipped with the learning and skills needed
to support their performance. Total investment
in learning and development for FY14 was over
£27 million, compared with £20 million investment
for FY13.
Leadership is key to our success and we
continue to grow inspiring leaders through
company-wide leadership programmes which
accelerate development and strengthen overall
leadership capability. Embedded in these
programmes is a focus on building a high-
performance culture, and achieving sustainable
and global growth.

High levels of engagement indicate
pride, advocacy, satisfaction and
commitment
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Jaguar Land Rover partners with a number of
universities, colleges and specialist trainers to
create industry-leading programmes, designed to
enhance the technical and academic skills base
particularly within engineering. The Technical
Accreditation Scheme is one such example, as well
as Jaguar Land Rover’s engineering degrees and
Maintenance Technician development pathways.
THE PERFECT START FOR THE
NEXT GENERATION
Jaguar Land Rover is an ever more attractive
destination for graduates, borne out by the leading
national surveys. Over the last three years, Jaguar
Land Rover has excelled in its rating in The Times
“Top 100 Graduate Employers”, moving to 21st
place in 2013, up from 60th place in 2011. This is
also refected in The Guardian Top 300 Graduate
Employers where we have seen a rise to 20th in
2013 from 127th place in 2011.
The Guardian
Top 300 Graduate Employers
The Times
Top 100 Graduate Employers
Climbing the graduate league tables
21st
2013
20th
2013
26th
2012
30th
2012
60th
2011
127th
2011
Jaguar Land Rover has for decades delivered
industry-leading apprenticeships and is now the
UK’s largest automotive apprenticeship provider.
Apprenticeships are central to our commitment to
fostering emerging talent.
In 2013, Jaguar Land Rover recruited 149
apprentices, taking the number on its award-
winning Advanced and Higher programme to
almost 500.
Jaguar Land Rover partners
with universities and trainers
to deliver technical skills
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High levels of engagement indicate
pride, advocacy, satisfaction
and commitment
e are committed to treating
employees with respect and
promoting equal opportunities.
Jaguar Land Rover’s Dignity at Work
policy promotes a safe, pleasant and
welcoming workplace for all, with zero tolerance of
any form of discrimination.
Employees with disabilities are supported through
occupational health and accessibility measures at
all sites. We have been awarded the “Two Ticks”
symbol by the UK Government’s Jobcentre Plus
organisation, which recognises employers that have
made commitments to employ, keep and develop
the abilities of disabled staff.
Jaguar Land Rover is a member of “Opportunity
Now”, an organisation driving the focus on gender
equality in the workplace. Improving gender
balance is a priority as the automotive industry
has traditionally attracted more men than women
and women represent just 10% of the Company’s
workforce. The proportion of women in the business
increased by 1% in FY14 and we remain focused
on attracting more women into engineering
roles, with women making up around 24% of the
graduate intake, 8% of apprentices and 22% of
undergraduate placements in FY14.
We also offer a personal development
programme specifcally for women, with 250
women participating since its launch in 2009.
The Engineering Network for Women, connects
women who work for Jaguar Land Rover with
female engineering students interested in pursuing
a career in the automotive sector. Jaguar Land
Rover’s Women in Engineering Sponsorship
Scheme gives fnancial and practical support to
female undergraduates interested in engineering
careers, as well as work experience with the
Company through 3, 6 or 15 month placements and
we have increased our target for placements from
10 to 17 in FY14, with each participant assigned a
mentor and a bursary of £1,500.
Jaguar Land Rover is committed to safety and
well-being, striving to continuously improve working
conditions and promote safe working practices to
W
Caring for
a diverse
workforce
An inclusive approach that respects
and welcomes all employees.
ensure the safety and well-being of our employees
and the wider community. We are focused on
assuring the safety of everything we design,
construct, operate and maintain, ensuring the right
tools, systems and support are in place. Everyone
involved with our business is expected to take a
lead in demonstrating this responsibility.
Jaguar Land Rover holds external accreditation
to OHSAS18001 and was reaccredited at the end
of FY13 after a set of successful surveillance audits
and zero major non-compliance.
2013 saw the launch of Destination Zero –
A Journey to Zero Harm. This is underpinned by
everyone understanding and taking a responsibility
for their own and their fellow workers’ safety and
well-being. We continue to support this with the
management health and safety training workshops
and saw a further 437 management graded
employees attending this workshop this year.
Safety and well-being is relevant to all aspects
of our business, and is included in the commitments
and objectives of every department. Health
promotion activities take place at all Jaguar Land
Rover locations with almost 70 events taking
place in FY14 covering topics such as Diabetes
Awareness, Heart Disease and Smoking Health.
Occupational Health is supported and delivered
by on-site health facilities, including cognitive
behaviour therapy and physiotherapy, coupled with
the introduction of Well-being Centres at a number
of the sites. The continued active use of “WellPoint
Kiosks” – which are designed to encourage
preventative health improvement – has seen
over 8,000 new users registered in FY14.
Safety and well-being are key as we grow
internationally and are delivered via a safety
management system that provides a framework
for all operations. With over 35 million working
hours recorded across the business, our
manufacturing operations at Castle Bromwich,
Solihull and Halewood achieved 39, 41 and 46
weeks zero lost time accidents respectively.
We also support in areas such as international
assignment and travel health for our employees.
Jaguar Land Rover strives
to improve working conditions
across all operations
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Financial
Discussion
Management
report
New products have driven global
success for Jaguar Land Rover
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aguar Land Rover achieved another
strong performance in the fscal year
ending 31 March 2014 with revenues
of almost £19.4 billion (up 23%) on
retail sales of 434,311 units (up 16%),
EBITDA of £3.4 billion (up 45%), and proft before
tax (PBT) of £2.5 billion (up 49%).
The growth in retail sales has been supported
by new products. Land Rover has grown by 12%,
primarily driven by the introduction of the Range
Rover Sport, a full year of the Range Rover, and
continued strong growth of the Range Rover
Evoque. Jaguar was up 37% buoyed by the
introduction of the critically acclaimed new Jaguar
F-TYPE and with strong demand for XJ and XF
models on the back of Sportbrake, all-wheel drive
and smaller engine derivatives. The Company
maintains a balanced sales profle, with all markets
contributing to the growth. Notably, China and North
America volumes have increased 34% and 20%
year-on-year respectively. The UK and Europe were
up 6% and 2%, and Asia Pacifc and Rest of the
World were up 28% and 15% respectively.
Complementing the strong volumes the Company
has also benefted from a favourable model
and market mix to generate a record EBITDA of
£3.4 billion (17.5% margin) for the year ended
31 March 2014, up £1.1 billion, or 2.7ppt of EBITDA
margin from prior year. EBITDA performance does
also include currency effects, notably underlying
losses versus the strengthening Pound Sterling,
offset by realised hedging gains which are now
included in EBITDA together with revaluation of
current assets and liabilities.
The increase in proft before tax to £2.5 billion
captures depreciation and amortisation costs
as well as net fnancial expense. Depreciation
and amortisation in FY14 was £875 million up
from £622 million in FY13, in line with the growth
in capital spending. Net fnance expense was
£154 million up £158 million from FY13, primarily
refecting the reversal of the mark-to-market of the
embedded derivative option associated with the
£750 million of debt callable in May 2014.
This debt was tendered for and redeemed in
the quarter ended 31 March 2014, and associated
costs are also refected in PBT. Finally, PBT
includes £137 million of gains in relation to the
mark-to-market of foreign currency denominated
long-term debt and unmatured FX option and
commodity hedges, this compares to a £47 million
loss in FY13. The proft after tax of £1.9 billion
refects an effective tax rate of 25%.
Free cash fow of £1.2 billion (up £555 million)
refects the strong EBITDA, less £2.7 billion of total
investment (up £632 million), plus positive working
capital of £393 million. The free cash fow is before
net repayment of debt (£79 million after refnancing
£750 million of debt tendered and redeemed), net
fnance expense (£269 million including the tender
and debt redemption fees) and a £150 million
dividend paid in June 2013. JLR has declared
another £150 million dividend paid in June 2014.
The 31 March 2014 cash position was a very
healthy £3.5 billion, and total liquidity was
£4.8 billion. This includes £1.3 billion of undrawn
committed credit facilities (of which £322 million will
mature in July 2016 and £968 million in July 2018).
Net cash is £1.5 billion, including total debt of
£2.0 billion. The debt balance includes the successful
issuance in the year of a US$700 million 5 year bond
at 4.125% and £400 million 8 year bond at 5%. The
proceeds of these issuances were used to refnance
£750 million of debt callable in May 2014, but
tendered for and repaid to the facility agent in the
quarter ended 31 March 2014.
The strong performance in FY14 as well as the
strong balance sheet and liquidity, with proven
access to funding from capital markets and banks,
supports the Company’s plans to increase total
investment to, in the region of, £3.5 billion to
£3.7 billion in FY15.
J
Kenneth Gregor
Chief Financial Offcer
Jaguar Land Rover
28 July 2014
CFO’s
statement
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Strategic
report
18%
17%
+16%
+45 %
Total retail sales to 434,311
Growth in EBITDA
he Directors of Jaguar Land Rover
Automotive plc present the Strategic
report of Jaguar Land Rover
Automotive plc and its subsidiaries
(the “Company”), for the year ended
31 March 2014 (“FY14”). The Company is a
wholly-owned subsidiary of Tata Motors, a part of
the Tata Group, a global enterprise headquartered
in India, with revenues of around $97 billion in
FY13, comprising over 100 operating companies,
in more than 100 countries and in seven business
sectors: communications and information
technology, engineering, materials, services,
energy, consumer products and chemicals.
Tata Motors Limited is India’s largest automobile
company. It is the leader in commercial vehicles
in each segment, and among the top four in
passenger vehicles.
GENERAL TRENDS IN
PERFORMANCE
RESULTS AND PERFORMANCE
Strong volume growth
The Company has had a successful year of
continued growth in all markets with overall volumes
up 16%, refecting continued product successes
including the launch of the Range Rover Sport and
Jaguar F-TYPE, and a full year of sales of the
Range Rover. More established models have also
been performing well, in particular derivatives such
as the XF Sportbrake, all-wheel drive, and smaller
engine options across the range.
Retail volumes have grown across all markets,
led by China region up 34% from last year, to record
retail sales of 103,077 units. North America and
Asia Pacifc regions also performed strongly, up
20% and 28% to 75,671 and 22,795 units
respectively, while the UK and Europe were up
6% and 2% to 76,721 and 82,854 units respectively.
Wholesale volumes for FY14 were 429,861 units,
an increase of 16% on FY13. At a brand level,
wholesale volumes were 79,307 units for Jaguar
and 350,554 units for Land Rover, representing
growth of 37% and 12% respectively.
T
In line with the volume growth, and supported by
favourable market and product mix, FY14 saw
record revenues, up 23% to £19,386 million.
EBITDA growth
Consolidated EBITDA for FY14 was a record
£3,393 million, an increase of 45% compared to
FY13. The EBITDA improvement resulted from
increased sales volumes and revenues, as well as
favourable product and market mix, as higher margin
products were sold in higher margin destinations.
Also the Company has been able to keep costs in
check, through cost discipline and various
effciencies and improvement initiatives. Material and
Other cost of sales for the year were £11,904 million,
equivalent to 61.4% of revenue. This represents
an improvement of 1.3% from FY13 in part due
to decreases in raw material prices.
Employee costs for FY14 were up £320 million
(24%) to £1,654 million as the Company has
increased permanent and agency headcount,
particularly in product development and
manufacturing, to support the Company’s
growth agenda.
Other expenses, including those relating to
manufacturing, launch, freight and distribution,
warranty, product development expense, selling and
fxed marketing, were £3,717 million in the year, an
increase of £642 million (21%) versus FY13.
From FY14 onwards EBITDA now includes
mark-to-market of current assets and liabilities
and realised gains on matured FX and commodity
hedges for the full year. This is described more
fully on page 82.
Of the £1,266 million total product development
spend, £1,030 million was capitalised in line with
policy under IFRS accounting.
Net income
Proft before tax (PBT) for FY14 was £2,501 million,
an increase of £827 million (49%) compared to FY13.
PBT performance refects the higher EBITDAplus
gains of £137 million arising from mark-to-market of
unrealised FX options and commodity hedges and
revaluation of foreign currency loans. This compares
to a £47 million loss in FY13.
PBT also captures depreciation and amortisation
charges, up £253 million to £875 million for FY14
given increased product development and facilities
investment. Higher net fnance expense of
£154 million includes circa £62 million of one-off
costs incurred in the redemption of the higher
coupon £500 million and $410 million 2018 notes
(at 8.125% and 7.75% coupon respectively) and
a £47 million reversal of gain on related bond call
options. The bond redemption was pre-fnanced by
the successful issuances of $700 million 4.125%
2018 notes and £400 million 5% 2022 notes. This
served to reduce the Company’s overall cost of
debt in line with the improving credit and market
conditions. Proft after tax was £1,879 million, an
effective tax rate of 25%.
ECONOMIC COMMENT AND
PERFORMANCE IN KEY
GEOGRAPHICAL MARKETS
The global operating environment improved
considerably in FY14, as economic activity
strengthened and spending in most economies began
to recover. The advanced economies, particularly
the US and UK, led the rebound, as growth became
broader and more entrenched. Europe also saw the
frst tentative signs of recovery after a long and painful
slowdown. Emerging market economies slowed and
future growth forecasts were revised down.
In the UK, the recovery turned out stronger than
expected. UK labour market conditions improved as
employment increased and the numbers out of work
fell. Rising consumer and business confdence helped
to underpin stronger retail sales and investment
spending, while the recovery in house prices helped
shore up household wealth. Against this backdrop,
total vehicle sales improved 12.5% compared to the
previous year. Jaguar Land Rover sales climbed 6.2%
on the year, supported by a strong performance
from Jaguar (10.7% growth) and the launch of the
F-TYPE convertible. The 5% annual growth in Land
Rover sales refects the strong market position in
the UK for SUVs.
The US economy continued to recover although
perhaps less strongly than anticipated. Industrial
activity picked up pace throughout the year, supporting
continued employment growth. Bad weather between
December and March, and the Federal Government
shutdown in October disrupted consumers’ normal
spending patterns but did not knock the recovery
off course. In the year to March, total passenger car
sales expanded by 6.2% with Jaguar Land Rover
outperforming the market to deliver sales growth of
19.2%, or 20.2% including Canada.
In Europe, there emerged the frst signs of recovery
after recession. Following several quarters of
contraction, GDP in the Eurozone bottomed out and
started to pick up. Led by Germany, consumer and
business confdence began to return, industrial activity
started to recover, and the deterioration in labour market
conditions came to a halt. Admittedly, there is still a
long way to go: defation risks remain, the sovereign
and banking crisis is not fully resolved, and there is
a considerable gulf in performance between the core
and the periphery. Nonetheless, the automotive market
is making a nascent recovery. In Germany, Jaguar
Land Rover sales grew 6.5%, against 0.2% for total
passenger cars. In Italy, Jaguar Land Rover sales
edged up 1.1%, driven by Land Rover, against a total
market contraction of 1.6%. Although in France sales fell
across the board. The most encouraging performance
came from Spain where, after three years of double-
digit contraction, the market rebounded by 11.7%,
and Jaguar Land Rover sales rose 14.7%.
China’s economy slowed slightly in 2013 as
authorities sought to rein in excessive credit growth
and advance their reform agenda. Potential growth has
decreased as the economy has expanded in size, but
also as a desirable by-product of more balanced growth.
Passenger car sales outpaced the broader economy,
reaching a new peak of almost 18.4 million units in the
year to March, growing faster than either of the previous
two years. Total Jaguar Land Rover sales in the China
region reached 103,077, up from 77,075 in FY13.
Jaguar volumes more than doubled to 19,891 while
Land Rover sales reached 83,186. Elsewhere, many
emerging markets experienced a more challenging
economic environment.
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CASH FLOW
Net cash from operating activities was £3,422 million
in FY14, in line with profts, plus positive working
capital of £393 million versus £382 million in prior
period, less tax paid of £402 million (£248 million
in FY13). This compares to operating cash fow of
£2,429 million in FY13.
The Company invested signifcantly in the year, up
£527 million to £2,444 million. This demonstrates the
Company’s commitment to product development and
also capacity increases, including facilities in China
and UK.
Net cash used in fnancing activities was
£498 million in FY14 compared to £178 million in
FY13. In FY14 fnancing activities included early
redemption of circa £750 million equivalent of higher
coupon long-term bonds through tender/exercise of
call option in Q4 pre-fnanced by the issuance of $700
million bond in December 2013 and £400 million bond
in January 2014. Financing activities also included
a dividend paid to Tata Motors of £150 million, £79
million of debt repayments, and interest and fees of
£269 million.
CAPITAL STRUCTURE
BACKGROUND
Liquidity and capital resources
As at 31 March 2014, on a consolidated level,
the Company had cash and cash equivalents of
£2,260 million and short-term deposits of between
3-12 months’ duration of £1,199 million (totalling
£3,459 million). In addition, the Company had
available undrawn long-term committed facilities
of £1,290 million (£323 million maturing in July 2016
and £967 million maturing in July 2018). Subject
to regulation the Company pools cash through
inter-company loans from each of its subsidiaries
to Jaguar Land Rover, UK, and maintains an annual
dividend distribution. The total amount of cash and
cash equivalents includes £536 million held by
subsidiaries in jurisdictions outside the UK. The cash
in some of these juridictions is subject to restriction on
pooling cash to the UK through inter-company loans
or interim dividends although annual dividends are
generally permitted.
The Company fnances its capital requirements
through cash generated from operations and external
debt, including long-term debt, and revolving credit,
factoring and working capital facilities. At 31 March
Borrowings and description of indebtedness
The Company has continued to enjoy good access
to the debt market to raise long-term fnance. Most
recently the Company successfully pre-fnanced the
redemption of callable high coupon debt with the
issuance of two new bonds: (i) $700 million 4.125%
due 2018, issued December 2013 and (ii) £400m 5%
due 2022, issued January 2014. As with previous
Bonds these issuances were on a senior unsecured
basis, and were not subject to the registration
requirements of the US Securities Act. The notes have
semi-annual interest payments and are subject to
certain customary covenants and events of default.
FY14 FY13 Change (%)
UK 76,721 72,270 6%
North America 75,671 62,959 20%
Europe 82,854 80,994 2%
China 103,077 77,075 34%
Asia Pacifc 22,795 17,849 28%
All other markets 73,193 63,489 15%
Total JLR 434,311 374,636 16%
Facility Facility Amount (£million) Outstanding (£million) Undrawn (£million) First Call Date
Committed
£500m 8.25% Senior Notes due 2020* 500.0 500.0 – Mar-2016
£400m 5% Senior Notes due 2022** 400.0 400.0 – NCL
$410m 8.125% Senior Notes due 2021* 246.5 246.5 – May-2016
$500m 5.625% Senior Notes due 2023* 300.6 300.6 – Feb-2018
$700m 4.125% Senior Notes due 2018** 420.9 420.9 – NCL
Revolving 3 and 5 year credit facilities 1,290.0 – 1,290.0
Receivable factoring facilities 214.1 166.9 47.2
Other 0.1 0.1 –
Subtotal 3,372.2 2,035.0 1,337.2
Uncommitted – – –
Subtotal – – –
Prepaid costs – (25.4) –
Total 3,372.2 2,009.6 1,337.2
BORROWING AND DESCRIPTION OF INDEBTEDNESS AS AT 31 MARCH 2014
PERFORMANCE IN KEY GEOGRAPHICAL MARKETS ON RETAIL BASIS
The announcement by the US Federal Reserve
in May 2013 that it would soon begin reducing its
monthly asset purchases (so-called “tapering”),
caused currencies to depreciate, stock markets to
fall and borrowing costs to rise. Countries with large
current account and fscal defcits were worst affected.
In Brazil, rising interest rates and falling consumer
confdence left total new vehicle registrations down
4.5% year-on-year. Despite this backdrop, Jaguar
Land Rover expanded its sales by 21.1% to over
11,000 vehicles. Meanwhile, in India and Russia the
total vehicle markets also contracted (by 6.2% and
6.0% respectively), but Jaguar Land Rover grew
its sales by 8.6% and 14.7%. In South Africa the
economic situation dragged Company sales down
9.9% on the previous year.
The Asia Pacifc sales region (including Australia,
S. Korea and Japan) saw the fastest rate of growth
after China. Total Company sales increased by 27.7%
year-on-year to 22,795. In particular, South Korea
experienced the fastest expansion, growing 51.8% on
the back of economic growth following the slowdown
in 2012. In Japan, advanced purchases of vehicles
to beat the increase in the consumption tax in April
2014 more than offset the deterioration in consumer
sentiment. Total Company sales increased by 33.2%
against growth in the total passenger car market of
9.0% in the year to March. In Australia, the unwinding
of the mining boom and growing slack in the economy
were compounded by dwindling consumer confdence
and rising unemployment. Total new car sales growth
was 1.3% after over 8% the year before. Company
sales were buoyant though, and managed to grow
by 15.3%.
2014, the Company had £2,010 million of debt,
consisting of £1,843 million equivalent of long-term
unsecured debt and £167 million working capital
debt facilities. This is detailed in the table below. In the
ordinary course of business, the Company also enters
into, and maintains, letters of credit, cash pooling and
cash management facilities, performance bonds and
guarantees and other similar facilities.
* 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, Jaguar Land Rover 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.
Looking ahead, global economic activity is expected
to improve further in FY15, driven by continued
expansion in the US and UK, and recovery in Europe.
In emerging markets challenges remain particularly
as global credit conditions will tighten further.
Nonetheless, the prospects for most of these markets
remain good.
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25%
£1,290 million revolving 3 and 5 year
credit facilities
The Company as borrower had entered into a
committed revolving credit facility for 3 and 5 years
under a facility agreement dated 1 December 2011
with a syndicate of banks. Jaguar Land Rover
Holdings Limited (formerly called Land Rover), Jaguar
Land Rover Limited, Land Rover Exports Limited,
Jaguar Land Rover Nominee Company Limited
(formerly Jaguar Land Rover Exports Limited) and
Jaguar Land Rover North America, LLC, are the
guarantors. In July 2013, the Company amended
and restated the facility to £1,250 million at better
pricing and terms and conditions. This has since been
upsized to £1,290 million. As at March 2014,
the facility is fully undrawn. The facility has two
tranches, a three-year tranche of £323 million
(maturing in 2016) and a fve-year tranche of
£967 million (maturing in 2018). Jaguar Land Rover
is subject to certain customary fnancial and other
covenants under this facility.
Various Sterling bilateral term
loan facilities supported by CNY deposits:
During the course of FY14 the Company repaid the
amounts outstanding under the various short-term
loan facilities, previously secured by restricted cash
on deposit from Jaguar Land Rover China (the
Company’s national sales company, NSC), and
guaranteed by Land Rover (now Jaguar Land Rover
Holdings Limited).
Receivables factoring facilities
Jaguar Land Rover Limited has maintained invoice
discounting facilities with one or more banks.
Following the transfer of the assets and liabilities
of Jaguar Land Rover Exports Limited into Jaguar
Land Rover Limited on 1 April 2013, Jaguar Land
Rover Limited is the sole seller under these facilities.
Jaguar Land Rover Holdings Limited (formerly called
Land Rover) is party to the facility agreement as a
guarantor. The facility was renewed in March 2013
for a period of two years. Of the total committed facility
of £214 million, £167 million was drawn as on
31 March 2014. Receivables are generated from
sales of fnished goods and Land Rover spare parts
and accessories.

