SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the Month of June 2022
Commission File Number: 001-32294
TATA MOTORS LIMITED
(Translation of registrant’s name into
English)
BOMBAY HOUSE
24, HOMI MODY STREET,
MUMBAI 400 001, MAHARASHTRA, INDIA
Telephone # 91 22 6665 8282 Fax # 91 22 6665
7799
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file
annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K
in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
Indicate by check mark whether by furnishing the information
contained in this Form, the Registrant is also thereby furnishing
the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934:
Yes ☐ No ☒
If “Yes” is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g 3-2(b): Not
Applicable
TABLE OF CONTENTS
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorised.
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| Tata Motors Limited |
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| By: |
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/s/ Mr Maloy Kumar Gupta |
| Name: |
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Mr Maloy Kumar Gupta |
| Title: |
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Company Secretary |
Dated: June 21, 2022
Item 1
J A G U A R L A N D R O V E R A U T O M O T I
V E P L C ANNUAL REPORT 2021/22
CONTENTS S T R AT E G I C R E P O R T 5 F i s
c a l y e a r a t a g l a n c e 6 C h a i r m a n ’s s t a t e m e
n t 8 C h i e f E x e c u t i v e O f f i c e r ’s s t a t e m e n
t 10 O u r s t r a t e g y 14 R e f o c u s 16 O u r b u s i n e s
s m o d e l 18 O u r p r o d u c t a n d i n n o v a t i o n a c h
i e v e m e n t s 20 O u r e n v i r o n m e n t a l a n d s o c i
a l g o v e r n a n c e 26 O p e r a t i n g e n v i r o n m e n t
28 G l o b a l r e t a i l s a l e s 30 C h i e f F i n a n c i a l
O f f i c e r ’s s t a t e m e n t 36 O u r a p p r o a c h t o r i
s k 40 I n t r o d u c t i o n t o g o v e r n a n c e 44 L e a d e
r s h i p 48 E f f e c t i v e n e s s 50 A c c o u n t a b i l i t
y 52 I n v e s t o r r e l a t i o n s e n g a g e m e n t 52 A p p
r o a c h t o Ta x DIRECT ORS ’ R E P O R T 54 D i r e c t o r s ’
r e p o r t F I N A N C I A L S TAT E M E N T S 58 I n d e p e n d
e n t a u d i t o r ’s r e p o r t 68 C o n s o l i d a t e d i n c
o m e s t a t e m e n t 68 c Co om n s porlei h d e a n t e s d i v
e s t iantceo m m ee n ta n od f e x p e n s e 69 C o n s o l i d a
t e d b a l a n c e s h e e t 70 C c h oa nn sg oe l isd a i n t
eedq u s t i t ayt e m e n t o f 71 C o n s o l i d a t e d c a s h
f l o w s t a t e m e n t 72 f Ni o n t ae nsc i(a f lo r sm t ai n
t e gm pean rt ts o ) f t h e c o n s o l i d a t e d 140 P a r e n
t c o m p a n y f i n a n c i a l s t a t e m e n t s
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
3
FISCAL YEAR AT A GLANCE WE ARE A GLOBAL
AUTOMOTIVE MANUFACTURER OF DISTINCT BRITISH BRANDS, JAGUAR AND LAND
ROVER. WE ARE REIMAGINING THESE BRANDS IN A WORLD OF MODERN LUXURY
BY DESIGN, WITH SUSTAINABILITY AND QUALITY AT THEIR
HEART. THROUGH THIS STRATEGY, WE WILL BECOME
THE CREATOR OF THE WORLD’S MOST DESIRABLE LUXURY VEHICLES AND
SERVICES, FOR THE MOST DISCERNING OF CUSTOMERS. RETA I L S A L E S
1 R E V E N U E 3 376,381 UNITS Ł18.3bn FY2021/22: 376,381
FY2021/22: Ł18.3bn FY2020/21: 439,588 FY2020/21: Ł19.7bn FY2019/20:
508,659 FY2019/20: Ł23.0bn F R E E C A S H F L O W 1 N E T D E B T
4 Ł(1.2)bn Ł3.2bn FY2021/22: Ł(1.2)bn FY2021/22: Ł3.2bn FY2020/21:
Ł0.2bn FY2020/21: Ł1.9bn FY2019/20: Ł(0.8)bn FY2019/20: Ł2.2bn P R
O F I T/ ( L O S S ) B E F O R E TA X A N D E X C E P T I O N A L C
H A R G E S 12 Ł(0.4)bn FY2021/22: Ł(0.4)bn FY2020/21: Ł0.7bn
FY2019/20: Ł(0.4)bn 1 Please see note 3 of the financial statements
on page 76 for alternative performance measures. 2 Please see note
4 of the financial statements on page 78 for more information
relating to exceptional items. The Ł43 million of exceptional
charges in FY22 relates to customer liabilities arising from
sanctions imposed against Russia by many countries, preventing the
shipment of vehicles and certain parts to the market. 3 Please see
note 5 of the financial statements on page 80. 4 Net debt is
defined as total cash and cash equivalents, deposits and
investments per the alternative performance measures on page 76
less total interest-bearing loans and borrowings per note 25 on
page 104. Annual Report 2021/22 J A G U A R L A N D R O V E R A U T
O M O T I V E P L C 5
Recent history has been relentless with the
