Automotive   |   Jaguar Land Rover
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
TABLE OF CONTENTS  
Page  
KEY FIGURES ................................................................................................................................................  
KEY MILESTONES.........................................................................................................................................  
DIRECTORS' REPORT  
3
4
Operating review ...............................................................................................................................  
5
General Trends in Performance (including Results of Operations) ................................................... 10  
Business Risks and Mitigating Factors............................................................................................... 13  
Other Business Factors...................................................................................................................... 23  
Liquidity and Capital Resources......................................................................................................... 25  
Related Party Transactions ................................................................................................................ 30  
Acquisitions and Disposals................................................................................................................. 30  
Off Balance Sheet Arrangements....................................................................................................... 30  
Contingencies..................................................................................................................................... 30  
Commitments ..................................................................................................................................... 30  
Board of Directors............................................................................................................................... 31  
Corporate Governance....................................................................................................................... 31  
Audit ................................................................................................................................................... 34  
Acknowledgements............................................................................................................................ 34  
Independent Auditors’ Report to the Members of Jaguar Land Rover PLC (previously  
JaguarLandRover Limited) ................................................................................................................ 36  
CONSOLIDATED FINANCIAL STATEMENTS............................................................................................... 38  
Consolidated Income Statement ........................................................................................................ 39  
Consolidated Statement of Comprehensive Income.......................................................................... 40  
Consolidated Balance Sheet.............................................................................................................. 41  
Consolidated Statement of Changes in Equity................................................................................... 43  
Consolidated Cash Flow Statement................................................................................................... 44  
Notes .................................................................................................................................................. 46  
Parent Company Balance Sheet........................................................................................................ 110  
Parent Company Statement of Changes in Equity............................................................................. 111  
This report refers to: group, company, Jaguar Land Rover, JLR etc which refers to Jaguar Land Rover  
PLC and its subsidiaries.  
2
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
KEY FIGURES  
Year ended 31 March  
2010  
2011  
% Change  
Volume ( in 000's)  
Retail  
241  
244  
208  
194  
16  
26  
Wholesales  
£
in millions  
Income Statement  
Revenue  
9,871  
1,502  
15.2  
6,527  
349  
5.4  
51  
EBITDA  
EBITDA Margin %  
Net Income (PAT)  
Net Income (PAT) %  
Balance Sheet  
Net assets / (liabilities)  
Cash  
1,036  
10.5  
24  
0.4  
1,475  
1,028  
1,382  
354  
(463)  
680  
Debt  
3,030  
2,350  
Net Debt (Debt less Cash)  
Cash Flow  
Free Cash flow (Cash from  
operations plus Cash used in  
investing)  
876  
(101)  
3
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
KEY MILESTONES FOR THE YEAR ENDED 31 MARCH 2011  
th  
0 Anniversary of the E-Type  
5
Jaguar hosted E-Type drives at the Parc des Eaux Vives in Geneva, where the original car was launched  
by the marque's founder Sir William Lyons half a century ago.  
The appeal of the E-Type transcended the automotive world. Such is the inherent rightness of its  
proportions, stance and purity of line, that it is a permanent exhibit in New York's Museum of Modern Art.  
Its influence is still apparent in Jaguar's modern range - products that offer a peerless blend of  
performance, comfort, cutting-edge technology and award-winning design.  
th  
5 Anniversary of the Jaguar marque  
7
23 September 2010 marked the 75th anniversary of the Jaguar marque. To celebrate the occasion, a  
group of 75 individually-numbered, iconic Jaguars from across the years made a two-day journey from  
Coventry to Goodwood. This exclusive celebration drive, started in Coventry, took in London's May Fair  
Hotel – site of the original Jaguar model launch in 1935 – and finished at the UK's largest heritage motor  
festival, the Goodwood Revival.  
Further celebrations of Jaguar's 75th anniversary were unveiled on 30 September 2010 with the C-X75  
concept car, embracing 4 wheel electronic drive technology, supported by micro gas turbines to generate  
power to extend the range to 560 miles, whilst delivering supercar performance and producing only 28  
2
grams of CO per kilometre.  
th  
0 Anniversary of the 'iconic' Range Rover  
4
The Range Rover celebrated its 40th birthday on 17 June 2010. Recognised as one of the most  
significant vehicles in the history of motoring, the Range Rover was the world's first vehicle to be as good  
on-road as it was off-road. It was the first fully capable, luxury 4x4 and was a milestone in the  
development of the Sport Utility Vehicle.  
The iconic Range Rover's credentials have attracted attention and ultimately ownership from a broad  
range of high profile individuals including sports personalities, actors, politicians, fashion models and  
royal households around the globe.  
rd  
3
addition to Range Rover product range - Range Rover Evoque  
th  
To coincide with the 40 anniversary celebrations Land Rover revealed the Range Rover Evoque. This  
all-new coupe will join Range Rover and Range Rover Sport in the product line-up during the summer of  
2011. The Range Rover Evoque will be the smallest, lightest and most fuel efficient Range Rover ever  
produced. Customers will have a choice of both 4WD and 2WD versions, with sub 130g/km CO . The  
2
Range Rover Evoque will be built at the company's Halewood plant. In addition the appointment of  
Victoria Beckham as Creative Design Executive was announced; she will be collaborating on future  
special edition Range Rover design projects, starting with a Special Edition Range Rover Evoque.  
4
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
DIRECTORS' REPORT  
The Directors of Jaguar Land Rover PLC present the Annual Report and Audited consolidated Financial  
Statements of Jaguar Land Rover PLC and its subsidiary companies ('the company'), for the year ended  
st  
1 March 2011.  
3
The company was formed by Tata Motors on 18 January 2008 to acquire Jaguar Cars Limited and Land  
Rover from Ford. The transaction was completed on 2 June 2008. The company is a wholly-owned  
subsidiary and integrated business division of Tata Motors, a part of the Tata Group, an Indian business  
conglomerate with operations in more than 80 countries across six continents. Tata Motors is India’s  
leading automobile company and ranks as the third largest bus manufacturer and the fourth largest truck  
manufacturer in the world.  
Operating review  
Business background  
The company designs, develops, manufactures and sells Jaguar premium sports saloons and sports 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. Jaguar and Land Rover collectively received over 80  
awards from leading international motoring writers, magazines and opinion formers during the year to 31  
March 2011.  
The company operates three major production facilities and two advanced design and engineering  
facilities all in the United Kingdom. At 31 March 2011, the company employed 18,059 employees globally  
(
including agency staff of 2,849).  
The company operates a global sales and distribution network designed to achieve worldwide sales and  
facilitate growth in key markets. The company's three principal regional markets are North America, the  
United Kingdom and the Rest of Europe (including Russia), which respectively accounted for 21.6%,  
24.0% and 27.2% of the company's wholesale volumes in the year ended 31 March 2011 and 19.4%,  
28.4% and 27.2% in 2010. The company have also increased its presence in China, which accounted for  
11.0% of the wholesale volumes in the year ended 31 March 2011 and 9.7% in 2010.  
Product design, development and technology  
The company's vehicles are designed and developed by award-winning design teams, and the company  
is committed to a programme of periodic enhancements in product design. The company's two design  
and development centres are equipped with computer-aided design, manufacturing and engineering  
tools, and are configured for competitive product development cycle time and efficient data management.  
In recent years, the company has refreshed the entire Jaguar range under a unified concept and design  
language and continued to enhance the design of Land Rover’s range of all-terrain vehicles.  
The company's R&D operations look for synergies through sharing premium technologies, powertrain  
designs and vehicle architecture. All of the company's products are designed and engineered primarily in  
the United Kingdom. The company endeavours to implement the best technologies into the company's  
product range to meet the requirements of a globally competitive market. The company aims to develop  
vehicles running on alternative fuels and hybrids and also invest in other programmes for the  
development of technologies aiming to improve the environmental performance of its vehicles including  
the reduction of CO2 emissions.  
5
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
The company's vehicles  
Jaguar Models and Update  
Jaguar designs, develops and manufactures premium sports saloons and sports cars recognised for their  
performance, design and unique British style. Jaguar’s range of products comprises the XK sports car  
(
coupe and convertible), the XF saloon and the new XJ saloon.  
•
Launched in 2006, the all-aluminium XK is Jaguar’s premium luxury sports car, combining  
performance and luxury in coupe and convertible models. The XK was significantly updated in  
2009 with a new engine and exterior and interior design enhancements, and the XK range has  
been further revised, with a new look for 2011. The new XKR-S was unveiled at the Geneva  
Motor Show on 1 March 2011, which is the sporting flagship for the company's revitalised XK line-  
up. The XKR-S is the fastest and most powerful production sports GT that Jaguar has ever built.  
•
The XF, launched in 2008, is a premium executive car that merges sports car styling with the  
sophistication of a luxury saloon. The Jaguar XF is Jaguar’s best-selling model across the world  
by volume and it has garnered more than 80 international awards since its launch, including  
being named ‘‘Best Executive Car’’ by What Car? Magazine in every year since its launch. For  
2011, fundamental design changes to the front and rear of the XF aim to bring a more assertive,  
purposeful stance to the XFR, which the company believes is now a bolder and more appealing  
automobile closer to the original C-XF concept car. In addition, the Jaguar 2012 Model Year  
(
12MY) line-up was introduced at the New York Auto Show in April 2011, including a new four-  
cylinder 2.2-litre diesel version of the XF with Intelligent Stop-Start Technology, making it the  
most fuel-efficient Jaguar yet and allowing Jaguar to compete more effectively with competitors in  
the UK fleet and company car markets.  
•
The XJ is Jaguar’s largest luxury saloon vehicle, powered by a choice of supercharged and  
naturally aspirated 5.0-litre V8 petrol engines and a 3.0-litre diesel engine. A 3.0-litre V6 petrol  
engine was launched in the Chinese market in early 2011 which provides significant savings on  
duty in that market. Using Jaguar’s aerospace inspired aluminium body architecture, the XJ’s  
lightweight aluminium body provides improved agility and economy. In May 2010, customer  
deliveries of the new XJ started and it received more than 20 international awards in 2010,  
including ‘‘Best Luxury Car’’ from China’s Auto News, ‘‘Annual Limousine King’’ from Quattroroute  
(
Italy), ‘‘Luxury Car of the Year’’ from Top Gear (UK), Automobile Magazine’s ‘‘2011 Design of the  
Year’’ and ‘‘Best Executive Sedan’’ at the Bloomberg Awards in the United States. For 2011, the  
XJ has been upgraded to include a new Executive Package and a Rear Seat Comfort package,  
which makes the company's flagship model the ultimate executive limousine experience.  
•
The Jaguar C-X75 concept car was showcased at the Paris Motorshow in September 2010 to  
mark the brand’s 75th anniversary. This dominated all media outlets at the show. It revealed next-  
generation powertrain technology in the form of electric motors and a Bladon Jets developed  
turbine generator. The design also received great praise, leading the way for Jaguars of the  
future. In May 2011, the company announced its decision to build production versions of the C-  
X75 in association with Williams F1.  
Land Rover models and update  
Land Rover designs, develops and manufactures premium all-terrain vehicles that aim to differentiate  
themselves from the competition by their simplicity, ability, strength and durability. Land Rover’s range of  
products comprises the Defender, Freelander 2 (LR2), Discovery 4 (LR4), Range Rover Sport and Range  
Rover.  
•
The Defender is Land Rover’s most capable off-roader, and is recognised as a leading vehicle in  
the segment targeting extreme all-terrain abilities.  
•
The Freelander 2 is a versatile vehicle for both urban sophistication and off-road capability. For  
the 2011 Model Year, the company introduced a choice of 4WD and 2WD, with an eD4 engine  
capable of 4.98L/100km which was especially well received in major European markets.  
6
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
•
The Discovery 4 is a mid-size SUV that features genuine all-terrain capability. A range of new  
features, including the new 3.0-litre LR-TDV6 diesel engine, helped the Discovery win the What  
Car? Magazine award for the Best 4x4 for the seventh successive year.  
•
•
The Range Rover Sport combines the performance of a sports tourer with the versatility of a Land  
Rover.  
The Range Rover is the flagship of the brand with a unique blend of British luxury, classic design  
with distinctive, high-quality interiors and outstanding all-terrain ability. The 2011 Model Year  
Range Rover, with an all-new 4.4-litre TDV8 engine, aiming to achieve a 14% reduction in CO  
emissions and a 19% improvement in fuel consumption to 7.81L/100km compared to the 2010  
Model Year, has been particularly well received in the UK, Europe and overseas.  
2
•
Land Rover products offer a range of powertrains, including turbocharged V6 diesel, V6 petrol  
engines and V8 naturally aspirated and supercharged petrol engines, with manual and automatic  
transmissions.  
•
The Range Rover Evoque, a class leading urban 4x4 was launched on 4 July 2011.  
Facilities  
The company operates three automotive manufacturing facilities in the United Kingdom. At Solihull, the  
company produces the Land Rover Defender, Discovery 4, Range Rover and Range Rover Sport models.  
At Castle Bromwich, the company produces the Jaguar XK, XJ and XF models. At Halewood, the  
company produces the Freelander and will commence production of the Range Rover Evoque at this  
facility in 2011. The company believes that its three existing automotive manufacturing facilities at  
Solihull, Castle Bromwich and Halewood provide a flexible manufacturing footprint to support its product  
plans. In addition to its automotive manufacturing facilities, the company also has two product  
development, design and engineering facilities in the United Kingdom. The facility located at Gaydon  
houses the company's design and engineering centre and global headquarters, and the facility located at  
Whitley houses a second design and engineering centre.  
Sales and distribution  
The company markets Jaguar products in 101 markets and Land Rover products in 174 markets, through  
a global network of 18 national sales companies (‘‘NSCs’’), 83 importers, 61 export partners and 2,241  
franchise sales dealers, of which 524 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 finished  
vehicles and dealer inventory throughout its network. These measures include continuous monitoring of  
retail volumes (i.e. sales from its dealers to end customers) and the level of inventory of finished vehicles  
at dealers and inventory en-route from the company's manufacturing facilities to the company's NSCs and  
dealers. The company monitors those inventory levels versus internal ‘‘ideal stock’’ targets that it believes  
are appropriate for each market and model. The ‘‘ideal stock’’ target reflects specific distribution  
requirements for each market, including the transit times for those markets. The company conducts a  
monthly ‘‘global forecast review’’ to assess sales running rates and volume expectations over the coming  
months and uses that information to plan sales actions and production actions to meet the market  
requirements. The company has a monthly ‘‘sales and programming committee’’ at which it reviews the  
sales forecast and plans, and reviews and modifies the company's production plans as required in order  
to meet anticipated sales levels and ensure that the company's inventory and dealer inventory of finished  
vehicles is managed to ‘‘ideal stock’’ levels.  
The company has entered into arrangements with independent partners to provide financing to its  
customers, including FGA Capital, a joint venture between Fiat Auto and Credit Agricole, for the United  
Kingdom and European markets, Chase Auto Finance for the US market, and local providers in a number  
of other key markets. The company's financing partners offer its customers a full range of consumer  
financing options.  
7
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
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 specific markets. The company's success is tied to its investment  
in product development, and is reflected in the strategic focus on capital expenditure, R&D and product  
design.  
Grow the business through new products and market expansion  
The company offers products in the premium performance car and all-terrain vehicle segments, and the  
company intends to grow the business by diversifying the product range within these segments, for  
example by offering different powertrain combinations. The new Range Rover Evoque will help expansion  
into a market segment that is attracted by a smaller, lighter and more ‘‘urban’’ off-road vehicle than the  
market segment in which the company's Range Rover models traditionally compete, while the new 2.2-  
litre diesel XF will cater for a much wider group of potential customers, particularly company car drivers.  
In addition, the company has a strategy of expanding regional coverage into select geographic locations  
where it has identified an opportunity to grow within its core segments. As a producer of distinctive,  
premium products, the company believes it is well positioned to increase revenues in emerging affluent  
countries with growing sales potential. There are three specific aspects to the company's strategy of  
geographic expansion.  
•
The company aims to establish new manufacturing facilities, assembly points and suppliers in  
selected markets. For example, the company has established a product development operation in  
India and the company sell vehicle kits to be assembled in CKD facilities in India, Kenya,  
Malaysia, Turkey and Pakistan. The company is also seeking to establish a manufacturing base  
in China. In addition, the company will continue to look for opportunities to source materials and  
components in a cost-efficient manner and, in pursuit of that objective, the company has already  
opened purchasing offices in China and India.  
•
The company aims to increase its marketing and dealer network in emerging markets. For  
example, the company will continue to grow its presence in the Indian market by opening  
additional dealerships across the country. In China, the company has established an NSC to  
expand its presence in this key market and plans to increase the network of sales dealerships  
across the country, up to 100 dealerships by the end of 2011.  
•
The company aims to leverage its relationship with Tata Motors and the synergies it can achieve  
in the areas of research and product development, supply sourcing, manufacturing and assembly  
and other vital operations, including the co-development of a small efficient diesel engine.  
Transform the business structure to deliver sustainable returns  
The automobile industry is highly cyclical. To mitigate the impact of cyclicality and provide a foundation  
from which to invest in new products, designs and technologies in line with its overall strategy, the  
company plans to strengthen operations by gaining a significant presence across a select range of  
products and a wide diversity of geographic markets. One key component of this strategy, which  
delivered positive results over the last six quarters, is the company's focus on improving the mix of  
products and the mix of markets.  
The company also plans to continue to strengthen business operations in addition to vehicle sales, such  
as spare part sales, service and maintenance contracts.  
The company undertakes a variety of internal and external benchmarking exercises, market testing and  
internal comparative analysis across its own vehicles, which help it to identify cost improvement  
opportunities for components, systems and sub-systems. The company also explores opportunities to  
source materials from low-cost countries as well as sharing components across platforms in order to gain  
economies of scale and reduce engineering costs. The company believes its strategy to enhance global  
sourcing will enable it to take advantage of low-cost bases in countries such as India and China. The  
company is taking the same approach with engineering, where it is progressively building up capability  
8
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
through its product development operation in India by allowing incremental levels of design responsibility  
to be tested on successive programmes. In addition, the company has intensified efforts to review and  
realign its cost structure through a number of measures, such as the reduction of manpower costs  
through increased employee flexibility between sites and a rationalisation of the company's other fixed  
costs.  
Investment in product development and technology to maintain high quality  
One of the company's principal goals is to enhance its status as a leading manufacturer of premium  
passenger vehicles by investment in products, R&D, quality improvement and quality control. The  
company's strategy is to maintain and improve its competitive position by developing technologically  
advanced vehicles. Over the years, the company has enhanced its technological strengths through  
extensive in-house R&D activities, particularly through two advanced engineering and design centres,  
which centralise its capabilities in product design and engineering. In pursuit of this strategy, the company  
has recently embarked upon a programme of product development and improvement involving  
investment in research, design and technical innovation. The substantial majority of this planned product  
investment relates to new and replacement models, derivatives, powertrain actions and other upgrades  
and the associated investment in tools and facilities and other equipment.  
The company considers technological leadership to be a significant factor in its continued success, and  
therefore continues to devote significant resources to upgrading its technological capabilities. In line with  
this objective, 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.  
The company is pursuing various quality improvement programmes, both internally and at its suppliers’  
operations, in an effort to enhance customer satisfaction and reduce future warranty costs. The company  
has also established a procedure for ensuring quality control of outsourced components, and products  
purchased from approved sources undergo a supplier quality improvement process. Reliability and other  
quality targets are built into a new product introduction 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. The company believes its  
extensive sales and service network has also enabled it to provide quality and timely customer service.  
Through close coordination supported by IT systems, the company monitors quality performance in the  
field and implements corrections on an ongoing basis to improve the performance of its products.  
Products and environmental performance  
The company's strategy is to invest in products and technologies that position its products ahead of  
expected stricter environmental regulations and ensure that it benefits from a shift in consumer  
awareness of the environmental impact of the vehicles they drive. The company is committed to  
continued investment in new technologies, including developing sustainable technologies to improve fuel  
economy and reduce CO2 emissions. The company is the largest investor in automotive R&D in the  
United Kingdom. The company also believes that it is also the leader in automotive green-technology in  
the United Kingdom. The company's environmental vehicle strategy focuses on new propulsion  
technology, weight reduction and reducing parasitic losses through the driveline. Projects like  
REEVolution, REHEV and Range-e are some examples of the company's research into the electrification  
of premium sedan and all-terrain vehicles.  
The company is a global leader in the use of aluminium and other lightweight materials to reduce vehicle  
weight and it is ahead its competitors in the implementation of aluminium construction. The company  
already offers two aluminium vehicles, the Jaguar XJ and Jaguar XK. The company plan to deploy its  
core competency in aluminium construction across more models in its range. The new, all-aluminium  
Jaguar XJ 3.0 V6 twin-turbo diesel has CO  
more efficient vehicle technologies. Range Rover’s 2011 Model Year has been updated with an all-new  
.4-litre TDV8 with 8-speed transmission, resulting in a 14% reduction in CO and an improvement in fuel  
consumption of nearly 19% to 7.81L/100km. The 2011 Model Year Freelander 2, which went on sale in  
2 emissions rated at 184g/km. The company is also developing  
4
2
December 2010, features a new eD4 diesel engine capable of 4.98L/100km and CO  
1
demonstrates some of the technologies the company are developing for the future.  
2
emissions of  
58g/km in 2WD. Jaguar’s C-X75 concept car incorporates electric plus twin gas turbines and  
9
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
The company is also taking measures to reduce emissions, waste and the use of natural resources from  
all of its operations. The company recognises the need to use resources responsibly, produce less waste  
and reduce its carbon footprint. The company has set itself a target for a 25% reduction in CO2 and waste  
to landfill and a 10% reduction in water usage from 2007 levels by 2012. The company is implementing  
life cycle techniques so that it can evaluate and reduce its environmental footprint throughout the value  
chain.  
The company has been certified to the international environmental management standard, ISO14001,  
2
since 1998. As part of integrated CO  
offset programmes. The company offsets all its own manufacturing CO  
2
management strategy it has have one of the largest voluntary CO  
2
emissions and provides  
programmes to enable the company's customers to offset the emissions from vehicle use.  
General trends in performance (including results of operations)  
Results and prospects  
Successful financial year  
The company has had a successful year as a result of better than anticipated GDP growth in mature  
economies; the continuation of monetary policy and stimulus programmes deployed; and favourable  
exchange rates coupled with its own cost reduction and efficiency improvement initiatives. Rapid growth  
economies, for example China and Russia where GDP was significantly higher resulting in increased  
demand for premium vehicles, also helped the company's performance. The demand growth for premium  
car and SUV vehicle segments ranged from 14% in mature markets up to 109% in China, where the  
company experienced similar levels of retail growth.  
Record revenue and earnings  
The company generated record revenue and earnings during the year ended 31 March 2011. This was  
primarily driven by increased demand for both brands as well as a strong product and market mix.  
Consolidated revenues for the year ended 31 March 2011 were £9,871 million, an increase of 51%  
compared to the year ended 31 March 2010. This was mainly driven by a combination of increased  
volume, product and market mix, particularly in China and Russia, for both brands and favourable  
exchange rate movements.  
EBITDA growth  
Consolidated EBITDA for year ended 31 March 2011 was £1,502 million, an increase of £1,153 million  
compared to the year ended 31 March 2010, a significant improvement mainly driven by increased  
revenue and improved margins. Increases in material costs and other expenses within the EBITDA  
growth is explained below.  
The improvement in results of operations, particularly in EBITDA, net income and the cash and general  
liquidity position, were attributable to an increase in wholesale volumes and an improvement in product  
mix associated with the introduction of the new Jaguar XJ and the continued strength of the Range Rover  
and Range Rover Sport. The company also experienced an improvement in market mix, in particular the  
strengthening of business in China, which was supported by the launch of an NSC in China in mid-2010.  
Further, the company's performance was also improved by the positive impact of the strengthening of the  
US dollar against the pound sterling and the Euro, improving the company's revenues (a portion of which  
comprises wholesale volumes in US dollars) against the backdrop of a largely pound sterling and euro  
cost base. The improvement in the company's results of operations in the year ended 31 March 2011  
was also partially attributable to further cost-efficiency improvements in material costs and manufacturing  
costs, supported by increased production volume levels. The company continues to benefit from cost  
efficiencies and effective cash management initiatives that it adopted in response to the challenging  
operating conditions in 2008 and 2009, including the alignment of production with demand, active  
management of working capital through extension of the term of trade payables and acceleration of the  
10  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
term of trade receivables while reducing inventories, and scaling down the cost base across its business.  
The company expects its strong operating cash generation to fund most product investment requirements  
and allow for profitable growth in the future.  
Material costs of sale for the year ended 31 March 2011 were £6,178 million, an increase of £1,741  
million (39%) compared to the year ended 31 March 2010. The main drivers of this increase in costs are  
the increase in volume, together with product and market mix (including higher duties), exchange and  
increases in raw materials, partially offset by cost efficiencies. For the year ended 31 March 2011 the  
material cost of sale as a percentage of revenue has improved over year ended 31 March 2010 by 55%.  
Employee costs for year ended 31 March 2011 were £789 million (5%), an increase of £42 million  
compared to the year ended 31 March 2010. This reflects an increase in permanent and agency  
headcount, primarily in Product Development, and the latest two-year wage rate agreement signed in  
November 2010. Other expense for the year ended 31 March 2011 was £1,969 million, an increase of  
£490 million (33%) compared to the year ended 31 March 2010. These costs include manufacturing and  
launch costs, freight and distribution costs, warranty costs, product development expense, selling and  
fixed marketing. Some of these were attributable to spend on the Range Rover Evoque that goes on sale  
during September of 2011 as well as on XJ which was launched in May 2010. Expenditure capitalised for  
year ended 31 March 2011 of £531 million increased by £73million compared to the year ended 31 March  
2010.This reflected the increased spend on future model development for both brands.  
Net Income growth  
Consolidated Net Income (PAT) for the year ended 31 March 2011 was £1,036 million, an increase of  
£
1,012 million compared to the year ended 31 March 2010. Depreciation and amortisation costs were  
396 million, an increase of £79 million compared to the year ended 31 March 2010, reflecting the  
£
additional product development and facilities spend within the year. The net foreign exchange gain was  
£
£
33 million, a decrease of £20 million compared to the year ended 31 March 2010. Finance income was  
10 million, an increase of £7 million compared to the year ended 31 March 2010, due to the significant  
increase in additional cash generated by the company during year ended 31 March 2011. Finance  
Expense (net of capitalised interest) was £33 million, a decrease of £20 million compared to the year  
ended 31 March 2010. The reduction is due to the increase in capital expenditure eligible for  
capitalisation.  
Strong volume growth  
Overall consolidated retail volumes were 240,905 units, an increase of 16% compared to the prior year.  
Retail volumes for the year ended 31 March 2011 were 51,818 units for Jaguar and 189,087 units for  
Land Rover growth of 2% and 20% respectively.  
Retail volumes in the UK were 58,134 units, a 2% increase on the prior period, whilst the North American  
retail volumes were 50,280, an increase of 21%. Retail volumes in key growth markets saw significant  
increases with China retail volumes ending the reporting period at 28,893 and Russia at 11,689, up on  
the prior reporting period by 70% and 32% respectively. There was moderate growth in Europe of 6%  
resulting in a retail volume of 53,711. Across all other markets the retail volume of 38,198 represented  
16% growth on the prior reporting period.  
Wholesale volumes for the year ended 31 March 2011 were 243,621 units, an increase of 26% on the  
prior reporting period. At a brand level wholesale volumes were 190,628 units for Land Rover and 52,993  
units for Jaguar (30% and 12% growth respectively).  
Performance in key geographical markets on retail basis  
United States  
United States premium car segment volumes increased by 14.4% compared to the year ended 31 March  
2010, with Jaguar up 16.3%. United States premium SUV segment volumes were up 45% compared to  
the prior year with Land Rover up 49%.  
United States retail volumes for year ended 31 March 2011 for the combined brands were 46,881 units.  