BUSINESS REVIEW
Business background
The Company designs, develops, manufactures and
sells Jaguar premium performance cars and Land
Rover premium all-terrain vehicles, as well as related
parts and accessories. The Company has a long
tradition as a manufacturer of premium passenger
vehicles with internationally recognised brands, an
exclusive product portfolio of award-winning vehicles,
a global distribution network and strong research
and development (R&D) capabilities. The Company
currently operates three major production facilities
and two advanced design and engineering facilities
all in the United Kingdom.
At 31 March 2014, the Company employed circa
29,000 employees globally. The Company operates
a global sales and distribution network designed to
support worldwide sales and facilitate growth across
170 countries.
Legal structure
The process of consolidating legal entities under the
Company continued with the transfer of the assets
and liabilities of Jaguar Land Rover Exports Limited
to Jaguar Land Rover Limited, the primary operating
company in the Group. The simplifed legal structure
is represented below.
Product design, development and technology
The Company is committed to a programme of regular
enhancements in product design, and each of its
vehicles is designed and developed by award-winning
design teams based in two design and development
centres, each equipped with computer-aided design,
manufacturing and engineering tools, and confgured
for competitive product development cycle time
and effcient data management. The Company has
refreshed the entire Jaguar range under a unifed
concept and design language epitomised in the new
Jaguar F-TYPE and the new smaller Jaguar XE
sedan planned for launch in 2015. The Company
has also continued to enhance the design of Land
Rover’s range of all-terrain vehicles with the new
Discovery family of vehicles, the frst of which being
the Discovery Sport on sale in calendar year 2015.
The Company endeavours to implement the
best technologies into its product range to meet
the requirements of a globally competitive market,
and continues to commit signifcant investment into
research and development. The Company also strives
for effciencies through sharing premium technologies,
powertrain designs and vehicle architecture across
its products. For example, the aluminium body
architecture, frst used in the Jaguar XJ and XK, is
now being extended across the feet, most recently
in the Range Rover and Range Rover Sport. It is
anticipated that this will be a signifcant contributor to
further effciencies in manufacturing and engineering,
as well as to the reduction of CO
2
emissions and the
improvement of fuel economy. Furthermore, signifcant
investment is made in alternative fuel and hybrid
technology as well as other development programmes
aimed at further improving the environmental
performance of its vehicles.
In September 2013, the Company announced
investment in the National Automotive Innovation
Campus at the University of Warwick in the United
Kingdom to complement existing product development
centres.This Campus is planned to open in 2016
and will focus on advanced technology, innovation
and research and will feature engineering workshops
and laboratories, advanced powertrain facilities and
advanced design, visualisation and rapid prototyping.
In November 2013, the Company announced plans
to work with Intel to establish a technology research
centre in Oregon in the United States to develop the
next generation in vehicle technologies, helping to
enhance future vehicle infotainment systems.
Facilities
The Company operates three automotive
manufacturing facilities in the United Kingdom.
At Solihull, the Company produces the Land Rover
Defender, Discovery, Range Rover and Range Rover
Sport models. Solihull has recently benefted from
investment in a new assembly hall which, in FY15,
will produce the new Jaguar XE sedan and Range
Rover Sport. In addition, Castle Bromwich produces
the Jaguar XK, XJ, XF and new F-TYPE models,
and Halewood, produces the Freelander and the
Range Rover Evoque. Outside the UK, the Company
has committed to a 50:50 Joint Venture (JV) with
Chery Automotive to build a factory in Changshu,
China to supply the local market from FY15. The JV
is expected to invest a total of CNY10.9 billion into
the manufacturing plant, R&D centre and engine
production facility. The Company is committed to
invest CNY3.5 billion of equity capital in the JV
Company, representing 50% of the share capital and
voting rights of the JV Company.
In December 2013, the Company signed an
agreement to invest £240 million into a production
facility in Rio de Janeiro in Brazil. Construction of the
premium vehicle manufacturing facility will commence
in 2014. The frst vehicles are expected to come off
the assembly line in 2016, subject to the fnal approval
of the plans from the Brazilian Federal Government
under its Inovar Auto Programme. The new plant will
have a capacity to build 24,000 vehicles annually for
the local market.
In December 2012, the Company signed a
Letter of Intent with the National Industrial Clusters
Development Program (NICDP) in the Kingdom
of Saudi Arabia to undertake a detailed feasibility
study anticipating Saudi Arabia as a possible future
location for a Jaguar Land Rover automotive facility.
Discussions with the Government of the Kingdom of
Saudi Arabia are still at a preliminary stage.
In FY15 the Company will also start full production
at its Engine Manufacturing Centre at Wolverhampton,
UK. The world-class plant will manufacture a family
of premium, technologically advanced engines,
“Ingenium”. These will be entirely designed and built
in-house for exclusive use. The Jaguar XE, debuting
in 2015, will be the frst vehicle equipped with these
four-cylinder engines.
Complementing its fexible manufacturing footprint
the Company has two design and engineering
facilities at Gaydon and Whitley, both in the United
Kingdom, and its global headquarters is also located
at the Whitley site.
Sales and distribution
The Company’s products are sold in over 170
countries, through a global network of 18 national
sales companies (NSCs), 84 importers, 53 export
partners and 2,518 franchise sales dealers, of which
784 are joint Jaguar and Land Rover dealers.
The Company has established robust business
processes and systems to ensure that its production
plans meet anticipated retail sales demand and to
enable the active management of its inventory of
fnished vehicles and dealer inventory throughout
its network.
The Company has arrangements in place for the
provision of dealer and consumer fnancial services
products with third-party providers, including: Black
Horse (part of the Lloyds Bank Group) in the UK,
FGA Capital (a joint venture between Fiat Auto and
Credit Agricole) in Europe, Chase Auto Finance
in the USA and other local auto fnancial services
providers in other key markets.
Tata Motors Limited (India)
TML Holdings PTE Limited
(Singapore)
Jaguar Land Rover
Automotive plc
Jaguar Land Rover
Holdings Limited
Jaguar Land Rover
Limited
Jaguar Land Rover
North America LLC and Jaguar
Land Rover Exports Ltd
National Sales Companies
100%
100%
100%
100%
100%
Simplifed
corporate
structure
25%
100%
Jaguar Land Rover
China (NSC)
Chery Jaguar Land Rover
Automotive Co. Ltd
JAGUARLANDROVERAUTOMOTIVE PLC ANNUAL REPORT 2013-14 JAGUARLANDROVERAUTOMOTIVE PLC ANNUAL REPORT 2013-14
80 Overview | Brands | Manufacturing | Technology | Responsible business Management report Governance | Financials
Wholesales by region (%) OBJECTIVES AND STRATEGIES
The Company has a multifaceted strategy to position
itself as a leading manufacturer of premium vehicles
offering high-quality products tailored to specifc
markets, and to proftably grow its strong, globally
recognized brands.The Company invests substantially
to develop new products in new and existing segments
with new powertrains and technologies to meet
customer aspirations and regulatory requirements.
Complementing this, the Company invests in
manufacturing capacity in the United Kingdom and
internationally to meet customer demand.
Grow the business through new
products and market expansion
The Company offers products in the premium
performance car and all-terrain vehicle segments,
and intends to grow the business by diversifying the
product range within these segments. For instance,
the Range Rover Evoque defned the market segment
for smaller, lighter and more “urban” off-road vehicles,
complementing the more mature Range Rover,
Freelander and Discovery markets. Similarly for Jaguar,
the 2.2L Diesel XF caters well for a wide customer base,
notably including the corporate market segment, and
the XF Sportbrake adds a premium estate model to the
portfolio. The XJ luxury saloon continues to perform well,
and of course the Jaguar F-TYPE, available in both soft
top and now coupé, provides a vivid representation of
the confdence and ambition of the brand. As well as the
core product family, various options, such as long wheel
base, smaller engine and all-wheel drive derivatives,
help to strengthen our overall product offering.
The Company also has ambitious but robust plans
to continue to develop the product range. First will be
the Land Rover Discovery Sport available for sale in
2015 and to be the frst in a new family of Discovery.
Jaguar will follow with the launch of the XE, the eagerly
anticipated mid-sized sedan, and in due course a
crossover based on the C-X17 concept. The Company
will also develop hybrid and long wheelbase derivatives
of existing models.
Complementing the new products the Company
intends to expand its global footprint. First, it will
increase its marketing and dealer network in emerging
markets. For example, a National Sales Company
has been established in China (in 2010) and the
network of sales dealerships has been grown to
170 dealerships as at 31 March 2014. Second, the
Company is progressing new manufacturing facilities,
assembly points and suppliers in selected markets. This
includes a manufacturing and assembly joint venture
in China with Chery Automobile Company Limited; an
assembly facility in India operated by Tata Motors; and
a manufacturing facility in Brazil. We also continue to
explore further broadening our manufacturing base,
including opportunities in Saudi Arabia. The Company
also benefts from the relationship with Tata Motors and
the synergies achieved in the areas of research and
product development, supply sourcing, manufacturing
and assembly and other operations.
Invest in manufacturing
In line with other premium automotive manufacturers
the Company maintains a capital spending target
of 10-12% of revenue. However, in the near and
medium term higher capital spending is anticipated
to take advantage of the growth opportunities
presented. For the fscal year ending March 2015
capital spending is expected to be in the region of
£3.5-£3.7 billion (split approximately 40% for R&D
and 60% for expenditure on tangible fxed assets
such as facilities, tools and equipment as well as
investment in our China joint venture).
Capital spend is primarily funded from operating
cash fow, supported by the Company’s strong
balance sheet and liquidity, and proven access to
funding from capital markets and banks.
At 31 March 2014, free cash fow after investment
was £1,150 million, and total liquidity was £4,796
million, including £1,290 million of long-term undrawn
credit facilities (of which £967 million maturing in
July 2018 and £323 million maturing in July 2016).
Invest in R&D, technology and people
The Company’s strategy is to maintain and
improve its competitive position by developing
technologically advanced vehicles, particularly
with regard to economy and emissions aspects.
To this end the Company has enhanced its
technological strengths through extensive in-house
R&D activities, particularly through two advanced
engineering and design centres, which centralise
capabilities in product design and engineering.
Furthermore, the Company is involved in a number
of advanced research consortia that bring together
leading manufacturers, suppliers and academic
specialists in the UK, supported by funding from
the Government’s Technology Strategy Board.
In September 2013, the Company announced the
investment in the National Automotive Innovation
Campus at the University of Warwick, UK. This
will focus on advanced technology, innovation and
research and feature engineering workshops and
laboratories, advanced powertrain facilities and
advanced design, visualisation and rapid prototyping
capabilities. In November 2013, the Company also
announced plans to work with Intel to establish
a technology research centre in Oregon in the
United States to develop next generation vehicle
technologies, helping to enhance future vehicle
infotainment systems.
The Company has also invested in an
engine design and manufacturing facility in
Wolverhampton, UK with the frst of a new family of
“Ingenium” engines to be launched in 2015. This will
play a signifcant role in powertrain downsizing and
increased effciencies and reduced emissions.
Finally, to mention Jaguar’s pioneering use
of aluminium body architecture, already extended
to the Range Rover and Range Rover Sport, and
a key aspect of future models, combined with the
move to common architectures to support the
growing product family.
North America
Rest of the World Asia Pacifc China Region
24%
Europe
19%
UK
18%
17%
17%
5%
170
Dealerships across China
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in Autumn); holiday periods, including shutdowns
(in particular winter and summer holidays in Western
Europe); and specifc events such as the biannual
(March and September) change in registration plates
of vehicles in the United Kingdom. The resulting
sales profle infuences operating results on a
quarter-to-quarter basis.
The automotive industry also experiences
longer-term cyclicality. To mitigate the risk from an
industry downturn the Company maintains strong
liquidity with signifcant cash balances and committed
fnancing facilities, it also has a rigorous inventory
management process, including pipeline and dealer
stock, to ensure changes in the environment are
managed quickly and effectively. The Company
also manages refnancing risk by operating a
robust funding plan.
Industry competition
The global automotive industry, including the
premium passenger car segment, is highly
competitive and competition is likely to further
intensify in view of the continuing globalisation and
consolidation in the worldwide automotive industry.
There is a strong trend among market participants in
the premium automotive industry to retain positions
in established markets and to develop presence in
more proftable and fast-growing emerging markets,
such as China, India, Russia, Brazil and other parts
of Asia. Such a strategy is typically underpinned by a
full product offering, including such factors as: quality
and features of vehicles; innovation; development
time; cost advantage; pricing; reliability; safety; fuel
economy; environmental impact and perception
thereof, customer service and fnancing terms.
There is a risk that the Company is unable to
compete given its relatively small product portfolio,
and focus on premium performance cars and SUVs.
However, the Company does have a robust business
plan in place to deliver its strategy and ambition to
develop additional models, each well received by
the market. As well as the internal effort to maintain
a quality range of products, the Company places
emphasis on monitoring markets and competitors
to be able to understand and pre-empt external
dynamics and remain competitive.
Environmental regulations
Across its operations, the Company is subject to
numerous laws, regulations and policies covering
environmental interests such as greenhouse gas
emissions and fuel economy. Stringent regulation
is adopted by the European Union, which passed
legislation in April 2009 to regulate vehicle carbon
dioxide emissions to feet average of 130 grams
CO
2
per kilometre by 2012 and 95 grams CO
2

per kilometre by 2020. Similarly, the European
Parliament has adopted standards for emissions of
other air pollutants, such as oxides of nitrogen, to
be phased in from September 2014 and September
2017, according to regulations Euro 6b and 6c. As
comparison, the United States regulates estimated
combined average emissions level of 250 grams of
BUSINESS RISKS AND
MITIGATING FACTORS
MACRO AND INDUSTRY RISKS
Global economic environment
The Company is focused on the premium end of the
automotive industry, and can be heavily infuenced
by general economic conditions around the world.
The demand for its vehicles is infuenced by a
variety of factors including, among other things, the
growth rate of the global economy, availability of
credit, disposable income of consumers, interest
rates, environmental policies, tax policies, safety
regulations, freight rates and fuel prices. Recent
performance has been buoyed by the continued
economic recovery in western markets and ongoing
expansion of car ownership in emerging markets,
particularly China.
The Company does however remain vigilant
to economic and political developments, notably
risks posed by the tapering of monetary stimuli,
unexpected fscal policy changes, and the
sustainability of Chinese growth. Accordingly, the
Company continues to monitor economic indicators
within key markets as well as retail volume trends in
order to manage production and vehicle distribution.
The Company’s product development programme is
aimed at ensuring it has the right vehicles available
for the right markets at the right price, refecting
different priorities and uses across the globe.
Impact of political instability, wars, terrorism,
multinational conficts, natural disasters, fuel
shortages/prices, epidemics, labour strikes
and other risks
As the Company increases its global presence,
particularly to emerging markets, so too does
it increase the associated risk. With a broad
geographical footprint it is conceivable that the
Company’s operations may be subject to political
instability, wars and conficts, terrorism, natural
disasters, fuel shortages, epidemics and labour
strikes. Also, and particularly in emerging markets,
the Company is exposed to general uncertainty
in terms of changes, inconsistency and ambiguity
in economic and government policies, laws and
regulations, including taxation systems, as well
as commercial and employment practices and
procedures. Any signifcant or prolonged disruptions
or delays in the Company’s operations related
to these risks could adversely impact its results
of operations.The Company is able to mitigate
the impact of isolated risks through geographic
diversifcation of sales, and by managing such risks
through close monitoring of developments in
each country.

Seasonality and cyclicality
Sales volumes in particular are infuenced by the
cyclicality and seasonality of demand for these
products. Seasonality arises from such factors as:
the introduction of new model year vehicles (typically
Key to success are the workforce, and the
Company continues to be successful in drawing
talent from many sources, as well as engaging in
a number of collaborations.
Transform the business structure to deliver
sustainable returns
The Company undertakes a variety of internal and
external benchmarking exercises, market testing
and internal comparative analysis across its own
vehicles, which help to identify cost improvement
opportunities for components, systems and sub-
systems. This includes sharing components across
platforms in order to reduce engineering costs
and gain economies of scale, particularly as the
Company looks to enhance global sourcing and to
take advantage of lower-cost bases in countries
such as India and China.
Continuing quality improvement
and customer frst
The Company recognises the importance of
superior vehicle quality and has implemented
programmes, both internally and at suppliers’
operations, focused on improving the quality of
its products, enhancing customer satisfaction and
reducing future warranty costs. Robust procedures
are also in place for ensuring quality control of
outsourced components. Products purchased
from approved sources undergo a supplier quality
improvement process. Assurance of quality is
further driven by the design team, which interacts
with downstream functions like process planning,
manufacturing and supplier management to ensure
quality in design processes and manufacturing.
Furthermore the extensive sales and service
network enables quality and timely customer
service. Through close coordination supported
by IT systems, it is possible to monitor quality
performance in the feld and implement corrections
on an ongoing basis to minimise any inconvenience
to customers. These policies have generated
positive results, and in 2011 and 2012 respectively
Land Rover and Jaguar were ranked the most
improved brands. In the J.D. Power and Associates
APEAL Study ranking of nameplates in the United
States and the Range Rover scored the highest
model score in the 2013 survey.
Year ended 31 March (£ millions) 2014 2013 2012
Proft after tax 1,879 1,214 1,460
Adjustments:
Foreign exchange (gains)/losses – fnancing (87) 37 12
Foreign exchange (gains)/losses – unrealised derivatives (57) 11 47
Unrealised commodity gains/(losses) 7 (1) 15
Share of loss from join ventures 7 12 –
Depreciation and amortisation 875 622 466
Finance income (38) (34) (16)
Finance expenses 185 18 85
Taxation 622 460 26
EBITDA 3,393 2,339 2,095
Memo: EBITDA as historically reported / historical basis 3,294 2,402 2,027
Set forth below is a reconciliation of Proft after tax to EBITDAand the impact of the change in methodology:
In order to better refect core operational performance, foreign exchange gains/(losses) related to
revaluation of trading assets and liabilities and realised gains/(losses) on matured commodity and foreign
exchange hedges are now included within EBITDA. Unrealised gains/(losses) on foreign exchange and
commodity hedges and unrealised gains/(losses) on revaluation of foreign currency debt are excluded
from EBITDA. Previously all elements of foreign exchange gains/(losses) including realised and unrealised
foreign exchange hedging and gains/(losses) were excluded from EBITDA and both realised and unrealised
commodity gains/(losses) were included within EBITDA.
Explanation of Change in EBITDA Methodology
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84 Overview | Brands | Manufacturing | Technology | Responsible business Management report Governance | Financials
CO
2
per mile for model years 2012 through 2016,
and 243 grams per mile for 2017 to 2025 (equivalent
to 151 and 101 grams of CO
2
per kilometre
respectively), as well as Corporate Average Fuel
Economy (“CAFE”) standards for passenger cars of
at least 6.75L/100km by 2020. Additionally, California
and “Green States” Advanced Clean Cars Program
promulgate the Zero Emission Vehicle Regulation
(driving down state greenhouse gas emissions by
the deployment of Plug-in Hybrid Electric Vehicle
and Battery Electric Vehicle technologies) and the
Low Emission Vehicle Regulation 3 (addressing
smog and air quality concerns by reducing emissions
of oxides of nitrogen and hydrocarbons to the lowest
regulated level in the world by 2025). In China,
Stage III fuel consumption Regulation drives a
national average fuel consumption of 6.9L/100km by
2015 and Stage IV drives a national average Fuel
Consumption of 5.0L/100km by 2020. In response
to the severe air quality issues seen in Beijing and
many major cities, Beijing also intend to adopt the
“most stringent” emissions standards in the world
from 2016, based on either Euro 6 or California
LEV3 standards.
To comply with current and future environmental
norms, the Company may incur additional capital
and R&D expenditure to upgrade products and
manufacturing facilities, as well as increased
running costs related to more sophisticated
manufacturing operations. These cost pressures
may be compounded by price pressures as various
states adopt fuel consumption or CO
2
-based
vehicle taxation systems, as well as the threat of
falling behind the competition. Furthermore, if the
Company is unable to develop commercially viable
technologies within the time frames set by the new
standards, the Company could face signifcant civil
penalties or be forced to restrict product offerings
drastically to remain in compliance.
To address this risk, the Company is committed
to innovation, including substantial investment in:
1) lightweighting – such as the pioneering use of all
aluminium construction; 2) powertrain downsizing
and effciency – with the announcement of the all
new “Ingenium” engine design and manufacturing
capability; and 3) electrifcation technologies with
stop/start technology already deployed, hybrid
models due out this year, and future plans for
plug-in hybrid and battery electric vehicles.
Furthermore, the Company has been successful
in securing a derogation in EU, permitted given
sales volumes, of a 25% reduction from 2007
levels by 2015 and by 45% by 2020, equivalent to
179.8 grams and 132 grams of CO
2
per kilometre
respectively. These derogations are based upon the
combined Jaguar Land Rover and Tata Motors feet.
Based on these investments the Company has
been able to develop a vehicle cycle plan compliant
with all known current and expected future
environmental regulations.
Exchange and interest rate fuctuations
The Company runs signifcant foreign currency
exposures versus the Pound Sterling as its
reporting currency. Exposures arise in relation to
the Company’s sales distribution (notably US Dollar
and Chinese Yuan and to a lesser extent Australian
Dollar, Canadian Dollar, Russian Rouble, Brazilian
Real, South African Rand, and South Korean Won)
and also its cost base, with signifcant sourcing from
Euro suppliers.
Currency risk can be considered in terms of short
term, operating risks, i.e. transaction risk where there
may be impact to the income statement from adverse
currency movements. In particular, the Company
is exposed to a strengthening Pound Sterling since
this would diminish the sterling value of overseas
sales. This transaction risk is managed at a cash
fow level through use of forward and option hedging
instruments over a short - to medium-term time
horizon, adhering to treasury policy approved
by the board.
Currency risk can also be considered in terms
of longer-term, strategic risks, termed translation
and economic risks. In this case the Company may
have a structural misalignment in the denomination
of costs and revenues which make it subject to
longer-term foreign exchange trends, beyond
the hedging period. These longer-term risks also
present a competitive disadvantage compared to
other automotive manufacturers that enjoy a more
favourable currency mix. To reduce these
longer-term exposures the Company is diversifying
its cost base and better aligning with its sales
profles, such as manufacturing in China and Brazil.
Furthermore the Company has issued US Dollar
debt which serves as a natural hedge to US Dollar
denominated sales.
The Company is also exposed to changes in
interest rates given variable interest bearing assets
and liabilities. The Company does issue US Dollar
and Pound Sterling denominated fxed coupon debt,
held to maturity and reported at historic cost.
To better understand and manage both currency
and interest rate risk the Company monitors short
and longer term economic trends and conducts
regular sensitivity analysis to assess potential
material impacts on the business.
Input prices
Prices of commodities used in manufacturing
automobiles, including steel, aluminium, copper,
rubber, platinum, palladium and rhodium, can be
volatile. Further, with the global economy coming
out of recession and increasing consumption in the
emerging markets, prices of these commodities
are likely to be volatile and may rise signifcantly.
In addition, an increased price and supply risk could
arise from the supply of rare and frequently sought
raw materials for which demand is high, especially
those used in vehicle electronics such as rare earths,
which are predominantly found in China. In the past,
China has limited the export of rare earths from time
Quality standards
An increasingly sophisticated customer also has
high-quality standards. Not only could this lead
to higher costs to meet expectations, but also
the reputational risk from any perceived or actual
reduction in quality which in turn could materially
affect the Company’s business, results of operations
and fnancial condition.
As a premium manufacturer the Company is
committed to exacting quality standards and the
Company’s product design and development process
is organised, and coordinated with manufacturing
and sales activities, to proactively address any
potential risks to achieving a high-quality product.
Key markets
The Company derives a signifcant proportion of its
revenues from the United Kingdom, Chinese, North
American and continental European markets, and
accordingly is exposed to any decline in demand in
these markets.
This risk is mitigated by avoiding an over-reliance
on any one market, and the Company has achieved
a balanced portfolio of circa 20% revenue from
each of China, UK, US and EU markets, and the
balance from rest of world. A diversifed portfolio will
also be maintained going forwards as the Company
continues its international expansion, with an
increased contribution from high-growth markets
such as India, Brazil and Russia.
The Company recognises and factors into
its planning the risks inherent with increased
international operations including cultural differences,
resourcing availability, political and legal risks (such
as obtaining permits and approvals), as well as
fnancial risks such as tax, exchange controls
and restrictions on repatriation of funds.
Distribution channels/dealer performance
The Company’s products are sold and serviced
through a network of authorised dealers and service
centres across its domestic market, and a network of
distributors and local dealers in international markets.
Any underperformance by dealers, distributors or
service centres could adversely affect our sales and
results of operations.
The Company monitors the performance of its
dealers and distributors and provides them with
support to assist them to perform to its expectations.
The Company has also launched a customer frst
initiative in conjunction with the distribution channels.
Consumer fnance and used car valuations
Automotive sales are supported by various fnancial
services groups, who provide dealer and consumer
fnance. Any reduction in the availability of such
fnance could impact the affordability of vehicles and
therefore impact demand volumes, or price as the
Company may have to offer certain incentives to
support sales. Further, the Company offers residual
value guarantees on the purchase of certain leases
in some markets. The value of these guarantees is
to time. If the Company is unable to fnd substitutes
for such raw materials or pass price increases on
to customers by raising prices, or to safeguard the
supply of scarce raw materials, its vehicle production,
business and results from operations could be affected.
The Company continues to pursue cost reduction,
value engineering and such other initiatives to mitigate
the risk of increasing input costs and supplements
these efforts through the use of fxed price supply
contracts with tenors of up to 12 months for energy
and commodities wherever possible. To manage
commodity price risk, the Company uses fxed price
and/or derivative contracts where appropriate.
COMPANY SPECIFIC RISKS
Strategy and customer demand
Over the past few years, the global market for
automobiles, particularly in established markets,
has been characterised by increasing demand for
more environmentally friendly and technologically
advanced vehicles. Evolving consumer preferences
not only warrant increased costs of marketing,
research and development, but fundamentally threaten
sales ambition to the extent that the Company’s
products may no longer be desirable. While this risk
is compounded by the Company’s relatively niche
positioning in premium performance car and all-terrain
vehicle segments, it will be mitigated as it realises
its growth ambitions and broadens its portfolio with a
series of new product launches.
Core to the Company’s strategy is innovation
and investment to develop new products in new
and existing segments with new powertrains and
technologies to meet customer aspirations and
regulatory requirements. The Company considers
technological leadership to be a key factor in its
success, and continues to devote signifcant resources
to upgrading its capabilities, particularly through
its advanced engineering and design centres. The
Company is involved in a number of advanced
research consortia that bring together leading
manufacturers, suppliers and academic specialists in
the United Kingdom, supported by funding from the
Government’s Technology Strategy Board. An example
of the development capabilities is Jaguar’s aluminium
body architecture, which has been extended for use
in Land Rover models such as the Range Rover and
Range Rover Sport. The Company has also made
signifcant investment in aerodynamics and powertrain
technologies, including an engine design and
manufacturing centre in Wolverhampton, UK, which
will produce the frst of the “Ingenium” family of engines
this year. Finally, the Company has recently announced
its frst hybrid vehicle and also is investing in electric
vehicles. Overall the Company is confdent that it will
continue to offer attractive, competitive products that
satisfy regulatory requirements.
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dependent on used car valuations in those markets
at the end of the lease, which is subject to change.
Consequently, the Company may be adversely
affected by movements in used car valuations.
The Company has robust arrangements in place
with: Black Horse (part of the Lloyds Bank Group)
in the UK, FGA Capital (a joint venture between
Fiat Auto and Credit Agricole) in Europe and Chase
Auto Finance in the USA for the provision of dealer
and consumer fnancial services products. Jaguar
Land Rover has similar arrangements with local auto
fnancial services providers in other key markets.
Supply chain
The Company relies on third parties for sourcing
raw materials, parts and components used in the
manufacture of its products. The Company’s ability
to procure supplies in a cost effective and timely
manner or at all is subject to various factors, some of
which are not within its control. While the Company
manages its supply chain as part of its supplier
management process, any signifcant problems with
suppliers or shortages of essential raw materials in
the future could have an impact on its operations.
Risks of disruption due to man-made or natural
disasters, could impact the supply chain. A natural
disaster could cause suppliers to halt, delay or
reduce production, which could reduce or disrupt
the supply of such raw materials, pre-products and
vehicle parts and/or an increase in their cost. Any
signifcant interruption in the supply of key inputs
could adversely affect the Company’s ability to
maintain its current and expected levels of production
and therefore negatively affect its revenues.
In managing a complex supply chain the
Company has developed close relationships with
both direct and indirect suppliers, and continues
to develop long-term strategic relationships with
suppliers to support the development of parts,
technology and production facilities.
The introduction of in-house engine manufacture
will enable greater fexibility in demand planning and
reduce the reliance upon a single supplier.
Manufacturing and engineering
The Company could experience disruption to its
manufacturing, design and engineering capabilities
for a variety of reasons including, extreme weather,
fre, theft, system failures, natural calamities,
mechanical or equipment failures and similar risks.
Any signifcant disruptions could adversely affect the
Company’s ability to design, manufacture and sell its
products and, if any of those events were to occur,
it cannot be certain that it would be able to shift its
design, engineering and manufacturing operations
to alternative sites in a timely manner or at all. Any
such disruption could therefore materially affect
business, fnancial condition or results of operations.
Furthermore, there is the risk that manufacturing
capacity does not meet, or exceeds, sales demand
thereby compromising business performance and
without any near term remedy given the time frames
and investments required for any change.
The Company currently has three manufacturing
facilities and two design and engineering centres,
all of which are located in the United Kingdom.
The Solihull site currently manufactures Land
Rover and Range Rover products, except the
Freelander and Range Rover Evoque, which are
produced in Halewood. The Castle Bromwich site,
is used to produce all Jaguar models. It is expected
that these sites will become more cross-branded
to provide fexibility in line with the adoption of a
suite of common architectures across the various
products. For example the Solihull site, which has
been extended with a new bodyshop and assembly
hall, will be able to accommodate multiple models off
the all-new aluminium architecture. Also in the UK,
the Company is investing in a new engine plant in
Wolverhampton in order to develop and build a family
of energy-effcient advanced “Ingenium” engines.
As well as manufacturing fexibility the Company
also strives to diversify its manufacturing locations.
It currently benefts from third-party facilities
overseas that build a number of its vehicles from
Complete Knock Down (CKD) kits, such as in
India, where the Freelander and XF vehicle kits
are assembled by Tata Motors in its Pune facility.
Beyond this the Company has invested in a joint
venture with Chery, located in China, to manufacture
products for the domestic market during FY15.
Additionally, the Company has announced that
it will build a manufacturing facility in Brazil with
production intended in FY17. Finally, a Letter of
Intent has been signed with the National Industrial
Clusters Development Program (NICDP) in the
Kingdom of Saudi Arabia with respect to the
set-up of an automotive facility. Risks inherent in
these new ventures is being managed from the
outset, particularly to ensure strategic alignment
with partners, and that robust and appropriate
governance and procedure is established.
Regulation of production facilities
The Company’s production facilities are subject to
a wide range of environmental emulations, a number
of which require a permit or licence to operate.
Such regulations address for example emissions
to atmosphere, energy use, the consumption and
subsequent discharge of water, the handling and
disposal of waste, management of refrigerants
and the storage and use of fuels. The regulation
of emissions associated with energy use has seen
some of the most recent environmental regulatory
changes. To that end the Company has a Climate
Change Agreement covering the production
operations, permits under the EU Emissions Trading
Scheme and is registered as a participant under the
Carbon Reduction Commitment Energy Effciency
Scheme in the UK.
appropriate actions to remedy issues across the
feet, and to manage recalls and minimise warranty
claims. The Company also develops dealer technical
updates to provide awareness of known vehicle
faults, which is in line with general industry practices.
Operational risks, including information
technology
Operational risk is the risk of loss resulting from
inadequate or failed internal processes, people and
systems or from external events. This includes,
among other things, losses that are caused by a
lack of controls within internal procedures, violation
of internal policies by employees, disruption or
malfunction of IT systems, computer networks
and telecommunications systems, mechanical or
equipment failures, human error, natural disasters
or malicious acts by third parties. Like any other
business with complex manufacturing, research,
procurement, sales and marketing and fnancing
operations, the Company is exposed to a variety
of operational risks and, if the protection measures
put in place prove insuffcient, results of operations
and fnancial conditions can be materially affected.
To mitigate these operating risks the Company
has implemented a robust control framework,
including policy, process and system controls,
delegation of authorities, governance and assurance.
A comprehensive disaster recovery plan is in place,
including back-up systems. The control environment
is monitored by the Company’s Internal Audit function
and is Sarbanes Oxley (S-Ox) compliant.
Patent protection and intellectual property
Although the Company does not regard any of its
businesses as being dependent upon any single
patent or related group of patents, its inability
to protect this intellectual property generally,
or the illegal breach of some or a large group
of its intellectual property rights, would have a
materially adverse effect on operations, business
and/or fnancial condition. The Company owns
or otherwise has rights in respect of a number of
patents and trademarks relating to the products that
it manufactures, which have been obtained over a
period of years. In connection with the design and
engineering of new vehicles and the enhancement
of existing models, the Company seeks to regularly
develop new technical designs for use in its
vehicles. It also uses technical designs which are
the intellectual property of third parties with such
third parties’ consent. These patents and trademarks
have been of value in the growth of the Company’s
business and may continue to be in the future.
The Company may be affected by restrictions
on the use of intellectual property rights held by
third-parties’ and so may be held legally liable for
the infringement of the intellectual property rights
of others in its products.
Some of the Jaguar Land Rover sites are in
locations subject to former industrial activity. Where
contaminants are identifed that require treatment
strategies are developed to manage the issue.
The Company may take fnancial responsibility
for the improvements necessary even where the
contamination was as a result of operations prior to
its occupation.
More stringent and wider reaching environmental
regulation can result in increased costs to: (i) operate
and maintain production facilities, (ii) install new
emission controls, (iii) trade or purchase allowances
associated with emissions from energy use, (iv)
administer and manage greenhouse gas emissions
operations. The Company may also be exposed to
risk and cost of non-compliance.
To mitigate the risk the Company is committed
to maintaining the highest operating standards
to ensure compliance with current and future
environmental regulation. The Company also
keeps abreast of regulatory developments so as
to manage proactively. This is evidenced in the
continued certifcation to the international standard
for environmental management systems ISO 14001.
Additionally, in 2013 the Company was awarded
the prestigious Business in the Community (BITC)
Responsible Business of the Year. Recognising,
among others, the Company’s investments in
environmental performance of cars, facilities and
logistics, Jaguar Land Rover is the UK’s frst-ever
manufacturing Company to win the UK’s most
highly regarded CSR award.

Product liability, warranties and recalls
The Company is subject to risks and costs associated
with product liability, warranties and recalls in
connection with performance, compliance or safety-
related issues affecting its products. In addition,
product recalls can cause the Company’s consumers
to question the safety or reliability of its vehicles and
harm reputation and hence impact demand.
Furthermore, the Company may also be subject
to class actions or other large-scale product liability
or other lawsuits. The use of shared components
in vehicle production increases this risk because
individual components are deployed in a number
of different models across the Company’s brands.
Any costs incurred or lost sales caused by product
liability, warranties and recalls could materially
adversely affect business.
To mitigate this risk the Company does not
compromise high-quality standards. It also monitors
its warranty performance very closely and ensures
that any issues that do arise are fully and timely
addressed, including appropriate actions to
manage faults and recalls.
The Company constantly monitors vehicles in
service through regular data feeds from dealerships
globally in order to identify trends and customer
satisfaction. This helps the Company to put in place
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Credit and liquidity risks
The Company’s main sources of liquidity are
cash generated from operations and external
debt, including term debt, committed revolving
credit facilities, and various other factoring and
working capital facilities. Historically the Company
has also received fnancial support in the form of
loans and preference shares from the Company’s
parent, Tata Motors Ltd. Adverse changes in the
global economic and fnancial environment may
result in lower consumer demand for vehicles, and
prevailing conditions in credit markets may adversely
affect both consumer demand and the cost and
availability of fnance for the Company’s business
and operations. If the global economy goes back into
recession and consumer demand drops, at the same
time as the supply of external fnancing becomes
limited, the Company may again face signifcant
liquidity risks.
As at 31 March 2014, on a consolidated level,
the Company had cash and cash equivalents of
£2,260 million and short-term deposits of between
3-12 months’ duration of £1,199 million as well as
undrawn committed facilities of £1,337 million. The
Company generally pools cash from its subsidiaries
to Jaguar Land Rover Limited, the primary operating
Company in the Group, until such time as the
cash is used for dividends. Good progress has
been made to reduce local cash balances, which
as at 31 March 2014 amount to £536 million. All
cash is invested according to strict credit criteria
and actively monitored by Group Treasury.
Labour relations
The Company employed an average of 27,953
staff across its operations. There is the risk that the
Company may face labour unrest, at its own facilities
or those of its suppliers, which may delay or disrupt
operations in the affected regions, including the
sourcing of raw materials and parts, the manufacture,
sales and distribution of vehicles and the provision
of services. If work stoppages or lock-outs at the
Company’s facilities or at the facilities of major
suppliers occur or continue for a long period of time,
the Company’s business, fnancial condition and
results of operations may be materially affected.
To reduce the likelihood of any such action, the
Company manages union relations with proactive
consultation and maintains good labour relations
with its employees.
Key personnel
The Company believes that its growth and future
success depend in large part on the skills of its
workforce, including executives and offcers,
designers and engineers. The loss of the services
of one or more of these key employees could impair
the Company’s ability to continue to implement its
business strategy. The Company’s success also
depends, in part, on its continued ability to attract
and retain experienced and qualifed employees,
particularly qualifed engineers with expertise in
automotive design and production. The competition
for such employees is intense, and the Company’s
inability to continue to attract, retain and motivate
employees could adversely affect its business and
plans to invest in the development of new designs
and products.
The Company’s Human Resources function has
developed policies and procedures to ensure that
it remains competitive in the labour market, both in
terms of attracting and retaining key personnel, and
also to ensure that the business growth ambition can
be effectively resourced across all its facilities.
Pension obligations
The Company provides post-retirement and pension
benefts to employees, some of which are defned
beneft plans. The Company’s pension liabilities are
generally funded and the defned beneft pension
plans’ assets are particularly signifcant. As part of
the Company’s Strategic Business Review process,
the Company closed the Jaguar and Land Rover
defned beneft pension plans to new joiners from
19 April 2010. All new employees since that date
have joined a new defned contribution pension plan.
Under the arrangements with the trustees of
the defned beneft pension schemes, an actuarial
valuation of the assets and liabilities of the schemes
is undertaken every three years. The most recent
valuation, as at April 2012 and completed in 2013,
indicated a shortfall in the assets of the schemes
as at April 2012, versus the actuarially determined
liabilities as at April 2012, of £702 million.
As part of the valuation process the Company
agreed a schedule of contributions which, together
with the expected investment performance of the
assets of the schemes, is expected to eliminate the
defcit by 2022. This included an incremental defcit
contribution of £100 million made in March 2013.
The Company also reached agreement with the
trustees to cancel security arrangements in favour
of the pension fund trustees agreed in prior valuation
as of April 2009. This security was released in March
2013. In March 2014 an advanced payment of
£100 million was made to the defned beneft pension
arrangements. The next actuarial valuation will be as
at April 2015 and would be expected to be completed
during 2016.
The Company monitors the asset allocation of
the plans and considers investment performance
against expectations regularly. The trustee employs
a reputable investment consultant to advise them
on the plans’ asset allocation with a view to meeting
their return objectives with the minimum level of risk.
The Company proactively develops approaches, in
tandem with the Trustee, to manage the asset-liability
risks it faces although lower returns on pension fund
assets, changes in market conditions, changes in
interest rates, changes in infation rates and adverse
changes in other critical actuarial assumptions, may
impact the Company’s pension liabilities or assets
and consequently increase funding requirements,
which in future could adversely affect the Company’s
fnancial condition and results of operations.
Insurance coverage
The Company maintains insurance coverage for
people, property and assets, including construction
and general, auto and product liability, in accordance
with treasury policy. Nevertheless there is the risk
that claims made under any policy may not be
satisfed fully or timely. There is also the risk that
insurance coverage could be insuffcient to fully
reimburse the Company for all losses arising for any
particular incident or that insurance premiums could
increase substantially.
To reduce the risk of adverse fnancial impact the
Company only places insurance with counterparties
of good standing and credit, and ensures competitive
pricing through periodic competitive tendering/
negotiation. The Company also periodically conducts
risk assessment and asset valuation exercises.
Corporate governance and public disclosure
The Company is affected by the corporate
governance and disclosure requirements of the
Company’s own listing on the Euro MTF market
and also of its parent, Tata Motors Limited, which is
listed on the Bombay Stock Exchange, the National
Stock Exchange of India and the New York Stock
Exchange (the “NYSE”). Changing laws, regulations
and standards relating to accounting, corporate
governance and public disclosure, including the
Sarbanes Oxley Act of 2002 and SEC regulations,
Securities and Exchange Board of India (the “SEBI”)
regulations, the NYSE listing rules and Indian
stock market listing regulations, have increased the
compliance complexity for the parent company and,
indirectly, for the Company. These new or changed
laws, regulations and standards may lack specifcity
and are subject to varying interpretations. Their
application in practice may evolve over time as new
guidance is provided by regulatory and governing
bodies. The Company is committed to maintaining
high standards of corporate governance and public
disclosure. However, the efforts to comply with evolving
laws, regulations and standards in this regard have
resulted in, and are likely to continue to result in,
increased general and administrative expenses.
In addition, there is the risk of non-compliance and
the penalties that may ensue.

Ownership structure
The Company is an indirect, wholly-owned subsidiary of
Tata Motors Limited through TML Holdings PTE. Limited
(Singapore) and accordingly is under the ultimate
control and infuence of its parent, as per the delegation
of authorities and including the election of Directors
and approval of signifcant corporate transactions.
By order of the Board
Dr Ralf Speth, Director
Jaguar Land Rover Automotive plc
28 July 2014
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Directors’
report
he Directors present their report
and the audited fnancial statements
of the Company for the year ended
31 March 2014. Jaguar Land Rover
Automotive plc (“Jaguar Land Rover”)
is a public limited company incorporated under the
laws of England and Wales. The business address
of the Directors and senior management of Jaguar
Land Rover is Abbey Road, Whitley, Coventry,
CV3 4LF, United Kingdom.
Future developments
Future developments impacting Jaguar Land Rover are
disclosed in the Strategic report on pages 74 to 89.
Dividends
The Directors recommended a dividend of
£150 million (£0.10 per ordinary share), (2013:
£150m, £0.10 per ordinary share) paid in
June 2014.
Directors
Biographies of the Directors currently serving on the
Board are set out on pages 94 and 95.
Directors’ indemnities
The Company has made qualifying third-party
indemnity provisions for the beneft of its Directors,
which were made during the year and remain in
force at the date of this report.
Corporate governance statement
The corporate governance statement is set out on
pages 98 to 100 and is incorporated by reference
into this report.
Charitable donations
The Company and those that work for it are
involved in many charitable activities across the
globe. It is the Company’s strong belief that it
should play an active role in the communities, both
local and worldwide. Given the number of charities
and the need to assess the impact of any donations
and potential tax consequences, the Company
can only make contributions to a limited number
of charitable causes that have been formally
approved. As a result, no one is authorised to
make any charitable contributions on behalf of the
Company without the necessary approval.
Political involvement and contributions
The Company respects an employee’s right to
use their own time and resources to participate as
individual citizens in political and governmental
activities of their choice. The Company itself
operates under legal limitations on its ability to
engage in political activities, and even where there
are no legal restrictions, the Company does not
typically make contributions to political candidates
or political parties or permit campaigning on its
property by political candidates (including those
who work for Jaguar Land Rover) or persons
working on their behalf. There have not been any
political donations in any of the periods covered by
these fnancial statements.
Employee information
The average number of employees within the Group
is shown in note 5 to the fnancial statements on
page 119.
Apart from ensuring that an individual has the
ability to carry out a particular role, the Company
does not discriminate in any way. It endeavours
to retain employees if they become disabled,
making reasonable adjustments to their role and,
if necessary, looking for redeployment opportunities
within the Company. The Company also ensure
that training, career development and promotion
opportunities are available to all employees
irrespective of gender, race, age or disability.
Research and development
The Company is committed to a continuing
programme of expenditure on research and
development activities as disclosed on pages 40
to 47 of the Annual Report.
Going concern
The Company’s business activities, together with
the factors likely to affect its future development,
performance and position are set out in the
Strategic report. The fnancial position of the
Company is described on pages 74 and 78.
In addition, in note 33 to the fnancial statements
includes the Company’s objectives, policies and
processes for managing its exposures to interest
rate risk, foreign currency risk, credit risk and
liquidity risk. Details of the Company’s fnancial
instruments and hedging activities are also provided
in note 33.
The Board has a reasonable expectation that
the Company has adequate resources to continue
in operational existence for the foreseeable future.
Accordingly, the fnancial statements set out on
pages 104 to 167 have been prepared on the
going concern basis.
Financial instruments
The disclosures required in relation to the use of
fnancial instruments by the Company together with
details of our treasury policy and management are
set out in note 33 to the fnancial statements.
Auditors
Deloitte LLP have indicated their willingness to
continue as auditors and their reappointment has
been approved by the Audit Committee.
Events after the balance sheet date
Full details of signifcant events since the
balance sheet date can be found in note 38
of the fnancial statements.
Statement of Directors’ responsibilities
in respect of the Directors’ report and the
fnancial statements
The Directors are responsible for preparing the
Annual Report and the fnancial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
fnancial statements for each fnancial year. Under
that law the Directors have elected to prepare the
fnancial statements in accordance with International
Financial Reporting Standards (IFRSs) as adopted
by the European Union. Under Company law the
Directors must not approve the fnancial statements
unless they are satisfed that they give a true and
fair view of the state of affairs of the Company and
of the proft or loss of the Company for that period.
In preparing these fnancial statements, International
Accounting Standard 1 requires that Directors:
• properly select and apply accounting policies;
• present information, including accounting policies,
in a manner that provides relevant, reliable,
comparable and understandable information;
• provide additional disclosures when compliance
with the specifc requirements in IFRS are
insuffcient to enable users to understand the
impact of particular transactions, other events and
conditions on the entity’s fnancial position and
fnancial performance; and
• make an assessment of the Company’s ability to
continue as a going concern.
The Directors are responsible for keeping adequate
accounting records that are suffcient to show and
explain the Company’s transactions and disclose
with reasonable accuracy at any time the fnancial
position of the Company and enable them to
ensure that the fnancial statements comply with the
Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence
for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
The Directors are responsible for the maintenance
and integrity of the corporate and fnancial
information included on the Company’s website.
Legislation in the United Kingdom governing the
preparation and dissemination of fnancial statements
may differ from legislation in other jurisdictions.
Statement of disclosure of information to
auditors
In the case of each of the persons who are Directors
at the time when the report is approved under
section 418 of the Companies Act, 2006 the following
applies: so far as the Directors are aware, there is
no relevant audit information of which the Group’s
auditors are unaware; and the Directors have taken
all the steps that they ought to have taken as a
Director in order to make themselves aware of any
relevant audit information and to establish that the
Group’s auditors are aware of that information.
T
Acknowledgement
The Directors wish to convey their appreciation to
all of the employees for their continued commitment,
effort and contribution in supporting the delivery
of the Group’s record performance. The Directors
would also like to extend thanks to all other key
stakeholders for the continued support to the
Company and their confdence in its management.
Directors’ responsibility statement
We confrm to the best of our knowledge the
fnancial statements, prepared in accordance with
International Financial Reporting Standards as
approved by the EU, give a true and fair view of the
assets, liabilities, fnancial position and proft or loss
of the Company and the undertakings included in
the consolidation taken as a whole.
By order of the Board
Dr Ralf Speth, Director
Jaguar Land Rover Automotive plc
28 July 2014
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Financial
Discussion
Governance
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94 Overview | Brands | Manufacturing | Technology | Responsible business | Management report Governance Financials
Board of
Directors
DR RALF SPETH
Director and Chief Executive Offcer
ANDREW M ROBB
Director
NASSER MUNJEE
Director
CHANDRASEKARAN
RAMAKRISHNAN
Director
CYRUS P MISTRY
Non-Executive Director and Chairman

Dr Ralf Speth was appointed to the post
of Chief Executive Offcer at Jaguar Land
Rover on 18 February 2010. Prior to this
appointment, Ralf was Head of Global
Operations at the international industrial
gases and engineering company, The Linde
Group. Ralf started his business career at
BMW, leaving after 20 years, followed by time
as Director of Production, Quality and Product
Planning at Ford’s Premier Automotive Group.
Ralf earned a Doctorate of Engineering and
is an Industrial Professor at the University of
Warwick.

Andrew Robb was appointed to the Jaguar
Land Rover board in 2009. Prior to joining
Jaguar Land Rover, Andrew was a Director of
Pilkington Group plc until 2003, having held
the position of Finance Director from 1989
to 2001. Andrew was previously Finance
Director of the Peninsular and Oriental Steam
Navigation Co from 1983. Andrew currently
holds a number of other directorships,
including as Non-Executive Independent
Director of Tata Steel Limited since 2007
and as Chairman of the Board of Tata Steel
Europe Limited (formerly Corus Group plc)
where he has been an Independent Director
since 2003.

Nasser Munjee was appointed to the
Board of Directors of Tata Motors Limited
with effect from 27 June 2008 and was
appointed to the Board of Directors of Jaguar
Land Rover on 2 February 2012. Nasser
served for over 20 years at the Housing
Development Finance Corporation (HDFC)
in India in various positions including as its
Executive Director. Nasser is also Chairman
of the Aga Khan Rural Support Programme,
Muniwarabad Charitable Trust and other
Aga Khan institutions and was the President
of the Bombay Chamber of Commerce and
Industry and has also served on numerous
Government Task Forces on Housing and
Urban Development. Nasser is also chairman,
board director and a member of the board of
trustees of several multinational companies,
trusts and public and private institutions.
Nasser holds a Bachelor’s degree and a
Master’s degree from the London School of
Economics.

Chandrasekaran Ramakrishnan has been the
Chief Financial Offcer at Tata Motors Limited
since 18 September 2007 and serves as its
President. Chandrasekaran is responsible
for Finance, Accounts, Taxation, Business
Planning, Investor Relations, Treasury, CRM
& DMS and I.T. Chandrasekaran has also
served as a Vice President of the Chairman’s
Offce and is the Executive Director of
Finance. Chandrasekaran joined Tata Motors
Limited in 1980, where he handled corporate
treasury and accounting functions as well as
management accounting. Chandrasekaran
joined Jaguar Land Rover’s board in 2012.
Chandrasekaran holds a Bachelor’s degree
in Commerce and is a Chartered Accountant
and a Cost Accountant.