Jaguar retail volumes for year ended 31 March 2011 increased by 16% compared to the year ended 31  
11  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
March 2010, leading to a 0.1% increase in market share. Land Rover retail volumes for the year ended 31  
March 2011 increased by 23% compared to the year ended 31 March 2010, maintaining market share.  
UK  
In the UK, the premium car segment volumes increased by 18.4% in the year ended 31 March 2011  
compared to the year ended 31 March 2010, with Jaguar up by 18.8% for the year ended 31 March 2011.  
The UK the premium SUV segment volumes increased by 30% in the year ended 31 March 2011  
compared to the year ended 31 March 2010, with Land Rover up 9% for the same period.  
UK retail volumes for the year ended 31 March 2011 for the combined brands were 58,134 units. Jaguar  
retail volumes for the year ended 31 March 2011 decreased by 11% (an increase of 19% when X-Type,  
which ceased production in December 2009, is excluded) compared to the year ended 31 March 2010,  
leading to a 0.1% increase in market share. Land Rover retail volumes for year ended 31 March 2011  
increased by 8% compared to the year ended 31 March 2010, maintaining market share.  
Europe (excluding Russia)  
The European premium car segment volume increased by 18.6% compared to the year ended 31 March  
2
2
010, and premium SUV segment volume increased by 29.7% compared to the year ended 31 March  
010.  
European retail volume for year ended 31 March 2011 for the combined Jaguar Land Rover brands were  
3,711 units, representing a 6.6% increase compared to the year ended 31 March 2010. Jaguar retail  
5
volume for year ended 31 March 2011 decreased by 4.5% (increase of 20% when X-Type, which ceased  
production in December 2009, is excluded) compared to the year ended 31 March 2010. Jaguar  
increased its share of the segment by 0.1 percentage points to 2.4%. Land Rover retail volume for the  
year ended 31 March 2011 increased by 9.8% compared to the year ended 31 March 2010, whilst its  
segment share decreased by 0.5 percentage points to 2.9%. Trading within certain European markets  
remained challenging during the period, especially with the recent uncertainty in Greece, Portugal, Spain,  
Ireland and Italy which has prompted the downgrading of sovereign debt ratings and has led to additional  
pressure on financial markets.  
Russia  
Russia premium car segment volume increased by 61.1% in the year ended 31 March 2011 compared to  
the year ended 31 March 2010, with Jaguar up 70.8% for year ended 31 March 2011 and the premium  
SUV segment volume increased 52% in the year ended 31 March 2011 compared to year ended 31  
March 2010 with Land Rover up 33% for the year ended 31 March 2011.  
The Russia retail volume for year ended 31 March 2011 for the combined brands were 11,689 units.  
Jaguar retail volume for the year ended 31 March 2011 increased by 27% compared to the year ended 31  
March 2010, leading to a 0.2% increase in market share. Land Rover retail volume for the year ended 31  
March 2011 increased by 33% compared to the year ended 31 March 2010, leading to a 2% decrease in  
market share. The Russian market was showing signs of recovery from the global economic crisis, driven  
particularly by the sharp fall in oil prices and the drying-up of foreign credits on which Russian banks and  
companies tend to rely heavily.  
China  
The China premium car segment volumes (for imports) increased by 46% in the year ended 31 March  
2
011 compared to the year ended 31 March 2010, with Jaguar up 51% for year ended 31 March 2011.  
The China premium SUV segment volumes (for imports) increased by 109% in the year ended 31 March  
011 as compared to the year ended 31 March 2010, with Land Rover up 73% for the year ended 31  
2
March 2011.  
The China retail volume for year ended 31 March 2011 for the combined brands were 28,893 units.  
Jaguar retail volume for the year ended 31 March 2011 increased by 41% compared to the year ended 31  
March 2010, leading to a 0.1% increase in market share. Land Rover retail volume for the year ended 31  
March 2011 increased by 74% compared to the year ended 31 March 2010, leading to a 2% decrease in  
market share.  
12  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Growth within the Chinese market was further enhanced through the strengthening of the company's  
business in China, which was supported by the launch of an NSC in China in mid-2010.  
Business risks and mitigating factors  
Global economic environment  
The company is focused on the premium end of the automotive industry, and can be heavily influenced  
by general economic conditions around the world. The demand for its vehicles is influenced 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. As a result of the recent global financial crisis, the company's business  
sustained significant losses in financial period 2009 due to the combination of global recession, lack of  
credit availability and increasing fuel prices. The global economic climate has improved since then, and  
whilst some key markets, such as the UK and US are growing more slowly than expected, the company's  
global reach and recognised brand names have enabled it to benefit from significant growth in Chinese  
and Russian markets. 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 is continuing  
to develop vehicles which are specifically aimed at these markets, such as a 3.0 litre petrol engine to  
minimise China import duties and enhanced rear seat entertainment systems reflecting the different  
priorities of the company's customers. The company's product development programme is aimed at  
ensuring the company has the right vehicles available for the right markets at the right price, reflecting  
different priorities and uses across the globe.  
Government regulations  
The company is subject throughout the world to comprehensive and constantly changing laws,  
regulations and policies. The company expects the number and extent of legal and regulatory  
requirements and the related costs of changes to the company's product line-up to increase significantly  
in the future. In Europe and the United States, for example, governmental regulation is primarily driven by  
concerns about the environment (including greenhouse gas emissions), vehicle safety, fuel economy and  
energy security. The European Union passed legislation in April 2009 to begin regulating vehicle carbon  
dioxide emissions in 2012. The legislation sets a target of a fleet average of 130 grams per kilometre by  
2012 and an ambitious target of 95 grams per kilometre by 2020, with the specific requirements for each  
manufacturer based on the average weight of the vehicles it sells. The company has applied to receive a  
permitted derogation from this emissions requirement available to small volume and niche manufacturers.  
If the company's derogation request is successful, the company would be permitted to reduce the  
2
company's emissions by 25% from 2007 levels rather than meeting a specific CO emissions target.  
Moreover, in 2007 the European Parliament adopted the latest in a series of more stringent standards for  
emissions of other air pollutants from passenger vehicles, to be phased in from September 2009 (Euro 5)  
and September 2014 (Euro 6). At the national level, an increasing number of EU Member States have  
adopted some form of fuel consumption or carbon dioxide-based vehicle taxation system.  
Additional measures have been proposed or adopted in the European Union to regulate safety features,  
tyre-rolling resistance, vehicle air conditioners, tyre-pressure monitors and gear shift indicators.  
In the United States, the Corporate Average Fuel Economy (“CAFE”), standards for passenger cars will  
require manufacturers of passenger vehicles and light trucks to meet an estimated combined average fuel  
economy level of at least 6.75L / 100km by 2020. California is implementing more stringent fuel economy  
standards. Moreover, under new US federal greenhouse gas regulations, passenger cars and light trucks  
for model years 2012 through 2016 must meet an estimated combined average emissions level of 250  
grams of carbon dioxide per mile.  
To comply with current and future environmental norms, the company may have to incur additional capital  
expenditure and R&D expenditure to upgrade products and manufacturing facilities, which would have an  
impact on the company's cost of production and the results of operations and may be difficult to pass  
through to the company's customers. If the company is unable to develop commercially viable  
technologies within the time frames set by the new standards, the company could face significant civil  
penalties or be forced to restrict product offerings drastically to remain in compliance.  
13  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Changes in corporate and other taxation policies, import or tariff policies, which are beyond the  
company's control and unpredictable could adversely affect the company's results of operations.  
The company's product development plan is structured to allow it to develop vehicles which comply with  
current and expected future environmental regulations particularly in the United States covered by the  
CAFE and in other countries such as China.  
Interest rate, currency and exchange rate fluctuations  
The company has both interest-bearing assets (including cash balances) and interest-bearing liabilities,  
many of which bear interest at variable rates. The company is therefore exposed to changes in interest  
rates in the various markets in which the company borrow. While the directors revisit the appropriateness  
of these arrangements in light of changes to the size or nature its operations, the company may be  
adversely affected by the effect of changes in interest rates.  
The company's operations are also subject to fluctuations in exchange rates with reference to countries in  
which the company operate. The company sells vehicles in the United Kingdom, North America, the Rest  
of Europe, China, Russia and many other markets and therefore generates revenue in, and has  
significant exposure to movements of, the US Dollar, Euro, Chinese Renminbi, Russian Rouble and other  
currencies relative to pounds sterling. The company sources the majority of its input materials and  
components and capital equipment from suppliers in the United Kingdom and Europe with the balance  
from other countries, and therefore has cost in, and significant exposure to the movement of, the euro  
and other currencies relative to pounds sterling. The majority of the company's product development and  
manufacturing operations and the company's global headquarters are based in the United Kingdom, but  
the company also has national sales companies which operate in the major markets in which the  
company sell vehicles.  
Moreover, the company has outstanding foreign currency denominated debt and is sensitive to  
fluctuations in foreign currency exchange rates. The company has experienced, and expects to continue  
to experience, foreign exchange losses and gains on obligations denominated in foreign currencies in  
respect of the company's borrowings and foreign currency assets and liabilities due to currency  
fluctuations.  
The company has managed to mitigate, to a certain extent, the foreign exchange risk in the short and  
medium term by making appropriate hedging arrangements. Adequacy of hedging lines, limitations on  
tenor and inherent risks of hedging arrangements themselves continue. These are being continuously  
monitored for timely action within the overall constraints.  
Supply chain  
The company relies on third parties for sourcing raw materials, parts and components used in the  
manufacture of the company's 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 the company's control.  
While the company manages its supply chain as part of the its supplier management process, any  
significant problems with suppliers or shortages of essential raw materials in the future could have an  
impact on the company's operations.  
Risks of disruption due to 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 significant 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.  
The recent tragic earthquake and tsunami in Japan shows the vulnerability of the automotive supply chain  
to external shocks. Several suppliers to the automotive industry, including those to the company, were  
severely impacted by the earthquake and tsunami and its after-effects. The company, however, managed  
to avoid any production disruption by working with its overall supply base to temporarily resource  
components and help Japanese suppliers to restart production.  
14  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
In managing a complex supply chain the company has developed close relationships with both direct and  
indirect suppliers. The company continues to develop long-term strategic relationships with suppliers to  
support the development of parts, technology and production facilities.  
Seasonality and cyclicality  
The sales volumes and prices for the company's vehicles are influenced by the cyclicality and seasonality  
of demand for these products. The company is affected by the biannual registration of vehicles in the  
United Kingdom, when new vehicle registrations take place in March and September, which in turn has  
an impact on the resale value of vehicles. This leads to an increase in sales during the period when the  
aforementioned change occurs. Most other markets, such as the United States, are driven by the  
introduction of new model year vehicles, which typically occurs in the autumn of each year. Furthermore,  
Western European markets tend to be impacted by the summer and winter holidays. The resulting sales  
profile influences operating results on a quarter-to-quarter basis. Sales in the automotive industry have  
been cyclical in the past and the company expects this cyclicality to continue.  
With the lessons learned during the recent global crisis and downturn that followed, the company keeps a  
close watch on inventory, including pipeline and dealer stock, with a view to quickly respond to any such  
signals from the market.  
Product development  
Over the past few years, the global market for automobiles, particularly in established markets, has been  
characterised by increasing demand for more environmentally friendly vehicles and technologies. In  
addition, the climate debate and promotion of new technologies are increasingly resulting in the  
automotive industry’s customers no longer looking for products only on the basis of the current standard  
factors, such as price, design, performance, brand image or comfort / features, but also on the basis of  
the technology used in the vehicle or the manufacturer or provider of this technology. This could lead to  
shifts in demand and the value-added parameters in the automotive industry.  
The company endeavours to take account of climate protection and the ever more stringent laws and  
regulations that have been and are likely to be adopted. The company is focusing on researching,  
developing and producing new drive technologies, such as hybrid engines and electric cars. The  
company is also investing in development programmes to reduce fuel consumption through the use of  
lightweight materials, reducing parasitic losses through the driveline and improvements in aerodynamics.  
One of the company's principal goals is to enhance the company's status as a leading manufacturer of  
premium passenger vehicles by investment in the company's products, R&D, quality improvement and  
quality control. The company's strategy is to maintain and improve the company's competitive position by  
developing technologically advanced vehicles. Over the years, the company has enhanced the  
company's technological strengths through extensive in-house R&D activities, particularly through the  
company's two advanced engineering and design centres, which centralise the company's capabilities in  
product design and engineering. In pursuit of this strategy, the company has recently announced a  
programme of future product development and improvement involving investment in research, design and  
technical innovation. The substantial part of the company's product investment relates to investment in  
new and replacement models, derivatives, powertrain actions and other upgrades and the associated  
investment in tools and facilities and other equipment.  
The company's R&D operations currently consist of a single engineering team, with a co-managed  
engineering function for Jaguar and Land Rover, sharing premium technologies, powertrain designs and  
vehicle architecture. The company endeavors to implement the best technologies into the company's  
product range to meet the requirements of a globally competitive market. One example of the company's  
development capabilities is Jaguar’s aluminium body architecture, which the company expects will be a  
significant contributor to further efficiencies in manufacturing and engineering, as well as the reduction of  
CO emissions. The company aim to develop vehicles running on alternative fuels and hybrids and also  
2
invest in other programmes for the development of technologies aiming to improve the environmental  
performance of the company's vehicles.  
The company considers technological leadership to be a significant factor in its continued success, and  
therefore intends to continue to devote significant resources to upgrading the company's technological  
capabilities. In line with this objective, the company is involved in a number of advanced research  
15  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
consortia that bring together leading manufacturers, suppliers and academic specialists in the United  
Kingdom, supported by funding from the government’s Technology Strategy Board. The technology  
showcased in the C-X75, and the Technology Strategy Board (TSB) supported Range-e and REEVolution  
(Range Extended Electric Vehicle) projects demonstrate the company's commitment to growth through  
design and product technology innovation.  
The company is pursuing various quality improvement programmes, both internally and at the company's  
suppliers’ operations, in an effort to enhance customer satisfaction and reduce the company's future  
warranty costs. The company has also established a procedure for ensuring quality control of outsourced  
components, and products purchased from approved sources undergo a supplier quality improvement  
process. Reliability and other quality targets are built into the company's new product introduction  
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. The company believes its extensive sales and service network has also  
enabled it to provide quality and timely customer service. Through close coordination supported by the  
company's IT systems, the company monitors quality performance in the field and implement corrections  
on an ongoing basis to improve the performance of its products.  
The company will examine collaborative opportunities with Tata Motors, to optimise synergetic strengths,  
which may include the development of engines.  
Patent protection and intellectual property  
The company does not regard any of its businesses as being dependent upon any single patent or  
related group of patents, and its inability to protect this intellectual property generally, or the illegal breach  
of some or a large group of the company's intellectual property rights, would have a materially adverse  
effect on the company's operations, business and / or financial 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. The company 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 of  
value in the future.  
The company may be affected by restrictions on the use of intellectual property rights held by third parties  
and the company may be held legally liable for the infringement of the intellectual property rights of others  
in the company's products.  
Dealer performance  
The company's products are sold and serviced through a network of authorised dealers and service  
centres across the company's domestic market, and a network of distributors and local dealers in  
international markets. The company monitors the performance of the company's dealers and distributors  
and provides them with support to assist them to perform to its expectations.  
Manufacturing and engineering  
The company 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, which originally  
housed the largest Spitfire factory in the UK, is used to produce all the company's Jaguar models. It is  
expected that these sites will become more cross-branded. The company is assessing investment  
opportunities for establishing a manufacturing base in China and benefit from third-party facilities  
overseas which build a number of its vehicles from CKD kits. In India, since April 2011, Freelander  
vehicle kits have been assembled by Tata Motors in a “complete knock down” (“CKD”) assembly facility.  
16  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
The company's design and engineering centres, in Whitley and Gaydon, are being reorganised to  
maximise efficiency in design and development.  
The company could experience disruption to its manufacturing, design and engineering capabilities for a  
variety of reasons, including, among others, extreme weather, fire, theft, system failures, natural  
calamities, mechanical or equipment failures and similar risks. Any significant disruptions could adversely  
affect the company's ability to design, manufacture and sell the company's products and, if any of those  
events were to occur, the company cannot be certain that the company 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 the company's business, financial condition or results of  
operations.  
Regulation of production facilities  
The company's production facilities are subject to a wide range of environmental, health and safety  
requirements. These requirements address, among other things, air emissions, wastewater discharges,  
accidental releases into the environment, human exposure to hazardous materials, the storage,  
treatment, transportation and disposal of wastes and hazardous materials, the investigation and clean-up  
of contamination, process safety and the maintenance of safe conditions in the workplace. Many of the  
company's operations require permits and controls to monitor or prevent pollution. The company has  
incurred, and will continue to incur, substantial ongoing capital and operating expenditures to ensure  
compliance with current and future environmental, health and safety laws and regulations or their more  
stringent enforcement. Other environmental, health and safety laws and regulations could impose  
restrictions or onerous conditions on the availability or the use of raw materials the company need for the  
company's manufacturing process.  
The company's manufacturing process results in the emission of greenhouse gases such as carbon  
dioxide. The EU Emissions Trading Scheme, an EU-wide system in which allowances to emit greenhouse  
gases are issued and traded, is anticipated to cover more industrial facilities and become progressively  
more stringent over time, including by reducing the number of allowances that will be allocated free of  
cost to manufacturing facilities. In addition, a number of further legislative and regulatory measures to  
address greenhouse gas emissions, including national laws and the Kyoto Protocol, are in various phases  
of discussion or implementation. These measures could result in increased costs to: (i) operate and  
maintain the company's production facilities; (ii) install new emissions controls; (iii) purchase or otherwise  
obtain allowances to emit greenhouse gases; and (iv) administer and manage the company's greenhouse  
gas emissions programme.  
Many of the company's sites have an extended history of industrial activity. The company may be  
required to investigate and remediate contamination at those sites, as well as properties the company  
formerly operated, regardless of whether the company caused the contamination or the activity causing  
the contamination was legal at the time it occurred. In connection with contaminated properties, as well as  
the company's operations generally, the company also could be subject to claims by government  
authorities, individuals and other third parties seeking damages for alleged personal injury or property  
damage resulting from hazardous substance contamination or exposure caused by the company's  
operations, facilities or products. The company could be required to establish or substantially increase  
financial reserves for such obligations or liabilities and, if the company fails to accurately predict the  
amount or timing of such costs, the related impact on the company's business, financial condition or  
results of operations could be material.  
The company has a reasonable good health and safety record. The company maintains its plant and  
facilities well with a view to meeting these regulatory requirements and has also in place a compliance  
reporting and monitoring process which should help to mitigate risk.  
Input prices  
Prices of commodities used in manufacturing automobiles, including steel, aluminium, copper, zinc,  
rubber, platinum, palladium and rhodium, have become increasingly volatile over the past two years.  
Further, with the global economy coming out of recession and increasing consumption in the emerging  
markets, prices of these commodities are likely to remain high and may rise significantly.  
17  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
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 limited the export of rare earths from time to  
time, and has announced that it will further reduce their production and export in 2011. If the company is  
unable to find substitutes for such raw materials or pass price increases on to customers by raising  
prices, or to safeguard the supply of scarce raw materials, the company's 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 fixed price supply  
contracts with tenors of up to 12 months for energy and commodities wherever possible.  
Product liability recall and warranty  
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 the company's  
vehicles and harm the company's reputation. Any harm to the reputation of any one of the company's  
models can result in a substantial loss of customers.  
Furthermore, the company may also be subject to class actions or other large-scale product liability or  
other lawsuits in various jurisdictions in which the company have a significant presence. 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 the company's business.  
The company monitors its warranty performance very closely as this is a significant potential cost to the  
business and to customers expectations of its brands.  
The company expends resources in connection with product recalls and these resources typically include  
the cost of the part being replaced and the labour required to remove and replace the defective part to  
ensure that consumers do not question the safety or reliability of its vehicles and harm its reputation.  
The company constantly monitor vehicles in service through regular data feeds from dealerships globally  
in order to identify trends and customer satisfaction. This enables the company to put in place appropriate  
actions 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.  
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 financing operations, the company is  
exposed to a variety of operational risks and, if the protection measures put in place prove insufficient, the  
company's results of operations and financial conditions can be materially affected.  
As part of the long-term development strategy under Tata, the company is reviewing its IT resources to  
ensure that they provide it with a "best in class" framework for running and managing its business.  
The company has a number of IT controls to help prevent significant issues in the case of IT failure.  
These include back-up systems and a comprehensive disaster recovery plan. These controls are  
monitored by the company's internal audit function and are S-Ox compliant.  
The company has an IT usage policy which is communicated to all staff when they join the company and  
there are regular reminders provided by the IT department. This policy is designed to prevent  
unauthorised software being used in breach of licensing rules and potentially introducing malicious  
software onto the system. The policy also aims to support the company's diversity policy by preventing  
the use of offensive, sexist or racist language through IT communications.  
18  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
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 towards intensifying efforts to retain their competitive position in established markets  
while also developing a presence in more profitable and fast growing emerging markets, such as China,  
India, Russia, Brazil and other parts of Asia. A range of factors affect the competitive environment,  
including, among other things, quality and features of vehicles, innovation, development time, ability to  
control costs, pricing, reliability, safety, fuel economy, environmental impact and perception thereof,  
customer service and financing terms. The company places emphasis on monitoring markets and  
competitors in order to develop the appropriate strategies to remain competitive.  
Customer demands  
Customer preferences, especially in many of the more mature markets, show an overall trend towards  
fuel efficient, small and environmentally friendly vehicles. In many markets, these preferences are driven  
by customers’ environmental concerns, increasing fuel prices and government regulations, such as  
regulations regarding the level of CO emissions, speed limits and higher taxes on sports utility vehicles  
2
or premium automobiles.  
Such a general shift in consumer preference towards smaller and more environmentally friendly vehicles  
could materially affect the company's ability to sell premium passenger cars and large or medium-sized  
all-terrain vehicles at current or targeted volume levels. In addition, there is a risk that the company's  
quality standards can only be maintained by incurring substantial costs for monitoring and quality  
assurance. For the company's customers, one of the determining factors in purchasing the company's  
vehicles is the high quality of the products. A decrease in the quality of the company's vehicles (or if the  
public were to have the impression that such a decrease in quality had occurred) could damage the  
company's image and reputation as a premium automobile manufacturer and in turn materially affect the  
company's business, results of operations and financial condition.  
The company operates in the premium performance car and all-terrain vehicle segments, which are very  
specific segments of the premium passenger car market. Accordingly, the company's performance is  
linked to market conditions and consumer demand in those two market segments. Other premium  
performance car manufacturers operate in a broader spectrum of market segments, which makes them  
comparatively less vulnerable to reduced demand for any specific segment. Any downturn or reduced  
demand for premium passenger cars and all-terrain vehicles in the geographic markets in which the  
company operate could have a more pronounced effect on the company's performance and earnings  
than would have been the case if the company had operated in a larger number of different market  
segments.  
In order to cater to the changing customer demand for fuel efficient, small and environmentally friendly  
vehicles the company focuses on weight reduction, new propulsion technologies and the introduction of  
smaller models like the Range Rover Evoque (September 2011). The Evoque is the lightest, most fuel  
efficient Range Rover ever and is a demonstration of the company's commitment to environmental  
sustainability. The new state-of-the-art petrol and diesel engines come with direct injection and stop-start.  
The addition of a front wheel drive variant ensures that optimum efficiency is achieved.  
As lighter vehicles require less energy (and emit less CO ) the usage of aluminium for automobile  
2
manufacturing increasingly attracts the interest of car manufacturers. With already two aluminium  
monocoque vehicles on offer – Jaguar XJ and Jaguar XK – the company is one of the pioneers of  
deploying aluminium technology in the automotive sector. The company plans to extend this core  
competency in aluminium construction to more of its model range.  
19  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
In the area of new propulsion technologies the company is involved in a number of advanced research  
projects which all aim at a significant reduction in CO emissions, both of the current range and future  
2
models. Range_e is the company's hybrid research prototype that uses a Range Rover Sport platform  
and has a range of 20 miles using electric power only, emitting less than 100g/km of CO , and a top  
2
speed of around 120mph. A number of prototypes have been built and are in trial.  
Customers also demand continued improvement in quality. As a premium manufacturer, the company  
recognises this and has in place a higher level of focus on the key levers that affect quality. In particular,  
the company's product design and development process has been reorganised to proactively address  
any potential risks to achieving a high quality product, but also manufacturing plants all the way to  
dealerships globally and their interaction with the customer.  
Consumer finance and used car valuations  
During the recent global financial crisis, several providers of customer finance reduced their supply of  
consumer financing for the purchase of new vehicles. Any reduction in the supply of available consumer  
finance in the future would make it more difficult for some of the company's customers to purchase the  
company's vehicles and could put it under commercial pressure to offer new (or expand existing) retail or  
dealer incentives to maintain demand for the company's vehicles.  
Further, the company offers residual value guarantees on the purchase of certain leases in some  
markets. The value of these guarantees is 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 in these markets.  
The company has arrangements in place with FGA Capital, a joint venture between Fiat Auto and Credit  
Agricole (FGAC) for UK and European consumer finance, Chase Auto Finance in North America, and has  
similar arrangements with local providers in a number of other key markets. The company works closely  
with its commercial finance providers to minimize the risk around residual values which in turn reduces  
the level of lease subvention.  
Key markets  
The company has a significant presence in the United Kingdom, North American and continental  
European markets from which the company derives approximately two-thirds of the company's revenues.  
The global economic downturn significantly impacted the automotive industry in these markets in 2009.  
Even though sales of passenger cars were aided by government-sponsored car-scrap incentives, these  
incentives primarily benefited the compact and micro-compact car segments and had virtually no slowing  
effect on the sales declines in the premium car or all-terrain vehicle segments in which the company  
operates. Although demand in these markets has recovered strongly, a decline in demand for the  
company's vehicles in these major markets may in the future significantly impair the company's business,  
financial position and results of operations. The company's strategy, which includes new product  
launches and expansion into growing markets, such as China, India, Russia and Brazil is designed to  
mitigate a decrease in demand for the company's products in mature markets in the future.  
The company's growth strategy relies on the expansion of the company's operations in other parts of the  
world, including China, India, Russia, Brazil and other parts of Asia, which feature higher growth potential  
than many of the more mature automotive markets. If the company is unable to manage risks related to  
the company's expansion and growth in other parts of the world and therefore fail to establish a strong  
presence in those higher growth markets, the company's business, results of operations and financial  
condition could be adversely affected or the company's investments could be lost.  
Credit and liquidity risks  
The company's main sources of liquidity are cash generated from operations, external debt in the form of  
working capital and other similar revolving credit facilities, external term debt, various factoring and VAT  
discount facilities and, during the economic downturn in 2010, financial support from the company's  
parent company. The company maintains short-term debt finance and intergroup funding arrangements  
that are designed to ensure that the company has sufficient credit and liquidity available for the  
company's operations. In addition, the company has issued long-term preference shares to Tata Motors  
Limited Holdings (TMLH). However, adverse changes in the global economic and financial environment  
20  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
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 finance for the company's  
business and operations. If the global economy goes back into recession and consumer demand for the  
company's vehicles drops, as a result of higher oil prices, excessive public debt or for any other reasons,  
and the supply of external financing becomes limited, the company may again face significant liquidity  
risks.  
The company is also subject to various types of restrictions or impediments on the ability of its subsidiary  
NSC's in certain countries to transfer cash across to the Company's head office. These restrictions or  
impediments are caused by exchange controls, withholding taxes on dividends and distributions and  
other similar restrictions in the markets in which the company operate. At 31 March 2011, the company  
had £1,028.3 million of cash and cash equivalents, of which £331.2 million was cash held in subsidiaries  
outside the United Kingdom. A portion of this amount is subject to various restrictions or impediments in  
certain countries. For example, the company's subsidiary in China is subject to foreign exchange controls  
and thereby restricted from transferring cash outside of China. China is further imposing a withholding tax  
on dividends and distributions to parent companies of Chinese subsidiaries, which creates additional  
disincentives and costs in relation to the remittance of cash outside of China. Brazil and Russia are also  
restricting the ability of the company's local subsidiaries to participate in cash pooling arrangements and  
to transfer cash balances outside of the relevant countries, but they do not restrict the ability of those  
entities to make intragroup loans or pay dividends. South Africa is also imposing a withholding tax. The  
company believes that these restrictions have not had and are not expected to have any impact on the  
company's ability to meet the company's cash obligations.  