Cyrus Mistry is the Chairman of Tata Sons.
He has been a Director of Tata Sons since
2006. He is also Chairman of all major
Tata companies, including Tata Industries,
Tata Steel, Tata Motors, Tata Consultancy
Services, Tata Power, Tata Teleservices,
Indian Hotels, Tata Global Beverages and
Tata Chemicals. Cyrus was appointed as a
Director of Tata Motors with effect from
29 May 2012 and took over as Chairman from
Mr Ratan N. Tata on his retirement with effect
from 28 December 2012. Prior to this Cyrus
was Managing Director of the Shapoorji
Pallonji Group. Cyrus is a graduate of civil
engineering from the Imperial College London
(1990) and has an MSc in management from
the London Business School (1997). Cyrus
was recognised with an Alumni Achievement
Award by the London Business School.
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Executive
Committee
members
Appointed Responsibility/experience
DR RALF SPETH
Director and Chief
Executive Offcer
February 2010 Dr Speth joined Jaguar Land Rover as Chief Executive Offcer in 2010, previously
he was Head of Global Operations of The Linde Group. Dr Speth brings signifcant
automotive experience to Jaguar Land Rover having worked for BMW and more
recently Ford’s Premier Automotive Group as Director of Production, Quality and
Product Planning.
KEITH BENJAMIN
Group Legal Director
February 2009 Keith is responsible for Jaguar Land Rover’s legal and compliance functions, including
risk assessment, compliance and corporate governance initiatives.
IAN CALLUM
Design Director, Jaguar
June 2008 Ian joined Jaguar in 1999 and is responsible for the new design language created over
the past decade. Ian has over 34 years’ experience in the automotive industry having
previously spent 12 years at Ford, working in a variety of roles and locations, before
moving to TWR in Oxford as Chief Designer in 1990.
JOHN EDWARDS
Managing Director Individual,
Products Division
October 2013 John has global responsibility for designing and creating a portfolio of brand extending
products. Previously John was Global Brand Director, Land Rover.
DR WOLFGANG EPPLE
Director Research
and Technology
June 2013 Dr Epple joined Jaguar Land Rover in June 2012 bringing with him 28 years of
experience in automotive product development, production and quality assurance.
Most recently he worked for PROTON, Malaysia’s leading auto manufacturer.
Before that Dr Epple spent some 24 years with BMW, including Director of Quality and
Director for the BMW 3 series. He also served as CEO and President of BMW Hybrid
Technology Corporation in the US.
ANDY GOSS
Group Sales Operations Director
October 2013 Andy has responsibility for global sales and customer service. He joined Jaguar Land
Rover from Porsche where he was Chief Executive Offcer of Porsche Cars, Great
Britain. Previously Andy was Sales Director for Toyota, after holding positions at
Citroen, Nissan and Austin Rover.
KENNETH GREGOR
Chief Financial Offcer
June 2008 Kenneth is Chief Financial Offcer of Jaguar Land Rover, after previously serving as
Group Financial Controller. Kenneth joined the Company in 1997, having previously
worked for HSBC Investment Banking in Mergers and Acquisitions.
ADRIAN HALLMARK
Group Strategy Director
November 2013 Adrian joined Jaguar Land Rover in 2010 as Global Brand Director, and has since
been appointed Group Strategy Director. Adrian brings more than 29 years’ automotive
experience, 18 years at Board level, with Porsche, Bentley, Volkswagen and most
recently SAAB Automobil AB. Adrian’s career has had specifc emphasis on Strategy,
Brand Management, Financial and General Management.
IAN HARNETT
Director of Purchasing
August 2009 Ian was appointed Director of Purchasing, Jaguar Land Rover in August 2009.
Previously Ian has worked for BMW, notably leading the Land Rover purchasing team
out of BMW ownership following the acquisition in 2000.
PHIL HODGKINSON
Director Global
Business Expansion
June 2012 Phil oversees the realisation of the Company’s international ambition with responsibility
for ensuring the effective co-ordination and delivery of product programmes in countries
such as China, Brazil and India. Phil previously worked for Ford Motor Company.
Appointed Responsibility/experience
BOB JOYCE
Director Product
Creation and Delivery
June 2008 Bob is Executive Director, Product Creation and Delivery for Jaguar Land Rover.
Bob joined Jaguar Land Rover from Ford, which he joined in 2001. Bob has over 37
years’ experience in the automotive industry, 27 of which in Jaguar Land Rover. Bob
previously worked for Rover and BMW, where he was involved in the highly successful
new Mini project.
SIMON LENTON
HR Director
January 2013 Simon joined Jaguar Land Rover as Director of Human Resources in 2013, with over
30 years’ experience in management and human resources.
GERRY McGOVERN
Design Director, Land Rover
June 2008 As Design Director and Chief Creative Offcer for Land Rover, Gerry creates some
of the world’s most distinctive and desirable vehicles and is recognised as one of
the world’s leading automotive designers. Gerry has more than 35 years’ automotive
experience having previously worked at Ford Motor Company, Rover, Peugeot
and Chrysler.
GRANT McPHERSON
Director of Quality
and Automotive Safety
October 2013 Grant is responsible for leading signifcant improvement in quality in all aspects of our
vehicles. Grant joined Jaguar Land Rover in May 2011 bringing with him a wealth of
manufacturing experience gathered in the UK manufacturing industry, including Honda
where he was appointed Quality and New Model Director.
FIONA PARGETER
Head of Global PR
Communications
November 2012 Fiona leads the global PR function at Jaguar Land Rover at a very busy and exciting
time for the business. Fiona brings over 20 years of experience to the role having
previously worked for Ford, Volvo and Nissan.
PHIL POPHAM
Group Marketing Director
October 2013 Phil is responsible for all global marketing activity and his role encapsulates brand
positioning; current and future product planning; marketing communications; brand
experience strategies and supporting future growth. Phil has over 25 years’ automotive
experience, including time with Volkswagen.
WOLFGANG STADLER
Director of Manufacturing
December 2013 Wolfgang is responsible for Jaguar Land Rover’s global manufacturing operations.
Wolfgang joined the Company from BMW Group where he most recently held the
position of Senior Vice President, BMW Plant Dingolfng.
JEREMY VINCENT
Chief Information Offcer
August 2008 Jeremy was appointed to the position of Chief Information Offcer in August 2008. Prior
to this he worked with the Birds Eye Igloo Group as they separated from their former
parent group, Unilever.
MIKE WRIGHT
Executive Director,
Head of Government affairs
December 2010 Mike’s focus is on developing corporate strategies to deliver the Company’s
growth ambitions. His direct responsibilities include leadership of Product
and Business Planning; Global Financial Services; Government Affairs; and
Corporate & Social Responsibility.
DR WOLFGANG ZIEBART
Director Group Engineering
August 2013 Dr Ziebart was appointed Director Group Engineering Jaguar Land Rover on 1 August
2013. Dr Ziebart brings signifcant experience to Jaguar Land Rover, including 23 years at
BMW where he most recently served as a member of the Board responsible for Product
Development and Procurement. Dr Ziebart was also a member of the board at Continental,
and previously CEO of Infneon semi-conductors.
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he Board has delegated powers to
the Committees of the Board through
written/stated terms of reference and
oversees the functioning operations
of the Committees through various
circulars and minutes. The Board also undertakes
the Company’s subsidiaries’ oversight functions
through review of their performance against their set
targets, advises them on growth plans and, where
necessary, gives strategic guidelines.
Board practices
The Board consists of one executive Director and
four non-executive Directors of whom two are
independent non-executive Directors (see page
94 to 95 for Director Biographies).
The roles of the Chairman and the Chief
Executive Offcer are distinct and separate, with
appropriate powers being delegated to the Chief
Executive Offcer to perform the day-to-day
activities of the Company.
The Board, along with its Committees, provides
leadership and guidance to the Company’s
management, particularly with respect to corporate
governance, business strategies and growth plans,
the consideration of risks and their mitigation
strategies, entry into new businesses, product
launches, demand fulflment and capital expenditure
requirements and the review of the Company’s
plans and targets.
The Board has delegated powers to the
Committees of the Board through written/stated
terms of reference and oversees the functioning
operations of the Committees through various
circulars and minutes. The Board also undertakes
the Company’s subsidiaries’ oversight functions
through review of their performance against their
set targets, advises them on growth plans and,
where necessary, gives strategic guidelines.
Audit Committee
The Audit Committee independently reviews the
adequacy and effectiveness of risk management
across the Company together with the integrity of
the fnancial statements, including a review of the
signifcant fnancial reporting judgements contained
in them. It is comprised of Andrew Robb (Chairman),
Chandrasekaran Ramakrishnan and Nasser Munjee,
who have recent and relevant fnancial experience.
The scope of the Audit Committee includes:
• Reviewing the annual and interim fnancial
statements prior to submission to the Board and
the shareholder, with particular reference to:
• Critical accounting policies and practices and
any changes to them, related party transactions
and contingent liabilities.
• Audit, legal and tax and accounting updates.
• Unusual or exceptional transactions.
• Major accounting entries involving estimates
based on the exercise of judgement,
including provisions for impairment and
other major items.
• The auditor’s report and any qualifcations or
emphases therein, taking particular note of any
audit differences or adjustments arising from
the audit.
• Reviewing the effectiveness of fnancial reporting,
internal control over fnancial reporting and
risk management procedures of the Company
(which extends to all associates and joint venture
companies). Such review considering compliance
with the provisions of Section 404 of the Sarbanes
Oxley Act and other relevant regulations and
disclosures from the Chief Executive Offcer or
Chief Financial Offcer. Also, the review should pay
particular reference to any material weaknesses or
signifcant defciencies in the design or operation
of the Company’s internal control over fnancial
reporting that are reasonably likely to adversely
affect the Group’s ability to record, process and
report fnancial data and to receive reports from
the external and internal auditors with respect to
these matters.
• Assessing the reliability and integrity of the Group’s
accounting policies and fnancial reporting and
disclosure practices and processes.
In relation to internal audits, the Audit Committee
has responsibility to:
• Review on a regular basis the adequacy of internal
audit functions, including the internal audit charter,
the structure of the internal audit department,
approval of the audit plan and its execution,
staffng and seniority of the offcial heading the
department, reporting structure, budget, audit
coverage and frequency;
• Review the regular internal reports to management
prepared by the internal audit department as well
as management’s response thereto;
• Review the fndings of any internal investigations
by the internal auditors into matters where there
is suspected fraud or irregularity or a failure of
internal control systems of a material nature and
reporting the matter to the Board;
• Discuss with internal auditors any signifcant
fndings and follow-up thereon; and
• Review internal audit reports relating to internal
control weaknesses.
In relation to external auditors, the Audit
Committee has responsibility to:
• Oversee the appointment of the external auditors, to
approve their terms of engagement, including fees,
the nature and scope of their work; and consider
when the external audit should be put out to tender;
• Review their performance and the effectiveness
of the audit every year and to pre-approve
any provision of non-audit services by the
external auditors;
• Review the signifcant audit issues with the
external auditors and how they have been
addressed in the fnancial statements;
• Establish a clear hiring policy in respect of
employees or former employees of the external
auditors and monitor the implementation of that
policy; and
• Evaluate the external auditors by reviewing
annually the frm’s independence, its internal
quality control procedures, any material issues
raised by the most recent quality control or peer
review of the frm, and the fndings of any enquiry
or investigation carried out by government or
professional bodies with respect to one or more
independent audits carried out by the frm within
the last fve years.
In relation to subsidiary company oversight, the
Audit Committee has responsibility to:
• Oversee the operation and maintenance of
procedures for receiving, processing and recording
complaints regarding accounting, internal controls
or auditing matters and for the confdential
submission by employees of concerns regarding
allegedly questionable or illegal practices.
The Audit Committee shall ensure that these
arrangements allow independent investigation of
such matters and appropriate follow up action;
• Oversee controls designed to prevent fraud
and to review all reports of instances of fraud;
• Satisfy itself that Company policy on ethics is
followed and to review any issues of confict of
interest, ethical conduct or compliance with law,
including competition law, brought to its attention;
• Oversee legal compliance in the
Company’s Group;
• Conduct and supervise such investigations or
enquiries as the Board may require.
Remuneration Committee
The Remuneration Committee is comprised of
Cyrus Mistry (Chairman) and Andrew Robb. The
Remuneration Committee may, at the Company’s
expense, obtain outside legal or other independent
professional advice and secure the attendance of
outsiders with relevant experience and expertise
if it considers this necessary. The scope of the
Remuneration Committee is to review and approve
Corporate
governance
T
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Risk and Assurance Committee
The Risk and Assurance Committee is responsible
for the ongoing development and co-ordination
of the system of risk management as well as the
consolidation, challenge and reporting of all risk
management information. It provides support and
guidance on the application of risk management
across the Company.