Labour relations  
In general, the company considers its labour relations with all of the its employees, a substantial portion  
belong to unions, to be good. However, in the future the company may face labour unrest, at the  
company's own facilities or those of the company's suppliers, which may delay or disrupt the company's  
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 the company's major suppliers occur or continue for a long period  
of time, the company's business, financial condition and results of operations may be materially affected.  
The company manages union relations with proactive consultation.  
Key personnel  
The company believes that the company's growth and future success depend in large part on the skills of  
the company's workforce, including executives and officers, as well as the designers and engineers. The  
loss of the services of one or more of these employees could impair the company's ability to continue to  
implement its business strategy. The company's success also depends, in part, on the company's  
continued ability to attract and retain experienced and qualified employees, particularly qualified  
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.  
Pension obligations  
The company provides post-retirement and pension benefits to the company's employees, some of which  
are defined benefit plans. The company's pension liabilities are generally funded and the pension plan  
assets are particularly significant. As part of the company's Strategic Business Review process, the  
company closed the Jaguar Land Rover defined benefit pension plans to new joiners as at 19 April 2010.  
All new employees have joined a new defined contribution pension plan.  
Under the arrangements with the trustees of the defined benefit 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 2009, indicated a shortfall in the assets of the schemes as at that date, versus the actuarially  
determined liabilities as at that date, of £403.0 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 deficit by  
21  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
2018. The company also granted a second and floating charge on its assets in favour of the pension fund  
trustees as security for its obligations under the pension schemes.  
The next actuarial valuation is presently expected to be in April 2012.  
Lower return on pension fund assets, changes in market conditions, changes in interest rates, changes in  
inflation rates and adverse changes in other critical actuarial assumptions, may impact the company's  
pension liabilities and consequently increase funding requirements, which in future could adversely affect  
the company's financial condition and results of operations.  
Insurance coverage  
While the company believes that the insurance coverage that the company it maintains is reasonably  
adequate to cover all normal risks associated with the operation of the company's business, there can be  
no assurance that any claim under the company's insurance policies will be honoured fully or timely, the  
company's insurance coverage will be sufficient in any respect or the company's insurance premiums will  
not increase substantially. Accordingly, to the extent that the company suffers loss or damage that is not  
covered by insurance or which exceeds the company's insurance coverage, or have to pay higher  
insurance premiums, the company's financial condition may be affected.  
Corporate governance and public disclosure  
The company is affected by the corporate governance and disclosure requirements of the company's  
parent, Tata Motors, 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 company's  
parent company and, indirectly, for the company. These new or changed laws, regulations and standards  
may lack specificity 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 company's  
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 can be no  
guarantee that the company will always succeed in complying with all applicable laws, regulations and  
standards.  
Impact of political instability, wars, terrorism, multinational conflicts, natural  
disasters, fuel shortages / prices, epidemics, labour strikes and other risks  
The company's products are exported to a number of geographical markets and the company plan to  
expand the company's international operations further in the future. Consequently, the company is subject  
to various risks associated with conducting the company's business both within and outside the  
company's domestic market and the company's operations may be subject to political instability, wars,  
terrorism, regional and / or multinational conflicts, natural disasters, fuel shortages, epidemics and labour  
strikes. In addition, conducting business internationally, especially in emerging markets, exposes it to  
additional risks, including adverse changes in economic and government policies, unpredictable shifts in  
regulation, inconsistent application of existing laws and regulations, unclear regulatory and taxation  
systems and divergent commercial and employment practices and procedures. Any significant or  
prolonged disruptions or delays in the company's operations related to these risks could adversely impact  
the company's results of operations.  
22  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Other business factors  
Employees  
The company has a highly skilled and committed workforce, many of whom have spent their entire  
working lives with the Jaguar and Land Rover brands. The company is committed to providing its  
employees with the best work environment, including training and development of opportunities to  
improve their skills and ensuring continuous development for all.  
The company is the largest automotive employer in the UK and the company's apprenticeship scheme  
provides world-class engineering training, which is vital for the continued success of the business. The  
company's graduate recruitment scheme led to it being listed in the Times Top 100 graduate employers  
this year for the first time.  
Wellbeing – The company offers a variety of initiatives designed to enhance the wellbeing of its  
employees to promote satisfaction, motivation and productivity. The company is committed to helping  
employees live a healthy lifestyle, with a good work-life balance. For example the company offers:  
•
Flexible working options including job-sharing, part-time work, working from home, and variable  
hours where an individual's role allows.  
•
•
A highly competitive maternity leave package of one year at full pay.  
The option to request a career break of up to four years for employees who have been working  
for the company for more than two years, for reasons ranging from childcare responsibilities to  
study and travelling.  
•
Nurses at on-site occupational health centres to advise staff on maintaining a good work-life  
balance.  
•
•
•
•
A free counselling service to all employees.  
Physiotherapy to those who are recovering from injury.  
On-site sports facilities to encourage employees to keep fit.  
In 2009, Jaguar Land Rover won the Working Families "Family Friendly employer" of the year  
award.  
Diversity  
The company is committed to treating its employees with respect, regardless of age, disability, gender,  
race, religion or sexual orientation. The company promotes equal opportunities in the work place, and its  
recruitment process is designed to be inclusive and ensure no one is put at a disadvantage. The  
company encourages everyone to challenge unacceptable behaviour and report any incidents of  
discrimination. All employees must comply with the "Dignity and Work" policy, designed to prevent  
harassment, bullying and victimisation. This is included in induction training for new starters. The  
company's Diversity and Inclusion Council oversees implementation of the policy and diversity champions  
sit on each of the company's People Development Committees. The company train diversity champions  
on the business case for diversity and how to challenge stereotypes and prejudice.  
The company's annual Diversity and Inclusion Awards recognise employees' best practice in promoting  
diversity, within and outside the business.  
•
Gender – The automotive industry traditionally attracts more men than women. The company  
is working to increase the number of women working at Jaguar Land Rover, and offers a  
range of initiatives to help employees balance work and family commitments. In 2009 women  
represented 8% of the company's employees, including 12% of managers and 1% of senior  
managers.  
23  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
•
•
•
•
The company launched a leadership training programme for women in 2009, with support  
from the UK government, to help more women reach senior roles. 120 women have already  
completed the training, which includes coaching and workshops on leadership skills and  
career development planning.  
The company's graduate recruitment process encourages female students to consider a  
technical career at Jaguar Land Rover. In 2010, Jaguar Land Rover sponsored the Institute of  
Engineering and Technology Young Woman Engineer of the Year Award, which honoured the  
UK's best engineers under the age of 30.  
Ethnic minorities – Around 8% of the company's employees are from ethnic minorities  
(defined as non-white British). This includes 5% of the company's managers and 1% of the  
company's senior managers.  
Disability - Jaguar Land Rover has been awarded the '"two ticks" disability badge by  
Jobcentre Plus in recognition of the company's commitment to employ, retain and develop  
people with disabilities.  
All the company's sites have an occupational health department that gives support to employees with  
disabilities and those who are recovering from injury. The company's recruitment centres are designed to  
be accessible to people with disabilities and the company will make any adjustments necessary to meet  
their needs.  
Apprenticeships give young people the chance to take their first step on the path to a career in  
manufacturing or engineering.  
The company's advanced apprenticeships last for around 3 years, including an initial period studying at  
college. Apprenticeships gain a qualification in engineering, as well as technical certificates.  
In 2009, the company took on 31 advanced apprenticeships, most from local communities, with a further  
38 starting in 2010. 13 more joined the company each year as part of the company's Apprenticeships  
Expansion Programme which supports smaller engineering and manufacturing businesses by training  
people who go on to work for other local companies.  
The company recruited 130 engineering and business graduates to take part in the company's graduate  
development programme in 2010. The company offers approximately 30 product development  
placements for engineering undergraduates each year, for a period of either 3 or 12 months.  
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 which 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 encourages employees to participate as individual citizens in political and government  
affairs. The company respects an employee's right to use their own time and resources to support the  
political 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 financial  
statements.  
24  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Liquidity and capital resources  
Financial restructuring  
The company reorganised its share capital and reregistered itself as a public limited company, effective 6  
April 2011, as part of the preparation for the bond issue and completed the following capital restructuring  
on 31 March 2011:  
•
•
•
converted 1,001,284,322 $1.00 ordinary shares to 644,642,161 £1.00 ordinary shares;  
converted two £1.00 deferred ordinary shares to two £1.00 ordinary shares, ranking pari passu  
with the other ordinary shares;  
converted 11,015,000 7.25% $100.00 preference shares into 856,000,000 £1.00 ordinary shares  
ranking pari passu with the other ordinary shares, and 407,052,620 7.25% £1.00 non-cumulative  
redeemable preference shares; and  
•
redeemed 250,000,000 7.25% £1.00 preference shares to reduce the outstanding balance of  
preference shares to 157,052,620.  
In May 2011, the company successfully raised £1 billion through a bond issue. The bond is listed on the  
Euro MTF market. Around 50% of the bonds were denominated in USD and 50% in pounds sterling. The  
bond provides long-term debt for the company, thus stabilising its funding position and providing funds for  
continued investment in product development. The bond is 75% repayable in 7 years, with the remainder  
in 10 years. The currency split reflects the company's global income and the interest of international  
investors in the company's future. Of the proceeds £250 million was used to repay funding from Tata  
Motors, £380 million was used to repay debt and £370 million was retained for future use in the business.  
The details of the tranches of the bond are as follows:  
•
•
•
£500 million Senior Notes due 2018 at a coupon of 8.125% per annum.  
$410 million Senior Notes due 2018 at a coupon of 7.75% per annum.  
$410 million Senior Notes due 2021 at a coupon of 8.125% per annum.  
The Notes are guaranteed on a senior unsecured basis by the company's subsidiaries - Jaguar Cars  
Limited, Land Rover, Jaguar Land Rover North America LLC, Land Rover Exports Limited and Jaguar  
Cars Exports Limited. This represents a significant step by the company to improve its capital structure by  
raising unsecured funds and extending its debt maturity profile.  
Liquidity and capital resources  
The company finances its capital requirements through cash generated from operations, external debt in  
the form of working capital and revolving credit facilities, external term debt, various factoring and VAT  
discount facilities and, during the downturn in the second and third quarters of 31 March 2010, financial  
support received from its parent company in the form of credit lines and preference shares helped  
maintain liquidity. 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. As at 31 March 2011, on a consolidated level, the company had cash and cash  
equivalents of £1028.3 million and undrawn committed facilities of £355.6 million. The total amount of  
cash and cash equivalents includes £331.2 million in subsidiaries of the Jaguar Land Rover outside the  
United Kingdom. A portion of this amount is subject to various restrictions or impediments on the ability of  
the company's subsidiaries in certain countries to transfer cash across the group, such as foreign  
exchange controls by withholding taxes on dividends and distributions and other similar measures. As at  
31 March 2011, this includes £220.6 million held by subsidiaries in China, a portion of which could be  
used to satisfy current liabilities in China. In addition, the company has cash affected by such restrictions  
or impediments (but not foreign exchange controls) in South Africa, Brazil, Russia and other countries. In  
25  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
each of these countries, the company can access its cash by using certain transaction structures that are  
common in the relevant country.  
The company believes that it has sufficient resources available to meet its planned capital requirements.  
However, it sources of funding could be adversely affected by an economic slowdown or other  
macroeconomic factors, which are beyond the company's control.  
The company's capitalisation  
The company financed the acquisition of the Jaguar and Land Rover businesses (for a total purchase  
price of US$2.5 billion) by way of a US$3.0 billion bridge loan arranged and guaranteed by Tata Motors  
with external lenders. The company refinanced part of this bridge loan (US$983.8 million) by issuing  
US dollar denominated ordinary shares (with aggregate cash proceeds of US$471.3 million) and  
preference shares (with aggregate cash proceeds of US$1,101.5 million) to Tata Motors Limited Holding  
(
TMLH), the company's immediate parent company. The balances of the proceeds from these share  
issuances, together with additional facilities, were used to finance the business in Financial Period 2009  
in the context of the economic downturn.  
In the year ended 31 March 2010, to refinance the balance of the company's bridge loan  
(
US$2,016.2 million) and finance the business in challenging trading conditions, the company issued US  
dollar denominated ordinary shares (with aggregate cash proceeds of US$530.0 million) and preference  
shares (with aggregate cash proceeds of US$1,620.8 million) to the company's immediate parent and  
entered into secured and unsecured short-term borrowings (with aggregate cash proceeds of  
£277.6 million), and long-term borrowings with third party lenders, including the £338.0 million Regional  
Development Bank Facilities.  
On 31 May 2010, preference shares were cancelled for an aggregate amount of US$79.2 million. On  
5
November 2010, the company redeemed US dollar denominated preference shares for an aggregate  
amount of US$298.0 million (giving rise to a short-term unsecured debt of £184.8 million at 31 March  
011).  
2
During the company's corporate reorganisation, the company further restructured its capitalisation by,  
among other things, converting its US dollar denominated ordinary shares into pound sterling  
denominated ordinary shares, converting its outstanding US Dollar denominated preference shares into  
an aggregate of £856.0 million pound sterling denominated ordinary shares and £407.1 million of pound  
sterling denominated preference shares and reducing capital to create a capital redemption reserve of  
£166.7 million. The company also redeemed an aggregate of £250.0 million of pound sterling  
denominated preference shares (giving rise to an equivalent liability that the company since extinguished  
by using part of the net proceeds of the recently completed bond issue). As of the 31 March 2011, the  
company has outstanding an aggregate amount of £157.1 million preference shares.  
Preference shares  
As at the 31 March 2011, the company has outstanding an aggregate amount of £157.1 million  
preference shares. The 7.25% non-cumulative redeemable preference shares of £1.00 each entitle TMLH  
to a fixed non-cumulative preferential dividend of £0.0725 per preference share to be paid out of the  
profits available for distribution in each fiscal year. On each dividend date, a payable preference dividend  
gives rise to a liability immediately payable by the company to TMLH. The preference shares have a  
maturity of ten years, but can be redeemed partially or totally by the company at any time prior to  
maturity. On redemption, the company has to pay £1.00 per preference share and the sum equal to any  
arrears of the preference dividend, whether or not such dividend has been declared or earned. On a  
return of capital on liquidation or otherwise, the assets of the company available for distribution among  
the shareholders will be applied first in repaying the holders of the preference shares, in preference to  
ordinary shareholders. To date, in the absence of available reserves for distribution the company has not  
paid or accrued any preference dividends to TMLH.  
26  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Borrowings and description of indebtedness  
The following table shows details of the company's financing arrangements as at 31 March 2011.  
Amount  
outstanding  
Amount  
as at 31 March undrawn as at  
Facility  
Amount  
Facility  
Maturity  
31 March  
2012  
11 November  
2014  
2011  
31 March 2011  
£
in millions  
£ in millions  
£ in millions  
Single-currency bilateral term loan facility  
(1)  
120.0  
0
120.0  
66.0  
0.0  
Single-currency secured syndicated borrowing-base  
revolving loan facility  
Regional development bank facilities  
116.0  
50.0  
5 March  
2018  
338.0  
338.0  
£
50.0 million three-year single-currency secured  
syndicated term loan facility  
Three years  
after first  
drawdown  
12 June  
2012  
5
0.0  
0.0  
50.0  
34.6  
£
£
70.0 million three-year term loan and overdraft facility  
...............................................  
175.0 million single-currency term loan  
70.0  
75.0  
35.4  
30 September  
2011  
1
90.0  
269.0  
0.0  
85.0  
11.0  
60.0  
340.0  
0.0  
0.0  
0.0  
—
Receivables factoring facilities -1  
Receivables factoring facilities -2  
Receivables factoring facilities-3  
Intercompany loan payable to TMLH  
Preference shares  
280.0  
60.0  
340.0  
434.8  
157.0  
43.9  
—
31 Dec 2011  
31 Jan 2012  
—
0.0  
—
434.8  
157.0  
43.9  
Other facilities  
Capitalised costs  
—
—
(36.5)  
Total  
2,009.7  
—
1,381.6  
766.6  
(
1) The company expects this facility to be extended to 30 September 2012 as an unsecured facility to finance the general  
working capital requirements of Land Rover, Jaguar Cars Limited and their respective subsidiaries.  
£120 million single-currency bilateral term loan facility  
On 29 January 2009 Land Rover entered into a £120 million single-currency bilateral term loan facility  
with a bank to finance its general working capital requirements. At 31 March 2011 the facility was  
undrawn. The facility is guaranteed by Jaguar Cars Exports Limited, Land Rover Exports Limited, Jaguar  
Cars Limited and Jaguar Land Rover North America, LLC. The group is subject to a maximum total debt  
to EBITDA ratio under this facility.  
At 31 March 2011 the facility was secured by certain assets of the group and matured on 31 March 2012.  
In May 2011 the maturity date of the facility was extended to September 2012 and the security  
arrangements removed.  
£116.0 million 5-year single currency secured syndicated borrowing—base revolving loan facility  
On 11 November 2009 Land Rover entered into a £116 million 5-year single currency secured syndicated  
borrowing (a finished vehicle financing facility) arranged by a commercial lender to finance its general  
working capital requirements. The facility is guaranteed by Jaguar Cars Exports Limited, Land Rover  
Exports Limited, Jaguar Cars Limited and Jaguar Land Rover North America, LLC. At 31 March 2011,  
the principal drawn amount under the facility is £50.0 million. All principal, interest and other sums must  
be repaid in full on 11 November 2014. The group is subject to the following financial covenants under  
this facility: maximum debt to EBITDA ratio; minimum EBITA to interest payable ratio; minimum current  
assets to current liabilities ratio; and maximum debt to equity ratio.  
27  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
£338 million regional development bank facilities  
On 24 February 2010 Land Rover entered into three finance contracts with a regional development bank  
for borrowing facilities of £338 million. Upon completion of the bond issue in May 2011 the aggregate  
principal drawn amount under the three facilities has been reduced to £109.0 million. Each finance  
contract is supported by a primary guarantee granted by a different bank in each case, and a counter  
guarantee granted by a different group of banks in each case. All principal, interest and other sums under  
each finance contract must be repaid in full on 5 March 2018. The purpose of each facility is to finance  
research and engineering activities aimed at achieving CO2 targets set by the European Commission.  
There are various covenants with which the borrower and the guarantor must comply including a financial  
covenant of maximum total debt to EBITDA ratio.  
£50 million three-year single currency secured syndicated term loan facility  
This facility was undrawn as of 31 March 2011. Upon completion of the bond issue in May 2011 this  
facility was cancelled.  
£70 million three-year term loan and overdraft facility  
At 31 March 2011, the principal drawn amount under the facility is £35.0 million. Upon completion of the  
bond issue in May 2011 the aggregate principal drawn amount under this facility was repaid and the  
entire facility was cancelled.  
£175 million single-currency term loan  
At 31 March 2011, the principal drawn amount under the facility is £90.0 million. Upon completion of the  
bond issue in May 2011 the aggregate principal drawn amount under this facility was repaid and the  
entire facility was cancelled.  
Receivables factoring facilities  
On 11 March 2011 Jaguar Cars Exports Limited and Land Rover Exports Limited entered into invoice  
discounting facilities with a bank as a buyer. Each company is party to the facility as a guarantor of the  
other company and is jointly and severally liable under the facility agreement. Of the total facilities £250.0  
million is on a committed basis. Receivables are generated from sales of finished goods and Land Rover  
spare parts and accessories. At 31 March 2011 £269.0 million was drawn under these facilities. The  
facility terminates on 31 December 2011 save the buyer may on 90 days' notice terminate earlier.  
Intercompany loan payable to TMLH  
The intercompany loan payable to TMLH arises from the obligation to repay £184.0 million and £250.0  
million as a result of the November 2010 and March 2011 redemption of preference shares.  
Preference shares  
A description of preference shares is provided above.  
28  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Liquidity and cash flows  
The company's principal sources of cash are cash generated from operations (primarily wholesale  
volumes of finished vehicles and parts) and external financings, which include term financings and  
revolving credit financings and similar committed liquidity lines. The company uses its cash to purchase  
raw materials and consumables, for maintenance of the company's plants, equipment and facilities, for  
capital expenditure on product development, to service or refinance the company's debt, to meet general  
operating expenses and for other purposes in the ordinary course of business. While global credit  
markets witnessed an improvement in liquidity and reduction in risk aversion, following the exceptional  
circumstances of Financial Period 2009, the recent events of the European sovereign debt crises  
continue to create uncertainty.  
As the company's subsidiary, Land Rover is the main entity used for financing and borrowing purposes,  
the company has a policy of aggregating and pooling cash balances within that entity on a daily basis.  
Certain of the company's subsidiaries and equity method affiliates have contractual and other limitations  
in respect of their ability to transfer funds to the company in the form of cash dividends, loans or  
advances.  
Cash flow data  
Net cash provided by operating activities was £1,645.2 million in the twelve months ended 31 March 2011  
compared to £662.1 million during the twelve months ended 31 March 2010. This is primarily attributable  
to the improvement in the company's net income to £1,035.9 million in the twelve months ended 31 March  
2011 from a net income of £23.5 million in the twelve months ended 31 March 2010. A recovery in the  
world economy, resulting in a significant improvement in sales volumes, positively impacted the  
company's income and operating cash flow in the twelve months of 31 March 2011.  
Net cash used in investing activities marginally increased to £769.4 million in the twelve months ended  
3
1 March 2011, compared with £763.1 million in the equivalent period in 2010. Purchase of property,  
plant and equipment and expenditure on intangible assets (product development projects) was  
781.1 million in the twelve months of 31 March 2011 and £737.8 million in the equivalent period of 2010.  
£
The company's capital expenditure relates mostly to capacity expansion of its production facilities, quality  
and reliability improvement projects, and the introduction of new products, including the costs associated  
with the development of the Range Rover Evoque.  
Net cash used in financing activities was £527.4 million in the twelve months ended 31 March 2011  
compared to net cash received from financing activities of £652.4 million in the twelve months ended  
31 March 2010. Cash used in financing activities in the twelve months ended 31 March 2011 included  
cash used to repay short-term debt (net £468.5 million), new long-term debt (net £19.4 million) and  
interest and fees paid on existing debt (£74.2 million). Cash generated from financing activities in the  
twelve months ended 31 March 2010 reflected the £1,035.2 million proceeds from the issue of preference  
shares to TMLH as a result of the financial support extended to the company during the economic  
downturn and the proceeds from the issue of £361.0 million of ordinary shares to the company's parent  
company, offset by the repayment of £1,036.4 million (net) of short-term debt in the same period.  
Sources of financing and capital structure  
The company funds its short-term working capital requirements with cash generated from operations,  
overdraft facilities with banks, short and medium-term borrowings from lending institutions and banks.  
The maturities of these short and medium-term borrowings and debentures are generally matched to  
particular cash flow requirements. At 31 March 2011, the company had several drawn long-term  
borrowings on the company's balance sheet as well as additional undrawn available facilities, details of  
which are set out under "Borrowings" section.  
Capital expenditure  
Capital expenditure, including capitalised product development spending, was £869.0 million (2010:  
£750.1 million, 2009: £607.1 million), which mainly included expenditure on tooling and product  
development for proposed product introductions. The company continues to make investments in new  
technologies through R&D activities to develop products that meet the requirements of the premium  
segment including developing sustainable technologies to improve fuel economy and reduce CO2  
29  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
emissions. In pursuit of this objective, annual capital spending (including capitalised product development  
costs) is expected to increase to approximately £1,500.0 million in 31 March 2012, slightly above 50% of  
which is expected to be research and development costs (with approximately 80% to 90% to be  
capitalised in line with the company's accounting policy) and slightly under 50% of which is expected to  
be expenditure on tangible fixed assets such as facilities, tools and equipment. The substantial majority of  
the company's expected product investment relates to investment in new and replacement models,  
derivatives, powertrain actions and other upgrades and the associated investment in tools and facilities  
and other equipment. The company intends to grow its team for product development and engineering to  
over 5,000 engineers and designers from approximately 4,500 at present to support programmes. The  
company intends to fund its product investment programme with cash generated from operations.  
Related party transactions  
The group’s related parties principally consist of Tata Sons Ltd., subsidiaries of Tata Sons Ltd, associates  
and joint ventures of the company. The group routinely enters into transactions with these related parties  
in the ordinary course of business. The group enters into transactions for sale and purchase of products  
with its associates and joint ventures. Transactions and balances with its own subsidiaries are eliminated  
on consolidation. Further details of related party transaction are set out in Note 36 to the Consolidated  
Financial Statements.  
Acquisitions and disposals  
On 2 June 2008, the company acquired the Jaguar and Land Rover businesses from Ford. The  
consideration was £1,279.4 million (US$2,300 billion), not including £149.7 million of cash acquired in the  
business. The company made no other material acquisitions or disposals since 2 June 2008.  
Off-balance sheet arrangements  
The company has no off-balance sheet financial arrangements.  
Contingencies  
In the normal course of business, the company faces claims and assertions by various parties. The  
company assesses such claims and assertions and monitors the legal environment on an ongoing basis,  
with the assistance of external legal counsel wherever necessary. The company records a liability for any  
claims where a potential loss is probable and capable of being estimated and discloses such matters in  
the company's financial statements, if material. Where potential losses are considered possible, but not  
probable, the company provides disclosure in the company's financial statements, if material, but the  
company does not record a liability in the company's accounts unless the loss becomes probable.  
There are various claims against the company, the majority of which pertain to motor accident claims and  
consumer complaints. Some of the cases also relate to replacement of parts of vehicles and/or  
compensation for deficiency in the services by the company or its dealers. The company believes that  
none of these contingencies, either individually or in aggregate, would have a material adverse effect on  
the company's financial condition, results of operations or cash flow.  
Commitments  
The company has entered into various contracts with suppliers and contractors for the acquisition of plant  
and machinery, equipment and various civil contracts of a capital nature aggregating £451.5 million at  
31 March 2011. The company has entered into various contracts with suppliers and contractors which  
include obligations aggregating £689.0 million at 31 March 2011, to purchase minimum or fixed quantities  
of material.  
30  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Board of Directors  
Jaguar Land Rover PLC 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 Banbury Road,  
Gaydon, Warwickshire, CV35 0RG, United Kingdom.  
The following table provides information with respect to members of the Board of Directors of Jaguar  
Land Rover:  
Year appointed as  
Director, Chief Executive  
Officer  
Name  
Position  
or Secretary  
Ratan N. Tata..........Chairman and Director  
Ravi Kant.................Director  
Andrew M. Robb .....Director  
Dr. Ralf D. Speth.....Chief Executive Officer and Director  
Carl-Peter Forster ...Director  
2008  
2008  
2009  
2010  
2010  
Board practices  
The Board consists of two executive directors and two non executive directors and an independent non  
executive director. Appointments of new directors are considered by the full Board.  
The roles of the Chairman and the Chief Executive Officer are distinct and separate with appropriate  
powers being delegated to the Chief Executive Officer 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 identification  
of risks and their mitigation strategies, entry into new businesses, product launches, demand fulfilment  
and capital expenditure requirements, and the review of the company's plans and targets.  
Corporate governance  
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 financial statements, including a review of the significant  
financial reporting judgments contained in them.  
It is comprised of two directors, one of whom is an independent director, who is financially literate and has  
relevant financial and/or audit exposure. The scope of the Audit Committee includes:  
•
Reviewing the annual and all interim financial statements prior to submission to the Board and  
the shareholder, with particular reference to.  
•
Critical accounting policies and practices and any changes to them, off-balance sheet structures,  
related party transactions and contingent liabilities.  
•
•
Audit, legal and tax and accounting updates.  