any proposals regarding the remuneration (including
base salary, bonus, long-term incentives, retention
awards and pension arrangements) of Directors;
review and approve all bonus plans and long-term
incentive plans at leadership level 5 and above
(including the structure of the plans, and whether,
and at what level, the plans should pay out); review
and approve changes to any pension plans; and
regularly review independent data regarding the
competitive position of salaries and benefts and
make recommendations, as appropriate.
Executive Committee
The Executive Committee, shown on page 96 to
97, is comprised of the Chief Executive Offcer and
his direct reports. The objective of the Executive
Committee is to provide strategic management, to
achieve business results and to ensure compliance
and control using various assurance tools and
functions such as an independent internal audit
function, a risk and assurance committee and a legal
compliance offce.
The Executive Committee is responsible for
the executive management of the business and
the strategic direction of the Company. It is also
responsible for risk management across the
Company, the communication of policy requirements
and the review and approval of the risk management
policy and framework. The Executive Committee
identifes strategic risk, debates strategies and
commits the allocation of key resources to manage
key and emerging risk factors. Within this role, the
Executive Committee defnes, sponsors, supports,
debates and challenges risk management activity
across the Company.
any apparent material misstatements or inconsistencies we
consider the implications for our report.
Opinion on fnancial statements
In our opinion:
• the fnancial statements give a true and fair viewof the
state of the Group’s and of the parent Company’s affairs
as at 31 March 2014 and of the Group’s proft for the year
then ended;
• the Group fnancial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
• the parent Company fnancial statements have been
properly prepared in accordance with IFRSs as adopted by
the European Union and as applied in accordance with the
provisions of the CompaniesAct 2006; and
• the fnancial statements have been prepared in accordance
with the requirements of the CompaniesAct 2006.
Separate opinion in relation to IFRSs as issued
by the IASB
As explained in note 2 to the Group fnancial statements,
the Group in addition to applying IFRSs as adopted by the
European Union, has also applied IFRSs as issued by the
International Accounting Standards Board (IASB).
In our opinion the Group fnancial statements comply
with IFRSs as issued by the IASB.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion the information given in the Strategic report
and the Directors’ report for the fnancial year for which the
fnancial statements are prepared is consistent with the
fnancial statements.
Matters on which we are required to report
by exception
We have nothing to report in respect of the following matters
where the CompaniesAct 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have not
been received frombranches not visited by us; or
• the parent Company fnancial statements are not in
agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specifed by
laware not made; or
• we have not received all the information and explanations
we require for our audit.
TO THE MEMBERS OF JAGUAR LAND ROVER
AUTOMOTIVE PLC
We have audited the fnancial statements of Jaguar Land
Rover Automotive plc for the year ended 31 March 2014
which comprise the Consolidated Income Statement,
the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Balance Sheets,
the Consolidated and Parent Company Cash Flow
Statements, the Consolidated and Parent Company
Statements of Changes in Equity and the related notes
1 to 53. The fnancial reporting framework that has
been applied in their preparation is applicable lawand
International Financial Reporting Standards (IFRSs) as
adopted by the European Union and, as regards the
parent Company fnancial statements, as applied in
accordance with the provisions of the Companies
Act 2006.
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of
the CompaniesAct 2006. Our audit work has been
undertaken so that we might state to the Company’s
members those matters we are required to state to
themin an auditor’s report and for no other purpose. To
the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors
and auditor
As explained more fully in the Directors’ Responsibilities
Statement, the Directors are responsible for the
preparation of the fnancial statements and for being
satisfed that they give a true and fair view. Our
responsibility is to audit and express an opinion on the
fnancial statements in accordance with applicable law
and International Standards onAuditing (UKand Ireland).
Those standards require us to comply with theAuditing
Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the fnancial statements
An audit involves obtaining evidence about the amounts
and disclosures in the fnancial statements suffcient to
give reasonable assurance that the fnancial statements
are free frommaterial misstatement, whether caused by
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the Group’s
and the parent Company’s circumstances and have
been consistently applied and adequately disclosed;
the reasonableness of signifcant accounting estimates
made by the Directors; and the overall presentation
of the fnancial statements. In addition, we read all the
fnancial and non-fnancial information in theAnnual
Report to identify material inconsistencies with the audited
fnancial statements and to identify any information that
is apparently materially incorrect based on, or materially
inconsistent with, the knowledge acquired by us in the
course of performing the audit. If we become aware of
Richard Knights
Senior statutory auditor for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Birmingham, United Kingdom
28 July 2014
Independent auditor’s report
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102 Overview | Brands | Manufacturing | Technology | Responsible business | Management report | Governance Financials
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Financial
Discussion
Financial
statements
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104
Consolidated
fnancial statements
Year ended 31 March (£ millions) Note 2014 2013
(restated)
2012
(restated)
Revenue 3 19,386 15,784 13,512
Material and other cost of sales 4 (11,904) (9,904) (8,733)
Employee cost 5 (1,654) (1,334) (1,039)
Other expenses 8 (3,717) (3,075) (2,529)
Development costs capitalised 9 1,030 860 751
Other income 153 70 37
Depreciation and amortisation (875) (622) (465)
Foreign exchange gain/(loss) 236 (109) 14
Finance income 10 38 34 16
Finance expense (net) 10 (185) (18) (85)
Share of loss from joint ventures 13 (7) (12) –
Proft before tax 11 2,501 1,674 1,479
Income tax expense 12 (622) (460) (19)
Proft for the year 1,879 1,214 1,460
CONSOLIDATED INCOME STATEMENT
The consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated
cash fow statement and related notes (where relevant) have been restated for the comparative prior years presented following the adoption of
IAS 19 Employee Benefts (2011) in the year as detailed in note 2 to the consolidated fnancial statements. The adoption of this revised standard
had no impact on the consolidated balance sheet in any of the years presented.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year ended 31 March (£ millions) Note 2014 2013
(restated)
2012
(restated)
Proft for the year 1,879 1,214 1,460
Items that will not be reclassifed subsequently to proft or loss:
Remeasurement of defned beneft obligation 30 (135) (346) (122)
Income tax related to items that will not be reclassifed 18 (4) 73 152
(139) (273) 30
Items that may be reclassifed subsequently to proft or loss:
Gain/(loss) on effective cash fow hedges 1,041 (288) (36)
Cash fow hedges reclassifed to foreign exchange (gain)/loss in proft or loss (112) 59 (20)
Income tax related to items that may be reclassifed 18 (194) 53 14
735 (176) (42)
Other comprehensive income/(expense) net of tax 596 (449) (12)
Total comprehensive income attributable to shareholders 2,475 765 1,448
As at 31 March (£ millions) Note 2014 2013 2012
Non-current assets
Equity accounted investees 13 145 60 1
Other fnancial assets 14 473 195 107
Property, plant and equipment 15 3,184 2,335 1,586
Intangible assets 16 4,240 3,522 2,801
Pension asset 30 – – 2
Other non-current assets 17 33 8 11
Deferred tax assets 18 284 508 474
Total non-current assets 8,359 6,628 4,982
Current assets
Cash and cash equivalents 19 2,260 2,072 2,430
Short-term deposits 1,199 775 –
Trade receivables 831 927 662
Other fnancial assets 14 392 176 183
Inventories 21 2,174 1,795 1,497
Other current assets 17 355 434 457
Current tax assets 19 30 6
Total current assets 7,230 6,209 5,235
Total assets 15,589 12,837 10,217
Current liabilities
Accounts payable 22 4,787 4,227 3,285
Short-term borrowings and current portion of long-term debt 23 167 328 490
Other fnancial liabilities 24 277 433 313
Provisions 25 395 335 279
Other current liabilities 26 395 482 559
Current tax liabilities 113 192 115
Total current liabilities 6,134 5,997 5,041
Non-current liabilities
Long-term debt 23 1,843 1,839 1,484
Other fnancial liabilities 24 69 227 73
Provisions 25 582 468 344
Retirement beneft obligation 30 674 657 327
Other non-current liabilities 26 77 24 5
Non-current tax liabilities – – 18
Deferred tax liabilities 18 346 86 1
Total non-current liabilities 3,591 3,301 2,252
Total liabilities 9,725 9,298 7,293
Equity attributable to shareholders
Ordinary share capital 27 1,501 1,501 1,501
Capital redemption reserve 167 167 167
Other reserves 28 4,196 1,871 1,256
Equity attributable to shareholders 5,864 3,539 2,924
Total liabilities and equity 15,589 12,837 10,217
w
These consolidated fnancial statements were approved by the Board of Directors and authorised for issue on 28 July 2014.
They were signed on its behalf by:
Dr Ralf Speth Chief Executive Offcer
Company registered number: 06477691
CONSOLIDATED BALANCE SHEET
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106
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED CASH FLOW STATEMENT
(£ millions) Ordinary share
capital
Capital redemption
reserve
Other reserves Total equity
Balance at 1 April 2013 1,501 167 1,871 3,539
Proft for the year – – 1,879 1,879
Other comprehensive income for the year – – 596 596
Total comprehensive income – – 2,475 2,475
Dividend paid – – (150) (150)
Balance at 31 March 2014 1,501 167 4,196 5,864
Balance at 1 April 2012 1,501 167 1,256 2,924
Proft for the year (restated) – – 1,214 1,214
Other comprehensive loss for the year (restated) – – (449) (449)
Total comprehensive income – – 765 765
Dividend paid – – (150) (150)
Balance at 31 March 2013 1,501 167 1,871 3,539
Balance at 1 April 2011 1,501 167 (192) 1,476
Proft for the year (restated) – – 1,460 1,460
Other comprehensive loss for the year (restated) – – (12) (12)
Total comprehensive income – – 1,448 1,448
Balance at 31 March 2012 1,501 167 1,256 2,924
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Cash fows from operating activities
Proft for the year 1,879 1,214 1,460
Adjustments for:
Depreciation and amortisation 875 622 466
Loss on sale of assets 4 2 8
Foreign exchange (gain)/loss on loans (87) 37 10
Income tax expense 622 460 19
Loss/(gain) on embedded derivative 47 (47) –
Finance expense (net) 138 18 85
Finance income (38) (34) (16)
Foreign exchange (gain)/loss on derivatives (57) 11 59
Foreign exchange loss on short-term deposits 41 – –
Share of loss from joint ventures 7 12 –
Cash fows from operating activities before changes in assets and liabilities 3,431 2,295 2,091
Trade receivables 96 (265) (95)
Finance receivables – 1 –
Other fnancial assets 10 (243) 10
Other current assets 121 23 (159)
Inventories (379) (284) (341)
Other non-current assets (24) 1 (4)
Accounts payable 534 797 893
Other current liabilities (86) (77) 199
Other fnancial liabilities 4 245 55
Other non-current liabilities and retirement beneft obligation (63) 15 33
Provisions 180 169 (31)
Cash generated from operations 3,824 2,677 2,651
Income tax paid (402) (248) (151)
Net cash generated from operating activities 3,422 2,429 2,500
Cash fows used in investing activities
Investment in joint ventures (92) (71) (1)
Movements in other restricted deposits 133 54 (147)
Investment in short-term deposits (464) (775) –
Purchases of property, plant and equipment (1,201) (891) (596)
Proceeds from sale of property, plant and equipment 4 3 –
Cash paid for intangible assets (1,155) (958) (814)
Finance income received 39 29 16
Net cash used in investing activities (2,736) (2,609) (1,542)
Cash fows (used in)/from fnancing activities
Finance expenses and fees paid (269) (179) (128)
Proceeds from issuance of short-term debt 1 88 105
Repayment of short-term debt (158) (250) (655)
Proceeds from issuance of long-term debt 829 317 1,500
Repayment of long-term debt (746) – (374)
Payments of lease obligations (5) (4) (4)
Dividends paid (150) (150) –
Net cash (used in)/generated from fnancing activities (498) (178) 444
Net change in cash and cash equivalents 188 (358) 1,402
Cash and cash equivalents at beginning of year 2,072 2,430 1,028
Cash and cash equivalents at end of year 2,260 2,072 2,430
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108
1 BACKGROUND AND
OPERATIONS
Jaguar Land Rover Automotive plc (“the Company”)
and its subsidiaries, (collectively referred to as “the
Group” or “JLR”), designs, manufactures and sells
a wide range of automotive vehicles. In December
2012 the Company name was changed from
Jaguar Land Rover plc to Jaguar Land Rover
Automotive plc.
The Company is a public limited Company
incorporated and domiciled in the UK and has its
registered offce at Whitley, Coventry, England.
The Company is a subsidiary of Tata Motors
Limited, India (“TATA Motors”) and acts as an
intermediate holding Company for the Jaguar Land
Rover business. The principal activity during the
year was the design, development, manufacture
and marketing of high-performance luxury saloons,
specialist sports cars and four wheel drive
off-road vehicles.
These consolidated fnancial statements have been
prepared in GBP and rounded to the nearest million
GBP (£ million) unless otherwise stated. Results for
the year ending and as at 31 March 2012 have been
disclosed solely for the information of the users.
2 ACCOUNTING POLICIES
STATEMENT OF COMPLIANCE
These consolidated fnancial statements have
been prepared in accordance with International
Financial Reporting Standards (referred to as “IFRS”)
as adopted by the European Union. There is no
difference between these accounts and the accounts
for the Group prepared under IFRS as adopted by the
International Accounting Standards Board (“IASB”).
The Company has applied s.408 of the Companies
Act 2006 and therefore the separate fnancial
statements of the Company do not include the
income statement or the statement of comprehensive
income of the Company on a stand-alone basis.
BASIS OF PREPARATION
The Consolidated Financial Statements have been
prepared on a historical cost basis except for certain
fnancial instruments which are measured at fair value.
Historical cost is generally based on the fair value of
the consideration given in exchange for the assets. The
principal accounting policies adopted are set out below.
GOING CONCERN
The Directors have considered the fnancial position
of the Group at 31 March 2014 (net assets of
£5,864 million (2013: £3,539 million, 2012: £2,924
million)) and the projected cash fows and fnancial
performance of the Group for at least 12 months from
the date of approval of these fnancial statements as
well as planned cost and cash improvement actions,
and believe that the plan for sustained proftability
remains on course.
The Directors have taken actions to ensure that
appropriate long-term cash resources are in place
at the date of signing the accounts to fund Group
operations. The Directors have reviewed the fnancial
covenants linked to the borrowings in place and
believe these will not be breached at any point and
that all debt repayments will be met.
Therefore the Directors consider, after making
appropriate enquiries and taking into consideration
the risks and uncertainties facing the Group, that
the Group has adequate resources to continue in
operation as a going concern for the foreseeable
future and is able to meet its fnancial covenants
linked to the borrowings in place. Accordingly the
Directors continue to adopt the going concern basis
in preparing these consolidated fnancial statements.
BASIS OF CONSOLIDATION
Subsidiaries
The consolidated fnancial statements include Jaguar
Land Rover Automotive plc and its subsidiaries.
Subsidiaries are entities controlled by the Company.
Control exists when the Company has power over
the investee, is exposed or has rights to variable
Notes to the
consolidated
fnancial statements
return from its involvement with the investee and
has the ability to use its power to affect its returns.
In assessing control, potential voting rights that
currently are exercisable are taken into account. All
subsidiaries of the Company given in note 39 are
included in the consolidated fnancial statements.
Inter-Company transactions and balances
including unrealised profts are eliminated in full
on consolidation.
Associates and joint ventures
(equity accounted investees)
Associates are those entities in which the Group has
signifcant infuence, but not control or joint control.
Signifcant infuence is the power to participate in
the fnancial and operating policy decisions of the
investee and is presumed to exist when the Group
holds between 20% and 50% of the voting power
of another entity. Joint ventures are those entities
over whose activities the Group has joint control,
established by contractual agreement and requiring
unanimous consent for decisions about the relevant
activities of the entity, being those activities that
signifcantly affect the entity’s returns.
Associates and joint ventures are accounted for
using the equity method and are recognised initially
at cost. The Group’s investment includes goodwill
identifed on acquisition, net of any accumulated
impairment losses. The consolidated fnancial
statements include the Group’s share of the income
and expenses, other comprehensive income and
equity movements of equity accounted investees,
from the date that signifcant infuence or joint
control commences until the date that signifcant
infuence or joint control ceases. When the Group’s
share of losses exceeds its interest in an equity
accounted investee, the carrying amount of that
interest (including any long-term investments) is
reduced to nil and the recognition of further losses
is discontinued except to the extent that the Group
has an obligation or has made payments on behalf
of the investee. When the Group transacts with an
associate or joint venture of the Group, profts and
losses are eliminated to the extent of the Group’s
interest in its associate or joint venture.
USE OF ESTIMATES AND JUDGEMENTS
The preparation of consolidated fnancial statements
in conformity with IFRS requires management to
make judgements, estimates and assumptions, that
affect the application of accounting policies and the
reported amounts of assets, liabilities, income,
expenses and disclosures of contingent assets and
liabilities at the date of these consolidated fnancial
statements and the reported amounts of revenues
and expenses for the years presented. Actual results
may differ from these estimates.
Estimates and underlying assumptions are
reviewed on an ongoing basis. Revisions to
accounting estimates are recognised in the year
in which the estimate is revised and future periods
affected.
In particular, information about signifcant areas
of estimation uncertainty and critical judgements in
applying accounting policies that have the most
signifcant effect on the amounts recognised in the
consolidated fnancial statements are included in the
following notes:
(i) Note 15 – Property, plant and equipment – the
Group applies judgement in determining the
estimate useful life of assets.
(ii) Note 16 – Intangible assets – management
applies signifcant judgement in establishing the
applicable criteria for capitalisation of appropriate
product development costs and impairment of
indefnite life intangible assets. The key inputs
to this assessment include the determination of
Cash Generating Units, value of cash fows and
appropriateness of discount rates.
(iii) Note 18 – Deferred tax – management applies
judgement in establishing the timing of the
recognition of deferred tax assets relating to
historic losses and assessing its recoverability
and estimating taxes ultimately payable on
remittance of overseas earnings.
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110
2 ACCOUNTING POLICIES
(CONTINUED)
(iv) Note 25 – Provision for product warranty –
it is necessary for the Group to assess the
provision for anticipated lifetime warranty and
campaign costs. The valuation of warranty
and campaign provisions requires a signifcant
amount of judgement and the requirement to
form appropriate assumptions around expected
future costs.
(v) Note 30 – Retirement beneft obligation – it
is necessary for actuarial assumptions to be
made, including discount and mortality rates
and the long-term rate of return upon scheme
assets. The Group engages a qualifed actuary
to assist with determining the assumptions to be
made when evaluating these liabilities.
(vi) Note 33 – Financial instruments – the Group
enters into complex fnancial instruments and
therefore appropriate accounting for these
requires judgement around the valuations.
Embedded derivatives relating to prepayment
options on senior notes are not considered as
closely related and are separately accounted
unless the exercise price of these options is
approximately equal on each exercise date to
the amortised cost of the senior notes.
REVENUE RECOGNITION
Revenue is measured at fair value of consideration
received or receivable.
Sale of products
The Group recognises revenues on the sale
of products, net of discounts, sales incentives,
customer bonuses and rebates granted, when
products are delivered to dealers or when delivered
to a carrier for export sales, which is when title
and risks and rewards of ownership pass to the
customer. Sale of products is presented net of
excise duty where applicable and other indirect
taxes. Revenues are recognised when collectability
of the resulting receivable is reasonably assured.
If the sale of products includes a determinable
amount for subsequent services (multiple –
component contracts), the related revenues are
deferred and recognised as income over the
relevant service period. Amounts are normally
recognised as income by reference to pattern of
related expenditure.
COST RECOGNITION
Costs and expenses are recognised when incurred
and are classifed according to their nature.
Expenditures are capitalised where appropriate in
accordance with the policy for internally generated
intangible assets and represent employee costs,
stores and other manufacturing supplies, and
other expenses incurred for product development
undertaken by the Group.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand,
demand deposits and highly liquid investments with
an original maturity of up to three months that are
readily convertible into known amounts of cash and
which are subject to insignifcant risk of changes
in value.
PROVISIONS
A provision is recognised if, as a result of a past
event, the Group has a present legal or constructive
obligation that can be estimated reliably, and it is
probable that an outfow of economic benefts will
be required to settle the obligation. Provisions are
determined by discounting the expected future cash
fows at a risk-free rate that refects current market
assessments of the time value of money and the
risks specifc to the liability. Provisions are held for
product warranties, legal and product liabilities,
residual risks and environmental risks as detailed
in note 25 to the consolidated fnancial statements.
The most signifcant is product warranty.
PRODUCT WARRANTY
The Group offers warranty cover in respect of
manufacturing defects, which become apparent
within one to fve years after purchase, dependent
on the market in which the purchase occurred.
The estimated liability for product warranties is
recorded when products are sold. These estimates
are established using historical information on the
nature, frequency and average cost of warranty
claims and management estimates regarding
possible future incidences based on actions on
product failures. The discount on the warranty
provision is calculated using a risk-free discount
rate as the risks specifc to the liability, such as
infation, are included in the base calculation. The
timing of outfows will vary as and when a warranty
claim will arise, being typically up to fve years.
FOREIGN CURRENCY
The Company has a functional currency of GBP.
The presentation currency of the consolidated
fnancial statements is GBP.
The functional currency of the UK and non-
UK selling operations is GBP being the primary
economic environment that infuences these
operations. This is on the basis that management
control is in the UK and that GBP is the currency
that primarily determines sales prices and is the
main currency for the retention of operating income.
Transactions in foreign currencies are recorded
at the exchange rate prevailing on the date of
transaction. Foreign currency denominated
monetary assets and liabilities are remeasured
into the functional currency at the exchange rate
prevailing on the balance sheet date. Exchange
differences are recognised in the consolidated
income statement.
INCOME TAXES
Income tax expense comprises current and
deferred taxes. Income tax expense is recognised
in the consolidated income statement except, when
they relate to items that are recognised outside
proft or loss (whether in other comprehensive
income or directly in equity), in which case tax is
also recognised outside proft or loss, or where
they arise from the initial accounting for a business
combination. In the case of a business combination
the tax effect is included in the accounting for the
business combination.
Current income taxes are determined based
on respective taxable income of each taxable
entity and tax rules applicable for respective tax
jurisdictions.
Deferred tax assets and liabilities are recognised
for the future tax consequences of temporary
differences between the carrying values of assets
and liabilities and their respective tax bases, and
unutilised business loss and depreciation carry-
forwards and tax credits. Such deferred tax assets
and liabilities are computed separately for each
taxable entity and for each taxable jurisdiction.
Deferred tax assets are recognised to the extent
that it is probable that future taxable income will be
available against which the deductible temporary
differences, unused tax losses, depreciation carry-
forwards and unused tax credits could be utilised.
Deferred tax assets and liabilities are measured
based on the tax rates that are expected to apply
in the year when the asset is realised or the liability
is settled, based on tax rates and tax laws that
have been enacted or substantively enacted by the
balance sheet date.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when
they relate to income taxes levied by the same
taxation authority and the Group intends to settle
its current tax assets and liabilities on a net basis.
INVENTORIES
Inventories are valued at the lower of cost and net
realisable value. Cost of raw materials and
consumables are ascertained on a frst-in frst-out
basis. Costs, including fxed and variable production
overheads, are allocated to work-in-progress and
fnished goods determined on a full absorption cost
basis. Net realisable value is the estimated selling
price in the ordinary course of business less
estimated cost of completion and selling expenses.
Class of property,
plant and equipment
Estimated
useful life
(years)
Buildings 20-40
Plant and equipment 3-30
Computers 3-6
Vehicles 3-10
Furniture and fxtures 3-20
Inventories include vehicles sold subject to
repurchase arrangements. These vehicles are
carried at cost to the Group and are amortised in
changes in stocks and work in progress to their
residual values (i.e. estimated second hand sale
value) over the term of the arrangement.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment is stated at cost of
acquisition or construction less accumulated
depreciation less accumulated impairment, if any.
Freehold land is measured at cost and is not
depreciated.
Cost includes purchase price, non-recoverable
taxes and duties, labour cost and direct overheads
for self-constructed assets and other direct costs
incurred up to the date the asset is ready for its
intended use.
Interest cost incurred for constructed assets is
capitalised up to the date the asset is ready for
its intended use, based on borrowings incurred
specifcally for fnancing the asset or the weighted
average rate of all other borrowings, if no specifc
borrowings have been incurred for the asset.
Depreciation is provided on a straight-line basis
over the estimated useful lives of the assets.
Estimated useful lives of the assets are as follows:
Assets held under fnance leases are depreciated
over their expected useful lives on the same basis
as owned assets or, where shorter, the term of the
relevant lease.
Depreciation is not recorded on assets under
construction until construction and installation is
complete and the asset is ready for its intended
use. Assets under construction includes capital
prepayments.
INTANGIBLE ASSETS
Acquired intangible assets
Intangible assets purchased including those
acquired in business combination, are measured
at cost or fair value as of the date of acquisition,
where applicable, less accumulated amortisation
and accumulated impairment, if any. Intangible
assets with indefnite lives are reviewed annually
to determine whether indefnite-life assessment
continues to be supportable. If not, the change in
the useful-life assessment from indefnite to fnite
is made on a prospective basis.
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112
2 ACCOUNTING POLICIES
(CONTINUED)
For intangible assets with defnite lives, amortisation
is provided on a straight-line basis over the
estimated useful lives of the acquired intangible
assets as per details below:
Class of intangible
asset
Estimated amortisation
period (years)
Patents and
technological
know-how
2-12
Customer related
– dealer network
20
Software 2-8
Intellectual property
rights and other
intangibles
Indefnite life
The amortisation for intangible assets with fnite
useful lives is reviewed at least at each year-end.
Changes in expected useful lives are treated as
changes in accounting estimates.
Capital-work-in-progress includes capital advances.
Customer-related intangibles acquired in
a business combination consist of order backlogs
and dealer networks.
Intellectual property rights and other intangibles
consists of brand names, which are considered
to have indefnite lives due to the longevity of
the brands.
Internally generated intangible assets
Research costs are charged to the consolidated
income statement in the year in which they
are incurred.
Product development costs incurred on new vehicle
platforms, engines, transmission and new products
are recognised as intangible assets, when feasibility
has been established, the Group has committed
technical, fnancial and other resources to complete the
development and it is probable that asset will generate
probable future economic benefts.
The costs capitalised include the cost of
materials, direct labour and directly attributable
overhead expenditure incurred up to the date the
asset is available for use.
Interest cost incurred is capitalised up to the
date the asset is ready for its intended use, based
on borrowings incurred specifcally for fnancing
the asset or the weighted average rate of all other
borrowings if no specifc borrowings have been
incurred for the asset.
Product development cost is amortised over
a period of between 2 and 10 years. Capitalised
development expenditure is measured at cost
less accumulated amortisation and accumulated
impairment loss.
IMPAIRMENT
Property, plant and equipment and other
intangible assets
At each balance sheet date, the Group assesses
whether there is any indication that any property,
plant and equipment and intangible assets may be
impaired. If any such impairment indicator exists
the recoverable amount of an asset is estimated to
determine the extent of impairment, if any. Where
it is not possible to estimate the recoverable amount
of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to
which the asset belongs.
Intangible assets with indefnite useful lives and
intangible assets not yet available for use are tested
for impairment annually, or earlier, if there is an
indication that the asset may be impaired.
Recoverable amount is the higher of fair value less
costs to sell and value in use. In assessing value in
use, the estimated future cash fows are discounted
to their present value using a pre-tax discount rate
that refects current market assessments of the time
value of money and the risks specifc to the asset for
which the estimates of future cash fows have not
been adjusted.
If the recoverable amount of an asset (or cash-
generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset
(or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognised
immediately in the consolidated income statement.
Equity accounted investees: joint ventures
and associates
The requirements of IAS 39 Financial Instruments:
Recognition and Measurement are applied to
determine whether it is necessary to recognise any
impairment loss with respect to the Group’s
investment in an associate or joint venture.
When necessary, the entire carrying amount of
the investment (including goodwill) is tested for
impairment in accordance with IAS 36 Impairment
of Assets as a single asset by comparing its
recoverable amount (the higher of value in use and
fair value less costs to sell) with its carrying amount.
Any impairment loss recognised forms part of the
carrying amount of the investment. Any reversal of
that impairment loss is recognised in accordance
with IAS 36 to the extent that the recoverable amount
of the investment subsequently increases.
GOVERNMENT GRANTS AND INCENTIVES
Government grants are recognised when there is
reasonable assurance that the Group will comply with
the relevant conditions and the grant will be received.
Government grants are recognised in the
consolidated income statement on a systematic
basis when the Group recognises, as expenses,
the related costs that the grants are intended
to compensate.
Government grants related to assets are deducted
from the cost of the asset and amortised over the
useful life of the asset. Government grants related
to income are presented as an offset against the
related expenditure and Government grants which are
awarded as incentives with no ongoing performance
obligations to the Group are recognised as other
income in the period the grant is received. Sales tax
incentives received from Governments are recognised
in the income statement at the reduced tax rate and
revenue is reported net of these sales tax incentives.
LEASES
At the inception of a lease, the lease arrangement
is classifed as either a fnance lease or an
operating lease, based on the substance of the
lease arrangement.
Assets taken on fnance lease
A fnance lease is recognised as an asset and a
liability at the commencement of the lease, at the
lower of the fair value of the asset and the present
value of the minimum lease payments. Initial direct
costs, if any, are also capitalised and, subsequent
to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to
that asset. Minimum lease payments made under
fnance leases are apportioned between the fnance
expense and the reduction of the outstanding liability.
The fnance expense is allocated to each year
during the lease term so as to produce a constant
periodic rate of interest on the remaining balance
of the liability.
Assets taken on operating lease
Leases other than fnance leases are operating
leases, and the leased assets are not recognised on
the Group’s balance sheet. Payments made under
operating leases are recognised in the consolidated
income statement on a straight-line basis over the
term of the lease.
EMPLOYEE BENEFITS
Pension plans
The Group operates several defned beneft pension
plans, which are contracted out of the second state
pension scheme. The assets of the plans are held in
separate trustee-administered funds. The plans
provide for monthly pension after retirement as per
salary drawn and service year as set out in the rules
of each plan.
Contributions to the plans by the Group take into
consideration the results of actuarial valuations. The
plans with a surplus position at the balance sheet
date have been limited to the maximum economic
beneft available from unconditional rights to refund
from the scheme or reduction in future contributions.
Where the subsidiary Group is considered to have
a contractual obligation to fund the pension plan
above the accounting value of the liabilities,
an onerous obligation is recognised.
The UK defned beneft schemes were closed to
new joiners in April 2010.
A separate defned contribution plan is available
to new employees of JLR. Costs in respect of this
plan are charged to the income statement
as incurred.
For defned beneft retirement beneft schemes,
the cost of providing benefts is determined using
the Projected Unit Credit Method, with actuarial
valuations being carried out at the end of each
reporting period.
Remeasurement comprising actuarial gains
and losses, the effect of the asset ceiling and
the return on scheme assets (excluding interest)
are recognised immediately in the balance
sheet with a charge or credit to the statement of
comprehensive income in the period in which they
occur. Remeasurement recorded in the statement
of comprehensive income is not recycled.
Past service cost, including curtailment gains
and losses, is generally recognised in proft or loss
in the period of scheme amendment. Net interest
is calculated by applying a discount rate to the net
defned beneft liability.
Defned beneft costs are split into three categories:
• current service cost, past-service cost and gains
and losses on curtailments and settlements;
• net interest cost; and
• remeasurement.
The Group presents the frst two components
of defned beneft costs within Employee costs
in its consolidated income statement (see note 5).
Net interest cost is recognised within fnance costs
(see note 10).
Post-retirement Medicare scheme
Under this unfunded scheme, employees of some
subsidiaries receive medical benefts subject to
certain limits of amount, periods after retirement
and types of benefts, depending on their grade
and location at the time of retirement. Employees
separated from the Group as part of an Early
Separation Scheme on medical grounds or due to
permanent disablement are also covered under the
scheme. The applicable subsidiaries account for
the liability for the post-retirement medical scheme
based on an annual actuarial valuation.
Actuarial gains and losses
Actuarial gains and losses relating to retirement
beneft plans are recognised in other comprehensive
income in the year in which they arise. Actuarial
gains and losses relating to long-term employee
benefts are recognised in the consolidated income
statement in the year in which they arise.
Measurement date
The measurement date of retirement plans
is 31 March.
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2 ACCOUNTING POLICIES
(CONTINUED)
LONG-TERM INCENTIVE PLAN (LTIP)
The Group operates an LTIP arrangement for
certain employees. The scheme provides a cash
payment to the employee based on a specifc
number of phantom shares at grant date and the
share price of Tata Motors Limited at the vesting
date, subject to proftability and employment
conditions. These are accounted for as cash settled
arrangements, whereby a liability is recognised
at fair value at the date of grant, using a Black
Scholes model. At each balance sheet date until
the liability is settled, the fair value of the liability
is remeasured, with any changes in fair value
recognised in proft or loss for the year.
FINANCIAL INSTRUMENTS
Classifcation, initial recognition and measurement
Afnancial instrument is any contract that gives rise to
a fnancial asset of one entity and a fnancial liability
or equity instrument of another entity. Financial
assets are classifed into categories: fnancial assets
at fair value through proft or loss, held-to-maturity
investments, loans and receivables and available-for-
sale fnancial assets. Financial liabilities are classifed
into fnancial liabilities at fair value through proft or
loss and other fnancial liabilities.
Financial instruments are recognised on the
balance sheet when the Group becomes a party
to the contractual provisions of the instrument.
Initially, a fnancial instrument is recognised at its
fair value. Transaction costs directly attributable
to the acquisition or issue of fnancial instruments
are recognised in determining the carrying amount,
if it is not classifed as at fair value through proft
or loss. Subsequently, fnancial instruments are
measured according to the category in which they
are classifed.
Financial assets and fnancial liabilities at fair value
through proft or loss: Derivatives, including embedded
derivatives separated from the host contract, unless
they are designated as hedging instruments, for which
hedge accounting is applied, are classifed into this
category. Financial assets and liabilities are measured
at fair value with changes in fair value recognised in
the consolidated income statement.
Loans and receivables: Loans and receivables are
non-derivative fnancial assets with fxed or
determinable payments that are not quoted in an
active market and which are not classifed as fnancial
assets at fair value through proft or loss or fnancial
assets available for sale. Subsequently, these are
measured at amortised cost using the effective
interest method less any impairment losses. These
include cash and cash equivalents, trade receivables,
fnance receivables and other fnancial assets.
Available-for-sale fnancial assets: Available-
for-sale fnancial assets are those non-derivative
fnancial assets that are either designated as such
upon initial recognition or are not classifed in any of
the other fnancial assets categories. Subsequently,
these are measured at fair value and changes
therein, other than impairment losses, which are
recognised directly in other comprehensive income,
net of applicable deferred income taxes. The Group
does not hold any available-for-sale fnancial assets.
Investments in equity instruments that do not
have a quoted market price in an active market and
whose fair value cannot be reliably measured, are
measured at cost.
Equity instruments
An equity instrument is any contract that evidences
residual interests in the assets of the Group after
deducting all of its liabilities. Equity instruments
issued by the Group are recorded at the proceeds
received, net of direct issue costs.
Other fnancial liabilities
These are measured at amortised cost using the
effective interest method.
Determination of fair value
Fair value is the price that would be received to
sell an asset or paid to transfer a liability in an
orderly transaction between market participants
at the measurement date, regardless of whether
that price is directly observable or estimated using
another valuation technique. In estimating the fair
value of an asset or liability, the Group takes into
account the characteristics of the asset or liability if
market participants would take those characteristics
into account when pricing the asset or liability at the
measurement date. Subsequent to initial recognition,
the Group determines the fair value of fnancial
instruments that are quoted in active markets using
the quoted bid prices (fnancial assets held) or
quoted ask prices (fnancial liabilities held) and using
valuation techniques for other instruments. Valuation
techniques include discounted cash fow method and
other valuation models.

Derecognition of fnancial assets and
fnancial liabilities
The Group derecognises a fnancial asset only
when the contractual rights to the cash fows
from the asset expires or it transfers the fnancial
asset and substantially all the risks and rewards
of ownership of the asset to another entity. If the
Group neither transfers nor retains substantially all
the risks and rewards of ownership and continues to
control the transferred asset, the Group recognises
its retained interest in the asset and an associated
liability for amounts it may have to pay. If the Group
retains substantially all the risks and rewards of
ownership of a transferred fnancial asset, the
Group continues to recognise the fnancial asset
and also recognises a collateralised borrowing for
the proceeds received.
Financial liabilities are derecognised when they
are extinguished, that is when the obligation is
discharged, cancelled or has expired.
When a fnancial instrument is derecognised,
the cumulative gain or loss in equity is transferred
to the consolidated income statement.
Impairment of fnancial assets
The Group assesses at each balance sheet date
whether there is objective evidence that a fnancial
asset, other than those at fair value through proft
or loss, or a Group of fnancial assets is impaired.
A fnancial asset is considered to be impaired if
objective evidence indicates that one or more
events have had a negative effect on the estimated
future cash fows of that asset.
Loans and receivables: Objective evidence
of impairment includes default in payments with
respect to amounts receivable from customers.
Impairment loss in respect of loans and receivables
is calculated as the difference between their
carrying amount and the present value of the
estimated future cash fows discounted at the
original effective interest rate. Such impairment
loss is recognised in the consolidated income
statement. If the amount of an impairment loss
decreases in a subsequent year, and the decrease
can be related objectively to an event occurring
after the impairment was recognised, the previously
recognised impairment loss is reversed. The
reversal is recognised in the consolidated
income statement.
Equity investments: Impairment loss on equity
investments carried at cost is recognised in the
consolidated income statement and is not reversed.
Hedge accounting
The Group uses foreign currency forward contracts
and options to hedge its risks associated with
foreign currency fuctuations relating to highly
probable forecast transactions. The Group
designates these forward contracts and options in
a cash fow hedging relationship by applying the
hedge accounting principles.
These forward contracts and options are stated at
fair value at each reporting date. Changes in the fair
value of these forward contracts and options that
are designated and effective as hedges of future
cash fows are recognised in other comprehensive
income (net of tax), and the ineffective portion
is recognised immediately in the consolidated
income statement. Amounts accumulated in
equity are reclassifed to the consolidated income
statement in the periods in which the forecasted
transactions occurs.
For options, the time value is not considered part
of the hedge, and this is treated as an ineffective
hedge portion and recognised immediately in the
consolidated income statement.
Hedge accounting is discontinued when the
hedging instrument expires or is sold, terminated
or exercised, or no longer qualifes for hedge
accounting. For forecast transactions, any
cumulative gain or loss on the hedging instrument
recognised in equity is retained there until the
forecast transaction occurs.
If the forecast transaction is no longer expected
to occur, the net cumulative gain or loss recognised
in other comprehensive income is immediately
transferred to the consolidated income statement
for the year.
NEW ACCOUNTING PRONOUNCEMENTS
In the current year, the Group adopted/early
adopted the following standards, revisions and
amendments to standards and interpretations:
IAS 1 Presentation of Financial Statements was
amended in June 2011 to revise the way other
comprehensive income is presented. In particular,
it requires entities to Group items presented in other
comprehensive income based on whether they
are potentially reclassifable to proft or loss
subsequently and requires tax associated with
items presented before tax to be shown separately
for each of the two Groups of other comprehensive
income items. The amendment is effective for
annual periods beginning on or after 1 July 2012,
with early adoption permitted. The amendments
have been applied retrospectively and hence the
presentation of items of other comprehensive
income has been modifed to refect the changes.
Other than the above-mentioned presentation
changes, the application of the amendments
to IAS 1 did not result in any impact on proft
or loss, other comprehensive income and total
comprehensive income.
IAS 19 Employee benefts (2011) was amended
in June 2011 to include revised requirements for
pensions and other post-retirement benefts,
termination benefts and other changes. The key
amendments include: requiring the recognition of
changes in the net defned beneft liability (asset)
including immediate recognition of defned beneft
cost, disaggregation of defned beneft cost into
components, recognition of remeasurements in
other comprehensive income, plan amendments,
curtailments and settlements (eliminating the
“corridor approach” permitted by the existing
IAS 19); introducing enhanced disclosures about
defned beneft plans; modifying accounting for
termination benefts, including distinguishing
benefts provided in exchange for service and
benefts provided in exchange for the termination
of employment and affect the recognition and
measurement of termination benefts; clarifying
various miscellaneous issues, including the
classifcation of employee benefts, current
estimates of mortality rates, tax and administration
costs and risk-sharing and conditional indexation
features; Incorporating other matters submitted to
the IFRS Interpretations Committee. The standard
is effective for annual periods beginning on or after
1 January 2013, with early application permitted.
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An amendment to IAS 27 Separate Financial
Statements (2011) was issued in May 2011. This
now only deals with the requirements for separate
fnancial statements, which have been carried
over largely unchanged from IAS 27 Consolidated
and Separate Financial Statements. Requirements
for consolidated fnancial statements are now
contained in IFRS 10 Consolidated Financial
Statements. The standard requires that when
an entity prepares separate fnancial statements,
investments in subsidiaries, associates, and jointly
controlled entities are accounted for either at cost,
or in accordance with IAS 39 Financial Instruments.
The standard also deals with the recognition of
dividends, certain Group reorganisations and
includes a number of disclosure requirements.
The amendment is effective for annual periods
beginning on or after 1 January 2013, with early
application permitted.
IAS 28 Investments in Associates and Joint
Ventures (2011) was issued in May 2011. This
standard supersedes IAS 28 Investments in
Associates and prescribes the accounting for
investments in associates and sets out the
requirements for the application of the equity
method when accounting for investments in
associates and joint ventures. The standard defnes
“signifcant infuence” and provides guidance on
how the equity method of accounting is to be
applied (including exemptions from applying the
equity method in some cases). It also prescribes
how investments in associates and joint ventures
should be tested for impairment. The standard is
effective for annual periods beginning on or after
1 January 2013, with early adoption permitted.
IAS 36 Impairment of Assets was amended in
May 2013 to reduce the circumstances in which the
recoverable amount of assets or cash-generating
units is required to be disclosed, clarify the
disclosures required, and to introduce an explicit
requirement to disclose the discount rate used
in determining impairment (or reversals) where
recoverable amount (based on fair value less
costs of disposal) is determined using a present
value technique. The amendment is effective for
annual periods beginning on or after 1 January
2014, with early adoption permitted.
IFRS 7 Financial Instruments: Disclosures was
amended in December 2011 to require information
about all recognised fnancial instruments that are
set off in accordance with paragraph 42 of IAS 32
Financial Instruments: Presentation to be disclosed.
The amendments also require disclosure of
information about recognised fnancial instruments
subject to enforceable master netting arrangements
and similar agreements even if they are not set
off under IAS 32. The amendments are effective
for annual periods beginning on or after 1 January
2013, with early application permitted.
IFRS 10 Consolidated Financial Statements
establishes principles for the presentation and
preparation of consolidated fnancial statements
when an entity controls one or more other entities.
Under IFRS 10, control is the single basis for
consolidation, irrespective of the nature of the
investee; this standard therefore eliminates the
risks-and-rewards approach that was used for
certain special purpose entities. IFRS 10 identifes
the three elements of control as power over the
investee, exposure, or rights, to variable returns
from involvement with the investee and the ability
to use power over the investee to affect the amount
of the investor’s returns. An investor must possess
all three elements to conclude that it controls an
investee. The assessment of control is based on
all facts and circumstances, and the conclusion is
reassessed if there are changes to at least one of
the three elements. The standard is effective for
annual periods beginning on or after 1 January
2013, with early adoption permitted. The Group has
reviewed its control assessments for its investees in
accordance with IFRS 10 and determined that the
adoption of IFRS 10 did not result in any change
in the consolidation status of any of its subsidiaries
and investees held during the period or comparative
periods covered by these fnancial statements.
IFRS 11 Joint Arrangements, issued in May
2011 and amended in June 2012 for transition
guidance, classifes joint arrangements as either
joint operations (combining the existing concepts
of jointly controlled assets and jointly controlled
operations) or joint ventures (equivalent to the
existing concept of a jointly controlled entity). A joint
operation is a joint arrangement whereby the parties
that have joint control have rights to the assets
and obligations for the liabilities. A joint venture is
a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the
net assets of the arrangement. IFRS 11 requires
the use of the equity method of accounting for
interests in joint ventures thereby eliminating the
proportionate consolidation method. The standard
is effective for annual periods beginning on or after
1 January 2013, with early adoption permitted.
IFRS 12 Disclosure of Interests in Other Entities
applies to entities that have an interest in a
subsidiary, a joint arrangement, an associate or
an unconsolidated structured entity. The standard,
issued in May 2011 and amended in June 2012
for transition guidance, requires an entity to
disclose information that enables users of fnancial
statements to evaluate the nature of, and risks
associated with, its interests in other entities; and
the effects of those interests on its fnancial position,
fnancial performance and cash fows. The standard
is effective for annual periods beginning on or after
1 January 2013, with early adoption permitted.
IFRS 13 Fair Value Measurement defnes
“fair value” and sets out in a single standard a
framework for measuring fair value and requires
disclosures about fair value measurements.
2 ACCOUNTING POLICIES
(CONTINUED)
As at 31 March (£ millions) 2013 2012
Impact on the consolidated income statement
Increase in employee cost (1) (28)
Decrease in income tax expense – 7
Decrease in proft for the year (1) (21)
Impact on the consolidated statement of comprehensive income
Decrease in remeasurement of defned beneft obligation 1 28
Decrease in income tax related to items that will not be reclassifed – (7)
Increase in total other comprehensive income net of tax 1 21
It seeks to increase consistency and comparability
in fair value measurements and related disclosures
through a fair value hierarchy. IFRS 13 was issued
in May 2011 and is applicable prospectively from
the beginning of the annual period in which the
standard is adopted. The standard is effective for
annual periods beginning on or after 1 January
2013, with early adoption permitted.
In addition, as part of the IASB’s Annual
Improvements, a number of minor amendments
have been made to standards in the 2009-2011
cycle. These amendments are effective for annual
periods beginning on or after 1 January 2013, with
early application permitted.

Of the above standards, revisions and amendments
to standards and interpretations, only the adoption of
IAS 19 Employee Benefts (2011) has had an impact
on the results of the Group. However, this does not
impact the net assets or total comprehensive income
of the Group in any period. The adjustment is for an
element of the defned beneft cost being transferred
between other comprehensive income and proft or
loss. The comparatives included in these fnancial
statements have been restated on a retrospective
basis for the impact of the adoption of the revised
IAS 19. The impact of the retrospective restatement
for IAS 19 on the components of total comprehensive
income is as follows:
In addition to the above restatement, the adoption
of IAS 1, IAS 19, IFRS 7, IFRS 12 and IFRS 13
has resulted in changes to the presentation and
disclosure included in the fnancial statements.
The adoption of the other standards, revisions and
amendments to standards and interpretations
in the current year has not had any impact on the
fnancial statements.
The following pronouncements, issued by
the IASB, are not yet effective and have not
yet been adopted by the Group. The Group is
evaluating the impact of these pronouncements
on the consolidated fnancial statements:
In October 2012, amendments were made to
IAS 27 Separate Financial Statements, IFRS 10
Consolidated Financial Statements and IFRS 12
Disclosure of Interests in Other Entities to: provide
“investment entities” an exemption from the
consolidation of particular subsidiaries and instead
require that an investment entity measure the
investment in each eligible subsidiary at fair value
through proft or loss in accordance with IFRS 9
Financial Instruments or IAS 39 Financial Instruments:
Recognition and Measurement; require additional
disclosure about why the entity is considered an
investment entity, details of the entity’s unconsolidated
subsidiaries, and the nature of relationship and
certain transactions between the investment entity
and its subsidiaries; and require an investment entity
to account for its investment in a relevant subsidiary
in the same way in its consolidated and separate
fnancial statements. These amendments are effective
for periods beginning on or after 1 January 2014, with
early adoption permitted.
IAS 32 Financial Instruments: Presentation
was amended in December 2011 to clarify certain
aspects because of diversity in application of the
requirements on offsetting. The amendments
focused on four main areas: the meaning of
“currently has a legally enforceable right of set-off”;
the application of simultaneous realisation and
settlement; the offsetting of collateral amounts;
and the unit of account for applying the offsetting
requirements. The amendment is effective for
annual periods beginning on or after 1 January
2014, with early adoption permitted.
IAS 39 Financial Instruments: Recognition and
Measurement was amended in June 2013 to make
it clear that there is no need to discontinue hedge
accounting if a hedging derivative is novated,
provided certain criteria are met. The amendment is
effective for annual periods beginning on or after
1 January 2014, with early adoption permitted.
IFRS15 Revenue from contracts with customers
was issued in May 2014. The standard outlines
a single comprehensive model for entities to use
in accounting for revenue arising from contracts
with customers. It supersedes current revenue
recognition guidance including IAS 18 Revenue,
IAS 11 Construction Contracts and related
interpretations. The standard is effective for annual
periods beginning on or after 1 January 2017, with
early adoption permitted.

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3 REVENUE
4 MATERIAL AND OTHER COST OF SALES
5 EMPLOYEE NUMBERS AND COSTS
Year ended 31 March (£ millions) 2014 2013 2012
Sale of goods 19,386 15,784 13,512
Total revenues 19,386 15,784 13,512
Year ended 31 March (£ millions) 2014 2013 2012
Changes in inventories of fnished goods and
work in progress (356) (309) (317)
Purchase of products for sale 715 549 505
Raw materials and consumables 11,545 9,664 8,545
Total material and other cost of sales 11,904 9,904 8,733
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Wages and salaries 1,230 1,020 777
Social security costs and benefts 192 152 107
Pension costs 232 162 155
Total employee costs 1,654 1,334 1,039
Average employee numbers year ended
31 March 2014
Non-agency Agency Total
Manufacturing 13,890 1,670 15,560
Research and development 4,307 1,916 6,223
Other 4,914 1,256 6,170
Total employee numbers 23,111 4,842 27,953
Average employee numbers year ended
31 March 2013
Non-agency Agency Total
Manufacturing 9,801 4,310 14,111
Research and development 3,940 1,665 5,605
Other 4,091 1,106 5,197
Total employee numbers 17,832 7,081 24,913
Average employee numbers year ended
31 March 2012
Non-agency Agency Total
Manufacturing 8,702 2,899 11,601
Research and development 3,548 1,231 4,779
Other 3,596 911 4,507
Total employee numbers 15,846 5,041 20,887
2 ACCOUNTING POLICIES
(CONTINUED)
IAS 16 Property, Plant and Equipment has
been amended to prohibit entities from using a
revenue-based depreciation method for items of
property, plant and equipment. IAS 38 introduces
a rebuttable presumption that revenue is not an
appropriate basis for amortising intangible assets.
The amendment is effective for annual periods
beginning on or after 1 January 2016, with early
adoption permitted.
IFRS11 Joint Arrangements addresses how a
joint operator should account for the interest in
a joint operation in which the activity of the joint
operation constitutes a business. The amendment
is effective for annual periods beginning on or after
1 January 2016, with early adoption permitted.
The following pronouncements, issued by
the IASB, have not yet been endorsed by the
EU, are not yet effective and have not yet been
adopted by the Company. The Company is
evaluating the impact of these pronouncements
on the consolidated fnancial statements:
In November 2013, IAS 19 Employee Benefts
was amended to clarify the requirements that relate
to how contributions from employees or third parties
that are linked to service should be attributed to
periods of service. In addition, it permits a practical
expedient if the amount of the contributions is
independent of the number of years of service, in
that contributions can, but are not required, to be
recognised as a reduction in the service cost in
the period in which the related service is rendered.
The amendment is effective for annual periods
beginning on or after 1 July 2014, with early
adoption permitted.
IFRS 9 Financial Instruments (2009) was issued
by IASB in November 2009 as the frst step in its
project to replace IAS 39 Financial Instruments:
Recognition and Measurement in its entirety.
This new standard introduces new requirements
for classifying and measuring fnancial assets,
requiring certain debt instruments to be measured
at amortised cost, allowing certain equity
instruments to be designated as fair value through
other comprehensive income and requiring all other
instruments to be measured at fair value through
proft or loss. In October 2010, IFRS 9 Financial
Instruments (2010) was issued, incorporating
revised requirements for the classifcation and
measurement of fnancial liabilities, and carrying
over the existing derecognition requirements from
IAS 39. In November 2013, IFRS 9 Financial
Instruments (Hedge Accounting and amendments
to IFRS 9, IFRS 7 and IAS 39) (2013) was issued.
This revised standard introduces a new chapter on
hedge accounting and permits any entity to apply
only the requirements introduced in IFRS 9 (2010)
for the presentation of gains and losses on fnancial
liabilities designated as at fair value through proft
or loss without applying the other requirements of
IFRS 9. It also removes the mandatory effective
date of IFRS 9 (2013), IFRS 9 (2010) and IFRS 9
(2009), leaving the effective date open pending the
fnalisation of the impairment and classifcation and
measurement requirements. Notwithstanding the
removal of an effective date, each standard remains
available for application. At its November 2013
meeting, the IASB tentatively decided that
the mandatory effective date of IFRS 9 will
be no earlier than annual periods beginning
on or after 1 January 2018.
IFRIC 21 Levies was issued in May 2013 to
provide guidance on when to recognise a liability
for a levy imposed by a government, both for levies
that are accounted for in accordance with IAS 37
Provisions, Contingent Liabilities and Contingent
Assets and those where the timing and amount
of the levy is certain. The interpretation identifes
the obligating event for the recognition of a liability
as the activity that triggers the payment of the
levy in accordance with the relevant legislation.
The interpretation is effective for annual periods
beginning on or after 1 January 2014, with early
adoption permitted.
In addition, as part of the IASB’s Annual
Improvements, a number of minor amendments
have been made to standards in the 2010-2012
and 2011-2013 cycles. These amendments are
effective for annual periods beginning on or after
1 July 2014, with early application permitted.
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8 OTHER EXPENSES
9 RESEARCH AND DEVELOPMENT
During the year legislation was enacted to allow UK companies to elect for the Research and Development Expenditure Credit (RDEC) on
qualifying expenditure incurred since 1 April 2013, instead of the existing super-deduction rules. As a result of this election £45 million of the
RDEC, the proportion relating to capitalised product development expenditure, has been offset against the cost of the respective assets.
The remaining £18 million of the RDEC has been recognised as other income.
Year ended 31 March (£ millions) 2014 2013 2012
Stores, spare parts and tools 114 81 57
Freight cost 610 437 342
Works, operations and other costs 1,538 1,303 1,075
Repairs 17 11 11
Power and fuel 62 57 49
Rent, rates and other taxes 41 33 27
Insurance 19 16 19
Warranty 541 462 372
Publicity 775 675 577
Total other expenses 3,717 3,075 2,529
Year ended 31 March (£ millions) 2014 2013 2012
Total research and development costs incurred 1,266 1,058 900
Research and development expensed (236) (198) (149)
Development costs capitalised 1,030 860 751
Interest capitalised 102 110 74
Research and development expenditure credit (45) – –
Total internally developed intangible additions 1,087 970 825
10 FINANCE INCOME AND EXPENSE
Year ended 31 March (£ millions) 2014 2013 2012
Finance income 38 34 16
Total fnance income 38 34 16
Total interest expense on fnancial liabilities measured at amortised cost (257) (176) (166)
Unwind of discount on provisions 6 1 7
Interest capitalised 113 110 74
Total interest expense (138) (65) (85)
Embedded derivative value (47) 47 –
Total fnance expense (net) (185) (18) (85)
The capitalisation rate used to calculate borrowing costs eligible for capitalisation was 7.2% (2013: 8.0%, 2012: 7.9%).
During the year ended 31 March 2014, the Group repaid two tranches of debt (see note 23) and as a result a redemption premium of £56 million
was incurred and the fair value of the embedded derivatives was expensed in full.
6 DIRECTORS’ EMOLUMENTS
7 LONG-TERM INCENTIVE PLAN (LTIP)
Year ended 31 March (£) 2014 2013 2012
Directors’ emoluments 3,059,210 2,097,405 7,875,898
The aggregate of emoluments and amounts receivable under the long-term incentive plan (LTIP) of the highest paid Director was £2,433,578
(2013: £1,905,298, 2012: £2,739,517). In addition, for the highest paid Director, pension benefts of £524,000 (2013: £836,000, 2012: £836,000)
have been accrued and cumulatively are subject to remuneration committee approval. During the year, the highest paid director did not receive
any LTIP awards.
No Directors received any LTIP cash payments during the years ended 31 March 2012, 2013 and 2014.
The Group operates a LTIP arrangement for certain employees. The scheme provides a cash payment to the employee based on a specifc
number of phantom shares at grant date and the share price of Tata Motors Limited at the vesting date. The cash payment is dependent on the
achievement of internal proftability targets over the three-year vesting period and continued employment at the end of the vesting period.
The cash payment has no exercise price and therefore the weighted average exercise price in all cases is £nil.
During the year ended 31 March 2012, following the granting and vesting of the awards in the table above, Tata Motors Limited performed a 5:1
share split. The actual number of phantom stock awards outstanding at 31 March 2012 was therefore 2,934,435.
The weighted average share price of the 778,599 phantom stock awards vesting in the year was £4.45 (2013: £4.18, 2012: £12.75).
The weighted average remaining contractual life of the outstanding awards is 1.3 years (2013: 1.5 years, 2012: 1.6 years).
The amount charged in the year in relation to the long term incentive plan was £11 million (2013: £5 million, 2012: £4 million).
The fair value of the balance sheet liability in respect of phantom stock awards outstanding at the year end was £17 million (2013: £10 million,
2012: £6 million).

The fair value of the awards was calculated using a Black Scholes model at the grant date. The fair value is updated at each reporting date as
the awards are accounted for as cash settled under IFRS 2. The inputs into the model are based on the Tata Motors Limited historic data and the
risk-free rate is calculated on government bond rates. The inputs used are:
Year ended 31 March (number) 2014 2013 2012
Outstanding at the beginning of the year 4,217,801 2,934,435 351,392
Granted during the year 1,956,741 1,935,130 327,318
Vested in the year (778,599) (491,029) (91,823)
Forfeited in the year (42,384) (160,735) –
Outstanding at the end of the year 5,353,559 4,217,801 586,887
Outstanding at 31 March 2012 post 5:1 share split 2,934,435
As at 31 March 2014 2013 2012
Risk-free rate (%) 0.91 0.26 0.49
Dividend yield (%) 0.49 1.57 1.44
Weighted average fair value per phantom share £4.95 £3.74 £4.08
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12 TAXATION
Prior year adjustments relate to differences between prior year estimates of tax position and current revised estimates or submission of
tax computations.
Recognised in the income statement
Recognised in the statement of comprehensive income
Reconciliation of effective tax rate
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Current tax expense
Current year 348 306 207
Adjustments for prior years 9 (20) 9
Current tax expense 357 286 216
Deferred tax expense/(credit)
Origination and reversal of temporary differences 330 138 (186)
Adjustments for prior years (11) 28 (11)
Rate change (54) 8 –
Deferred tax expense/(credit) 265 174 (197)
Total income tax expense 622 460 19
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Deferred tax credit on actuarial gains on retirement benefts (31) (80) (152)
Deferred tax expense/(credit) on change in fair value of cash fow hedges 214 (53) (14)
Deferred tax expense on rate change 15 7 –
198 (126) (166)
Total tax expense/(credit) 820 334 (147)
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Proft for the year 1,879 1,214 1,460
Total income tax expense 622 460 19
Proft before tax 2,501 1,674 1,479
Income tax expense using the tax rates applicable to individual entities of 2014: 23.6%
(2013: 24.2%, 2012: 26.4%) 590 405 391
Enhanced deductions for research and development – (33) (38)
Non-deductible expenses 15 11 6
Recognition of previously unrecognised deferred tax assets – – (382)
Changes in tax rate (54) 8 –
Overseas unremitted earnings 71 57 44
Share of loss from joint ventures 2 3 –
(Over)/under provided in prior years (2) 9 (2)
Total income tax expense 622 460 19
The UK Finance Act 2013 was enacted during the year which included provisions for a reduction in the UK corporation tax rate from 23% to 21%
with effect from 1 April 2014 and to 20% with effect from 1 April 2015. Accordingly, UK deferred tax has been provided at 20% (2013: 23%, 2012:
24%), as the majority of the temporary differences are expected to reverse at that rate.
11 PROFIT BEFORE TAX
The following table sets out the auditor remuneration for the year (rounded to the nearest £0.1 million):
During the year ended 31 March 2014, £91 million was received by a foreign subsidiary as an indirect tax incentive that requires the subsidiary
to meet certain criteria relating to vehicle effciency and investment in engineering and research and development. The incentive is provided as a
partial offset to the higher sales taxes payable following implementation of new legislation. £88 million has been recognised in revenue and
£3 million has been deferred to offset against capital expenditure, when incurred.
Expense/(income) included in proft before tax for the year are the following:
Year ended 31 March (£ millions) 2014 2013 2012
Foreign exchange (gain)/loss on loans (87) 37 10
Foreign exchange (gain)/loss on derivatives (57) 11 59
Unrealised loss/(gain) on commodities 7 (1) 15
Depreciation of property, plant and equipment 386 274 234
Amortisation of intangible assets (excluding internally generated development costs) 44 52 48
Amortisation of internally generated development costs 445 296 183
Research and development expense 236 198 149
Operating lease rentals in respect of plant, property and equipment 42 26 19
Loss on disposal of property, plant, equipment and software 4 2 8
Auditor remuneration (see below) 4 3 4
Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed separately as these fees
are disclosed on a consolidated basis.
Year ended 31 March (£ millions) 2014 2013 2012
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts 0.1 0.1 0.1
Fees payable to the Company’s auditor and their associates for other services to the Group
– audit of the Company’s subsidiaries 2.9 2.7 2.4
Total audit fees 3.0 2.8 2.5
Audit related assurance services 0.3 0.2 0.3
Other assurance services 0.5 0.3 0.8
Total non-audit fees 0.8 0.5 1.1
Total audit and related fees 3.8 3.3 3.6
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Included within the summarised fnancial information above are the following amounts:
The following reconciles the carrying amount of the Group’s interests in joint ventures and associates:
As at 31 March (£ millions) 2014 2013
Cash and cash equivalents 122 131
Other current assets 48 5
Current fnancial liabilities (excluding trade and other payables and provisions) – –
Non-current fnancial liabilities (excluding trade and other payables and provisions) (65) –
Depreciation and amortisation (1) –
Interest income 2 –
Interest expense (1) –
Income tax credit 13 –
As at 31 March (£ millions) 2014 2013 2012
Net assets of material joint venture 274 128 –
Share of net assets of:
Material joint venture 137 64 –
Individually immaterial joint ventures 2 (1) 1
Individually immaterial associates – – –
Foreign exchange differences 6 (3) –
Carrying amount of the Group’s interests in joint ventures and associates 145 60 1
The following reconciles the Group’s share of total comprehensive income from joint ventures and associates:
There are no contingent liabilities or commitments relating to the Group’s interest in its associates. The Group’s share of capital commitments of
its joint ventures at 31 March 2014 is £116 million (2013: £nil, 2012: £nil) relating to the Group’s interests in its joint ventures are disclosed in note
31. There are no contingent liabilities relating to the Group’s interests in its joint ventures.
The information above refects the amounts presented in the fnancial statements of the associates and joint ventures adjusted for differences in
accounting policies between the Group and its associates and joint ventures.
As at 31 March (£ millions) 2014 2013 2012
Total comprehensive loss of material joint venture (16) (20) –
Share of total comprehensive (loss) / income of:
Material joint venture (8) (10) –
Individually immaterial joint ventures 1 (2) –
Individually immaterial associates – – –
Share of total comprehensive loss from joint ventures and associates (7) (12) –
During the year ended 31 March 2013, the Company invested a 50% stake in Suzhou Chery Jaguar Land Rover Trading Co. Limited for £1 million
and a 50% stake in Chery Jaguar Land Rover Automotive Co. Limited for £70 million. During the current year, Suzhou Chery Jaguar Land Rover
Trading Co. Limited, previously a direct joint venture of the Group, was acquired in full by Chery Jaguar Land Rover Automotive Co. Limited.
Therefore, the results shown of Chery Jaguar Land Rover Automotive Co. Limited are the consolidated results for that entity in the current year,
which includes the results of Suzhou Chery Jaguar Land Rover Trading Co. Limited. The Group has increased its investment in Chery Jaguar
Land Rover Automotive Co. Limited by £92 million during the year ended 31 March 2014.
No dividend was received in the year (2013, 2012: no dividend) from any of the joint ventures or associates. All joint ventures and associates are
accounted for using the equity method and are private companies and there are no quoted market prices available for their shares.
The Group has the following investments at 31 March 2014:
As at 31 March (£ millions) 2014 2013 2012
Equity accounted investees 145 60 1
Investments consist of the following:
13 INVESTMENTS
Name of investment Proportion of voting rights Principal place of business
and country of incorporation
Principal activity
Jaguar Land Rover Schweiz AG 10.0% Switzerland Sale of automotive vehicles and parts
Jaguar Cars Finance Limited 49.9% England and Wales Non-trading
Spark44 (JV) Limited 50.0% England and Wales Provision of advertising services
Chery Jaguar Land Rover
Automotive Co. Limited
50.0% China Manufacture and
assembly of vehicles
Except for Spark44 (JV) Limited, the proportion of voting rights disclosed in the table above is the same as the interest in the ordinary share
capital. The Group has an interest in 55.2% of the total ordinary share capital of Spark44 (JV) Limited, however, this share capital is divided into A
and B ordinary shares (the Group holds 100% of the B shares), with each class of share having the same voting rights and interest in returns and
therefore Spark44 (JV) Limited is considered a joint venture.
Chery Jaguar Land Rover Automotive Co. Limited is a limited liability company, whose legal form confrms separation between the parties to the
joint arrangement. There is no contractual arrangement or any other facts or circumstances that indicate that the parties to the joint venture have
rights to the assets and obligations for the liabilities of the joint arrangement. Accordingly, Chery Jaguar Land Rover Automotive Co. Limited is
classifed as a joint venture.
The following table sets out the summarised fnancial information in aggregate for the share of investments in joint ventures and associates that
are not individually material:
The following table sets out the summarised fnancial information of the Group’s individually material joint venture, Chery Jaguar Land Rover
Automotive Co. Limited:
As at 31 March (£ millions) 2014 2013 2012
Group’s share of proft/(loss) for the year 1 (2) –
Group’s share of other comprehensive income – – –
Group’s share of total comprehensive income/(loss) 1 (2) –
Carrying amount of the Group’s interest 2 (1) 1
As at 31 March (£ millions) 2014 2013
Current assets 170 136
Current liabilities (67) (27)
Non-current assets 236 19
Non-current liabilities (65) –
Equity attributable to shareholders 274 128
Revenue – –
Loss for the year (16) (20)
Other comprehensive income – –
Total comprehensive loss (16) (20)
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Under construction additions are shown net of additions to Land and buildings of £152 million (2013: £29 million, 2012: £29 million) and additions
to Plant and equipment of £245 million (2013: £212 million, 2012: £165 million).
15 PROPERTY, PLANT AND EQUIPMENT
(£ millions) Land and
buildings
Plant and
equipment
Vehicles Computers Fixtures &
fttings
Leased
assets
Under
construction
Total
Cost
Balance at 1 April 2011 337 1,265 10 11 17 35 83 1,758
Additions 30 491 14 3 6 – 54 598
Disposals (2) (15) (4) – (1) – – (22)
Balance at 31 March 2012 365 1,741 20 14 22 35 137 2,334
Additions 31 808 4 1 12 8 179 1,043
Disposals (14) (50) (20) (1) (4) – – (89)
Balance at 31 March 2013 382 2,499 4 14 30 43 316 3,288
Additions 155 667 1 3 19 – 389 1,234
Disposals (3) (17) (1) – (1) – – (22)
Reclassifcation from
intangible assets – – – 8 – – – 8
Balance at 31 March 2014 534 3,149 4 25 48 43 705 4,508
Depreciation
Balance at 1 April 2011 49 451 3 2 12 11 – 528
Depreciation charge for the
period
9 212 4 1 4 4 – 234
Disposals – (11) (2) – (1) – – (14)
Balance at 31 March 2012 58 652 5 3 15 15 – 748
Depreciation charge for the
period
11 253 2 1 2 5 – 274
Disposals (13) (46) (6) – (4) – – (69)
Balance at 31 March 2013 56 859 1 4 13 20 – 953
Depreciation charge for the
period
16 359 1 2 3 5 – 386
Disposals (2) (12) (1) – (1) – – (16)
Reclassifcation from
intangible assets – – – 1 – – – 1
Balance at 31 March 2014 70 1,206 1 7 15 25 – 1,324
Net book value
At 31 March 2012 307 1,089 15 11 7 20 137 1,586
At 31 March 2013 326 1,640 3 10 17 23 316 2,335
At 31 March 2014 464 1,943 3 18 33 18 705 3,184
£23 million (2013: £47 million, 2012: £77 million) of the non-current restricted cash is held as security in relation to vehicles ultimately sold on
lease, pledged until the leases reach their respective conclusion.
£nil (2013: £110 million, 2012: £131 million) of the current restricted cash is held as security in relation to bank loans, pledged until the loans
reach their respective conclusion.
14 OTHER FINANCIAL ASSETS
As at 31 March (£ millions) 2014 2013 2012
Non-current
Restricted cash held as security 25 49 81
Derivative fnancial instruments 436 122 23
Other 12 24 3
Total non-current other fnancial assets 473 195 107
Current
Advances and other receivables recoverable in cash 22 24 1
Derivative fnancial instruments 361 31 48
Restricted cash held as security – 110 131
Other 9 11 3
Total current other fnancial assets 392 176 183
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IMPAIRMENT TESTING
The Directors are of the view that the operations of the Group represent a single cash-generating unit. The intellectual property rights are deemed
to have an indefnite useful life on the basis of the expected longevity of the brand names.