Unusual or exceptional transactions.  
31  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
•
•
Major accounting entries involving estimates based on the exercise of judgment, including  
provisions for impairment and other major items.  
The auditors’ report and any qualifications or emphases therein, taking particular note of any  
audit differences or adjustments arising from the audit.  
•
Reviewing the effectiveness of financial reporting, internal control and risk management procedures  
within the company's group, with particular regard to compliance with the Sarbanes Oxley legislation  
and other relevant regulations and to disclosures from the Chief Executive Officer or Chief Financial  
Officer, with particular reference to any significant weaknesses or deficiencies in the design or  
operation of internal controls which are reasonably likely to adversely affect the company's ability to  
record, process and report financial data and to receive reports from the external and internal  
auditors with respect to these matters.  
•
•
Assessing the reliability and integrity of the company's accounting policies and financial 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, staffing and seniority of the official heading the department, reporting structure,  
budget, coverage and the frequency of internal audit;  
•
•
review the regular internal reports to management prepared by the internal audit department as  
well as management’s response thereto;  
review the findings 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 significant findings 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, and the nature and scope of their work;  
review their performance and independence every year and to pre-approve any provision of non-  
audit services by the external auditors;  
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 firm’s independence, its internal quality  
control procedures, any material issues raised by the most recent quality control or peer review  
of the firm, and the findings of any enquiry or investigation carried out by government or  
professional bodies with respect to one or more independent audits carried out by the firm within  
the last five years.  
•
In relation to subsidiary company oversight, the appointment, compensation and oversight of auditors  
is covered by the Audit Committee. A working procedure has evolved which facilitates dual oversight  
and compliance between the company and its subsidiaries. The Audit Committee has responsibility  
to review the financial statements. The Audit Committee will perform and review the following:  
•
•
the appointment of the auditors;  
the fixing of remuneration of the auditors;  
32  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
•
•
•
the pre-approval of all services;  
compliance regarding prohibited services; and  
oversight of the work done by the auditors.  
•
To oversee the operation and maintenance of procedures for receiving, processing and recording  
complaints regarding accounting, internal controls or auditing matters and for the confidential  
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.  
•
•
To oversee controls designed to prevent fraud and to review all reports of instances of fraud.  
To satisfy itself that group policy on ethics is followed and to review any issues of conflict of interest,  
ethical conduct or compliance with law, including competition law, brought to its attention.  
•
•
To oversee legal compliance in the company's group.  
To conduct and supervise such investigations or enquiries as the Board may require.  
Remuneration Committee  
The Remuneration Committee is comprised of members appointed by the company's Board of Directors.  
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 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 benefits and  
make recommendations, as appropriate.  
Executive Committee  
The Executive Committee is comprised of the Chief Executive Officer 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 office.  
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 identifies strategic risk, debates strategies and commits the  
allocation of key resources to manage key and emerging risk factors. Within this role, the Executive  
Committee defines, sponsors, supports, debates and challenges risk management activity across the  
group.  
33  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
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.  
Audit  
During the period, Deloitte LLP were re-appointed as auditors to the company and certain subsidiary  
companies.  
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 414 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.  
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 company'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 confidence in its management.  
By order of the board  
Gaydon, Warwickshire  
July 2011  
34  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Statement of directors’ responsibilities in respect of the directors’ report and the  
financial statements  
The directors are responsible for preparing the Annual Report and the financial statements in accordance  
with applicable law and regulations.  
Company law requires the directors to prepare financial statements for each financial year. Under that law  
the directors have elected to prepare the financial statements in accordance with International Financial  
Reporting Standards (IFRSs) as adopted by the European Union (EU). The financial statements are  
required by law to be properly prepared in accordance with IFRSs as adopted by the European Union and  
the Companies Act 2006.  
International Accounting Standard 1 requires that financial statements present fairly for each financial  
year the company's financial position, financial performance and cash flows. This requires the faithful  
representation of the effects of transactions, other events and conditions in accordance with the  
definitions and recognition criteria for assets, liabilities, income and expenses set out in the International  
Accounting Standards Board's 'Framework for the preparation and presentation of financial statements'.  
In virtually all circumstances, a fair presentation will be achieved by compliance with all applicable IFRSs.  
However, directors are also required to:  
•
•
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 specific requirements in IFRSs are  
insufficient to enable users to understand the impact of particular transactions, other events and  
conditions on the entity's financial position and financial performance; and  
make an assessment of the company's ability to continue as a going concern.  
The directors are responsible for keeping proper accounting records that disclose with reasonable  
accuracy at any time the financial position of the company and enable them to ensure that the financial  
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 financial information  
included on the company's website. Legislation in the United Kingdom governing the preparation and  
dissemination of financial statements may differ from legislation in other jurisdictions.  
Directors’ responsibility statement  
We confirm to the best of our knowledge the financial statements, prepared in accordance with  
International Financial Reporting Standards as approved by the EU, give a true and fair view of the  
assets, liabilities, financial position and profit or loss of the company and the undertakings included in the  
consolidation taken as a whole.  
35  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Independent auditors’ report to the members of Jaguar Land Rover PLC  
(previously JaguarLandRover Limited)  
We have audited the financial statements of Jaguar Land Rover PLC for the year ended 31 March 2011  
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 50. The financial reporting framework that has been applied in their preparation is  
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European  
Union and, as regards the Parent Company financial 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 Companies Act 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 them in 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 financial statements and for being satisfied that they give a true and fair view. Our  
responsibility is to audit and express an opinion on the financial statements in accordance with applicable  
law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with  
the Auditing Practices Board’s Ethical Standards for Auditors.  
Scope of the audit of the financial statements  
An audit involves obtaining evidence about the amounts and disclosures in the financial statements  
sufficient to give reasonable assurance that the financial statements are free from material 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 significant accounting estimates made by the directors;  
and the overall presentation of the financial statements. In addition, we read all the financial and non-  
financial information in the annual report to identify material inconsistencies with the audited financial  
statements. If we become aware of any apparent material misstatements or inconsistencies we consider  
the implications for our report.  
Opinion on financial statements  
In our opinion:  
•
•
•
the financial statements give a true and fair view of the state of the group’s and of the parent  
company’s affairs as at 31 March 2011 and of the group’s profit for the period then ended;  
the group financial statements have been properly prepared in accordance with IFRSs as  
adopted by the European Union;  
the parent company financial 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  
Companies Act 2006; and  
•
the group financial statements have been prepared in accordance with the requirements of the  
Companies Act 2006.  
36  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Separate opinion in relation to IFRSs as issued by the IASB  
As explained in Note 2 to the group financial 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 financial 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 Directors’ Report for the financial year for which the financial  
statements are prepared is consistent with the financial statements.  
Matters on which we are required to report by exception  
We have nothing to report in respect of the following matters where the Companies Act 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 from branches not visited by us; or  
•
the parent company financial statements are not in agreement with the accounting records and  
returns; or  
•
•
certain disclosures of directors’ remuneration specified by law are not made; or  
we have not received all the information and explanations we require for our audit.  
Jane Lodge BSc FCA (Senior statutory auditor)  
for and on behalf of Deloitte LLP  
Chartered Accountants and Statutory Auditor  
Birmingham, United Kingdom  
37  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Jaguar Land Rover PLC (previously JaguarLandRover  
Limited)  
CONSOLIDATED FINANCIAL STATEMENTS  
Registered number 06477691  
Year ended 31 March 2011  
38  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Income Statement  
Year ended  
3
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
1 March  
2011  
Note  
4
£
m
£m  
£m  
Revenue  
9,870.7  
(6,178.1)  
(789.0)  
(1,969.4)  
650.5  
6,527.2  
(4,437.0)  
(746.8)  
(1,479.4)  
505.3  
4,949.5  
(3,375.0)  
(587.8)  
(1,508.6)  
438.4  
Material cost  
of sales  
Employee  
cost  
Other  
expenses  
Addback R&D  
costs  
6
7
6
R&D  
not  
costs  
(119.4)  
(47.8)  
(27.8)  
capitalised  
Other income  
36.4  
27.6  
27.4  
Earnings  
before  
1,501.7  
349.1  
(83.9)  
interest,  
tax,  
depreciatio  
n and  
amortisati  
on  
Depreciation  
and  
amortisatio  
n
Excess of fair  
value of net  
assets  
(396.3)  
(316.4)  
(209.1)  
116.0  
-
-
acquired  
over cost of  
acquisition  
Foreign  
3
32.9  
68.3  
(129.9)  
exchange  
gain/(loss)  
(
net)  
Finance  
income  
Finance  
expense  
9.7  
3.4  
10.0  
10  
10  
(33.1)  
(53.0)  
(78.8)  
(
net  
of  
capitalised  
interest)  
Net income /  
1,114.9  
51.4  
(375.7)  
(
loss)  
before tax  
Income tax  
5
(79.0)  
(27.9)  
(26.7)  
expense  
18  
Net income /  
1,035.9  
23.5  
(402.4)  
39  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
(loss)  
attributabl  
e
to  
shareholde  
rs  
40  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Statement of Comprehensive Income  
Note  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Net income  
loss)  
Other  
comprehensiv  
/
1,035.9  
23.5  
(402.4)  
(
e income:  
Currency  
translation  
differences  
Cash  
hedges  
123.4  
42.7  
100.8  
-
(607.5)  
-
flow  
booked  
equity  
in  
Cashflow  
hedges  
(13.2)  
-
-
moved from  
equity and  
recognised in  
the income  
statement  
Actuarial gains  
and losses  
30  
(321.1)  
(21.3)  
(200.5)  
Total  
867.7  
103.0  
(1,210.4)  
comprehensi  
ve income /  
(loss) for the  
period  
41  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Balance Sheet  
Note  
31 March 2011  
£
31 March 2010  
£m  
31 March 2009  
£m  
m
Non-current  
assets  
Investments  
Other  
13  
17  
0.3  
68.5  
0.3  
73.3  
0.3  
32.8  
financial  
assets  
Property,  
plant and  
equipmen  
t
19  
1,230.8  
1,236.2  
1,239.8  
Pension  
asset  
Intangible  
assets  
Deferred  
income  
taxes  
30  
20  
23  
0.9  
2,144.6  
112.2  
0.4  
1,676.0  
45.4  
36.0  
1,269.3  
31.6  
Total  
current  
assets  
non  
3,557.3  
3,031.6  
2,609.8  
Current  
assets  
Cash and  
cash  
equivalents  
Trade  
receivables  
Other  
11  
14  
1,028.3  
679.9  
128.5  
567.2  
61.5  
669.4  
20.1  
439.3  
12.3  
financial  
assets  
Inventories  
Other  
current  
15  
16  
1,155.6  
293.2  
995.4  
225.5  
928.0  
166.0  
assets  
Current  
income tax  
assets  
12.5  
2.4  
-
Total current  
assets  
3,118.3  
6,675.6  
2,592.7  
5,624.3  
1,674.1  
4,283.9  
Total assets  
Current  
liabilities  
Accounts  
payable  
Short term  
borrowings  
and current  
25  
26  
2,384.8  
863.4  
1,931.2  
904.9  
1,482.7  
1,953.1  
portion  
of  
42  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Note  
21  
31 March 2011  
£
31 March 2010  
£m  
31 March 2009  
£m  
m
long  
debt  
Other  
term  
132.9  
142.3  
116.3  
financial  
liabilities  
Provisions  
Other  
24  
22  
246.3  
360.2  
303.2  
295.1  
484.9  
89.8  
current  
liabilities  
Current  
79.8  
12.9  
17.9  
income tax  
liabilities  
Total  
current  
liabilities  
4,067.4  
3,589.6  
4,144.7  
Non-current  
liabilities  
Long term  
debt  
26  
21  
518.1  
20.4  
2,125.5  
29.3  
769.5  
34.0  
Other  
financial  
liabilities  
Deferred  
income  
taxes  
Provisions  
23  
24  
1.6  
1.6  
-
592.7  
341.1  
262.5  
Total non  
current  
liabilities  
1,132.8  
2,497.5  
1,066.0  
Total  
liabilities  
5,200.2  
6,087.1  
5,210.7  
43  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Balance Sheet (continued)  
Note  
31 March 2011  
£
31 March 2010  
£m  
31 March 2009  
£m  
m
Equity attributable to  
equity holders of the  
parent  
Ordinary shares  
Capital  
reserve  
27  
28  
1,500.6  
166.7  
644.6  
-
283.6  
-
redemption  
Reserves/accumulated  
deficit  
28  
(191.9)  
(1,107.4)  
(1,210.4)  
Equity attributable to  
equity holders of the  
parent  
1,475.4  
(462.8)  
(926.8)  
Total liabilities and  
equity  
6,675.6  
5,624.3  
4,283.9  
These financial statements were approved by the board of directors on  
behalf by:  
and were signed on its  
Director  
Company registered number: 6477691  
44  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Statement of Changes in Equity  
Capital redemption  
reserve  
£m  
Reserves /  
Accumulated deficit  
£m  
Total  
equity  
Ordinary shares  
£
m
£m  
Balance at 31  
March 2010  
Income for the  
year  
644.6  
-
-
-
(1,107.4)  
(462.8)  
-
-
1,035.9  
(168.2)  
1,035.9  
(168.2)  
Other  
comprehensiv  
e income for  
the year  
Total  
-
-
-
867.7  
47.8  
-
867.7  
47.8  
comprehensi  
ve income  
Cancellation of  
preference  
shares  
Issue  
ordinary  
shares  
-
of  
856.0  
166.7  
1,022.7  
Balance at 31  
March 2011  
1,500.6  
166.7  
(191.9)  
1,475.4  
Capital redemption  
reserve  
£m  
Reserves /  
Accumulated deficit  
£m  
Total  
Equity  
Ordinary shares  
£
m
£m  
Balance at 31  
March 2009  
Income for the  
year  
283.6  
-
-
-
(1,210.4)  
23.5  
(926.8)  
23.5  
-
-
Other  
79.5  
79.5  
comprehensiv  
e income for  
the year  
Total  
-
-
103.0  
103.0  
comprehensi  
ve income  
Issue  
ordinary  
shares  
of  
361.0  
-
-
361.0  
Balance at 31  
March 2010  
644.6  
-
(1,107.4)  
(462.8)  
Capital redemption  
reserve  
Reserves /  
Accumulated deficit  
Total  
Equity  
Ordinary shares  
45  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
£
m
-
£m  
£m  
-
£m  
-
Balance at 18  
January 2008  
Loss for the  
period  
-
-
-
-
(402.4)  
(808.0)  
(402.4)  
(808.0)  
Other  
-
comprehensiv  
e income for  
the period  
Total  
-
-
(1,210.4)  
(1,210.4)  
comprehensi  
ve income  
Issue  
ordinary  
shares  
of  
283.6  
-
-
283.6  
Balance at 31  
March 2009  
283.6  
-
(1,210.4)  
(926.8)  
46  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Cash Flow Statement  
Year ended  
31 March  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
2011  
£m  
£m  
£m  
Cash flows from  
operating activities  
Net income  
attributable  
shareholders  
/
(loss)  
to  
1,035.9  
23.5  
(402.4)  
Adjustments for:  
Depreciation  
amortisation  
Excess of fair value of  
net assets acquired  
and  
396.3  
-
316.4  
-
209.1  
(116.0)  
over  
acquisition  
Loss on sale of  
cost  
of  
5.8  
31.8  
43.9  
15.2  
property,  
equipment  
software  
plant,  
and  
Foreign  
exchange  
(17.1)  
(12.0)  
losses / (gains) on  
loans  
Income tax expense  
79.0  
33.1  
27.9  
53.0  
26.7  
78.8  
Finance  
net)  
Finance income  
Foreign exchange  
loss on derivatives  
Dividends received  
expense  
(
(9.7)  
0.5  
(3.4)  
-
(10.0)  
-
(2.0)  
-
-
included in other  
income  
Cash flows from  
used in) operating  
activities  
/
1,521.8  
493.1  
(210.6)  
(
Cash paid on option  
premia  
(16.2)  
-
-
Trade receivables  
Other financial assets  
Other current assets  
Inventories  
102.2  
16.9  
(67.7)  
(160.2)  
(0.5)  
(230.1)  
(19.0)  
(59.5)  
(67.4)  
35.6  
515.1  
(12.3)  
(166.0)  
251.8  
(36.0)  
Other  
assets  
Accounts Payable  
Other current  
liabilities  
Other  
liabilities  
Other  
liabilities  
Provisions  
non-current  
421.4  
65.1  
443.9  
205.3  
(423.7)  
89.8  
financial  
(18.2)  
(132.3)  
5.8  
31.3  
6.8  
114.6  
(186.9)  
(3.6)  
non-current  
(130.4)  
Cash generated from /  
used in) operations  
1,738.1  
709.6  
(67.8)  
(
47  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£
m
£m  
(47.5)  
£m  
(13.3)  
Income tax paid  
(92.9)  
Net cash from / (used  
operating  
1,645.2  
662.1  
(81.1)  
in)  
activities  
48  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Consolidated Cash Flow Statement (continued)  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£
m
£m  
£m  
Cash flows used in  
investing activities  
Acquisition  
of  
-
-
(1,279.4)  
subsidiary, net of  
cash acquired  
Movements in other  
restricted deposits  
(3.1)  
(28.7)  
(32.8)  
Purchases  
property, plant and  
equipment  
Proceeds from sale  
of property, plant  
and equipment  
of  
(207.7)  
3.7  
(266.1)  
(188.8)  
-
-
Acquisition  
intangible assets  
of  
(573.4)  
9.1  
(471.7)  
(410.6)  
10.0  
-
Finance  
received  
Dividends received  
income  
3.4  
-
2.0  
Net cash used in  
investing activities  
(769.4)  
(763.1)  
(1,901.6)  
Cash flows from  
financing activities  
Finance expenses  
and fees paid  
Proceeds from issue  
of ordinary shares  
(74.2)  
-
(69.2)  
361.0  
530.3  
(66.9)  
283.6  
Proceeds  
from  
9.2  
1,582.8  
issuance of short  
term debt  
Repayment of short  
term debt  
Payments of lease  
liabilities  
(477.7)  
(4.1)  
(1,566.7)  
(4.0)  
-
-
Proceeds  
from  
20.4  
1,448.8  
162.0  
issuance of long  
term debt  
Repayment of long  
term debt  
(1.0)  
(47.8)  
-
Net cash (used in ) /  
financing  
(527.4)  
652.4  
1,961.5  
from  
activities  
Net change in cash  
and cash equivalents  
348.4  
551.4  
(21.2)  
Cash  
and  
cash  
at  
679.9  
128.5  
-
equivalents  
beginning  
year/period  
of  
Cash acquired on  
-
-
149.7  
49  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
acquisition  
Cash and  
cash  
1,028.3  
679.9  
128.5  
equivalents at end of  
year/period  
50  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (forming part of the financial statements)  
1
Background and operations  
Jaguar Land Rover PLC (the company) was set up on 18 January 2008. The second comparative period  
is therefore the period from incorporation to 31 March 2009.  
The company acquired the Jaguar Land Rover business for USD 2.5 billion on 2 June 2008, which  
included three manufacturing facilities and two advanced engineering centres in the UK and a worldwide  
sales network.  
The company and its subsidiaries, collectively referred to as (“the group” or “JLR”), designs,  
manufactures and sells a wide range of automotive vehicles.  
The company is a public limited company incorporated and domiciled in the UK and has its registered  
office at Gaydon, Warwickshire, 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.  
Tata Sons Limited (or Tata Sons), together with its subsidiaries, owns 28% of the ordinary shares and  
50.97% of “A” ordinary shares of Tata Motors Limited, the ultimate parent company of JLR, and has the  
ability to influence the company’s operations significantly.  
The company became a public limited company (PLC) on 6 April 2011. The company was formerly known  
as JaguarLandRover Limited, and was a limited liability company for the period covered by these  
accounts.  
2
Accounting policies  
Statement of compliance  
These consolidated financial statements have been prepared in accordance with International Financial  
Reporting Standards (referred to as "IFRS") as approved by the EU. 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 taken advantage of s.408 of the Companies Act 2006 and therefore the accounts do  
not include the income statement of the company on a stand-alone basis.  
In the prior year, the company took advantage of s.401 of the Companies Act 2006 and did not produce  
group accounts. The individual statutory accounts were prepared under UK GAAP.  
The company has therefore converted to IFRS in these financial statements and has followed the  
requirements of IFRS 1 in the conversion. The prior period statements for the company have been  
restated in IFRS. There are no differences between the prior periods under UK GAAP and IFRS as  
adopted by the EU for the company.  
Basis of preparation  
The consolidated financial statements have been prepared on historical cost basis except for certain  
financial instruments which are measured at fair value.  
Going concern  
The directors have considered the financial position of the group at 31 March 2011 (net assets of  
£1,475.4 million (2010: net liabilities of £462.8 million, 2009: net liabilities of £926.8 million)) and the  
projected cash flows and financial performance of the group for at least 12 months from the date of  
approval of these financial statements as well as planned cost and cash improvement actions, and  
believe that the plan for sustained profitability remains on course.  
51  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
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 financial  
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 financial covenants linked to the  
borrowings in place. Accordingly they continue to adopt the going concern basis in preparing these  
financial statements.  
Basis of consolidation  
Subsidiaries  
The consolidated financial statements include Jaguar Land Rover PLC and its subsidiaries. Subsidiaries  
are entities controlled by the company. Control exists when the company has the power to govern the  
financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control,  
potential voting rights that currently are exercisable are taken into account. The results of subsidiaries  
acquired or disposed of during the year are included in the consolidated financial statements from the  
effective date of acquisition and up to the effective date of disposal, as appropriate.  
Inter-company transactions and balances including unrealised profits are eliminated in full on  
consolidation.  
Associates and jointly controlled entities (equity accounted investees)  
Associates are those entities in which the company has significant influence, but not control, over the  
financial and operating policies. Significant influence is presumed to exist when the company holds  
between 20 and 50 percent of the voting power of another entity. Jointly controlled entities are those  
entities over whose activities the company has joint control, established by contractual agreement and  
requiring unanimous consent for strategic financial and operating decisions.  
Equity accounted investees are accounted for using the equity method and are recognised initially at cost.  
The company’s investment includes goodwill identified on acquisition, net of any accumulated impairment  
losses. The consolidated financial statements include the company’s share of the income and expenses  
and equity movements of equity accounted investees, from the date that significant influence or joint  
control commences until the date that significant influence or joint control ceases. When the company’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 company has an obligation or has made payments on behalf of  
the investee.  
When the company transacts with an associate or jointly controlled entity of the company, profits and  
losses are eliminated to the extent of the company’s interest in its associate or jointly controlled entity.  
Business combination  
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. Acquisition  
related costs are recognised in net income / (loss) as incurred. The acquiree’s identifiable assets,  
liabilities and contingent liabilities that meet the conditions for recognition are recognised at their fair value  
at the acquisition date, except certain assets and liabilities required to be measured as per the applicable  
standard.  
Purchase consideration in excess of the company's interest in the acquiree's net fair value of identifiable  
assets, liabilities and contingent liabilities is recognised as goodwill. Excess of the company's interest in  
the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities over the purchase  
consideration is recognised, after reassessment of fair value of net assets acquired, in the consolidated  
income statement.  
52  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Use of estimates and judgments  
The preparation of financial statements in conformity with IFRS requires management to make  
judgments, 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 financial 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 significant areas of estimation uncertainty and critical judgments in  
applying accounting policies that have the most significant effect on the amounts recognised in the  
consolidated financial statements are included in the following notes:  
(
(
(
(
i)  
Note 20 – Property, plant and equipment – the group applies judgement in determining the estimate  
useful life of assets.  
ii)  
Note 21 – Intangible assets – management applies significant judgement in establishing the  
applicable criteria for capitalisation of appropriate product development costs.  
iii) Note 24 – Deferred tax – management applies judgement in establishing the timing of the  
recognition of deferred tax assets relating to historic losses.  
iv) Note 25 – Provision for product warranty - it is necessary for group to assess the provision for  
anticipated lifetime warranty and campaign costs. The valuation of warranty and campaign  
provisions requires a significant amount of judgement and the requirement to form appropriate  
assumptions around expected future costs.  
(
(
v)  
Note 31 – Assets and obligations relating to employee benefits – 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 qualified actuary to assist with determining the  
assumptions to be made when evaluating these liabilities.  
vi) Note 34 – Financial Instruments – the group enters into complex financial instruments and therefore  
appropriate accounting for these requires judgement around the valuations.  
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 includes export and other recurring and non-recurring incentives from Governments at the  
national and state levels. 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.  
Cost recognition  
Costs and expenses are recognised when incurred and are classified according to their nature.  
Expenditure capitalised represents employee costs, stores and other manufacturing supplies, and other  
expenses incurred for construction of product development undertaken by the group.  
53  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
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 outflow of economic benefits will be  
required to settle the obligation. Provisions are determined by discounting the expected future cash flows  
at a pre-tax rate that reflects current market assessments of the time value of money and the risks  
specific to the liability.  
Product warranty expenses  
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  
timing of outflows will vary as and when a warranty claim will arise, being typically up to four years.  
Residual risk  
In certain markets, the group is responsible for the residual risk arising on vehicles sold by dealers under  
leasing arrangements. The provision is based on the latest available market expectations of future  
residual value trends. The timing of the outflows will be at the end of the lease arrangements, being  
typically up to three years.  
Foreign currency  
At 31 March 2011, the parent company, Jaguar Land Rover PLC, has a functional currency of GBP. The  
presentation currency of the group consolidated accounts is GBP as that is the functional currency of the  
group's key manufacturing and selling operations.  
Prior to the capital reorganisation in Jaguar Land Rover PLC on 31 March 2011, the company had a  
functional currency of USD.  
For the period to 31 March 2009, the non-UK based selling operations had a functional currency based  
on their location. Following a reorganisation of overseas management after the acquisition, the functional  
currency of the non-UK selling operations changed to GBP from 1 April 2009.  
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.  
For the purpose of consolidation, the assets and liabilities of the group’s operations with a non-GBP  
functional currency are translated to GBP at the exchange rate prevailing on the balance sheet date, and  
the income and expenses at the average rate of exchange for the year. Exchange differences arising are  
recognised in other comprehensive income.  
54  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
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 net income /  
(
loss) (whether in other comprehensive income or directly in equity), in which case tax is also recognised  
outside net income / (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.  
55  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Inventories  
Inventories are valued at the lower of cost and net realisable value. Cost of raw materials and  
consumables are ascertained on a first in first out basis. Costs, including fixed and variable production  
overheads, are allocated to work-in-progress and finished 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.  
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 specifically for financing the asset or the weighted average rate of all  
other borrowings, if no specific 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:  
Estimated  
useful life  
(
years)  
Buildings  
20 to 40  
3 to 30  
3 to 6  
3 to 10  
3 to 20  
Plant and equipment  
Computers  
Vehicles  
Furniture and fixtures  
Assets held under finance 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 capital work-in-progress until construction and installation is complete  
and the asset is ready for its intended use. Capital-work-in-progress includes capital prepayments.  
56  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
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 indefinite lives are reviewed annually to determine whether  
indefinite-life assessment continues to be supportable. If not, the change in the useful-life assessment  
from indefinite to finite is made on a prospective basis.  
Amortisation is provided on a straight-line basis over the estimated useful lives of the intangible assets.  
The amortisation for intangible assets with finite 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 consist of order backlog and dealer network.  
Estimated  
amortisation  
period  
Patents and technological know-how  
Customer related – Dealer network  
Product development  
Intellectual property rights and other  
Software  
2 to 12 years  
20 years  
3 to 10 years  
Indefinite life  
2 to 8 years  
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 platform, engines, transmission and new products  
are recognised as intangible assets, when feasibility has been established, the group has committed  
technical, financial and other resources to complete the development and it is probable that asset will  
generate probable future economic benefits.  
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 specifically for financing the asset or the weighted average rate of all other  
borrowings if no specific borrowings have been incurred for the asset.  
Product development cost is amortised over a period of between 36 months and 120 months.  
Capitalised development expenditure is measured at cost less accumulated amortisation and  
accumulated impairment loss.  
57  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Leases  
At the inception of a lease, the lease arrangement is classified as either a finance lease or an operating  
lease, based on the substance of the lease arrangement.  
Assets taken on finance lease  
A finance 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 finance leases  
are apportioned between the finance expense and the reduction of the outstanding liability. The finance  
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 finance 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.  
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 with finite lives 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 indefinite 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 flows are discounted to their present value using a pre-tax discount rate  
that reflects current market assessments of the time value of money and the risks specific to the asset for  
which the estimates of future cash flows 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.  
As of 31 March 2011, 2010 and 2009, none of the group’s property, plant and equipment and intangible  
assets were considered impaired.  
58  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Employee benefits  
Pension plans  
The group operates several defined benefit 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 fund.  
Contributions to the plans by the group take into consideration the results of actuarial valuations. The  
plans with a surplus position at the year end have been limited to the maximum economic benefit  
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 defined benefit schemes were closed to new joiners in April 2010.  
A separate defined contribution plan is available to new employees of JLR. Costs in respect of this plan  
are charged to the income statement as incurred.  
Post-retirement Medicare scheme  
Under this unfunded scheme, employees of some subsidiaries receive medical benefits subject to certain  
limits of amount, periods after retirement and types of benefits, 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. Such subsidiaries  
account for the liability for post-retirement medical scheme based on an actuarial valuation.  
Actuarial gains and losses  
Actuarial gains and losses relating to retirement benefit plans are recognised in other comprehensive  
income in the year in which they arise. Actuarial gains and losses relating to long-term employee benefits  
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.  
Financial instruments  
Classification, initial recognition and measurement  
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial  
liability or equity instrument of another entity. Financial assets are classified into categories: financial  
assets at fair value through net income / (loss), held-to-maturity investments, loans and receivables and  
available-for-sale financial assets. Financial liabilities are classified into financial liabilities at fair value  
through net income / (loss) and other financial liabilities.  
Financial instruments are recognised on the balance sheet when the group becomes a party to the  
contractual provisions of the instrument.  
Initially, a financial instrument is recognised at its fair value. Transaction costs directly attributable to the  
acquisition or issue of financial instruments are recognised in determining the carrying amount, if it is not  
classified as at fair value through net income / (loss). Subsequently, financial instruments are measured  
according to the category in which they are classified.  
Financial assets and financial liabilities at fair value through net income / (loss): Derivatives, including  
embedded derivatives separated from the host contract, unless they are designated as hedging  
instruments, for which hedge accounting is applied, are classified into this category. Financial assets and  
liabilities are measured at fair value with changes in fair value recognised in the consolidated income  
statement.  
59  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Financial instruments (continued)  
Classification, initial recognition and measurement (continued)  
Loans and receivables: Loans and receivables are non-derivative financial assets with fixed or  
determinable payments that are not quoted in an active market and which are not classified as financial  
assets at fair value through net income / (loss) or financial 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, finance receivables and other financial  
assets.  
Available-for-sale financial assets: Available-for-sale financial assets are those non-derivative financial  
assets that are either designated as such upon initial recognition or are not classified in any of the other  
financial 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.  
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.  
When the financial asset is derecognised, the cumulative gain or loss in equity is transferred to the  
consolidated income statement.  
Equity instruments  
An equity instrument in 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 financial liabilities  
These are measured at amortised cost using the effective interest method.  
Determination of fair value:  
The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of  
the consideration given or received). Subsequent to initial recognition, the group determines the fair value  
of financial instruments that are quoted in active markets using the quoted bid prices (financial assets  
held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments.  
Valuation techniques include discounted cash flow method and other valuation models.  
Derecognition of financial assets and financial liabilities:  
The group derecognises a financial asset only when the contractual rights to the cash flows from the  
asset expires or it transfers the financial 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 financial asset, the group continues to recognise the  
financial asset and also recognises a collateralised borrowing for the proceeds received.  
Financial liabilities are derecognised when these are extinguished, that is when the obligation is  
discharged, cancelled or has expired.  
Impairment of financial assets:  
The group assesses at each balance sheet date whether there is objective evidence that a financial asset  
or a group of financial assets is impaired. A financial 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 flows  
of that asset.  
60  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
Financial instruments (continued)  
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 flows 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 income statement.  
Equity investments  
Impairment loss on equity investments carried at cost is not reversed.  
Hedge accounting:  
The group uses foreign currency forward contracts and options to hedge its risks associated with foreign  
currency fluctuations relating to highly probable forecast transactions. The group designates these  
forward contracts and options in a cash flow 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  
flows are recognised in other comprehensive income (net of tax), and the ineffective portion is  
recognised immediately in the consolidated income statement. Amounts accumulated in other  
comprehensive income are reclassified 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 qualifies 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.  
61  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
New accounting pronouncements  
The company adopted/early adopted following standards/amendments to standards and interpretations:  
IAS 27 Consolidated and Separate Financial Statements: Amendments to IAS 27 are applicable for  
annual periods beginning on or after July 1, 2009. However, the company early adopted IAS 27 in its  
financial statements for the year ended March 31, 2010.  
The revisions to IAS 27 principally affect the accounting for transactions or events that result in a change  
in the group’s interests in its subsidiaries. The adoption of the revised Standard has affected the  
accounting of  
•
•
•
the retained interest in a subsidiary subsequent to disposal of controlling interest;  
the changes in the ownership interest in a subsidiary that do not result in the change in control;  
the non-controlling interests having a deficit balance.  
The above changes have been applied from April 1, 2009 in accordance with the relevant transitional  
provisions.  
When control of a subsidiary is lost as a result of a transaction, event or other circumstance, the revised  
Standard requires that the company derecognise all assets, liabilities and non-controlling interests at their  
carrying amount. Any retained equity interest in the former subsidiary is recognised at its fair value at the  
date control is lost, with the resultant gain or loss recognised in profit or loss.  
In prior years, in the absence of specific requirements in IFRSs, increase in interest in existing  
subsidiaries was treated in the same manner as the acquisition of subsidiaries (with certain exceptions),  
with goodwill being recognised, where appropriate. For decreases in interests in existing subsidiaries that  
did not result in a loss of control, the difference between the consideration received and the carrying  
amount of the share of net assets disposed of was recognised in profit or loss. Under the amended IAS  
27, all such increases and decreases are dealt with in equity, with no impact on goodwill or profit or loss.  
In prior years, share in total comprehensive income attributable to the non-controlling interests in excess  
of the non-controlling interest’s interest in the subsidiary’s equity were attributed against the interests of  
the company except to the extent that the non-controlling interests has a binding obligation and is able to  
make an additional investment to cover the losses. Under the amended IAS 27, total comprehensive  
income is attributed to the non-controlling interests even if this results in the non-controlling interests  
having a deficit balance.  
This has not impacted on the group results in any period.  
The following pronouncements, issued by the IASB, 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  
financial statements:  
IFRS 9 Financial Instruments was issued by IASB in November 2009 as part of its project for revision of  
the accounting guidance for financial instruments. The new standard provides guidance with respect to  
classification and measurement of financial assets. The standard will be effective for annual periods  
beginning on or after January 1, 2013, with early application permitted. This Standard has not yet been  
endorsed by the EU.  
IFRIC Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments: IFRIC 19 is applicable  
for annual periods beginning on or after July 1, 2010. This interpretation addresses accounting of equity  
instruments issued in order to extinguish all or part of a financial liability. The issue of equity instruments  
to extinguish an obligation constitutes consideration paid. The consideration is measured at the fair value  
of the equity instruments issued, unless that fair value is not readily determinable, in which case the  
equity instruments should be measured at the fair value of the obligation extinguished. Any difference  
between the fair value of the equity instruments issued and the carrying value of the liability extinguished  
is recognised in profit or loss.  
62  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
IFRS 7 was amended in May 2010 and October 2010, as part of Improvements to IFRSs 2010. The effect  
of the amendments were to provide (a) qualitative disclosures in the context of quantitative disclosures to  
enable users to link related disclosures to form an overall picture of the nature and extent of risks arising  
from financial instruments and (b) help users of financial statements to evaluate the risk exposures  
relating to transfers of financial assets and the effect of those risks on an entity’s financial position. The  
amendments issued in May 2010 are effective for annual periods beginning on or after January 1, 2011  
and those issued in October 2010 are effective for annual periods beginning on or after July 1, 2011.  
Early application is permitted. These amendments have not yet been endorsed by the EU.  
IFRS 3 (2008) Business Combinations was amended by the IASB in May 2010 effective for annual  
periods beginning on or after July 01, 2010. Early application is permitted. The amendments were as  
follows:  
•
Measurement of non-controlling interests: The option to measure non-controlling interests either  
at fair value or at the present ownership instrument’s proportionate share of the acquiree’s net  
identifiable assets.  
•
Share-based payment transactions: The amendment clarifies that a liability or an equity  
instrument related to share based transactions of the acquiree would be measured in accordance  
with IFRS 2 Share-based Payment at the acquisition date.  
In May 2010, IASB issued an amendment to IFRIC 13 Customer Loyalty Programmes to provide a  
clarification on the measurement of the fair value award credits. The amendment stated that the fair value  
of the award credit should take into account the amount of the discounts or incentives that would  
otherwise be offered to customers who have not earned award credits from an initial sale and the  
proportion of award credits that are not expected to be redeemed by customers. This amendment is  
effective for annual periods beginning on or after January 01, 2011. Earlier application is permitted.  
Amendment to IAS 12 Income Taxes was issued by the IASB in December 2010 to clarify that recognition  
of deferred tax should have regard to the expected manner of recovery or settlement of the asset or  
liability. The amendment and consequential withdrawal of SIC 21 Deferred Tax: Recovery of Underlying  
Assets is effective for annual periods beginning on or after January 01, 2012. This Standard has not yet  
been endorsed by the EU.  
An amendment to IAS 24 Related Party Disclosures was issued by the IASB in December 2010 to  
simplify the disclosure requirements for entities that are controlled, jointly controlled or are significantly  
influenced by a  
Government (referred to as government-related entities) and to clarify the definition of a related party.  
This amendment is effective for annual periods beginning on or after January 01, 2011.  
An amendment to IFRIC 14 Prepayments of a Minimum Funding Requirement was issued by the IASB in  
December 2010 to address an unintended consequence of IFRIC 14, where entities are in some  
circumstances not permitted to recognise prepayments of minimum funding contributions as an asset.  
This amendment is effective for annual periods beginning on or after January 01, 2011.  
The following new IFRSs were issued during the year and are applicable to annual reporting periods  
beginning on or after January 01, 2013. None of these Standards have yet been endorsed by the EU  
IFRS 10 Consolidated Financial Statements establishes principles for the presentation and preparation of  
consolidated financial statements when an entity controls one or more other entities.  
IFRS 11 Joint Arrangements classifies 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). Joint operation is a joint arrangement whereby the  
parties that have joint control have rights to the assets and obligations for the liabilities. 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.  
63  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
2
Accounting policies (continued)  
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 IFRS requires an entity to  
disclose information that enables users of financial statements to evaluate the nature of, and risks  
associated with, its interests in other entities; and the effects of those interests on its financial position,  
financial performance and cash flows.  
IFRS 13 Fair value measurement defines ‘fair value’ and sets out in a single IFRS a framework for  
measuring fair value and requires disclosures about fair value measurements. It seeks to increase  
consistency and comparability in fair value measurements and related disclosures through a fair value  
hierarchy. IFRS 13 is applicable prospectively from the beginning of the annual period in which the  
Standard is adopted.  
Improvements to IAS 39 Financial Instruments: Recognition and Measurement issued in April 2010: An  
additional criteria for assessment of whether a call, put or prepayment option is a closely related  
embedded derivative or not was issued by way of improvements to IAS 39 in April 2010. The  
amendments are applicable for annual periods beginning on or after 1 January 2010. However, the group  
early adopted the improvements.  
As per the amendment, if the prepayment penalty reimburses the lender for the present value of the lost  
interest for the remaining term of the loan contract, it is treated as closely related to the host contract.  
Lost interest is the interest lost by the lender on account of changes in market interest rate.  
The impact of the early adoption is not material.  
In April 2009 and May 2010, IASB issued “improvements to IFRS” – a collection of amendments to  
certain International Financial Reporting Standards – as part of its program of annual improvements to its  
standards, which is intended to make necessary, but non-urgent, amendments to standards that will not  
be included as part of another major project. The amendments resulting from these improvements mainly  
have effective dates for annual periods beginning on or after 1 July, 2010, although entities are permitted  
to adopt them earlier. The group is evaluating the application of improvements.  
64  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
3
Acquisitions of subsidiaries  
Acquisitions  
Jaguar Land Rover Businesses (JLR)  
On 2 June 2008, the company acquired the Jaguar and Land Rover businesses (JLR) from Ford Motor  
company.  
JLR is engaged in the design, development, manufacture and sale of high performance luxury saloons,  
specialist sports cars and four wheel drive off-road vehicles and related components. The JLR  
businesses include three major manufacturing facilities and two advanced design and engineering  
centres in the United Kingdom, a worldwide sales and dealership network, intellectual property rights,  
patents and trademarks.  
The consideration was £1,279.4 million (US$ 2.5 billion) which was financed through a bridge loan facility  
provided by a syndicate of banks.  
The excess of fair value of net assets acquired over the cost of acquisition is £116.0 million and  
represents approximately 9% of the total acquisition cost. This excess is mainly attributable to significant  
value of two iconic brands - Jaguar and Land Rover.  
The company has accounted for the acquisition under the purchase method in accordance with IFRS 3 -  
Business Combinations. Accordingly the financial results of the acquired businesses since 2 June 2008  
have been included in the consolidated financial statements of the company.  
The acquisition had the following effect on the group’s assets and liabilities on the acquisition date.  
Effect of acquisition  
The acquisition had the following effect on the group’s assets and liabilities.  
Book value  
Fair value Recognised  
adjustment  
values  
on  
acquisition  
£m  
£
m
£m  
Acquiree’s net assets at the acquisition date:  
Property, plant and equipment  
Intangible assets  
1,116.8  
502.7  
1,095.7  
954.4  
149.7  
96.7  
398.1  
84.1  
1,213.5  
900.8  
1,179.8  
954.2  
149.7  
Inventories  
Trade and other receivables  
Cash and cash equivalents  
Deferred tax asset  
Interest bearing loans and borrowings  
Trade and other payables  
Provisions  
-
-
-
-
-
-
27.3  
27.3  
(402.0)  
(1,906.4)  
(721.5)  
(402.0)  
(1,906.4)  
(721.5)  
Net identifiable assets and liabilities  
1,395.4  
Consideration paid – cash  
Cash acquired  
1,279.4  
149.7  
Excess of fair value of net assets acquired over cost  
of acquisition  
116.0  
65  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
3
Acquisition of subsidiaries (continued)  
Since the date of acquisition to 31 March 2009, the acquired entities contributed loss of £453.1 million to  
the consolidated net loss for the year.  
A deferred tax liability of £162.1 million was recognised on the fair value adjustments. Also, a deferred tax  
asset of an equivalent amount has been recognised on unused tax losses and capital allowances. It is  
expected that any reversals of the deferred tax liability would be able to offset against the reversal of the  
deferred tax asset.  
4
Revenue  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Sale of goods  
9.870.7  
6,527.2  
4,949.5  
Total revenues  
9,870.7  
6,527.2  
4,949.5  
5
Net income  
Included in net income / (loss) for the year/period are the following:  
Year ended  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
1 March  
011  
2
£m  
£m  
£m  
Excess of fair value of net  
assets acquired over cost of  
acquisition  
-
-
(116.0)  
Net foreign exchange  
Depreciation of property,  
plant and equipment  
(32.9)  
242.8  
(68.3)  
237.1  
129.9  
159.3  
Amortisation of intangible  
assets (excluding internally  
48.1  
26.9  
47.2  
generated  
costs)  
Amortisation of internally  
development  
105.4  
52.4  
2.6  
generated  
costs  
development  
Research and development  
expense  
Operating lease rentals in  
respect of plant, property  
and equipment  
119.4  
16.4  
47.8  
16.5  
38.9  
12.3  
Loss on disposal of fixed  
assets  
Government grants  
Auditor remuneration – audit  
services (see below)  
5.8  
31.8  
15.2  
-
2.4  
(0.3)  
2.2  
(0.6)  
1.8  
66  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Government grant income relates to contributions towards a research project received in the year and for  
which expenditure has been incurred.  
67  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
5
Net income (continued)  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Fees  
payable  
to  
the  
0.1  
0.1  
0.1  
company's auditors for the  
audit of the company's  
annual accounts  
Fees  
payable  
to  
the  
company's auditors and  
their associates for other  
services to the group  
-
audit of the company's  
2.0  
1.9  
1.7  
subsidiaries pursuant to  
legislation  
Total audit fees  
2.1  
2.2  
1.8  
Other services pursuant to  
legislation  
reviews  
0.3  
-
-
–
quarterly  
Total audit and related  
fees  
2.4  
2.2  
1.8  
During the period, the group incurred non-audit fees totalling £5,000 (2009: Nil, 2008: £0.9 million).  
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.  
68  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
6
Material cost of sales and other expenses  
:
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£
m
£m  
£m  
Included in material cost of  
sales:  
Changes in inventories of  
finished goods and work in  
progress  
171.6  
49.3  
(260.4)  
Purchase of products for sale  
Raw  
consumables  
(714.3)  
(5,635.4)  
(603.1)  
(3,883.2)  
(497.5)  
(2,617.1)  
materials  
and  
Included in other expenses:  
Stores, spare parts and tools  
Freight cost  
Works, operations and other  
costs  
Repairs  
Power and fuel  
Rent, rates and other taxes  
Insurance  
76.7  
216.6  
784.2  
66.4  
172.4  
577.2  
42.7  
175.0  
610.9  
20.8  
41.7  
20.7  
11.2  
23.6  
31.8  
19.2  
13.0  
26.3  
42.1  
15.2  
12.0  
Warranty  
Publicity  
332.4  
465.1  
246.6  
328.6  
281.1  
283.1  
7
Staff numbers and costs  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Wages and salaries  
Social security costs and  
benefits  
617.4  
82.6  
577.8  
72.5  
542.5  
39.7  
Pension costs  
89.0  
96.5  
5.6  
Total staff costs  
Staff numbers  
789.0  
746.8  
587.8  
Average number in Average number in Average number in  
the year  
9,237  
4,325  
the year  
8,926  
3,853  
the period  
9,635  
4,253  
Manufacturing  
Research and development  
Other  
3,693  
3,605  
3,641  
Total staff numbers  
17,255  
16,384  
17,529  
69  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
8
Directors emoluments  
:
Year ended  
1 March  
Year ended Period ended  
31 March  
3
31 March  
2009  
£
2011  
£
2010  
£
Directors’ emoluments  
2,114,209  
,114,209  
50,000  
50,000  
2
50,000  
50,000  
The aggregate of emoluments and amounts receivable under long term incentive schemes of the highest  
paid director was £1,345,291 (2010 and 2009:£50,000). During the year, the highest paid director did not  
exercise share options.  
70  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
9
Share based payments  
The group operates a share based payment arrangement for certain employees. The scheme provides a  
cash payment to the employee based on a specific number of shares and the share price of Tata Motors  
Limited at the vesting date. The number of shares is dependent on the achievement of internal profitability  
targets over the vesting period and continued employment at the end of the vesting period.  
Year ended 31 March 2011  
Year ended 31 March 2010  
Number  
Weighted  
excise price  
-
average  
-
Number  
Weighted  
excise price  
-
average  
-
Outstanding  
at  
beginning  
the  
of  
the  
period  
Granted  
351,392  
351,392  
-
-
-
-
-
-
during the  
period  
Outstanding  
at the end  
of  
the  
period  
Exercisable  
at the end  
-
-
-
-
of  
the  
period  
The weighted average share price of options exercised in the year was nil as no share options were  
exercised during the year.  
At the balance sheet date, the exercise price of the outstanding options nil. The weighted average  
remaining contractual life of the outstanding options is 2 years.  
The fair value of the options was calculated using a Black Scholes model at the grant date. The fair value  
is updated at each reporting date as the options 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 Year ended  
31 March  
2010  
3
1 March  
2
011  
Volatility (%)  
Risk-Free rate (%)  
Dividend yield (%)  
Weighted average fair value per share  
14.6  
1.55  
1.17  
£18.31  
-
-
-
-
71  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
10  
Finance income and expense  
Recognised in net income / (loss)  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£
m
£m  
3.4  
3.4  
£m  
Finance income  
9.7  
9.7  
10.0  
Total finance income  
10.0  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Total interest expense on  
financial liabilities measured  
at amortised cost  
83.8  
67.3  
70.6  
Unwind of discount on  
provisions  
0.1  
(0.8)  
15.9  
(7.7)  
Interest  
capital  
transferred  
to  
(50.8)  
(13.5)  
Total finance expense  
33.1  
53.0  
78.8  
The capitalisation rate used to calculate borrowing costs eligible for capitalisation was 7.1% (2010: 4.8%,  
009: 4.8%)  
2
72  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
11  
Cash and cash equivalents  
Cash and cash equivalents consist of the following:  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Cash and cash equivalents  
1,028.3  
679.9  
128.5  
1
,028.3  
679.9  
128.5  
The group holds £1,028.3 million (2010: £679.9 million, period ended 31 March 2009: £128.5 million)  
cash and cash equivalents of which £220.6 million (2010: £32.8 million, period ended 31 March 2009:  
£2.8 million) is in China. The cash held in the group can be utilised across all the group's manufacturing  
and sales operations except for China (see details below). Certain loan covenant restrictions prevent the  
cash being utilised by Jaguar Land Rover PLC, the parent company or paid to shareholders until either  
the loan is repaid or June 2011.  
Due to Chinese foreign exchange controls, there are restrictions on taking cash out of the country. These  
controls limit the group's ability to utilise the cash held in China in all markets. At 31 March 2011, it is  
considered that all (2010: £24.7 million, 2009: £nil) of this cash will be utilised against current liabilities in  
China and therefore the restrictions on movement do not curtail the group's liquidity position.  
12  
Allowances for trade and other receivables  
Changes in the allowances for trade and other receivables are as follows:  
2010  
£m  
2
011  
2009  
£m  
£m  
At beginning of year/period  
Acquisition of subsidiary  
Allowance made during the  
year/period net  
16.3  
1.5  
15.7  
-
10.4  
-
10.1  
6.6  
Written off  
Foreign exchange translation  
differences  
(7.7)  
-
(9.6)  
(0.2)  
(1.6)  
0.6  
At end of year/period  
10.1  
16.3  
15.7  
73  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
74  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
13  
Investments  
Investments consist of the following:  
2011  
2010  
2009  
£
m
£m  
0.3  
£m  
0.3  
Unquoted equity investments,  
at cost  
0.3  
0.3  
0.3  
0.3  
The group consolidates the following subsidiaries:  
Subsidiary Undertaking Interest  
Class of shares  
Country of  
Incorporation and  
registration  
Principal activity  
Manufacture of motor  
Jaguar Cars Limited  
Land Rover  
100%  
100%  
Ordinary shares  
Ordinary shares  
England and Wales Vehicles  
Manufacture of motor  
England and Wales Vehicles  
Details of the indirect subsidiary undertakings are as follows:  
Name of Group  
Interest  
Class of shares  
Country of  
incorporation and  
operation  
Principal activity  
Jaguar Cars Exports  
Limited  
1
00%  
00%  
Ordinary shares  
England and Wales Export sales  
England and Wales Export sales  
Land Rover Exports  
Limited  
1
Ordinary shares  
Ordinary shares  
Ordinary shares  
Jaguar Belgium N.V.  
100%  
00%  
Belgium  
Distribution and sales  
Jaguar Deutschland  
GmbH  
1
Germany  
Distribution and sales  
Spain  
Italy  
Jaguar Hispania SL  
Jaguar Italia SpA  
100%  
100%  
Ordinary shares  
Ordinary shares  
Distribution and sales  
Distribution and sales  
Jaguar Land Rover Austria  
GmbH  
Capital contribution  
€145,300  
Austria  
100%  
100%  
100%  
Distribution and sales  
Distribution and sales  
Dormant  
Jaguar Land Rover North  
America LLC  
USA  
Ordinary shares  
Ordinary shares  
Jaguar Cars (South Africa)  
(
South Africa  
Pty) Ltd  
75  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
13  
Investments (continued)  
Name of Group  
Interest  
Class of shares  
Country of  
incorporation and  
operation  
Principal activity  
Jaguar Cars Overseas  
Holdings Limited  
1
1
1
1
1
00%  
00%  
00%  
00%  
00%  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
England and Wales Holding company  
England and Wales Dormant  
England and Wales Dormant  
England and Wales Dormant  
The Jaguar Collection  
Limited  
The Daimler Motor  
Company Limited  
Daimler Transport  
Vehicles Limited  
The Lanchester Motor  
Company  
Ordinary shares  
Ordinary shares  
England and Wales Dormant  
England and Wales Dormant  
SS Cars Limited  
100%  
Jaguar & Land Rover Asia  
Pacific  
Company Limited  
Distribution and sales  
Thailand  
1
00%  
00%  
Ordinary shares  
Ordinary shares  
Jaguar Land Rover Japan  
Limited  
1
Japan  
Korea  
Mexico  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Jaguar Land Rover Korea  
Group Limited  
1
00%  
00%  
Ordinary shares  
Jaguar Land Rover  
Mexico SA de CV  
1
Ordinary shares  
Ordinary shares  
Land Rover Group Limited 100%  
England and Wales Holding company  
Jaguar Landrover  
Portugal-Veiculos e  
Pecas, Lda  
Distribution and sales  
Portugal  
100%  
Ordinary shares  
Land Rover Espana SL  
100%  
Ordinary shares  
Ordinary shares  
Spain  
Distribution and sales  
Distribution and sales  
Land Rover Nederland BV 100%  
Holland  
Jaguar Land Rover Brand  
Management Consulting  
Distribution and sales  
1
00%  
00%  
Ordinary shares  
China  
(
Shanghai) Ltd  
Jaguar Land Rover  
Australia Pty Limited  
1
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Australia  
Belgium  
Ireland  
Italy  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Land Rover Belux SA/NV 100%  
Land Rover Ireland  
Limited  
1
00%  
100%  
00%  
Land Rover Italia SpA  
Land Rover Deutschland  
GmbH  
1
Germany  
76  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
13  
Investments (continued)  
Name of Group  
Interest  
Class of shares  
Country of  
incorporation and  
operation  
Principal activity  
Jaguar Land Rover  
Canada ULC  
Distribution and sales  
100%  
100%  
100%  
100%  
100%  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Canada  
South Africa  
France  
Distribution  
and sales  
Jaguar Land Rover (South  
Africa) (Pty) Ltd  
Distribution  
and sales  
Jaguar Land Rover France  
SAS  
Distribution  
and sales  
Jaguar Land Rover Brazil  
LLC  
Brazil  
Distribution  
and sales  
Jaguar Land Rover  
Russia  
Russian  
Distribution  
and sales  
Distribution  
and sales  
Land Rover Parts Limited 100%  
Land Rover Parts NA LLC 100%  
Ordinary Shares  
Ordinary Shares  
England and Wales  
USA  
In addition, the group has the following investments:  
Jaguar Land Rover Schweiz AG  
Jaguar Cars Finance Limited  
10% interest in the ordinary share capital  
49.9% interest in the ordinary share capital  
The principal activity of Jaguar Land Rover Schweiz AG is the sale of automotive vehicle and parts. The  
principal activity of Jaguar Cars Finance Limited is the provision of credit finance.  
The total assets, liabilities and profit of Jaguar Cars Finance Limited at the balance sheet date of 30  
September 2010 are below. The group share of these assets is 49.9%. In December 2010, Jaguar Cars  
Finance Limited paid a dividend of £4 million to shareholders, The group has recognised their share of  
the dividend of £2 million in other income. The group hold their share of the remaining net assets of £0.2  
million as investments. The group do not account for this company as an associate as it is a non-trading  
dormant entity.  