The recoverable amount of the cash-generating unit has been calculated with reference to its value in use. The key assumptions of this
calculation are shown below:
The growth rates used in the value in use calculation refect those inherent within the Board’s business plan which is primarily a function of
the Group’s cycle plan assumptions, past performance and management’s expectation of future market developments, approved by the Board
through to 2018/9. The cash fows are then extrapolated into perpetuity assuming a zero growth rate.
No reasonably possible change in any of the key assumptions would cause the recoverable amount calculated above to be less than the carrying
value of the assets of the cash-generating unit.
As at 31 March 2014 2013 2012
Period on which management approved forecasts are based 5 years 5 years 4 years
Growth rate applied beyond approved forecast period 0% 0% 0%
Pre-tax discount rate 10.9% 10.2% 10.8%
17 OTHER ASSETS
As at 31 March (£ millions) 2014 2013 2012
Current
Recoverable VAT 237 378 409
Prepaid expenses 70 56 48
Other 48 – –
Total current other assets 355 434 457
Non-current
Prepaid expenses 31 5 9
Other 2 3 2
Total non-current other assets 33 8 11
16 INTANGIBLE ASSETS
(£ millions) Software Patents &
technological
know-how
Customer
related
Intellectual
property
rights
&other
intangibles
Product
development
inprogress
Capitalised
product
development
Total
Cost
Balance at 1April 2011 121 147 89 618 947 499 2,421
Other additions – externally purchased 63 – – – – – 63
Other additions – internally developed – – – – 825 – 825
Capitalised product development –
internally developed – – – – (480) 480 –
Disposals (1) – – – – – (1)
Balance at 31 March2012 183 147 89 618 1,292 979 3,308
Other additions – externally purchased 99 – – – – – 99
Other additions – internally developed – – – – 970 – 970
Capitalised product development –
internally developed – – – – (999) 999 –
Disposals (35) – – – – – (35)
Balance at 31 March 2013 247 147 89 618 1,263 1,978 4,342
Other additions – externally purchased 127 – – – – – 127
Other additions – internally developed – – – – 1,087 – 1,087
Capitalised product development –
internally developed – – – – (583) 583 –
Disposals (3) – – – – (146) (149)
Reclassifcation to tangible assets (8) – – – – – (8)
Balance at 31 March 2014 363 147 89 618 1,767 2,415 5,399
Amortisation and impairment
Balance at 1 April 2011 43 42 37 – – 155 277
Amortisation for the year 33 12 3 – – 183 231
Disposals (1) – – – – – (1)
Balance at 31 March 2012 75 54 40 – – 338 507
Amortisation for the year 33 16 3 – – 296 348
Disposals (35) – – – – – (35)
Balance at 31 March 2013 73 70 43 – – 634 820
Amortisation for the year 26 15 3 – – 445 489
Disposals (3) – – – – (146) (149)
Reclassifcation to tangible assets (1) – – – – – (1)
Balance at 31 March 2014 95 85 46 – – 933 1,159
Net book value
At 31 March 2012 108 93 49 618 1,292 641 2,801
At 31 March 2013 174 77 46 618 1,263 1,344 3,522
At 31 March 2014 268 62 43 618 1,767 1,482 4,240
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Signifcant components of deferred tax asset and liability for the year ended 31 March 2013 are as follows:
* Included within £21 million is a reversal of £39 million relating to withholding tax incurred on inter-company dividends paid in the year.
** For balance sheet presentation purposes, deferred tax assets and deferred tax liabilities are offset to the extent they relate to the same taxation
authority and are expected to be settled on a net basis.
The Group continued to recognise all deferred tax assets at 31 March 2013 in view of the continued proftability of the companies in which the
deferred tax assets arise.
All deferred tax assets and deferred tax liabilities at 31 March 2013 are non-current.
(£ millions) Opening
balance
Recognised in
proft or loss
(restated)
Recognised
in other
comprehensive
income
(restated)
Foreign
exchange
Closing
balance
Deferred tax assets
Property, plant and equipment 145 – – – 145
Expenses deductible in future years: Provisions,
allowances for doubtful receivables 136 49 – (3) 182
Derivative fnancial instruments 19 (8) 50 – 61
Retirement benefts 100 (9) 73 – 164
Unrealised proft in inventory 77 (1) – – 76
Tax loss 614 (58) – – 556
Other – 2 – – 2
Total deferred tax asset 1,091 (25) 123 (3) 1,186
Deferred tax liabilities
Property, plant and equipment 5 (3) – – 2
Intangible assets 544 132 – – 676
Derivative fnancial instruments 4 (1) (3) – –
Overseas unremitted earnings 65 21 – – 86
Total deferred tax liability 618 149 (3) – 764
Presented as deferred tax asset** 474 508
Presented as deferred tax liability** (1) (86)
18 DEFERRED TAX ASSETS AND LIABILITIES
Signifcant components of deferred tax asset and liability for the year ended 31 March 2014 are as follows:
* Included within £55 million is a reversal of £5 million relating to withholding tax incurred on inter-company dividends paid in the year.
** For balance sheet presentation purposes, deferred tax assets and deferred tax liabilities are offset to the extent they relate to the same
taxation authority and are expected to be settled on a net basis.
(£ millions) Opening
balance
Recognised in
proft or loss
Recognised
in other
comprehensive
income
Foreign
exchange
Closing
balance
Deferred tax assets
Property, plant and equipment 145 (71) – – 74
Expenses deductible in future years:
Provisions, allowances for doubtful receivables 182 29 – (21) 190
Derivative fnancial instruments 61 – (61) – –
Retirement benefts 164 (25) (4) – 135
Unrealised proft in inventory 76 62 – – 138
Tax loss 556 (181) – – 375
Other 2 13 – – 15
Total deferred tax asset 1,186 (173) (65) (21) 927
Deferred tax liabilities
Property, plant and equipment 2 – – – 2
Intangible assets 676 37 – – 713
Derivative fnancial instruments – – 133 – 133
Overseas unremitted earnings 86 55* – – 141
Total deferred tax liability 764 92 133 – 989
Presented as deferred tax asset** 508 284
Presented as deferred tax liability** (86) (346)
*
The Group continues to recognise all deferred tax assets at 31 March 2014 in view of the continued proftability of the companies in which the
deferred tax assets arise.
All deferred tax assets and deferred tax liabilities at 31 March 2014 are non-current.
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20 ALLOWANCES FOR TRADE AND OTHER RECEIVABLES
21 INVENTORIES
22 ACCOUNTS PAYABLE
Changes in the allowances for trade and other receivables are as follows:
Inventories of fnished goods include £174 million (2013: £171 million, 2012: £134 million), relating to vehicles sold to rental car companies, feet
customers and others with guaranteed repurchase arrangements.
Cost of inventories (including cost of purchased products) recognised as an expense during the year amounted to £13,421 million
(2013: £11,151 million, 2012: £9,674 million).
During the year, the Group recorded inventory write-down expense of £24 million (2013: £33 million, 2012: £11 million). The write-down is
included in material and other cost of sales. No previous write-downs have been reversed in any period.
Year ended 31 March (£ millions) 2014 2013 2012
At beginning of year 10 13 10
Change in allowance during the year (1) (1) 5
Written off (1) (2) (2)
At end of year 8 10 13
As at 31 March (£ millions) 2014 2013 2012
Raw materials and consumables 75 52 63
Work in progress 211 197 169
Finished goods 1,888 1,546 1,265
Total inventories 2,174 1,795 1,497
As at 31 March (£ millions) 2014 2013 2012
Trade payables 3,154 2,628 2,272
Liabilities to employees 148 106 88
Liabilities for expenses 1,244 1,277 856
Capital creditors 241 216 69
Total accounts payable 4,787 4,227 3,285
Signifcant components of deferred tax asset and liability for the year ended 31 March 2012 are as follows:
(£ millions) Opening
balance
Recognised in
proft or loss
(restated)
Recognised
in other
comprehensive
income (restated)
Foreign
exchange
Closing
balance
Deferred tax assets
Property, plant and equipment 224 – – – 145
Expenses deductible in future years: Provisions,
allowances for doubtful receivables 105 31 – – 136
Derivative fnancial instruments – 10 9 – 19
Retirement benefts 49 (101) 152 – 100
Unrealised proft in inventory 43 34 – – 77
Tax loss – 614 – – 614
Total deferred tax asset 421 509 161 – 1,091
Deferred tax liabilities
Property, plant and equipment 2 3 – – 5
Intangible assets 275 269 – – 544
Derivative fnancial instruments 12 (3) (5) – 4
Overseas unremitted earnings 22 43 – – 65
Total deferred tax liability 311 312 (5) – 618
Presented as deferred tax asset** 112 474
Presented as deferred tax liability** (2) (1)
* Included within £43 million is a reversal of £4 million relating to withholding tax incurred on inter-company dividends paid in the year.
** For balance sheet presentation purposes, deferred tax assets and deferred tax liabilities are offset to the extent they relate to the same taxation
authority and are expected to be settled on a net basis.
At 31 March 2012, the Group recognised all previously unrecognised unused tax losses and other temporary differences in the JLR business
in the UK (£505 million) in light of the planned consolidation of the UK manufacturing business in the year ending 31 March 2013 and business
forecasts showing continuing proftability. Accordingly, £149 million of previously unrecognised deductible temporary differences was utilised to
reduce current tax expense and previously unrecognised deferred tax benefts of £233 million and £123 million were recognised in the statements
of income and other comprehensive income respectively in the year ended 31 March 2012.
19 CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of the following:
At 31 March 2014, all cash held by the Group can be utilised across the Group’s manufacturing and sales operations. The restrictions on cash
reported in prior years (2013: £524 million, 2012: £454 million) related to amounts held in China which could not be utilised by other Group
companies due to the exchange controls in place. In the year ended 31 March 2014, these exchange controls were relaxed by the Chinese
authorities to allow the lending of surplus cash held in China if certain criteria are met.
As at 31 March (£ millions) 2014 2013 2012
Cash and cash equivalents 2,260 2,072 2,430
2,260 2,072 2,430
18 DEFERRED TAX ASSETS AND LIABILITIES (CONTINUED)
*
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24 OTHER FINANCIAL LIABILITIES
As at 31 March (£ millions) 2014 2013 2012
Due in
1 year or less 296 483 474
2nd and 3rd years 254 296 268
4th and 5th years 666 288 268
More than 5 years 1,666 2,152 2,023
Total contractual cash fows 2,882 3,219 3,033
As at 31 March (£ millions) 2014 2013 2012
Current
Finance lease obligations 5 5 5
Interest accrued 24 39 46
Derivative fnancial instruments 65 206 108
Liability for vehicles sold under a repurchase arrangement 183 183 154
Total current other fnancial liabilities 277 433 313
Non-current
Finance lease obligations 13 18 15
Derivative fnancial instruments 55 208 33
Other payables 1 1 25
Total non-current other fnancial liabilities 69 227 73
Preference shares contain no right to vote upon any resolution at any general meeting of the Company. In June 2012, £157 million of preference
shares were repaid.
The contractual cash fows of interest bearing debt and borrowings as of 31 March 2014 are set out below, including estimated interest payments
and assumes the debt will be repaid at the maturity date.
UNDRAWN FACILITIES
As at 31 March 2014, the Group has a fully undrawn revolving credit facility of £1,290 million. This facility is split into 3 and 5 year tranches which
are available until 2016 and 2018 respectively.
23 INTEREST BEARING LOANS AND BORROWINGS
As at 31 March (£ millions) 2014 2013 2012
EURO MTF listed bond 1,843 1,839 1,484
Loans from banks 167 328 333
Redeemable preference shares classifed as debt – – 157
Finance lease obligations 18 23 20
Total borrowings 2,028 2,190 1,994
Less:
Current bank loan (167) (328) (333)
Current other loans – – (157)
Short-term borrowings (167) (328) (490)
Current portion of fnance lease obligations (5) (5) (5)
Long-term debt 1,856 1,857 1,499
Held as long-term debt 1,843 1,839 1,484
Held as long-term fnance leases 13 18 15
As at 31 March (£ millions) 2014 2013 2012
Short-term borrowings
Bank loan 167 328 333
Redeemable preference shares classifed as debt – – 157
Short-term borrowings 167 328 490
Long-term debt
EURO MTF listed debt 1,843 1,839 1,484
Long-term debt 1,843 1,839 1,484
EURO MTF LISTED DEBT
The bonds are listed on the EURO MTF market, which is a listed market regulated by the Luxembourg Stock Exchange. Details of the tranches of
the bonds outstanding at 31 March 2014 are as follows:
• $410 million Senior Notes due 2021 at a coupon of 8.125% per annum – issued May 2011
• £500 million Senior Notes due 2020 at a coupon of 8.25% per annum – issued March 2012
• $500 million Senior Notes due 2023 at a coupon of 5.625% per annum – issued January 2013
• $700 million Senior Notes due 2018 at a coupon of 4.125% per annum – issued December 2013
• £400 million Senior Notes due 2022 at a coupon of 5.000% per annum – issued January 2014
The bond funds raised were used to repay both long-term and short-term debt and provide additional cash facilities for the Group.
Details of the tranches of the bonds repaid in the year ended 31 March 2014 are as follows:
• £500 million Senior Notes due 2018 at a coupon of 8.125% per annum – issued May 2011
• $410 million Senior Notes due 2018 at a coupon of 7.75% per annum – issued May 2011
PREFERENCE SHARES CLASSIFIED AS DEBT
The holders of the preference shares are entitled to be paid out of the profts available for distribution of the Company in each fnancial year a
fxed non-cumulative preferential dividend of 7.25% per annum. The preference share dividend is payable in priority to any payment to the holders
of other classes of capital stock.
On a return of capital on liquidation or otherwise, the assets of the Company available for distribution shall be applied frst to holders of preference
shares the sum of £1 per share together with a sum equal to any arrears and accruals of preference dividend. The Company may redeem the
preference shares at any time, but must do so not later than ten years after the date of issue. The holders may demand repayment with one
month’s notice at any time. On redemption, the Company shall pay £1 per preference share and a sum equal to any arrears or accruals of
preference dividend.
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26 OTHER LIABILITIES
27 CAPITAL AND RESERVES
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings
of the Company.
Preference shares contain no right to vote upon any resolution at any general meeting of the Company. In June 2012, all £157 million of
preference shares were repaid.
The capital redemption reserve of £167 million (2013, 2012: £167 million) was created in March 2011 on the cancellation of share capital.
As at 31 March (£ millions) 2014 2013 2012
Current
Liabilities for advances received 253 180 184
Deferred revenue 19 5 7
VAT 85 261 346
Others 38 36 22
Total current other liabilities 395 482 559
Non-current
Deferred revenue 63 13 5
Others 14 11 –
Total non-current other liabilities 77 24 5
As at 31 March (£ millions) 2014 2013 2012
Allotted, called up and fully paid
1,500,642,163 ordinary shares of £1 each 1,501 1,501 1,501
Nil (2013: nil, 2012: 157,052,620) 7.25% preference shares of £1 each – – 157
Total capital 1,501 1,501 1,658
Presented as equity 1,501 1,501 1,501
Presented as debt – – 157
LEGAL AND PRODUCT LIABILITY PROVISION
A legal and product liability provision is maintained in respect of known litigation which impacts the Group, but for which the amount and timing
are uncertain. 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 a leasing arrangement. The provision is
based on the latest available market expectations of future residual value trends that may change over time. The timing of the outfows 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.
25 PROVISIONS
Year ended 31 March (£ millions) 2014 2013 2012
Current
Product warranty 343 317 261
Legal and product liability 49 16 16
Provisions for residual risk 2 2 2
Other employee benefts obligations 1 – –
Total current provisions 395 335 279
Non-current
Other employee benefts obligations 10 7 2
Product warranty 538 426 308
Provision for residual risk 13 13 14
Provision for environmental liability 21 22 20
Total non-current provisions 582 468 344
Product warranty
Opening balance 743 569 503
Provision made during the year 541 462 372
Provision used during the year (397) (284) (298)
Impact of discounting (6) (1) (7)
Foreign currency translation – (3) (1)
Closing balance 881 743 569
Legal and product liability
Opening balance 16 16 19
Provision made during the year 41 6 17
Provision used during the year (5) (7) (20)
Foreign currency translation (3) 1 –
Closing balance 49 16 16
Residual risk
Opening balance 15 16 7
Provision made during the year 2 – 9
Provision used during the year – (1) –
Foreign currency translation (2) – –
Closing balance 15 15 16
Environmental liability
Opening balance 22 20 18
Provision made during the year – 3 3
Provision used during the year (1) (1) (1)
Closing balance 21 22 20
PRODUCT WARRANTY PROVISION
The Group offers warranty cover in respect of manufacturing defects, which become apparent within one to fve years after purchase, dependent
on the market in which the purchase occurred. The estimated liability for product warranties is recorded when products are sold. These estimates
are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding
possible future incidences based on actions on product failures. The discount on the warranty provision is calculated using a risk-free discount
rate as the risks specifc to the liability, such as infation, are included in the base calculation. The timing of outfows will vary as and when a
warranty claim will arise, being typically up to fve years.
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29 DIVIDENDS
30 EMPLOYEE BENEFITS
Year ended 31 March (£ millions) 2014 2013 2012
Dividend proposed for the previous year paid during the year of £0.10
(2013: £nil, 2012: £nil) per ordinary share 150 – –
Dividend for the year paid during the year of £nil
(2013: £0.10, 2012: £nil) per ordinary share – 150 –
Amounts recognised as distributions to equity holders during the year 150 150 –
Proposed dividend for the year of £0.10 (2013: £0.10, 2012: £nil) per ordinary share 150 150 –
The proposed dividend for the year ended 31 March 2014 was paid in full in June 2014. Preference shares of £157 million were repaid in the year
ended 31 March 2013, along with preference share dividends of £14 million (2012: accrued £11 million).
The Group operates defned beneft schemes for qualifying employees of certain of its subsidiaries. The defned beneft schemes are
administered by a separate fund that is legally separated from the Company. The trustees of the pension schemes are required by law to act in
the interest of the fund and of all relevant stakeholders in the scheme and are responsible for the investment policy with regard to the assets of
the schemes and all other governance matters. The board of trustees must be composed of representatives of the Company and plan participants
in accordance with the plan’s regulations.
Under the schemes, the employees are entitled to post-retirement benefts based on their length of service and salary.
Through its defned beneft pension plans the Group is exposed to a number of risks, the most signifcant of which are detailed below:
Asset volatility
The plan liabilities are calculated using a discount rate set with references to corporate bond yields; if plan assets underperform these corporate
bonds, this will create a defcit. The defned beneft plans hold a signifcant proportion of equity type assets, which are expected to outperform
corporate bonds in the long term while providing volatility and risk in the short term.
As the plans mature, the Group intends to reduce the level of investment risk by investing more in assets that better match the liabilities.
However, the Group believes that due to the long-term nature of the plan liabilities and the strength of the supporting Group, a level of continuing
equity type investments is an appropriate element of the Group’s long-term strategy to manage the plans effciently.
Changes in bond yields
A decrease in corporate bond yields will increase plan liabilities, although this is expected to be partially offset by an increase in the value of the
plans’ bond holdings and interest rate hedging instruments.
Infation risk
Some of the Group pension obligations are linked to infation, and higher infation will lead to higher liabilities (although, in most cases, caps on
the level of infationary increases are in place to protect the plans against extreme infation). The plans hold a signifcant proportion of assets in
index linked gilts, together with other infation hedging instruments and also assets which are more loosely correlated with infation. However an
increase in infation will also increase the defcit to some degree.
Life expectancy
The majority of the plans’ obligations are to provide benefts for the life of the members, so increases in life expectancy will result in an increase
in the plans’ liabilities. This is particularly signifcant in the UK defned beneft plans, where infationary increases result in higher sensitivity to
changes in life expectancy.
28 OTHER RESERVES
The movement of other reserves is as follows:
(£ millions) Translation reserve Hedging reserve Retained earnings Total reserves
Balance at 1 April 2013 (383) (196) 2,450 1,871
Proft for the year – – 1,879 1,879
Remeasurement of defned beneft obligation – – (135) (135)
Gain on effective cash fow hedges – 1,041 – 1,041
Income tax related to items recognised in other
comprehensive income – (220) (4) (224)
Cash fow hedges reclassifed to foreign exchange in
proft or loss – (112) – (112)
Income tax related to items reclassifed to proft or loss – 26 – 26
Dividend paid – – (150) (150)
Balance at 31 March 2014 (383) 539 4,040 4,196
Balance at 1 April 2012 (383) (20) 1,659 1,256
Proft for the year (restated) – – 1,214 1,214
Remeasurement of defned beneft obligation – – (346) (346)
Loss on effective cash fow hedges – (288) – (288)
Income tax related to items recognised in other
comprehensive income – 66 73 139
Cash fow hedges reclassifed to foreign exchange
in proft or loss – 59 – 59
Income tax related to items reclassifed to proft or loss – (13) – (13)
Dividend paid – – (150) (150)
Balance at 31 March 2013 (383) (196) 2,450 1,871
Balance at 1 April 2011 (383) 22 169 (192)
Proft for the year (restated) – – 1,460 1,460
Remeasurement of defned beneft obligation – – (122) (122)
Loss on effective cash fow hedges – (36) – (36)
Income tax related to items recognised in other
comprehensive income – 9 152 161
Cash fow hedges reclassifed to foreign exchange
in proft or loss – (20) – (20)
Income tax related to items reclassifed to proft or loss – 5 – 5
Balance at 31 March 2012 (383) (20) 1,659 1,256
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Amounts recognised in the consolidated statement of comprehensive income of:
The most recent actuarial valuations of scheme assets and the present value of the defned beneft liability were carried out at 31 March 2014 by
a qualifed independent actuary. The present value of the defned beneft liability, and the related current service cost and past service cost, were
measured using the projected unit credit method.
The principal assumptions used in accounting for the pension plans are set out below:
For the valuation at 31 March 2014 and 2013, 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 in both 2014 and 2013 of 115% has been used for the Jaguar
Pension Plan, 110% for the Land Rover Pension Scheme, and 105% for males and 90% for females for Jaguar Executive Pension Plan. There
is an allowance for future improvements in line with the CMI (2013) projections (2013: CMI (2012) projections) and an allowance for long-term
improvements of 1.25% per annum.
For the valuation at 31 March 2012, the mortality assumptions used are the SAPS base table, in particular S1PMA for males, S1PFA for
females and the Light table for members of the Jaguar Executive Pension Plan, with a scaling factor of 90% for males and 115% for females
for all members. There was an allowance for future improvements in line with the CMI (2011) projections and an allowance for long-term
improvements of 1.25% per annum.
Amounts recognised in the consolidated balance sheet consist of:
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Actuarial gains/(losses) arising from:
Changes in demographic assumptions (39) (115) 33
Changes in fnancial assumptions (243) 951 259
Experience adjustments 8 15 75
Remeasurement loss/(gain) on the return of plan assets,excluding amounts included
in interest income 407 (384) (190)
Change in restriction of pension asset recognised (as per IFRIC 14) 2 (27) (6)
Change in onerous obligation, excluding amounts included in interest expense – (94) (49)
Remeasurement of defned beneft obligation 135 346 122
As at 31 March (£ millions) 2014 2013 2012
Present value of unfunded defned beneft obligations (1) (1) (1)
Present value of funded defned beneft obligations (6,052) (6,020) (4,915)
Fair value of plan assets 5,382 5,365 4,707
Restriction of pension asset recognised (as per IFRIC 14) (3) (1) (28)
Onerous obligation – – (88)
Net retirement beneft obligation (674) (657) (325)