2
£
011  
000  
2010  
£000  
2009  
£000  
Total assets  
Total liabilities  
Revenues  
5,904  
(1,441)  
5,133  
3,696  
789  
(22)  
12  
782  
(23)  
38  
Net income  
8
27  
14  
Other financial assets - current  
2011  
2010  
2009  
£m  
£m  
£m  
Advances and other  
8.1  
11.4  
12.2  
receivables recoverable in cash  
Derivative financial instruments  
Other  
49.7  
3.7  
-
8.7  
-
0.1  
61.5  
20.1  
12.3  
77  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
15  
Inventories  
2011  
2010  
2009  
£m  
£m  
£m  
Raw materials and  
consumables  
38.5  
49.9  
31.8  
Work in progress  
Finished goods  
87.1  
1,030.0  
79.6  
865.9  
95.8  
800.4  
1
,155.6  
995.4  
928.0  
Inventories of finished goods include £117.1 million (2010: £124.2 million, 2009 £104.1 million), relating to  
vehicles sold to rental car companies, fleet customers and others with guaranteed repurchase  
arrangements.  
Cost of inventories (including cost of purchased products) recognised as expense during the year  
amounted to £7,011.7 million (2010: £5,123.7 million, 2009: £4,038.6 million).  
During the year, the group recorded inventory write-down expense of £12.2 million (2010: £19.5 million,  
2009: £13.0 million). The write-down is included in other expenses. No previous write-downs have been  
reversed in any period.  
The carrying amount of inventories carried at fair value less costs to sell amounted to £32.7 million (2010:  
£262.2 million, 2009: £244.6 million).  
Inventories with a net book value of £66.7 million (2010: £94.4, 2009 £nil) are pledged as security in  
respect of certain bank loans.  
16  
Other current assets  
2011  
2010  
2009  
£m  
£m  
£m  
VAT  
Prepaid expenses  
Others  
258.2  
35.0  
-
189.0  
36.5  
-
95.6  
69.5  
0.9  
293.2  
225.5  
166.0  
17  
Other financial assets (non current)  
2011  
2010  
2009  
£m  
£m  
£m  
Restricted cash  
Others  
64.6  
3.9  
61.5  
11.8  
32.8  
-
68.5  
73.3  
32.8  
£59.4 million (2010: £49.1 million, 2009 £32.8 million) of the restricted cash is held as security in relation  
to vehicles ultimately sold on lease, a on-going legal case and a bank loan. The amount is pledged until  
either the lease, legal case or loan reaches their respective conclusion.  
78  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
18  
Taxation  
Recognised in the income statement  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Current tax expense  
Current year/period  
Adjustments for prior years  
113.5  
32.3  
36.3  
3.8  
30.6  
0.4  
Current  
expense  
income  
tax  
145.8  
40.1  
31.0  
Deferred tax expense  
Origination and reversal of  
temporary differences  
Prior years  
(34.7)  
(32.1)  
(10.5)  
(1.7)  
(4.3)  
-
Deferred tax expense  
(66.8)  
79.0  
(12.2)  
27.9  
(4.3)  
26.7  
Total income tax expense  
Prior year adjustments relate to differences between prior year estimates of tax position and current  
revised estimates or submission of tax computations.  
Reconciliation of effective tax rate  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£
m
£m  
23.5  
£m  
(402.4)  
Net  
income  
/
(loss)  
1,035.9  
attributable to shareholders  
for the year/period  
Total income tax expense  
79.0  
27.9  
26.7  
Net  
excluding taxation  
income  
/
(loss)  
1,114.9  
51.4  
(375.7)  
Income tax expense using  
the tax rates applicable to  
individual entities of 27.4%  
305.6  
(27.0)  
20.6  
(98.4)  
(27.3)  
(
2010; 40% , 2009: 26.4%)  
Enhanced deductions for  
research and development  
Non-deductible expenses  
Recognition of deferred tax  
on property, plant and  
equipment that was not  
previously recognised  
(26.2)  
6.2  
(132.2)  
14.8  
-
21.5  
-
Losses on which deferred  
tax was not previously  
recognised  
(106.6)  
-
-
Other timing differences  
Deferred tax on employee  
(3.3)  
13.7  
16.6  
-
130.5  
-
79  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
benefits  
not  
previously  
unremitted  
recognised  
Overseas  
earnings  
22.4  
0.2  
-
-
Under / (over) provided in  
prior years  
2.1  
0.4  
Total income tax expense  
79.0  
27.9  
26.7  
80  
Notes (continued)  
19  
Property, plant and equipment  
Land and Plant and  
Buildings Equipment  
Vehicles Computers Fixtures &  
Fittings  
Leased Under  
Assets Construction  
Total  
£m  
£m  
£m  
£m  
£m  
£m  
£m  
£m  
Cost  
Balance at 18 January 2008  
-
332.1  
-
790.7  
-
2.6  
-
17.7  
-
1.8  
-
35.1  
-
33.5  
-
1,213.5  
Acquisitions  
combinations  
through  
business  
Effect of movements in foreign exchange  
Additions  
Disposals  
9.3  
7.8  
(0.2)  
1.9  
179.4  
(53.4)  
-
-
-
-
-
-
8.2  
1.6  
(3.3)  
-
-
-
-
19.4  
188.8  
(61.6)  
-
(4.7)  
Balance at 31 March 2009  
349.0  
918.6  
2.6  
17.7  
8.3  
35.1  
28.8  
1,360.1  
Balance at 1 April 2009  
Additions  
Disposals  
349.0  
6.9  
(21.3)  
918.6  
246.4  
(22.1)  
2.6  
0.6  
(1.7)  
17.7  
1.9  
(7.8)  
8.3  
9.1  
-
35.1  
28.8  
-
(0.1)  
1,360.1  
264.9  
(53.0)  
-
-
Balance at 31 March 2010  
334.6  
1,142.9  
1.5  
11.8  
17.4  
35.1  
28.7  
1,572.0  
Balance at 1 April 2010  
Additions  
Disposals  
334.6  
6.2  
(3.8)  
1,142.9  
166.6  
(45.0)  
1.5  
10.0  
(0.9)  
11.8  
2.2  
(2.6)  
17.4  
5.5  
(6.0)  
35.1  
28.7  
54.3  
-
1,572.0  
244.8  
(58.3)  
-
-
Balance at 31 March 2011  
337.0  
1,264.5  
10.6  
11.4  
16.9  
35.1  
83.0  
1,758.5  
81  
81  
Notes (continued)  
19 Property, plant and equipment (continued)  
Land and  
Buildings  
Plant and  
Equipment  
£m  
Fixtures &  
Fittings  
£m  
Under  
Construction  
£m  
Vehicles  
£m  
Computers  
£m  
Leased Assets  
£m  
Total  
£m  
£m  
Depreciation  
impairment  
and  
Balance at 18 January  
008  
Depreciation charge for  
the period  
Disposals  
-
-
-
-
-
-
-
-
-
2
31.8  
110.2  
0.8  
3.1  
10.3  
3.1  
159.3  
(2.5)  
5.3  
(40.9)  
2.1  
-
-
-
-
(3.0)  
-
-
-
-
-
(46.4)  
7.4  
Effects of movements in  
foreign exchange  
Balance at 31 March  
2009  
34.6  
71.4  
0.8  
3.1  
7.3  
3.1  
-
120.3  
Balance at 1 April 2009  
Depreciation charge for  
the period  
34.6  
12.7  
71.4  
212.0  
0.8  
0.4  
3.1  
2.0  
7.3  
6.0  
3.1  
4.0  
-
-
120.3  
237.1  
Disposals  
(6.1)  
(13.0)  
(0.3)  
(1.2)  
(1.0)  
-
-
(21.6)  
Balance at 31 March  
2010  
41.2  
270.4  
0.9  
3.9  
12.3  
7.1  
-
335.8  
Balance at 1 April 2010  
Depreciation charge for  
the period  
41.2  
11.0  
270.4  
220.2  
0.9  
2.0  
3.9  
1.0  
12.3  
4.5  
7.1  
4.1  
-
-
335.8  
242.8  
Disposals  
(3.6)  
(39.7)  
(0.4)  
(2.6)  
(4.6)  
-
-
(50.9)  
Balance at 31 March  
2011  
48.6  
450.9  
2.5  
2.3  
12.2  
11.2  
-
527.7  
82  
82  
Notes (continued)  
19 Property, plant and equipment (continued)  
Land and Plant and  
Buildings Equipment  
Fixtures &  
Fittings  
£m  
Leased Under  
Assets Construction  
Vehicles Computers  
Total  
£m  
£m  
£m  
£m  
£m  
£m  
£m  
Net book value  
At 31 March 2009  
314.4  
293.4  
288.4  
847.2  
872.5  
813.6  
1.8  
0.6  
8.1  
14.6  
7.9  
1.0  
5.1  
4.7  
32.0  
28.0  
23.9  
28.8  
28.7  
83.0  
1,239.8  
At 31 March 2010  
1,236.2  
At 31 March 2011  
9.1  
1,230.8  
The group had £113.9 million of freehold land at the end of all 3 periods. This land is not depreciated.  
83  
83  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
20  
Intangible assets  
Software  
Patents and  
technological  
know-how  
Customer  
Intellectual  
related property rights  
Product  
development  
in progress  
Capitalised  
product  
development  
Total  
and  
other  
intangibles  
£m  
£m  
£m  
£m  
£m  
£m  
£m  
Cost  
Balance at 18 January 2008  
-
24.0  
-
147.0  
-
88.7  
-
618.3  
-
22.8  
-
-
-
900.8  
Acquisitions  
combinations  
Other acquisitions – internally developed  
through  
business  
-
-
-
-
344.6  
73.7  
418.3  
Balance at 31 March 2009  
24.0  
147.0  
88.7  
618.3  
367.4  
73.7  
1,319.1  
Balance at 1 April 2009  
24.0  
47.6  
14.2  
(2.9)  
147.0  
88.7  
618.3  
367.4  
122.2  
73.7  
301.2  
1,319.1  
471.0  
14.2  
Other acquisitions – internally developed  
Other acquisitions – externally purchased  
Disposals  
-
-
-
-
-
-
-
-
-
-
-
-
-
(2.9)  
Balance at 31 March 2010  
82.9  
147.0  
88.7  
618.3  
489.6  
374.9  
1,801.4  
Balance at 1 April 2010  
Other acquisitions  
Other acquisitions – internally developed  
Disposals  
82.9  
42.3  
-
147.0  
88.7  
618.3  
489.6  
374.9  
1,801.4  
42.3  
581.9  
(4.7)  
-
-
-
-
-
-
-
-
-
-
457.7  
-
-
124.2  
-
(4.7)  
Balance at 31 March 2011  
120.5  
147.0  
88.7  
618.3  
947.3  
499.1  
2,420.9  
84  
84  
Notes (continued)  
20  
Intangible assets (continued)  
Software  
Patents and  
technological  
know-how  
Customer  
related  
Intellectual Product  
property rights development  
Capitalised  
product  
development  
Total  
and  
other  
in progress  
£m  
intangibles  
£m  
£m  
£m  
£m  
£m  
£m  
Amortisation and impairment  
Balance at 18 January 2008  
Amortisation for the period  
-
4.0  
-
12.8  
-
30.4  
-
-
-
-
-
2.6  
-
49.8  
Balance at 31 March 2009  
4.0  
12.8  
30.4  
-
-
2.6  
49.8  
Balance at 1 April 2009  
Amortisation for the year  
Disposals  
4.0  
7.3  
(3.7)  
12.8  
16.6  
-
30.4  
3.0  
-
-
-
-
-
-
-
2.6  
52.4  
-
49.8  
79.3  
(3.7)  
Balance at 31 March 2010  
7.6  
29.4  
33.4  
-
-
55.0  
125.4  
Balance at 1 April 2010  
Amortisation for the year  
Disposals  
7.6  
38.2  
(2.6)  
29.4  
12.3  
-
33.4  
3.0  
-
-
-
-
-
-
-
55.0  
100.0  
-
125.4  
153.5  
(2.6)  
Balance at 31 March 2011  
43.2  
41.7  
36.4  
-
-
155.0  
276.3  
Net book value  
At 31 March 2009  
20.0  
75.3  
77.3  
134.2  
117.6  
105.3  
58.3  
55.3  
52.3  
618.3  
367.4  
489.6  
947.3  
71.1  
319.9  
344.1  
1,269.3  
1,676.0  
2,144.6  
At 31 March 2010  
618.3  
At 31 March 2011  
618.3  
85  
85  
Notes (continued)  
20  
Intangible assets (continued)  
Impairment testing  
The directors are of the view that there is a single cash generating unit. The intellectual property rights are deemed to have an indefinite 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 features of this calculation are shown below:  
2011  
2010  
2009  
Period on which management approved forecasts are based  
Growth rate applied beyond approved forecast period  
Pre-tax discount rate  
5 years  
0%  
12.4%  
5 years  
0 %  
10.9 %  
5 years  
0 %  
9.3 %  
The growth rates used in the value in use calculation reflect those inherent within the Business Plan, approved by the Board through to 2015/6. The cashflows are  
then extrapolated into perpetuity assuming a zero growth rate.  
No reasonable 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.  
86  
86  
Notes (continued)  
21  
Other financial liabilities  
2
011  
2010  
2009  
Current  
Finance lease obligations  
Interest accrued  
Financial instruments  
Liability for vehicles sold  
under a repurchase  
arrangement  
£m  
5.2  
1.1  
5.2  
£m  
5.5  
1.8  
0.5  
£m  
5.6  
3.7  
-
121.4  
134.5  
107.0  
132.9  
142.3  
116.3  
Non Current  
Finance lease obligations  
Other payables  
18.7  
1.7  
22.5  
6.8  
26.4  
7.6  
20.4  
29.3  
34.0  
22  
Other current liabilities  
2
011  
2010  
2009  
£
m
£m  
153.9  
£m  
34.9  
Liabilities for advances  
162.8  
received  
VAT  
Others  
178.6  
18.8  
123.5  
17.7  
52.4  
2.5  
360.2  
295.1  
89.8  
87  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
23  
Deferred tax assets and liabilities – group  
Significant components of deferred tax asset and liability for the year ended March 2009:  
Recognised in  
Balance at acquisition  
Closing  
balance  
£m  
net income / (loss)  
£m  
£m  
Deferred tax assets  
Depreciation brought  
forward  
Expenses deductible  
in future  
years:  
120.5  
50.4  
-
(3.0)  
117.5  
12.6  
-
Provisions,  
(37.8)  
allowances for  
doubtful receivables,  
finance  
receivables  
Compensated  
absences and  
retirement benefits  
Others  
-
0.2  
3.9  
4.1  
Total deferred tax  
asset  
171.1  
(36.9)  
134.2  
Deferred tax  
liabilities  
Intangible assets  
Others  
114.7  
29.1  
(12.1)  
(29.1)  
102.6  
-
Total deferred tax  
liability  
143.8  
27.3  
(41.2)  
4.3  
102.6  
31.6  
Total net deferred  
tax asset  
Held as deferred tax  
asset  
Held as deferred tax  
liability  
27.3  
-
4.3  
-
31.6  
-
88  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
23  
Deferred tax assets and liabilities – group (continued)  
Significant components of deferred tax asset and liability for the year ended March 2010:  
Opening  
balance  
Recognised in  
net income / (loss)  
Closing  
balance  
£m  
£m  
£m  
Deferred tax assets  
Depreciation brought  
forward  
Expenses deductible  
in future  
years:  
117.5  
12.6  
-
61.6  
179.1  
Provisions,  
27.3  
46.9  
39.9  
46.9  
allowances for  
doubtful receivables,  
finance  
receivables  
Compensated  
absences and  
retirement benefits  
Unrealised profit in  
inventory  
-
8.6  
8.6  
Others  
4.1  
19.0  
23.1  
Total deferred tax  
asset  
134.2  
163.4  
297.6  
Deferred tax  
liabilities  
Property, plant and  
equipment  
Intangible assets  
102.6  
151.2  
253.8  
Total deferred tax  
liability  
102.6  
151.2  
253.8  
Total net deferred  
tax asset  
31.6  
12.2  
43.8  
Held as deferred tax  
asset  
Held as deferred tax  
liability  
31.6  
-
13.8  
(1.6)  
45.4  
(1.6)  
89  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
90  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
23  
Deferred tax assets and liabilities – group (continued)  
Significant components of deferred tax asset and liability for the year ended March 2011:  
Opening  
balance  
Recognised in  
net income / (loss)  
£m  
Recognised in other  
comprehensive income  
£m  
Closing  
balance  
£m  
£m  
Deferred tax  
assets  
Depreciation  
brought  
forward  
179.1  
44.7  
-
223.8  
Expenses  
deductible in  
future  
years:  
Provisions,  
allowances  
for  
39.9  
65.0  
-
104.9  
doubtful  
receivables,  
finance  
receivables  
Compensated  
absences and  
retirement  
benefits  
46.9  
8.6  
(5.8)  
34.8  
7.7  
-
48.8  
43.4  
Unrealised  
profit in  
inventory  
Others  
23.1  
(22.9)  
-
0.2  
Total  
deferred tax  
asset  
297.6  
123.5  
7.7  
421.1  
Deferred tax  
liabilities  
Property,  
plant and  
equipment  
Intangible  
assets  
-
1.5  
-
1.5  
253.8  
-
21.3  
3.9  
-
275.1  
11.6  
Derivative  
financial  
7.7  
instruments  
Overseas  
unremitted  
earnings  
-
253.8  
43.8  
22.3  
56.7  
66.8  
-
7.7  
-
22.3  
310.5  
110.6  
Total  
deferred tax  
liability  
Total net  
deferred tax  
asset  
91  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Held as  
45.4  
(1.6)  
66.8  
-
-
112.2  
(1.6)  
deferred tax  
asset  
Held as  
-
deferred tax  
liability  
The unrecognised deferred tax asset amounted to £422.1 million (2010: £664.0 million) at the end of the  
period. These relate to retirement benefits (£32.4 million) and tax losses (£389.7 million). The deferred  
tax asset has not been recognised on the basis that its recovery is not probable in the foreseeable future.  
The unrecognised deferred tax asset does not have an expiry date and can be carried forward  
indefinitely.  
The level of deferred tax asset recognised on the balance sheet is necessarily reviewed at each balance  
sheet date. The extent of any such recognition is based on the latest available evidence as to whether  
sufficient taxable profits will be available in future against which deferred tax assets can be utilised.  
92  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
24  
Provisions  
Provisions  
2
011  
2010  
2009  
£m  
£m  
£m  
Current  
Product warranty  
Product liability  
Provisions for residual risk  
226.3  
19.1  
0.9  
270.7  
30.6  
1.9  
383.1  
24.7  
77.1  
Total current  
246.3  
303.2  
484.9  
Non current  
Defined benefit obligations  
Other employee benefits  
obligations  
290.5  
1.0  
101.4  
1.3  
72.6  
2.0  
Product warranty  
276.8  
6.1  
18.3  
205.7  
13.9  
18.8  
148.8  
18.3  
20.8  
Provision for residual risk  
Provision for environmental  
liability  
Total non current  
592.7  
341.1  
£m  
262.5  
£m  
Product warranty  
2
011  
2010  
2009  
£m  
Opening balance  
Amounts  
acquisition  
476.4  
-
531.9  
-
-
548.9  
arising  
on  
Provision made during the  
year/period  
Provision used during the  
year/period  
Impact of discounting  
332.4  
(305.8)  
0.1  
246.6  
(301.3)  
(0.8)  
281.1  
(314.0)  
15.9  
Closing balance  
503.1  
476.4  
531.9  
Product liability  
2
011  
2010  
2009  
£m  
£m  
£m  
Opening balance  
Amounts  
acquisition  
30.6  
-
24.7  
-
-
16.3  
arising  
on  
Provision made during the  
year/period  
Provision used during the  
year/period  
6.8  
11.1  
(5.2)  
10.2  
(1.8)  
(18.3)  
Closing balance  
19.1  
30.6  
24.7  
93  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
24  
Provisions (continued)  
Residual risk  
2
011  
2010  
2009  
£m  
£m  
£m  
Opening balance  
Amounts  
acquisition  
15.8  
-
95.4  
-
-
74.9  
arising  
on  
Provision made during the  
year/period  
Provision used during the  
year/period  
Unused amounts released  
in the period  
22.5  
(31.3)  
-
-
75.2  
(54.7)  
-
(15.2)  
(64.4)  
Closing balance  
7.0  
15.8  
£m  
95.4  
£m  
Environmental liability  
2
011  
2010  
2009  
£
m
Opening balance  
Amounts  
acquisition  
18.8  
-
20.8  
-
-
20.4  
arising  
on  
Provision made during the  
year/period  
Provision used during the  
year/period  
Unused amount released in  
the period  
-
-
1.5  
(1.1)  
-
(0.5)  
-
(0.2)  
(1.8)  
Closing balance  
18.3  
18.8  
20.8  
Warranty provision  
The group offers warranty cover in respect of manufacturing defects, which become apparent within a  
year of up to four years after purchase, dependent on the market in which the purchase occurred. The  
discount on the warranty provision is calculated using a risk-free discount rate as the risks specific to the  
liability, such as inflation, are included in the base calculation. The warranty provision was previously  
presented with the impact of inflation included in the discounting rate.  
A change in accounting estimate increased warranty provisions in the year by £9.2 million (2010 and  
2009: nil)  
Product liability provision  
A product liability provision is maintained in respect of known litigation which the group is party to.  
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. The timing of the outflows will be at the end of the lease arrangements – being typically up  
to three years.  
Environmental risk provision  
This provision relates to various environmental remediation costs such as asbestos removal and land  
clean up. The timing of when these costs will be incurred is not known with certainty.  
94  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
25  
Accounts payable  
2
011  
2010  
£m  
2009  
£m  
£m  
Trade payables  
1,627.4  
75.5  
681.9  
-
1,442.5  
54.1  
400.0  
34.6  
902.2  
58.9  
521.6  
-
Liabilities to employees  
Liabilities for expenses  
Others  
2,384.8  
1,931.2  
1,482.7  
26  
Interest bearing loans and borrowings  
2
011  
2010  
2009  
£m  
£m  
£m  
Others:  
Loan from banks  
Redeemable  
789.5  
157.1  
1,221.9  
1,795.5  
1,953.1  
769.5  
preference  
shares classified as debt  
Other loans  
Finance lease liabilities  
434.9  
23.9  
13.0  
28.0  
-
32.0  
1,405.4  
3,058.4  
2,754.6  
Less:  
Current portion of bank loan  
Current portion of other  
loans  
(428.5)  
(434.9)  
(892.9)  
(12.0)  
(1,953.1)  
-
Short term borrowings  
Current portion of finance  
lease liabilities  
(863.4)  
(5.2)  
(904.9)  
(5.5)  
(1,953.1)  
(5.6)  
Long term debt  
536.8  
2,148.0  
795.9  
Held as long term debt  
518.1  
18.7  
2,125.5  
22.5  
769.5  
26.4  
Held as long term finance  
leases  
95  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
26  
Interest bearing loans and borrowings (continued)  
2
011  
2010  
£m  
2009  
£m  
£m  
Bank loan  
Loans from parent  
428.5  
434.9  
892.9  
12.0  
1,953.1  
-
Short term borrowings  
863.4  
904.9  
1,953.1  
Bank loan  
Redeemable  
361.0  
157.1  
329.0  
1,795.5  
-
769.5  
preference  
shares classified as debt  
Other loans  
-
1.0  
-
Long term debt  
518.1  
2,125.5  
769.5  
Certain loans from banks availed by some of the subsidiary companies carry covenants placing certain  
restrictions on repayment of intra group loans and payments of dividends.  
Preference shares classified as debt  
The holders of the preference shares are entitled to be paid out of the profits available for distribution of  
the company in each financial year a fixed 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 first 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. On redemption, the company shall pay £1 per preference share and a sum equal  
to any arrears or accruals of preference dividend.  
Preference shares contain no right to vote upon any resolution at any general meeting of the company.  
The contractual cash flows of interest bearing debt and borrowings as of 31 March 2011 is set out below,  
including estimated interest payments and excluding the effect of netting agreements. The analysis  
assumes the annual coupon rate of 7.25% will be paid on the preference shares each year and the debt  
will be repaid at the maturity date.  
2
011  
2010  
2009  
£m  
£m  
£m  
Due in  
1
2
4
year or less  
898.7  
213.8  
149.0  
298.3  
927.2  
21.4  
250.6  
1,966.0  
59.3  
230.4  
nd  
th  
rd  
and 3 years  
th  
and 5 years  
More than 5 years  
1,983.4  
1,051.5  
1,559.8  
3,182.6  
3,307.2  
96  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
27  
Capital and reserves  
2
011  
2010  
2009  
£m  
£m  
£m  
Allotted, called up and  
fully paid  
Nil (2010: 1,001,284,322,  
-
644.6  
283.6  
2009:  
471,284,322)  
Ordinary shares of USD $1  
each  
Nil (2010: 27,222,877, 2009:  
-
1,795.5  
769.5  
1
1,015,000) 7.25% non  
cumulative preference  
shares of USD $100  
1
,500,642,163 (2010 and  
009: Nil) Ordinary shares  
1,500.6  
157.1  
-
-
-
-
2
of £1 each  
1
57,052,620 (2010 and  
009: Nil) 7.25% Preference  
2
shares of £1 each  
1,657.3  
2,440.1  
1,053.1  
Held as equity  
Held as debt  
1,500.6  
157.1  
644.6  
283.6  
769.5  
1,795.5  
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.  
The holders of the preference shares are entitled to be paid out of the profits available for distribution of  
the company in each financial year a fixed non-cumulative preferential dividend of 7.25% per annum. The  
preference share dividend shall be 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 first 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. On redemption, the company shall pay £1 per preference share and a sum equal  
to any arrears or accruals of preference dividend.  
Preference shares contain no right to vote upon any resolution at any general meeting of the company.  
Movements in share capital of the company  
In May 2010, £47.8 million of USD preference shares were cancelled.  
In November 2010, $298 million of preference shares were converted to short term debt.  
In March 2011, the USD ordinary shares and the USD preference shares were converted to GBP ordinary  
shares and preference shares. The total share capital was reduced and a capital redemption reserve of  
£166.7 million was created. £250 million of the new preference shares were converted into short-term  
debt.  
All dividends due on the preference shares were waived by the parent for no cost to the company.  
97  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
28  
Other reserves  
The movement of other reserves is as follows:  
Hedging  
reserve  
Total  
Accumulated  
deficit: profit  
Translation  
reserve  
Pension  
reserve  
Reserves /  
accumulated  
deficit  
&loss reserve  
£m  
£m  
-
£m  
£m  
£m  
Balance at 31 March  
010  
Net profit for the year  
2
(506.7)  
-
(221.8)  
-
(378.9)  
1,035.9  
(1,107.4)  
1,035.9  
-
-
Foreign  
translation  
Movements  
currency  
123.4  
-
-
123.4  
(321.1)  
in  
-
employee benefit plan  
Cashflow hedges  
-
-
(321.1)  
-
-
-
29.5  
-
29.5  
47.8  
Cancellation  
of  
preference shares  
Tax booked through  
other comprehensive  
income  
-
-
-
47.8  
-
(7.7)  
7.7  
-
Balance at 31 March  
2011  
(383.3)  
21.8  
(535.2)  
704.8  
(191.9)  
Hedging  
reserve  
Accumulated  
deficit: profit  
and loss  
reserve  
Total  
Reserves /  
accumulated  
deficit  
Translation  
reserve  
Pension  
Reserve  
£m  
£m  
£m  
£m  
£m  
Balance at  
009  
Net profit for the year  
1
April  
-
(1,210.4)  
2
(607.5)  
-
(200.5)  
-
(402.4)  
23.5  
-
-
23.5  
100.8  
Foreign  
currency  
translation  
Movements  
employee benefit plan  
100.8  
-
-
-
-
in  
-
(21.3)  
(21.3)  
Balance at 31 March  
2010  
(506.7)  
-
(221.8)  
(378.9)  
(1,107.4)  
98  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
28  
Other reserves (continued)  
Total  
Accumulated  
deficit: profit  
Translation  
reserve  
Hedging  
reserve  
Pension  
Reserve  
Reserves /  
accumulated  
deficit  
&
loss reserve  
£m  
£m  
£m  
£m  
£m  
Balance at 18 January  
008  
Net loss for the period  
-
2
-
-
-
-
-
(402.4)  
-
(402.4)  
-
-
Foreign  
currency  
translation  
Movements  
employee benefit plan  
(607.5)  
-
-
-
-
(607.5)  
(200.5)  
in  
-
(200.5)  
Balance at 31 March  
2009  
(607.5)  
-
(200.5)  
(402.4)  
(1,210.4)  
99  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
28  
Other reserves (continued)  
The movement in capital redemption reserve is as follows:  
011  
2
2010  
2009  
£m  
£m  
£m  
Balance at beginning of  
year/period  
Created in the year on  
cancellation of share capital  
-
-
-
-
-
166.7  
166.7  
Balance  
year/period  
at  
end  
of  
-
-
29  
Dividends  
During 2009, 2010 and 2011, no dividends were paid or proposed on the ordinary shares. No dividend  
was paid or proposed on the non-cumulative preference shares.  
30  
Employee benefits  
Jaguar Cars Ltd and Land Rover UK, have pension arrangements providing employees with defined  
benefits related to pay and service as set out in the rules of each fund. The following table sets out the  
disclosure pertaining to employee benefits of Jaguar Cars Limited and Land Rover, UK.  
Change in defined benefit obligation  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Defined benefit obligation,  
beginning of the year/period  
Liability on acquisition  
Service cost  
Interest cost  
Actuarial (gain) /loss  
Benefits paid  
Member contributions  
Prior service costs  
Other adjustments  
Foreign currency translation  
3,871.3  
3,045.1  
-
-
106.4  
216.1  
226.3  
(128.6)  
6.6  
-
63.4  
205.3  
647.3  
(109.0)  
19.5  
-
3,189.6  
62.3  
162.5  
(339.0)  
(77.6)  
30.6  
-
5.0  
(1.4)  
(1.6)  
(0.3)  
-
7.9  
8.8  
Defined benefit obligation,  
at end of year/period  
4,300.1  
3,871.3  
3,045.1  
100  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
30  
Employee benefits (continued)  
Change in plan assets  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Fair value of plan assets,  
beginning of the year/period  
Asset on acquisition  
Expected return on plan  
assets  
3,806.5  
3,109.0  
-
-
241.6  
-
173.6  
3,518.0  
220.4  
Actuarial gain /(loss) being  
actual return on assets  
differing from expected  
return on assets  
30.5  
562.2  
(673.1)  
Employer’s contributions  
Members contributions  
Benefits paid  
Plan combinations  
Foreign currency translation  
218.3  
6.6  
(128.6)  
(1.4)  
(1.5)  
52.5  
19.5  
(109.0)  
-
76.1  
30.6  
(77.6)  
7.5  
(1.3)  
7.1  
Fair value of plan assets  
at end of year/period  
4,172.0  
3,806.5  
3,109.0  
Amount recognised in the balance sheet consist of  
Year ended  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
31 March  
2011  
£m  
£m  
£m  
Present value of unfunded  
defined benefit obligations  
Present value of funded  
defined benefit obligations  
Fair value of plan assets  
Restriction of pension asset  
(1.1)  
(1.6)  
(11.0)  
(4,299.0)  
(3,869.7)  
(3,034.1)  
4,172.0  
(33.7)  
3,806.5  
(2.9)  
3,109.0  
(40.0)  
(as per IFRIC 14)  
Onerous obligation  
(127.8)  
(33.3)  
(60.0)  
Net liability  
Other  
(289.6)  
-
(101.0)  
-
(36.1)  
(0.5)  
Non current assets  
Non current liabilities  
0.9  
(290.5)  
0.4  
(101.4)  
36.0  
(72.6)  
Total net liability  
(289.6)  
(101.0)  
(36.6)  
101  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
30  
Employee benefits (continued)  
Experience adjustments  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Present value of defined benefit obligation  
Fair value of plan assets  
Surplus/ (deficit)  
(4,300.1)  
4,172.0  
(120.1)  
(3,871.3)  
3,806.5  
(64.8)  
(3,045.1)  
3,109.0  
63.9  
Experience adjustments on plan liabilities (as a  
percentage of plan liabilities)  
97.5 / 2.0% (170.5) / (4.0%)  
33.2 / (1.09%)  
Experience adjustments on plan assets (as a  
percentage of plan assets)  
30.5 / 0.7%  
562.2 / 14.8% 673.1 / (21.6%)  
Amount recognised in other comprehensive income  
Year ended  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
31 March  
2011  
£m  
£m  
£m  
Actuarial loss  
Change in restriction of  
pension asset (as per IFRIC  
(195.8)  
(30.8)  
(85.1)  
37.1  
(334.1)  
133.6  
14)  
Change in onerous  
obligation  
(94.5)  
26.7  
-
(
321.1)  
(21.3)  
(200.5)  
Net pension and post retirement cost consists of the following components  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
£m  
£m  
£m  
Current service cost  
Prior service cost  
Interest cost  
Expected return on plan  
assets  
106.4  
5.0  
216.1  
(241.6)  
63.4  
-
205.3  
(173.6)  
62.3  
-
162.5  
(220.4)  
Net periodic pension cost  
85.9  
95.1  
4.4  
102  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
30  
Employee benefits (continued)  
The assumptions used in accounting for the pension plans are set out below:  
Year ended  
1 March  
011  
Year ended  
31 March  
2010  
Period ended  
31 March  
2009  
3
2
Discount rate  
5.5%  
3.9%  
5.5%  
4.0%  
6.7%  
3.8%  
Rate of increase in  
compensation level of  
covered employees  
Inflation increase  
Expected rate of return on  
plan assets  
3.4%  
6.2%  
3.5%  
6.5%  
3.3%  
5.8%  
For the valuation at 31 March 2011, 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 is an  
allowance for future improvements in line with the CMI (2010) projections and an allowance for long term  
improvements of 1.00% per annum  
For the valuations at 31 March 2010 and 2009, the mortality assumptions used are "92 series" base table  
(
based on a year of use of 2009), with medium cohort improvements applied from 2005, and an underpin  
to future mortality improvements of 1% p.a. for males and 0.5% for females. In addition there is a scaling  
factor of 135% (males and females) for the Jaguar Pension Plan and Land Rover Pension Scheme, and  
110% (males) / 115% (females) for the Jaguar Executive Pension Plan.  
Changes in the mortality assumptions used in the current period compared to the prior period have  
increased the liability by £283.7 million in the year.  
Pension plans asset allocation by category is as follows:  
Year ended 31 March  
011  
Year ended  
31 March  
Period ended  
31 March  
2009  
2
2010  
%
%
%
Asset category  
Debt  
Equities  
62  
29  
9
47  
51  
2
62  
35  
3
Others  
The expected return on assets assumptions are derived by considering the expected long-term rates of  
return on plan investments. The overall rate of return is a weighted average of the expected returns of the  
individual investments made in the group plans. The long-term rates of return on equities are derived from  
considering current risk free rates of return with the addition of an appropriate future risk premium from an  
analysis of historic returns in various countries. The long-term rates of return on bonds are set in line with  
market yields currently available at the statement of financial position date.  
The expected net periodic pension cost for the year ended 31 March 2012 is £100.1 million. The group  
expects to contribute £116.5 million to its plans in the year ended 31 March 2012.  
Defined contribution plan  
The group’s contribution to defined contribution plans aggregated £3.4 million, (2010: £0.2 million, 2009:  
£1.0 million).  
103  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
31  
Commitments and contingencies  
In the normal course, 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 financial  
statements, if material. For potential losses that are considered possible, but not probable, the group  
provides disclosure in the financial statements but does not record a liability in its accounts unless the  
loss becomes probable.  
The following is a description of claims and assertions where a potential loss is possible, but not  
probable. Management believes that none of the contingencies described below, either individually or in  
aggregate, would have a material adverse effect on the group’s financial condition, results of operations  
or cash flows.  
Litigation  
The group is involved in legal proceedings, both as plaintiff and as defendant and there are claims of  
£10.8 million which management have not recognised as they are not considered probable.  
Other claims  
There are other claims against the group, the majority of which pertains to motor accident claims and  
consumer complaints. Some of the cases also relate to replacement of parts of vehicles and/or  
compensation for deficiency in the services by the group or its dealers.  
The Group has not provided £1.3 million for tax matters in dispute as it is not considered probable that  
these will be settled in an adverse position for the Group.  
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 £451.5 million (2010:  
£216.3 million, 2009: £232.0 million) and £3.5 million (2010 and 2009 nil) relating to the acquisition of  
intangible assets.  
The group has entered into various contracts with vendors and contractors which include obligations  
aggregating £689.0 million (2010: £431.0 million, 2009: £468.0 million) to purchase minimum or fixed  
quantities of material.  
For commitments related to leases, see note 34.  
Inventory of £66.7 million (2010: £94.4 million, 2009: Nil) and trade receivables with a carrying amount of  
£268.9 million (2010: £296.8, 2009: £164.0 million) and property, plant and equipment with a carrying  
amount of £463.4 million (2010 £714.8, 2009: £139.7 million) are pledged as collateral/security against  
the borrowings and commitments.  
There are guarantees provided in the ordinary course of business of £23.3 million, of which £14.3 million  
are to HMRC.  
104  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
32  
Capital management  
The group’s objectives for managing capital are to create value for shareholders, to safeguard business  
continuity and support the growth of the group.  
The group determines the amount of capital required on the basis of annual operating plans and long-  
term product and other strategic investment plans. The funding requirements are met through a mixture of  
equity, convertible or non-convertible debt securities and other long-term/short-term borrowings. The  
group's policy is aimed at combination of short-term and long-term borrowings.  
The group monitors the capital structure on basis of total debt to equity ratio and maturity profile of the  
overall debt portfolio of the group.  
Total debt includes all long and short-term debts and finance lease payables. Equity comprises all  
components.  
The following table summarises the capital of the group:  
2
011  
2010  
£m  
2009  
£m  
£m  
Equity  
1,475.4  
(462.8)  
(926.8)  
Short term debt  
Long term debt  
868.6  
536.8  
910.4  
2,148.0  
1,958.7  
795.9  
Total debt  
1,405.4  
2,880.8  
3,058.4  
2,595.6  
2,754.6  
1,827.8  
Total capital (debt and  
equity)  
105  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial instruments  
This section gives an overview of the significance of financial instruments for the group and provides  
additional information on balance sheet items that contain financial instruments.  
The details of significant 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  
financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.  
(
a)  
Financial assets and liabilities  
The following table presents the carrying amounts and fair value of each category of financial assets and  
liabilities as of 31 March 2009:  
Financial assets  
Cash and  
loans and  
receivables  
Total  
carrying  
value  
Total  
fair value  
£m  
£m  
£m  
Cash and cash equivalents  
Unquoted equity instruments  
Trade receivables  
Other financial assets - current  
Other financial assets – non-  
current  
128.5  
0.3  
439.3  
12.3  
32.8  
128.5  
0.3  
439.3  
12.3  
32.8  
128.5  
-*  
439.3  
12.3  
32.8  
6
13.2  
613.2  
612.9  
*
the fair value in respect of the unquoted equity investments cannot be reliably measured.  
Financial liabilities  
Other  
financial  
liabilities  
Total  
carrying  
value  
Total  
fair value  
£
m
£m  
£m  
Accounts payable  
Short-term debt  
Long-term debt  
1,482.7  
1,953.1  
769.5  
1,482.7  
1,953.1  
769.5  
1,482.7  
1,953.1  
769.5  
Other financial liabilities –  
current  
116.3  
116.3  
116.3  
Other financial liabilities - non-  
current  
34.0  
34.0  
34.0  
4,355.6  
4,355.6  
4,355.6  
106  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
The following table shows the carrying amounts and fair value of each category of financial assets and  
liabilities as at 31 March 2010:  
Financial assets  
Cash and  
loans and  
receivables  
Total  
carrying  
value  
Total  
fair value  
£m  
£m  
£m  
Cash and cash equivalents  
Short term deposits with bank  
Trade receivables  
Unquoted equity investments  
Other financial assets - current  
Other financial assets - non-current  
679.9  
-
679.9  
679.9  
669.4  
0.3  
669.4  
0.3  
669.4  
-*  
20.1  
73.3  
20.1  
73.3  
20.1  
73.3  
1,443.0  
1,443.0  
1,442.7  
*
The fair value in respect of the unquoted equity investments cannot be reliably measured.  
Financial liabilities  
Other  
financial  
liabilities  
Total  
carrying  
value  
Total  
fair value  
£m  
£m  
£m  
Accounts payable  
Short-term debt  
Long-term debt  
Other financial liabilities – current  
Other financial liabilities - non-current  
1,931.2  
904.9  
2,125.5  
142.3  
29.3  
1,931.2  
904.9  
2,125.5  
142.3  
29.3  
1,931.2  
904.9  
2,125.5  
142.3  
29.3  
5,133.2  
5,133.2  
5,133.2  
The following table shows the carrying amounts and fair value of each category of financial assets and  
liabilities as at 31 March 2011:  
Financial assets  
Cash and Derivatives Derivatives  
Total  
carrying  
value  
Total  
fair value  
loans and  
receivables  
in cash  
flow accounted  
hedging  
not hedge  
relationship  
£m  
£m  
£m  
Cash and cash equivalents  
Trade receivables  
Unquoted equity investments  
Other financial assets - current  
Other financial assets - non-current  
1,028.3  
567.2  
0.3  
-
-
1,028.3  
567.2  
0.3  
1,028.3  
567.2  
-*  
-
-
-
34.7  
-
-
14.9  
-
11.9  
68.5  
61.5  
68.5  
61.5  
68.5  
1,676.2  
34.7  
14.9  
1,725.8  
1,725.5  
107  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
*
The fair value in respect of the unquoted equity investments cannot be reliably measured.  
Financial liabilities  
Other  
financial  
liabilities  
Derivatives  
in cash  
flow  
Total  
carrying  
value  
Total  
fair value  
hedging  
relationship  
£m  
£m  
£m  
Accounts payable  
Short-term debt  
Long-term debt  
Other financial liabilities – current  
Other financial liabilities - non-current  
2,384.8  
863.4  
518.1  
127.7  
20.4  
-
-
-
2,384.8  
863.4  
518.1  
132.9  
20.4  
2,384.8  
863.4  
520.3  
132.9  
20.4  
5.2  
-
3,914.4  
5.2  
3,919.6  
3,921.8  
Fair value hierarchy  
Financial instruments carried 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 financial assets 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 financial 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 significant unobservable inputs (Level 3): This level of hierarchy includes  
financial 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.  
All financial instruments held at fair value are valued using Level 2 valuation techniques.  
Notes  
1.  
The short term financial assets and liabilities, except for derivative instruments, are stated at  
amortised cost which is approximately equal to their fair value.  
2.  
The fair value of finance receivables have been estimated by discounting expected cash flows  
using rates at which loans of similar credit quality and maturity would be made as of March 31,  
2011.  
Management uses its best judgment in estimating the fair value of its financial instruments. However,  
there are inherent limitations in any estimation technique. Therefore, for substantially all financial  
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 2011, 31 March 2010 and 31 March 2009 have been measured as of the  
respective dates. As such, the fair values of these financial instruments subsequent to the respective  
reporting dates may be different than the amounts reported at each year-end.  
108  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
b)  
Cash flow hedging  
As of 31 March 2011, the group has taken out a number of cash flow hedging instruments. The group  
uses both USD/GBP forward and option contracts and USD/Euro forward contracts to hedge future cash  
flows from sales and purchases. The hedging risk management policy covers forecast sales and  
purchases up to 3 years into the future. At 31 March 2011, all derivative contracts have a maturity of less  
than 1 year.  
The group also has a number of USD/Euro options which are entered into as an economic hedge of the  
financial 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 the change in fair value  
is recognised immediately in the income statement.  
As at March 31, 2010 and 31 March 2009, there are no designated cash flow hedges.  
As per its risk management policy, the group uses foreign currency forward contracts to hedge its risk  
associated with foreign currency fluctuations relating to highly probable forecast sales transactions. The  
fair value of such forward contracts as of 31 March 2011 was £29.5 million (Nil in period ended 31 March  
2010 and 31 March 2009).  
Changes in fair value of forward exchange 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 £29.5 million  
was recognised in other comprehensive income during the year ended 31 March 2011 (Nil in period  
ended 31 March 2010 and 31 March 2009).  
(
c)  
Financial risk management  
In the course of its business, the group is exposed primarily to fluctuations in foreign currency exchange  
rates, interest rates, liquidity and credit risk, which may adversely impact the fair value of its financial  
instruments.  
The group has a risk management policy which not only covers the foreign exchange risks but also the  
risks associated with the financial assets and liabilities like interest rate 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  
fluctuations to the group’s business plan.  
Achieve greater predictability to earnings – by determining the financial value of the expected earnings in  
advance.  
109  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
d)  
Market risk  
Market risk is the risk of any loss in future earnings in realisable fair values or in future cash flows that  
may result from a change in the price of a financial instrument. The value of a financial instrument may  
change as a result of changes in the interest rates, foreign currency exchange rate, equity price  
fluctuations, liquidity and other market changes. Future specific market movements cannot be normally  
predicted with reasonable accuracy.  
The following table set forth information relating to foreign currency exposure below as of 31 March 2011:  
US Dollar  
Chinese  
Yuan  
£m  
Euro  
£m  
JPY  
£m  
*Others  
£m  
Total  
£m  
£m  
Financial assets  
Financial liabilities  
206.3  
(256.7)  
279.3  
(281.9)  
209.7  
(321.8)  
40.3  
(16.5)  
364.9  
(328.7)  
1,100.5  
(1,205.6)  
Net exposure asset/  
(
(50.4)  
(2.6)  
(112.1)  
23.8  
36.2  
(105.1)  
liability)  
* Others include Russian Rouble, Singapore dollars, Swiss Franc, Australian dollars, South African Rand,  
Thai baht, Korean won etc.  
10% appreciation/ depreciation of the Euro, USD, Yen and Chinese Yuan would result in an increase/  
decrease in the group’s net profit before tax and net assets by approximately £10.2 million, £4.6 million,  
2.2 million and £0.2 million respectively for the year ended 31 March 2011.  
£
The following table set forth information relating to foreign currency exposure below as of 31 March 2010:  
US Dollar  
Euro  
£m  
JPY  
£m  
Russian  
Rouble  
£m  
*Others  
£m  
Total  
£m  
£m  
Financial assets  
Financial liabilities  
280.7  
(2,074.9)  
150.8  
(452.5)  
23.4  
(62.7)  
25.1  
(5.9)  
164.4  
(61.1)  
644.4  
(2,657.1)  
Net exposure asset /  
(
(
1,794.2)  
(301.7)  
(39.3)  
19.2  
103.3  
(2,012.7)  
liability)  
* Others include Singapore dollars, Swiss Franc, Australian dollars, South African Rand, Chinese Yuan,  
Thai baht, Korean won etc.  
10% appreciation/ depreciation of the Euro, USD and Yen would result in an increase/ decrease in the  
group’s net profit before tax and net assets by approximately £3.0 million, £17.9 million and £0.4 million  
respectively for the year ended 31 March 2010.  
110  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
d)  
Market risk (continued)  
The following table set forth information relating to foreign currency exposure as of 31 March 2009:  
US Dollar  
Euro  
£m  
JPY  
£m  
*Others  
£m  
Total  
£m  
£m  
Financial assets  
Financial liabilities  
44.5  
(2,444.2)  
48.0  
(109.3)  
26.7  
(9.2)  
103.6  
(155.4)  
222.8  
(2,718.1)  
Net exposure asset / (liability)  
(2,399.7)  
(61.3)  
17.5  
(51.8)  
(2,495.3)  
*
Others include currencies such as Swiss Franc, Singapore dollars, Chinese Yuan, Australian dollars etc.  
0% weakening/strengthening of the Euro, USD and Yen would result in a decrease/increase in the  
1
group’s net loss before tax and net assets by approximately £0.1 million, £0.7 million and £0.1 million  
respectively for the year ended 31 March 2011.  
The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve.  
Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not  
react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets  
and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of  
assets may change with a lag.  
The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield  
curves. This calculation also assumes that the change occurs at the balance sheet date and has been  
calculated based on risk exposures outstanding as at that date. The year end balances are not  
necessarily representative of the average debt outstanding during the year.  
This analysis assumes that all other variables, in particular foreign currency rates, remain constant.  
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any  
movement in the reference rates could have an impact on the cash flows as well as costs.  
The group is subject to variable interest rates on some of its interest bearing liabilities. The group’s  
interest rate exposure is mainly related to debt obligations. The group also uses a mix of interest rate  
sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations  
like non-convertible bonds and short term loans.  
In its financing business, the group enters into transactions with customers which primarily result  
receivables at fixed rates. In order to manage this risk, the group has a policy to match funding in terms of  
maturities and interest rates and also for certain part of the portfolio; the group does not match funding  
with maturities in order to take advantage of market opportunities.  
The group also enters into arrangements of securitisation of receivables in order to reduce the impact of  
interest rate movements.  
As of 31 March 2011 net financial liability of £451.3 million (2010: £945.4 million) was subject to the  
variable interest rate. Increase/decrease of 100 basis points in interest rates at the balance sheet date  
would result in an impact of £4.5 million (2010: £8.0 million) in the consolidated income statement.  
111  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
e) Liquidity risk  
Liquidity risk is the risk that the group will not be able to meet its financial obligations as they fall due.  
The group's policy on liquidity risk is to ensure that sufficient borrowing facilities are available to fund  
ongoing operations without the need to carry significant net debt over the medium term. The group's  
principal borrowing facilities are provided by its parent group (Tata Motors Limited, India, the ultimate  
parent undertaking and the immediate parent company, TML Singapore Pte Limited) in the form of  
redeemable preference shares classified as debt. The quantum of committed borrowing facilities available  
to the group is reviewed regularly and is designed to exceed forecast peak gross debt levels.  
The following are the contractual maturities of financial liabilities, including estimated interest payments  
and excluding the effect of netting agreements:  
3
1 March 2011  
1
to  
5
years  
and  
Carrying Contractual  
amount cash flows or less  
1 year <3yea  
3 to  
rs <5years  
over  
£m  
£m  
£m  
£m  
£m  
£m  
Non-derivative financial liabilities  
Long term bank loans and preference  
shares  
518.1  
686.5  
25.4 213.8  
149.0  
298.3  
Short-term borrowings  
Finance lease liabilities  
Other financial liabilities  
Accounts payable  
863.4  
23.9  
129.4  
873.4  
27.6  
129.4  
873.4  
5.2  
127.7  
-
5.3  
1.7  
-
-
13.6  
-
3.5  
-
-
-
2,384.8  
2,384.8 2,384.8  
-
3
,919.6  
4,101.7 3,416.5 220.8  
162.6  
301.8  
31 March 2010  
5
years  
and  
over  
CarryingContractual 1 year 1 to 2 to  
amount cash flows or less <2years <5years  
£
m
£m  
£m  
£m  
£m  
£m  
Non-derivative financial liabilities  
Secured bank loans  
1,221.9  
13.0  
1,341.0  
13.0  
871.6  
12.0  
15.2  
1.0  
273.6  
-
180.6  
-
Unsecured bank facility  
1,234.9  
1,354.0  
883.6  
16.2  
273.6  
180.6  
Finance lease liabilities  
Redeemable  
classified as debt  
28.0  
shares 1,795.5  
33.1  
1,795.5  
5.5  
-
5.2  
-
15.2  
-
7.2  
1,795.5  
preference  
Other financial liabilities  
Accounts payable  
143.6  
1,931.2  
143.6 136.8  
1,931.2 1,931.2  
6.8  
-
-
-
-
-
5,133.2  
5,257.4 2,957.1  
28.2  
288.8  
1,983.3  
112  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
e) Liquidity risk (continued)  
31 March 2009  
5
years  
and  
CarryingContractual 1 year  
amount cash flows or less <2years <5years  
1 to  
2 to  
over  
£m  
£
m
£m  
£m  
£m  
£m  
Non-derivative financial liabilities  
Secured bank loans  
Unsecured bank facility  
351.1  
1,602.0  
353.4 353.4  
1,607.0 1,607.0  
-
-
-
-
-
-
1,953.1  
1,960.4 1,960.4  
-
-
-
Finance lease liabilities  
Redeemable  
classified as debt  
32.0  
769.5  
38.6  
1,308.2  
5.6  
-
5.5  
53.9  
14.9  
215.5  
12.6  
1,038.8  
preference  
shares  
Other financial liabilities  
Accounts payable  
118.3  
1,482.7  
118.3 110.7  
1,482.7 1,482.7  
7.6  
-
-
-
-
-
4,355.6  
4,908.2 3,559.4  
67.0  
230.4  
1,051.4  
113  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
f)  
Credit risk  
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according  
to the contractual terms or obligations. Credit risk encompasses both the direct risk of default and the risk  
of deterioration of creditworthiness as well as concentration risks  
Financial instruments that are subject to concentrations of credit risk principally consist of investments  
classified as loans and receivables, trade receivables and finance receivables. None of the financial  
instruments of the group result in material concentrations of credit risks.  
Exposure to credit risk  
The carrying amount of financial assets represents the maximum credit exposure. The maximum  
exposure to credit risk was £1,720.0 million (2010: £1,442.7 million, 2009: £612.9 million), being the total  
of the carrying amount of financial assets excluding unquoted equity investments.  
Financial assets that are neither past due nor impaired  
None of the group’s cash equivalents, including time deposits with banks, are past due or impaired.  
Regarding trade receivables and other receivables, and other loans or receivables that are neither  
impaired nor past due, there were no indications as at 31 March 2011, that defaults in payment  
obligations will occur.  
2011  
Gross  
2011  
Impairment  
£m  
£
m
Not yet due  
531.9  
34.5  
-
-
-
-
Overdue < 3 months  
Overdue >3<6 months  
Overdue >6 months  
10.9  
10.1  
5
77.3  
10.1  
Included within trade receivables is £268.9 million of receivables which are part of a debt factoring  
arrangement. These assets do not qualify for derecognition due to the recourse arrangements in place.  
The related liability is in short term borrowings.  
None of the group’s cash equivalents, including time deposits with banks, are past due or impaired.  
Regarding trade receivables and other receivables, and other loans or receivables that are neither  
impaired nor past due, there were no indications as at 31 March 2010, that defaults in payment  
obligations will occur.  
2010  
Gross  
2010  
Impairment  
£m  
£m  
Not yet due  
600.6  
60.8  
21.3  
3.0  
0.8  
0.2  
14.8  
0.5  
Overdue < 3 months  
Overdue >3<6 months  
Overdue >6 months  
6
85.7  
16.3  
114  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
33  
Financial Instruments (continued)  
(
f)  
Credit risk (continued)  
Included within trade receivables is £296.8 million of receivables which are part of a debt factoring  
arrangement. These assets do not qualify for derecognition due to the recourse arrangements in place.  
The related liability is in short term borrowings.  
None of the group’s cash equivalents, including time deposits with banks, are past due or impaired.  
Regarding trade receivables, there were no indications as at 31 March 2009, that defaults in payment  
obligations will occur.  
2009  
Gross  
2009  
Impairment  
£m  
£m  
Not yet due  
366.7  
63.1  
20.9  
4.4  
1.5  
0.3  
11.0  
2.9  
Overdue < 3 months  
Overdue >3<6 months  
Overdue >6 months  
4
55.1  
15.7  
Included within trade receivables is £164.0 million of receivables which are part of a debt factoring  
arrangement. These assets do not qualify for derecognition due to the recourse arrangements in place.  
The related liability is in short term borrowings.  