Presented as non-current asset – – 2
Presented as non-current liability (674) (657) (327)
Year ended 31 March (%) 2014 2013 2012
Discount rate 4.6 4.4 5.1
Expected rate of increase in compensation level of covered employees 3.9 3.9 3.8
Infation increase 3.4 3.4 3.3
30 EMPLOYEE BENEFITS (CONTINUED)
The following tables set out the disclosures pertaining to the retirement beneft amounts recognised in the fnancial statements:
Change in present value of defned beneft obligation
Change in fair value of plan assets
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Defned beneft obligation at beginning of year 6,021 4,916 4,300
Current service cost 176 123 108
Interest expense 262 247 234
Actuarial (gains)/losses arising from:
Changes in demographic assumptions (39) (115) 33
Changes in fnancial assumptions (243) 951 259
Experience adjustments 8 15 75
Past service cost 6 6 15
Exchange differences on foreign schemes (2) 1 (1)
Member contributions 1 7 7
Benefts paid (137) (129) (114)
Other adjustments – (1) –
Defned beneft obligation at end of year 6,053 6,021 4,916
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Fair value of plan assets at beginning of year 5,365 4,707 4,172
Interest income 237 238 230
Remeasurement (loss)/gain on the return of plan assets, excluding amounts
included in interest income (407) 384 190
Administrative expenses (8) (10) (9)
Exchange differences on foreign schemes (2) 1 –
Employer contributions 333 168 231
Member contributions 1 7 7
Benefts paid (137) (129) (114)
Other adjustments – (1) –
Fair value of plan assets at end of year 5,382 5,365 4,707
The actual return on plan assets for the year was £(170) million (2013: £622 million, 2012: £420 million).
Amounts recognised in the consolidated income statement consist of:
Year ended 31 March (£ millions) 2014 2013
(restated)
2012
(restated)
Current service cost 176 123 108
Past service cost 6 6 15
Administrative expenses 8 10 9
Net interest cost (including onerous obligations) 25 15 13
Components of defned beneft cost recognised in the consolidated
income statement 215 154 145
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The assumed life expectations on retirement at age 65 are:
Valuation at 31 March (years) 2014 2013 2012
Retiring today:
Males 20.0 22.2 23.3
Females 24.5 24.6 23.7
Retiring in 20 years:
Males 23.8 23.9 25.0
Females 26.4 26.6 25.6
The below sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely
to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defned beneft obligation to
signifcant actuarial assumptions the same method (present value of the defned beneft obligation calculated with the projected unit credit method
at the end of the reporting period) has been applied as when calculating the pension liability recognised within the statement of fnancial position.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to previous periods.
*Quoted prices for indentical assets or liabilities in active markets.
The split of level 1 assets is 79% (2013: 82%, 2012: 83%), level 2 assets 20% (2013: 17%, 2012: 16%) and level 3 assets 1% (2013: 1%, 2012 1%).
Equity instruments and majority of debt instruments have quoted prices in active markets (level 1). Corporate bonds (non-investment grade),
derivatives, property and other assets are classed as level 2 instruments. Private market holdings are classifed as level 3 instruments.
The Group has agreed that it will aim to eliminate the pension plan funding defcit over the next eight years. Funding levels are monitored on an
annual basis and the current agreed contribution rate is 22.3% of pensionable salaries in the UK. The next triennial valuation is due to be carried
out as at 5 April 2015 and completed by 5 June 2016. The Group considers that the contribution rates set at the last valuation date are suffcient
to eliminate the defcit over the agreed period and that regular contributions, which are based on service costs, will not increase signifcantly.
The average duration of the beneft obligation at 31 March 2014 is 22.5 years (2013: 22.5 years, 2012: 19.4 years).
The expected net periodic pension cost for the year ended 31 March 2015 is £206 million. The Group expects to contribute £113 million to its
plans in the year ended 31 March 2015.
DEFINED CONTRIBUTION PLAN
The Group’s contribution to defned contribution plans aggregated £23 million (2013: £12 million, 2012: £11 million).
A
Assumption Change in assumption Impact on scheme liabilities Impact on service cost
Discount rate Increase/decrease by 0.25% Decrease/increase by £348 million Decrease/increase by £12 million
Infation rate Increase/decrease by 0.25% Increase/decrease by £294 million Increase/decrease by £12 million
Mortality Increase/decrease by 1 year Increase/decrease by £145 million Increase/decrease by £4 million
The fair value of plan assets is represented by the following major categories:
As at 31 March (£ millions) 2014 2013 2012
Quoted* Unquoted Total % Quoted* Unquoted Total % Quoted* Unquoted Total %
Equity instruments
Information technology 73 – 73 1 119 – 119 2 127 – 127 3
Energy 61 – 61 1 100 – 100 2 106 – 106 2
Manufacturing 67 – 67 1 109 – 109 2 116 – 116 2
Financials 128 – 128 3 203 – 203 4 137 – 137 3
Other 281 – 281 5 464 – 464 9 570 – 570 12
610 – 610 11 995 995 19 1,056 1,056 22
Debt instruments
Government 2,119 – 2,119 40 2,106 – 2,106 39 1,988 – 1,988 42
Corporate bonds
(investment grade) 1,167 – 1,167 22 1,128 – 1,128 21 843 – 843 18
Corporate bonds
(non-investment grade) – 280 280 5 – 202 202 4 – 181 181 4
3,286 280 3,566 67 3,234 202 3,436 64 2,831 181 3,012 64
Property funds
UK – 173 173 3 – 128 128 2 – 46 46 1
Other – 63 63 1 – 59 59 1 – 50 50 1
– 236 236 4 – 187 187 3 – 96 96 2
Cash and cash
equivalents
360 – 360 7 204 – 204 4 – – – –
Other
Hedge funds – 308 308 6 – 317 317 6 – 144 144 3
Private markets – 78 78 1 – 50 50 1 – 34 34 1
Alternatives – 220 220 4 – 203 203 4 – 365 365 8
– 606 606 11 – 570 570 11 – 543 543 12
Derivatives
Foreign exchange contracts – 4 4 – – (27) (27) (1) – – – –
– 4 4 – – (27) (27) (1) – – – –
Total 4,256 1,126 5,382 100 4,433 932 5,365 100 3,887 820 4,707 100
30 EMPLOYEE BENEFITS (CONTINUED)
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31 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 ongoing 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 fnancial statements, if
material. For potential losses that are considered possible, but not probable, the Group provides disclosure in the fnancial statements but does
not record a liability in its accounts unless the loss becomes probable. Such potential losses may be of an uncertain timing and/or amount.
The following is a description of claims and assertions where a potential loss is possible, but not probable. Management believes that none of the
contingencies described below, either individually or in aggregate, would have a material adverse effect on the Group’s fnancial condition, results
of operations or cash fows.
LITIGATION
The Group is involved in legal proceedings, both as plaintiff and as defendant and there are claims as at 31 March 2014 of £27 million (2013:
£16 million, 2012: £10 million) against the Group 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 defciency in the services by the Group or its dealers.
OTHER CLAIMS
The Group had no signifcant tax matters in dispute as at 31 March 2014 (2013: £nil, 2012: £2 million).
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 to £940 million (2013: £288 million, 2012: £545 million) and £nil (2013: £nil, 2012: £nil) relating to the
acquisition of intangible assets.
The Group has entered into various contracts with vendors and contractors which include obligations aggregating to £717 million (2013:
£887 million, 2012: £866 million) to purchase minimum or fxed quantities of material and other procurement commitments
Commitments related to leases are set out in note 34.
Inventory of £nil (2013: £nil, 2012: £69 million) and trade receivables with a carrying amount of £167 million (2013: £242 million, 2012:
£143 million) and property, plant and equipment with a carrying amount of £nil (2013: £nil, 2012: £nil) and restricted cash with a
carrying amount of £nil (2013: £110 million, 2012: £131 million) are pledged as collateral/security against the borrowings and commitments.
There are guarantees provided in the ordinary course of business of £1 million.
Stipulated within the joint venture agreement for Chery Jaguar Land Rover Automotive Co. Limited is a commitment for the Group to contribute
a total of RMB 3,500 million of capital, of which RMB 1,625 million has been contributed as at 31 March 2014. The outstanding commitment of
RMB 1,875 million translates to £181 million at year-end exchange rates.
32 CAPITAL MANAGEMENT
33 FINANCIAL INSTRUMENTS
The Group’s objectives when managing capital are to ensure the going concern operation of its entities and to maintain an effcient 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 issues supported by committed borrowing facilities to meet anticipated
funding requirements and maintain suffcient 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 EBITDA
and 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.
This section gives an overview of the signifcance of fnancial instruments for the Group and provides additional information on balance sheet
items that contain fnancial instruments.
The details of signifcant accounting policies, including the criteria for recognition, the basis of measurement and the basis on which income
and expenses are recognised, in respect of each class of fnancial asset, fnancial liability and equity instrument are disclosed in note 2 to the
fnancial statements.
As at 31 March (£ millions) 2014 2013 2012
Short-term debt 172 333 495
Long-term debt 1,856 1,857 1,499
Total debt* 2,028 2,190 1,994
Equity 5,864 3,539 2,924
Total capital 7,892 5,729 4,918
(A) FINANCIAL ASSETS AND LIABILITIES
The following table shows the carrying amounts and fair value of each category of fnancial assets and liabilities as at 31 March 2014:
Financial assets
Financial liabilities
(£ millions) Cash, loans and
receivables
Derivatives in cash fow
hedging relationship
Fair value through
proft and loss
Total carrying
value
Total fair
value
Cash and cash equivalents 2,260 – – 2,260 2,260
Short-term deposits 1,199 – – 1,199 1,199
Trade receivables 831 – – 831 831
Other fnancial assets – current 31 349 12 392 392
Other fnancial assets – non-current 37 415 21 473 473
Total fnancial assets 4,358 764 33 5,155 5,155
(£ millions) Other fnancial
liabilities
Derivatives in cash fow
hedging relationship
Fair value through
proft and loss
Total carrying
value
Total fair
value
Accounts payable 4,787 – – 4,787 4,787
Short-term debt 167 – – 167 167
Long-term debt 1,843 – – 1,843 1,982
Other fnancial liabilities – current 212 54 11 277 277
Other fnancial liabilities – non-current 14 37 18 69 69
Total fnancial liabilities 7,023 91 29 7,143 7,282
The following table summarises the capital of the Group:
*Total debt includes fnance lease obligations of £18 million (2013: £23 million, 2012: £20 million).
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33 FINANCIAL INSTRUMENTS (CONTINUED)
The following table shows the carrying amounts and fair value of each category of fnancial assets and liabilities as at 31 March 2013:
The following table shows the carrying amounts and fair value of each category of fnancial assets and liabilities as at 31 March 2012:
Financial assets
Financial assets
Financial liabilities
Financial liabilities
(£ millions) Cash, loans and
receivables
Derivatives in
cash fow hedging
relationship
Fair value through
proft and loss
Total carrying
value
Total fair
value
Cash and cash equivalents 2,072 – – 2,072 2,072
Short-term deposits 775 – – 775 775
Trade receivables 927 – – 927 927
Other fnancial assets – current 145 30 1 176 176
Other fnancial assets – non current 73 51 71 195 195
Total fnancial assets 3,992 81 72 4,145 4,145
(£ millions) Cash, loans and
receivables
Derivatives in
cash fow hedging
relationship
Fair value through
proft and loss
Total carrying
value
Total fair
value
Cash and cash equivalents 2,430 – – 2,430 2,430
Trade receivables 662 – – 662 662
Other fnancial assets – current 135 47 1 183 183
Other fnancial assets – non current 84 23 – 107 107
Total fnancial assets 3,311 70 1 3,382 3,382
(£ millions) Other fnancial
liabilities
Derivatives in
cash fow hedging
relationship
Fair value through
proft and loss
Total carrying
value
Total fair
value
Accounts payable 4,227 – – 4,227 4,227
Short-term debt 328 – – 328 328
Long-term debt 1,839 – – 1,839 2,058
Other fnancial liabilities – current 227 179 27 433 433
Other fnancial liabilities – non current 19 156 52 227 227
Total fnancial liabilities 6,640 335 79 7,054 7,273
(£ millions) Other fnancial
liabilities
Derivatives in
cash fow hedging
relationship
Fair value through
proft and loss
Total carrying
value
Total fair value
Accounts payable 3,285 – – 3,285 3,285
Short-term debt 490 – – 490 490
Long-term debt 1,484 – – 1,484 1,534
Other fnancial liabilities – current 205 85 23 313 313
Other fnancial liabilities – non current 40 11 22 73 73
Total fnancial liabilities 5,504 96 45 5,645 5,695
OFFSETTING
Certain fnancial assets and fnancial liabilities are subject to offsetting where there is currently a legally enforceable right to set off recognised
amounts and the Group intends to either settle on a net basis or to realise the asset and settle the liability simultaneously. Derivative fnancial
assets and fnancial liabilities are subject to master netting arrangements whereby in the case of insolvency, derivative fnancial assets and fnancial
liabilities will be settled on a net basis.
The following table discloses the amounts that have been offset in arriving at the balance sheet presentation and the amounts that are available for
offset only under certain conditions as at 31 March 2014:
(£ millions) Gross amount
recognised
Gross amount
of recognised
set off in the
balance sheet
Net amount
present in the
balance sheet
Gross amount
of derivatives
which can be
offset in case of
insolvency
Cash collateral
pledged
Net amount after
offsetting
Financial assets
Derivative fnancial assets 855 (58) 797 (120) – 677
Cash and cash equivalents 2,282 (22) 2,260 –
–
2,260
3,137 (80) 3,057 (120) – 2,937
Financial liabilities
Derivative fnancial liabilities 178 (58) 120 (120) – –
Short-term debt 189 (22) 167 – – 167
367 (80) 287 (120) – 167
(£ millions) Gross amount
recognised
Gross amount
of recognised
set off in the
balance sheet
Net amount
present in the
balance sheet
Gross amount
of derivatives
which can be
offset in case of
insolvency
Cash collateral
pledged
Net amount after
offsetting
Financial assets
Derivative fnancial assets 164 (11) 153 (105) – 48
164 (11) 153 (105) – 48
Financial liabilities
Derivative fnancial liabilities 425 (11) 414 (105) – 309
425 (11) 414 (105) – 309
(£ millions) Gross amount
recognised
Gross amount
of recognised
set off in the
balance sheet
Net amount
present in the
balance sheet
Gross amount
of derivatives
which can be
offset in case of
insolvency
Cash collateral
pledged
Net amount
after offsetting
Financial assets
Derivative fnancial assets 71 – 71 (69) – 2
71 – 71 (69) – 2
Financial liabilities
Derivative fnancial liabilities 141 – 141 (69) – 72
141 – 141 (69) – 72
The following table discloses the amounts that have been offset in arriving at the balance sheet presentation and the amounts that are available
for offset only under certain conditions as at 31 March 2013:
The following table discloses the amounts that have been offset in arriving at the balance sheet presentation and the amounts that are available
for offset only under certain conditions as at 31 March 2012:
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33 FINANCIAL INSTRUMENTS (CONTINUED)
Fair value hierarchy
Financial instruments held at fair value are required to be measured by reference to the following levels.
• Quoted prices in an active market (Level 1): This level of hierarchy includes fnancial instruments that are measured by reference to quoted
prices (unadjusted) in active markets for identical assets or liabilities. This category mainly includes quoted equity shares, quoted corporate
debt instruments and mutual fund investments.
• Valuation techniques with observable inputs (Level 2): This level of hierarchy includes fnancial assets and liabilities measured using inputs
other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices).
• Valuation techniques with signifcant unobservable inputs (Level 3): This level of hierarchy includes fnancial assets and liabilities measured
using inputs that are not based on observable market data (unobservable inputs). Fair values are determined in whole or in part using
a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same
instrument nor are they based on available market data.
The fnancial instruments that are measured subsequent to initial recognition at fair value are forward currency contracts, commodity contracts
and embedded derivatives. All of these fnancial instruments are classifed as Level 2 fair value measurements, as defned by IFRS 7, being those
derived from inputs other than quoted prices that observable. These valuation techniques maximise the use of observable market data where
it is available and rely as little as possible on entity specifc estimates. Fair value of derivative fnancial assets and liabilities are estimated by
discounting expected future contractual cash fows using prevailing market interest rate curves from Reuters.
The long-term unsecured listed bonds are held at amortised cost. Its fair value (disclosed above) is determined using Level 1 valuation
techniques, based on the closing price at 31 March 2014 on the Euro MTF market. There has been no change in the valuation techniques
adopted or any transfers between fair value levels.
Fair values of cash and cash equivalents, short-term deposits, trade receivables and payables, short-term debt, other fnancial assets and
liabilities, current and non-current (excluding derivatives) are assumed to approximate to cost due to the short term maturing of the instruments
and as the impact of discounting is not signifcant.
Fair value of prepayment options of £nil (2013: £47 million, 2012: £nil) relates to the GBP 500 million and USD 410 million senior notes due 2018
which were bifurcated but have been repaid early in the year ended 31 March 2014. The fair value represents the difference in the traded market
price of the bonds and the expected price the bonds would trade at if they did not contain any prepayment features. The expected price is based
on market inputs including credit spreads and interest rates.
Management uses its best judgement in estimating the fair value of its fnancial instruments. However, there are inherent limitations in any
estimation technique. Therefore, for substantially all fnancial instruments, the fair value estimates presented above are not necessarily indicative
of all the amounts that the Group could have realised in a sales transaction as of respective dates. The estimated fair value amounts as of
31 March 2014, 31 March 2013 and 31 March 2012 have been measured as of the respective dates. As such, the fair values of these fnancial
instruments subsequent to the respective reporting dates may be different than the amounts reported at each year-end.
(B) CASH FLOW HEDGING
The Group risk management policy allows the use of currency and interest derivative instruments to manage its exposure to fuctuations in foreign
exchange and interest rates. To the extent possible under IAS 39, these instruments are designated in hedging relationships if they meet the
requirements outlined in the standard.
As of 31 March 2014, the Group has taken out a number of cash fow hedging instruments. The Group uses USD/GBP forward and option
contracts, USD/Euro forward contracts and other currency options to hedge future cash fows from sales and purchases. Cash fow hedges are
expected to be recognised in proft or loss during the years ending 31 March 2015 to 2018.
The Group also has a number of USD/Euro options which are entered into as an economic hedge of the fnancial risks of the Group. These
contracts do not meet the hedge accounting criteria of IAS 39, so the change in fair value is recognised immediately in the income statement.
The time value of options is considered ineffective in the hedge relationship and thus the change in time value is recognised immediately in the
income statement.
The Group uses foreign currency contracts to hedge its risk associated with foreign currency fuctuations relating to highly probable forecast
transactions. The fair value of such contracts as of 31 March 2014 was a net asset of £673 million (2013: net liability of £254 million, 2012: net
liability of £26 million).
Changes in fair value of foreign currency contracts to the extent determined to be an effective hedge is recognised in the statement of other
comprehensive income and the ineffective portion of the fair value change is recognised in income statement. Accordingly, the fair value change
of net gain of £1,041 million (2013: loss of £288 million, 2012: loss of £36 million) was recognised in other comprehensive income.
The ineffective portion that arises from cash fow hedges amounts to a gain of £5 million (2013: loss of £1 million, 2012: loss of £1 million) which
has been recognised in foreign exchange gain/(loss) in the consolidated income statement. The gain on derivative contracts not eligible for
hedging was £57 million (2013: loss of £11 million, 2012: loss of £59 million) which has been recognised in foreign gain/(loss) in the consolidated
income statement.
The total loss on commodities of £18 million (2013: £10 million, 2012: £12 million) has been recognised in other income in the consolidated
income statement.
A 10% depreciation/appreciation of the foreign currency underlying such contracts would have resulted in an approximate additional gain/(loss)
of £734 million/(£893) million (2013: £612 million/(£831) million, 2012: £493 million/(£385) million) in equity and a gain/(loss) of £51 million/(£31)
million (2013: £35 million/£28 million, 2012: £28 million/(£9) million) in the consolidated income statement.
(C) FINANCIAL RISK MANAGEMENT
In the course of its business, the Group is exposed primarily to fuctuations in foreign currency exchange rates, interest rates, liquidity and credit
risk, which may adversely impact the fair value of its fnancial instruments.
The Group has a risk management policy which covers the foreign exchange risks and credit risks. The risk management policy is approved by
the Board of Directors. The risk management framework aims to:
• Create a stable business planning environment – by reducing the impact of currency and interest rate fuctuations to the Company’s
business plan.
• Achieve greater predictability to earnings – by determining the fnancial value of the expected earnings in advance.
(D) MARKET RISK
Market risk is the risk of any loss in future earnings in realisable fair values or in future cash fows that may result from a change in the price of
a fnancial instrument. The value of a fnancial instrument may change as a result of changes in any of the risks outlined in (C) above or other
market changes. Future specifc market movements cannot be normally predicted with reasonable accuracy.
Each of the sensitivity analyses presented in the following sections (E) to (H) assumes that all other variables remain constant and are based on
reasonably possible changes in each of the market risks presented.
(E) FOREIGN CURRENCY EXCHANGE RATE RISK
The fuctuation in foreign currency exchange rates may have potential impact on the consolidated income statement, the consolidated statement
of comprehensive income, the consolidated balance sheet, the consolidated cash fow statement and the consolidated statement of changes
in equity, where any transaction references more than one currency or where assets/liabilities are denominated in a currency other than the
functional currency of the respective consolidated entities.
Considering the countries and economic environment in which the Group operates, its operations are subject to risks arising from fuctuations
in exchange rates in those countries. The risks primarily relate to fuctuations in US Dollar, Chinese Yuan, Japanese Yen and Euro against the
functional currency of the Group.
The Group, as per its risk management policy, uses derivative instruments primarily to hedge foreign exchange exposure. Any weakening of the
functional currency may impact the Group’s cost of imports and cost of borrowings.
The Group evaluates the impact of foreign exchange rate fuctuations by assessing its exposure to exchange rate risks. It hedges a part of these
risks by using derivative fnancial instruments in line with its risk management policies.
The following table sets forth information relating to foreign currency exposure as of 31 March 2014:
As at 31 March 2014 (£ millions) US Dollar Chinese Yuan Euro JPY *Others Total
Financial assets 463 840 296 17 318 1,934
Financial liabilities (1,594) (715) (1,322) (62) (224) (3,915)
Net exposure asset/(liability) (1,130) 125 (1,026) (45) 94 (1,982)
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The following are the undiscounted contractual maturities of fnancial liabilities, including estimated interest payments:
As at 31 March 2014 (£ millions) Carrying amount Contractual cash fows 1 year or less 1 to