Derivative financial instruments and risk management  
The group risk management policy allows the use of currency and interest derivative instruments to  
manage its exposure to fluctuations in foreign exchange and interest rates. To the extent possible under  
IAS 39, these instruments are hedge accounted under that Standard.  
The gain on hedged derivative contracts recognised in equity was £29.5 million. The loss on derivative  
contracts not eligible for hedging and recognised in the consolidated income statement was £1.1 million.  
A 10% depreciation/appreciation of the foreign currency underlying such contracts would have resulted in  
an approximate additional gain/loss of £3.0 million in equity and a loss/gain of £0.1 million in the  
consolidated income statement.  
115  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
34  
Operating leases  
Non-cancellable operating lease rentals are payable as follows:  
2
011  
2010  
£m  
2009  
£m  
£m  
Less than one year  
Between one and five years  
More than five years  
10.5  
18.9  
-
7.8  
14.9  
-
6.7  
12.4  
3.5  
29.4  
22.7  
22.6  
The group leases a number of properties and plant and machinery under operating leases.  
Leases as lessor  
The future minimum lease payments under non-cancellable leases are as follows:  
2
011  
2010  
£m  
2009  
£m  
£m  
Less than one year  
Between one and five years  
More than five years  
2.3  
0.3  
-
11.8  
0.2  
-
5.1  
0.2  
-
2
.6  
12.0  
5.3  
The above leases relate to amounts payable in respect of land and buildings and fleet car sales. The  
average lease life is less than one year.  
116  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
35  
Segment reporting  
The JLR group operates in the automotive segment. The group has only one operating segment, so no  
separate segmental report is given.  
The geographic spread of sales and assets is as disclosed below  
UK  
£m  
US  
£m  
China Rest of Europe Rest of World  
£m  
31 March 2011  
£m  
£m  
Revenue  
1,923.8  
3,336.3  
850.1  
2,005.3  
15.6  
1.0  
1,642.7  
9.3  
11.1  
2,042.8  
4.0  
1.1  
2,256.1  
10.2  
5.7  
Segment assets  
Capital  
expenditure  
UK  
£m  
US  
£m  
China Rest of Europe Rest of World  
£m  
31 March 2010  
£m  
£m  
Revenue  
1,536.7  
2,874.1  
744.6  
1,266.7  
15.4  
4.3  
635.2  
0.6  
0.3  
1,666.0  
5.4  
0.6  
1,422.7  
16.6  
1.5  
Segment assets  
Capital  
expenditure  
UK  
£m  
US  
£m  
China Rest of Europe Rest of World  
£m  
31 March 2009  
£m  
£m  
Revenue  
2,111.1  
2,473.2  
602.5  
684.7  
13.3  
0.7  
256.0  
0.6  
0.3  
1,026.3  
5.4  
0.8  
871.3  
16.6  
2.8  
Segment assets  
Capital  
expenditure  
117  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
36  
Related party transactions  
The group’s related parties principally consist of Tata Sons Ltd., subsidiaries of Tata Sons Ltd, associates  
and joint ventures of the company. The group routinely enters into transactions with these related parties  
in the ordinary course of business. The group enters into transactions for sale and purchase of products  
with its associates and joint ventures. Transactions and balances with its own subsidiaries are eliminated  
on consolidation.  
The following table summarises related party transactions and balances not eliminated in the  
consolidated financial statements for the year ended 31 March 2011.  
WithWith immediate  
associates  
or ultimate  
parent  
2011  
2011  
£m  
£m  
Sale of products  
-
34.0  
-
10.5  
-
38.7  
-
5.5  
-
434.9  
Services received  
Trade and other receivables  
Accounts payable  
Loans given  
The following table summarises related party transactions and balances not eliminated in the  
consolidated financial statements for the year ended 31 March 2010.  
With With  
associates immediate or  
With With  
associates immediate or  
ultimate  
parent  
ultimate  
parent  
2
010  
2010  
£m  
2009  
£m  
2009  
£m  
£m  
Sale of products  
Services received  
-
26.7  
12.5  
0.3  
-
12.9  
-
-
Loan transactions in the period  
Trade and other receivables  
Loans given  
-
3.6  
-
1,026.0  
0.6  
1,795.7  
-
-
-
769.5  
-
769.5  
The following table summarises related party transactions and balances included in the consolidated  
financial statements for the year ended 31 March 2011:  
Compensation of key management personnel  
2
011  
2010  
£m  
2009  
£m  
£m  
Short term benefits  
Post-employment benefits  
7.4  
0.3  
3.4  
0.2  
2.3  
0.3  
7.7  
3.6  
2.6  
118  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
37  
Ultimate parent company and parent company of larger group  
The immediate parent undertaking is TML Singapore Pte Limited and ultimate parent undertaking and  
controlling party is Tata Motors Limited, India which is the parent of the smallest and largest group to  
consolidate these financial statements.  
Copies of the Tata Motors Limited, India consolidated financial statements can be obtained from the  
Group Secretary, Tata Motors Limited, Bombay House, 24, Homi Mody Street, Mumbai – 400001, India.  
38  
Subsequent events  
As part of the group's capital management and to ensure availability of long-term debt, the group has  
been identifying additional borrowing facilities.  
On 19 May 2011, the company issued £1,000 million of listed bonds. The bonds are listed on the Euro  
MTF market, which is a listed market regulated by the Luxembourg Stock Exchange.  
The bonds are fixed rate and £500 million denominated in GBP and £500 million denominated in USD.  
£750 million is due for repayment in 2018 and the remaining is due in 2021.  
The bond funds raised will be used to repay both long and short term debt and provide additional cash  
facilities for the group.  
119  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Parent Company Balance Sheet  
at 31 March 2011  
Note  
40  
2011  
2010  
£m  
2009  
£m  
£m  
Non-current assets  
Investments  
1,874.8  
1,605.2  
1,605.2  
Total non current assets  
1,874.8  
1,605.2  
1,605.2  
Current assets  
Cash and cash equivalents  
Other Financial Assets  
39  
41  
3.7  
404.6  
0.9  
411.1  
0.1  
357.8  
Total current assets  
Total assets  
408.3  
412.0  
357.9  
2,283.1  
2,017.2  
1,963.1  
Current liabilities  
Short term borrowings and current  
portion of long term debt  
43  
43  
434.8  
-
1,408.5  
Total current liabilities  
434.8  
-
1,408.5  
Non-current liabilities  
Long term debt  
157.1  
157.1  
591.9  
1,795.5  
1,795.5  
1,795.5  
769.5  
769.5  
Total non current liabilities  
Total liabilities  
2,178.0  
Equity attributable  
holders of the parent  
to  
equity  
Ordinary shares  
Capital redemption reserve  
Foreign currency on change to  
presentational currency  
Accumulated reserves / (deficit)  
44  
1,500.6  
166.7  
-
644.6  
-
(371.2)  
283.6  
-
(462.0)  
23.9  
(51.7)  
(36.5)  
Equity attributable to equity  
holders of the parent  
1,691.2  
221.7  
(214.9)  
Total liabilities and equity  
2,283.1  
2,017.2  
1,963.1  
These financial statements were approved by the board of directors on  
and were signed on its behalf by:  
Director  
Company registered number: 6477691  
120  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Parent Company Statement of Changes in Equity  
For the year ended 31 March 2011  
Foreign  
currency on  
change to  
Ordinary  
Capital  
share redemption  
Accumulated  
reserves /  
(deficit)  
Total  
Equity  
Capital  
reserve presentational  
currency  
£m  
£m  
£m  
£m  
£m  
Balance at 31 March 2010  
Income / (loss) for the year  
644.6  
-
-
-
(371.2)  
-
(51.7)  
21.9  
-
221.7  
21.9  
-
-
Foreign currency on change to  
presentational currency  
371.2  
371.2  
Cancellation of redeemable  
preference shares  
-
-
-
-
48.8  
4.9  
48.8  
Issue of ordinary shares  
856.0  
166.7  
1,027.6  
Balance at 31 March 2011  
1,500.6  
166.7  
-
23.9  
1,691.2  
Foreign  
currency on  
change to  
Ordinary  
Capital  
share redemption  
Accumulated  
reserves /  
(deficit)  
Total  
Equity  
Capital  
reserve presentational  
currency  
£m  
£m  
£m  
£m  
£m  
Balance at 31 March 2009  
Loss for the year  
283.6  
-
-
-
(462.0)  
-
(36.5)  
(15.2)  
-
(214.9)  
(15.2)  
90.8  
-
-
Foreign currency on change to  
presentational currency  
90.8  
Issue of ordinary shares  
361.0  
-
-
-
361.0  
Balance at 31 March 2010  
644.6  
-
(371.2)  
(51.7)  
221.7  
121  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Parent Company Cash Flow Statements  
for the year ended 31 March 2011  
Year ended  
1 March  
011  
Year  
31 March  
2010  
3
2
£m  
£m  
Cash flows from operating activities  
Net income / (loss)  
Adjustments for:  
21.9  
(21.9)  
-
(15.2)  
12.8  
Finance income / (expense) (net)  
Net cash from operating activities  
(2.4)  
Cash flows used in investing activities  
Finance income received  
2.8  
Net cash used in investing activities  
2.8  
-
Cash flows from financing activities  
Proceeds from issue of ordinary shares  
Finance expense paid  
Repayment of short term debt  
Proceeds from issuance of long term debt  
-
-
-
-
370.3  
(29.7)  
(1,179.1)  
841.7  
Net cash from financing activities  
-
3.2  
Net change in cash and cash equivalents  
Cash and cash equivalents at beginning of year  
2.8  
0.9  
0.8  
0.1  
Cash and cash equivalents at end of year  
3.7  
0.9  
122  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
39  
Cash and Cash equivalents  
Cash and cash equivalents consist of the following:  
Year ended  
1 March 2011  
Year ended Year ended 31 March  
31 March 2010  
£m  
3
2010  
£m  
£m  
0.1  
Balances with banks  
3.7  
0.9  
3.7  
0.9  
0.1  
40  
Investments  
Investments consist of the following:  
2011  
2010  
£m  
2009  
£m  
£m  
Unquoted equity investments,  
at cost  
1,874.8  
1,605.2  
1,605.2  
1,874.8  
1,605.2  
1,605.2  
The movement in investments in the period is due to the conversion of the functional currency of the  
company from USD to GBP. The company has not made any additional investments or disposals of  
investments in the year.  
The company has the following investments in subsidiaries:  
Subsidiary Undertaking Interest  
Class of shares  
Country of  
Incorporation and  
Registration  
Principal activity  
Manufacture and sale  
Jaguar Cars Limited  
Land Rover  
100%  
100%  
Ordinary shares  
Ordinary shares  
England and Wales of motor vehicles  
Manufacture and sale  
England and Wales of motor vehicles  
123  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
40  
Investments (continued)  
The shareholdings above are recorded at acquisition values in the company's accounts. Details of the  
indirect subsidiary undertakings are as follows:  
Name of Company  
Interest  
Class of shares  
Country of  
incorporation and  
operation  
Principal activity  
Jaguar Cars Exports  
Limited  
1
00%  
00%  
Ordinary shares  
England and Wales Export sales  
England and Wales Export sales  
Land Rover Exports  
Limited  
1
Ordinary shares  
Ordinary shares  
Ordinary shares  
Jaguar Belgium N.V.  
100%  
00%  
Belgium  
Distribution and sales  
Jaguar Deutschland  
GmbH  
1
Germany  
Distribution and sales  
Spain  
Italy  
Jaguar Hispania SL  
Jaguar Italia SpA  
100%  
100%  
Ordinary shares  
Ordinary shares  
Distribution and sales  
Distribution and sales  
Jaguar Land Rover Austria  
GmbH  
Capital contribution  
€145,300  
Austria  
1
1
1
1
1
1
1
1
00%  
00%  
00%  
00%  
00%  
00%  
00%  
00%  
Distribution and sales  
Distribution and sales  
Dormant  
Jaguar Land Rover North  
America LLC  
USA  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Jaguar Cars (South Africa)  
(
South Africa  
Pty) Ltd  
Jaguar Cars Overseas  
Holdings Limited  
England and Wales Holding company  
England and Wales Dormant  
England and Wales Dormant  
England and Wales Dormant  
The Jaguar Collection  
Limited  
The Daimler Motor  
Company Limited  
Daimler Transport  
Vehicles Limited  
The Lanchester Motor  
Company  
Ordinary shares  
Ordinary shares  
Ordinary shares  
England and Wales Dormant  
England and Wales Dormant  
SS Cars Limited  
100%  
Jaguar Land Rover Japan  
Limited  
100%  
100%  
100%  
Japan  
Korea  
Mexico  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Jaguar Land Rover Korea  
Group Limited  
Ordinary shares  
Jaguar Land Rover  
Mexico SA de CV  
Ordinary shares  
Ordinary shares  
Land Rover Group Limited 100%  
England and Wales Holding company  
Jaguar Landrover  
Portugal-Veiculos e  
Pecas, Lda  
Distribution and sales  
Portugal  
100%  
Ordinary shares  
124  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
40  
Investments (continued)  
Name of Company  
Interest  
Class of shares  
Country of  
incorporation and  
operation  
Principal activity  
Land Rover Espana SL  
100%  
Ordinary shares  
Ordinary shares  
Spain  
Distribution and sales  
Distribution and sales  
Land Rover Nederland BV 100%  
Holland  
Jaguar Land Rover Auto  
Trade (Shanghai) Co Ltd  
Distribution and sales  
1
00%  
00%  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
Ordinary shares  
China  
Jaguar Land Rover  
Australia Pty Limited  
1
Australia  
Belgium  
Ireland  
Italy  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Distribution and sales  
Land Rover Belux SA/NV 100%  
Land Rover Ireland  
Limited  
100%  
Land Rover Italia SpA  
100%  
Land Rover Deutschland  
GmbH  
100%  
100%  
100%  
100%  
100%  
Germany  
Jaguar Land Rover  
Canada ULC  
Distribution and sales  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Canada  
South Africa  
France  
Distribution  
and sales  
Jaguar Land Rover (South  
Africa) (Pty) Ltd  
Distribution  
and sales  
Jaguar Land Rover France  
SAS  
Distribution  
and sales  
Jaguar Land Rover Brazil  
LLC  
Brazil  
Distribution  
and sales  
Distribution  
and sales  
Distribution  
and sales  
Jaguar Land Rover  
100%  
Ordinary Shares  
Ordinary Shares  
Ordinary Shares  
Russia  
Land Rover Parts Limited 100%  
Land Rover Parts NA LLC 100%  
England and Wales  
USA  
In addition, the group has the following investments:  
Jaguar Land Rover Schweiz AG  
Jaguar Cars Finance Limited  
10% interest in the ordinary share capital  
49.9% interest in the ordinary share capital  
The principal activity of Jaguar Land Rover Schweiz AG is the sale of automotive vehicle and parts. The  
principal activity of Jaguar Cars Finance Limited was the provision of credit finance. The company has  
been dormant in the period covered by these accounts.  
125  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
41  
Other financial assets  
2
011  
£
2010  
£m  
2009  
£m  
m
Receivables from subsidiaries  
404.6  
411.1  
357.8  
42  
Deferred tax assets and liabilities  
The company has no deferred tax assets or liabilities either recognised or unrecognised.  
43  
Interest bearing loans and borrowings  
2
011  
2010  
£m  
2009  
£m  
£m  
Others:  
Bank loans  
Redeemable  
-
157.1  
-
1,795.5  
1,408.5  
769.5  
preference  
shares classed as debt  
Loans from parent  
434.8  
-
-
5
91.9  
1,795.5  
2,178.0  
Less:  
Current portion of bank loan  
Current portion of parent  
loan  
-
(434.8)  
-
-
(1,408.5)  
-
Long term debt  
157.1  
1,795.5  
769.5  
Held as long term debt  
157.1  
1,795.5  
1,795.5  
Preference shares classified as debt  
The holders of the preference shares are entitled to be paid out of the profits available for distribution of  
the company in each financial year a fixed 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 first to holders of preference shares the par value of each 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. On redemption, the company shall pay the par value per preference share and a  
sum equal to any arrears or accruals of preference dividend.  
Preference shares contain no right to vote upon any resolution at any general meeting of the company.  
The dividend on the preference shares has been waived by the shareholder in the current and preceding  
year.  
The contractual cash flows of interest bearing debt and borrowings as of 31 March 2011 is set out below,  
including estimated interest payments and excluding the effect of netting agreements. The analysis  
assumes the annual coupon rate of 7.25% will not be paid on the preference shares each year and the  
debt will be repaid at the maturity date.  
126  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
43  
Interest bearing loans and borrowings (continued)  
2
011  
2010  
£m  
2009  
£m  
£m  
Due in  
1
1
2
year or less  
to 2 years  
to 5 years  
434.8  
-
-
-
1,408.5  
-
-
-
-
More than 5 years  
157.1  
1,795.5  
769.5  
591.9  
1,795.5  
2,178.0  
127  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
44  
Capital and reserves  
2
011  
2010  
£m  
2009  
£m  
£m  
Allotted, called up and fully  
paid  
1,500,600,000 (2010 and 2009:  
Nil) ordinary shares of £1 each  
1,500.6  
157.1  
-
-
-
-
1
57,100,000 (2010 and 2009: Nil)  
.25% preference shares of £1  
7
each  
Nil, (2010: 1,001,284,322, 2009:  
-
-
644.6  
283.6  
769.5  
471,284,322) Ordinary shares of  
USD $1 each  
Nil, (2010: 27,222,877, 2009:  
11,015,000)  
1,795.5  
7.25%  
non  
cumulative preference shares of  
USD $100  
1657.7  
2440.1  
1,053.1  
Held as equity  
Held as debt  
1,500.6  
157.1  
644.6  
283.6  
769.5  
1,795.5  
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.  
The holders of the preference shares are entitled to be paid out of the profits available for distribution of  
the company in each financial year a fixed non-cumulative preferential dividend of 7.25% per annum. The  
preference share dividend shall be 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 first to holders of preference shares the sum of $100 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. On redemption, the company shall pay $100 per preference share and a sum  
equal to any arrears or accruals of preference dividend.  
Preference shares contain no right to vote upon any resolution at any general meeting of the company.  
Movements in share capital of the company  
On 31 May 2010, 792,000 USD $100 preference shares were cancelled.  
On November 5 2010, 2,890,000 USD $100 were cancelled and converted into short term debt.  
On 31 March 2011, the remaining USD preference shares and USD ordinary shares were converted into  
the GBP ordinary shares and preference shares. A capital contribution reserve was set up as a result of  
this reorganisation.  
Due to the conversion of the share capital of the company, the functional currency changed from USD to  
GBP.  
45  
Dividends  
During 2011, 2010 and 2009, no dividends were paid or proposed on the ordinary shares. No dividend  
was paid or proposed on the non-cumulative preference shares.  
128  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
46  
Commitments and contingencies  
The company does not have any commitments or contingencies.  
47  
Capital management  
The company’s objectives for managing capital are to create value for shareholders, to safeguard  
business continuity and support the growth of the company.  
The company determines the amount of capital required on the basis of annual operating plans and long-  
term product and other strategic investment plans. The funding requirements are met through a mixture of  
equity, convertible or non-convertible debt securities and other long-term/short-term borrowings. The  
company's policy is aimed at combination of short-term and long-term borrowings.  
The company monitors the capital structure on basis of total debt to equity ratio and maturity profile of the  
overall debt portfolio of the company.  
Total debt includes all long and short-term debts and finance lease payables. Equity comprises all  
components excluding loss on cash flow hedges and foreign currency translation reserve.  
The following table summarises the capital of the company:  
2
011  
2010  
£m  
2009  
£m  
£m  
Equity  
1,691.2  
221.7  
(214.9)  
Short term debt  
Long term debt  
434.8  
157.1  
-
1,795.5  
1,408.5  
769.5  
Total debt  
591.9  
1,795.5  
2,017.2  
2,178.0  
1,963.1  
Total capital (debt and  
equity)  
2,283.1  
129  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
48  
Financial instruments  
This section gives an overview of the significance of financial instruments for the company and provides  
additional information on balance sheet items that contain financial instruments.  
The details of significant 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  
financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.  
(
a)  
Financial assets and liabilities  
The following table presents the carrying amounts and fair value of each category of financial assets and  
liabilities as of 31 March 2011:  
Financial assets  
Cash and  
loans and  
receivables  
Total  
carrying  
value  
Total  
fair value  
£
m
£m  
£m  
Cash and cash equivalents  
Other financial assets - current  
3.7  
404.6  
3.7  
404.6  
3.7  
404.6  
408.3  
408.3  
408.3  
Financial liabilities  
Other  
financial  
liabilities  
Total  
Total  
fair value  
carrying  
value  
£m  
£m  
£m  
Short-term  
Long-term debt  
434.8  
157.1  
434.8  
157.1  
434.8  
157.1  
5
91.9  
591.9  
591.9  
The following table shows the carrying amounts and fair value of each category of financial assets and  
liabilities as at 31 March 2010:  
Financial assets  
Cash and  
loans and  
receivables  
Total  
carrying  
value  
Total  
fair value  
£
m
£m  
£m  
Cash and cash equivalents  
Other financial assets - current  
0.9  
411.1  
0.9  
411.1  
0.9  
411.1  
412.0  
412.0  
412.0  
130  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
48  
Financial Instruments (continued)  
Financial liabilities  
Other  
financial  
liabilities  
Total  
carrying  
value  
Total  
fair value  
£
m
£m  
£m  
Long-term debt  
1,795.5  
1,795.5  
1,795.5  
Fair value hierarchy  
Financial instruments carried 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 financial assets 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 financial 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 significant unobservable inputs (Level 3): This level of hierarchy includes  
financial 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.  
Notes  
1.  
The short term financial assets and liabilities are stated at amortised cost which is approximately  
equal to their fair value.  
Management uses its best judgment in estimating the fair value of its financial instruments. However,  
there are inherent limitations in any estimation technique. Therefore, for substantially all financial  
instruments, the fair value estimates presented above are not necessarily indicative of all the amounts  
that the company could have realised in a sales transaction as of respective dates. The estimated fair  
value amounts as of March 31, 2011 and 31 March 2010 have been measured as of the respective dates.  
As such, the fair values of these financial instruments subsequent to the respective reporting dates may  
be different than the amounts reported at each year-end.  
(
b)  
As at March 31, 2011 and 31 March 2010, there are no designated cash flow hedges.  
c) Financial risk management  
Cash flow hedging  
(
In the course of its business, the company is exposed primarily to fluctuations in foreign currency  
exchange rates, interest rates, equity price, liquidity and credit risk, which may adversely impact the fair  
value of its financial instruments.  
The company has a risk management policy which not only covers the foreign exchange risks but also  
the risks associated with the financial assets and liabilities like interest rate 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  
fluctuations to the company’s business plan.  
Achieve greater predictability to earnings – by determining the financial value of the expected earnings in  
advance.  
131  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
48  
Financial Instruments (continued)  
(
d)  
Market risk  
Market risk is the risk of any loss in future earnings in realisable fair values or in future cash flows that  
may result from a change in the price of a financial instrument. The value of a financial instrument may  
change as a result of changes in the interest rates, foreign currency exchange rate, equity price  
fluctuations, liquidity and other market changes. Future specific market movements cannot be normally  
predicted with reasonable accuracy.  
(
i)  
Foreign currency exchange rate risk:  
The fluctuation in foreign currency exchange rates may have potential impact on the income statement,  
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 company.  
The company's operations are subject to risks arising from fluctuations in exchange rates. The risks  
primarily relate to fluctuations in the GBP:US Dollar rate as the company has USD assets and liabilities  
and a GBP functional currency.  
The following analysis has been worked out based on the gross exposure as of the Balance Sheet date  
which could affect the income statement.  
The following table set forth information relating to foreign currency exposure below as of 31 March 2011:  
US Dollar  
£
m
Financial assets  
Financial liabilities  
434.8  
(154.6)  
Net exposure asset  
280.2  
10% appreciation/ depreciation of the USD would result in an increase/ decrease in the company’s net  
profit before tax and net assets by approximately £25.5 million.  
The following table set forth information relating to foreign currency exposure as of 31 March 2010:  
US Dollar  
£
m
Financial assets  
Financial liabilities  
411.1  
(1,795.5)  
Net exposure liability  
(1,384.4)  
10% weakening/strengthening of the Euro, USD and Yen would result in a decrease/increase in the  
company’s net loss before tax and net assets by approximately £138.4 million for the year ended 31  
March 2010.  
(
e)  
Interest rate risk  
Interest rate risk is measured by using the cash flow sensitivity for changes in variable interest rates. Any  
movement in the reference rates could have an impact on the cash flows as well as costs.  
The company is subject to variable interest rates on some of its interest bearing liabilities. The company’s  
interest rate exposure is mainly related to debt obligations. The company also uses a mix of interest rate  
sensitive financial instruments to manage the liquidity and fund requirements for its day to day operations  
like preference shares and short term loans.  
132  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
48  
Financial instruments (continued)  
As of 31 March 2011 net financial assets of £411.1 million (2010: £404.6 million) were subject to the  
variable interest rate. Increase/decrease of 100 basis points in interest rates at the balance sheet date  
would result in an impact of £4.1 million (2009: £4.0 million).  
The model assumes that interest rate changes are instantaneous parallel shifts in the yield curve.  
Although some assets and liabilities may have similar maturities or periods to re-pricing, these may not  
react correspondingly to changes in market interest rates. Also, the interest rates on some types of assets  
and liabilities may fluctuate with changes in market interest rates, while interest rates on other types of  
assets may change with a lag.  
The risk estimates provided assume a parallel shift of 100 basis points interest rate across all yield  
curves. This calculation also assumes that the change occurs at the balance sheet date and has been  
calculated based on risk exposures outstanding as at that date. The year end balances are not  
necessarily representative of the average debt outstanding during the year.  
This analysis assumes that all other variables, in particular foreign currency rates, remain constant  
(
f)  
Credit risk  
Credit risk is the risk of financial loss arising from counterparty failure to repay or service debt according  
to the contractual terms or obligations. Credit risk encompasses of both, the direct risk of default and the  
risk of deterioration of creditworthiness as well as concentration risks  
Financial instruments that are subject to concentrations of credit risk consist of loans to subsidiaries.  
Exposure to credit risk  
The carrying amount of financial assets represents the maximum credit exposure. The maximum  
exposure to credit risk was £408.3 million (2009: £412.0 million), being the total of the carrying amount of  
cash balance with banks and other finance receivables.  
Financial assets that are neither past due nor impaired  
None of the company’s cash equivalents or other financial receivables, including time deposits with  
banks, are past due or impaired.  
49  
Related party transactions  
The company’s related parties principally consist of Tata Sons Ltd., subsidiaries of Tata Sons Ltd,  
associates and joint ventures of Tata Sons (including Tata Motors). The company routinely enters into  
transactions with these related parties in the ordinary course of business.  
The following table summarises related party transactions and balances not eliminated in the  
consolidated financial statements for the year ended 31 March 2011.  
With  
subsidiaries  
With With With immediate  
immediate subsidiaries parent  
parent  
2011  
£m  
2
011  
2010  
£m  
2010  
£m  
£m  
Loans from parent  
Loans to subsidiaries  
-
404.6  
591.9  
-
-
411.1  
1,795.5  
-
There was no compensation paid by the company to the directors or to key management personnel.  
Apart from the directors, the company did not have any employees and had no employee costs.  
133  
Jaguar Land Rover PLC (previously JaguarLandRover Limited)  
Directors' report and financial statements  
Year ended 31 March 2011  
Notes (continued)  
50  
Ultimate parent company and parent company of larger group  
The immediate parent undertaking is TML Singapore Pte Limited and ultimate parent undertaking and  
controlling party is Tata Motors Limited, India which is the parent of the smallest and largest group to  
consolidate these financial statements.  
Copies of the Tata Motors Limited, India consolidated financial statements can be obtained from the  
Group Secretary, Tata Motors Limited, Bombay House, 24, Homi Mody Street, Mumbai – 400001, India.  
134  


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