global pandemic, military conflict, growing inequality, supply
chain shortages and more. Decades of experience have been squeezed
into two dizzying years. Businesses have had to cope with this
unprecedented sequence of events with speed and agility. While
these changes have had a serious impact on businesses and
communities, they have also accelerated some important trends for
the future viz. i) Energy transition – irreversible move to green
mobility, ii) Supply Chain transition – rebalancing of supply
chains to become resilient, iii) Digital transition – Artificial
Intelligence and Machine Learning becoming mainstream and iv)
Talent transition – Coming of age of the Talent Cloud – a diverse,
inclusive, global talent pool that can be accessed remotely. In the
midst of these changes, Jaguar Land Rover embarked on CHAIRMAN’S
the Reimagine journey to embrace an electric future and transform
into a digitally savvy modern luxury business delivering strong
STATEMENT financial results. During the year, we saw the successful
global launch of the award“Jaguar Land Rover is in a strong
position winning New Range Rover, while customer deliveries of
Defender with a striking portfolio of attractive premium continued
across 94 markets, with 107,208 units sold by the end of luxury
products, a healthy bank of customer FY2021/22. orders, low
break-evens and the right strategy to support its unique and
renowned The global shortage of semiconductors had a
disproportionately British brands in a rapidly changing legislative
adverse impact on Jaguar Land Rover’s production and sales and
commercial landscape.” compared to our competitors. Even though we
took various steps
to address the issue, the situation continues
to remain challenging. attractive premium luxury products, a
healthy bank of customer This is a key issue facing Jaguar Land
Rover and we are working orders, low break-evens and the right
strategy to support its assiduously to address the same during
FY2021/22. This should aid unique and renowned British brands in a
rapidly changing legislative a gradual recovery in performance
through the coming year. and commercial landscape. Additionally,
Jaguar Land Rover is an important player in the automotive vertical
of the Tata Group where The company delivered a resilient
performance during the year we are driving collaboration, knowledge
sharing and synergies across despite a fall in revenues by reducing
their breakeven levels to our group companies. 320,000 units. While
production and sales remained significantly constrained, the
business continued to see strong demand for its I am confident that
in the coming years we will be able to realise products, with
global retail orders at record levels thanks to strong the full
potential of Jaguar Land Rover as it executes its strategy to
demand for Defender and New Range Rover. seize the mega trends
described above. I would like to thank all our colleagues and
partners for their passion and commitment, as we Revenue fell
7 per cent to Ł18.3 billion, whilst the company’s EBIT
accelerate, together, towards a successful and peaceful future.
margins fell to negative 0.4 per cent, with lower volumes on
working capital in the first half of the financial year resulting
in a free cash outflow of Ł1.2 billion. Retail sales declined
14 per cent for the year. Recently, the people of Jaguar Land
Rover provided timely support to alleviate the humanitarian crisis
in the aftermath of the Ukraine/ Russia conflict by mobilising
vehicles to support the International Federation of Red Cross and
Red Crescent refugee programmes; in raising tens of thousands of
pounds through individual donations to aid agencies; and in
offering direct support to reunite families. NATARAJAN
CHANDRASEKARAN CHAIRMAN Looking beyond these near-term challenges
outlined above, Jaguar Land Rover Automotive plc Jaguar Land Rover
is in a strong position with a striking portfolio of 13 June
2022 Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M
O T I V E P L C 7
Fiscal year 2021/22 has been a year of
foundational delivery against our ‘Reimagine’ strategy—our roadmap
to accelerate our transformation into a modern luxury business,
with its supporting transformation plan, ‘Refocus’. We are ready to
do more and go faster. This progress has been achieved in
extraordinary circumstances, with our operations disrupted by the
ongoing effects of Covid-19
restrictions as well as the industry-wide global semiconductor
supply shortage. While the situation is
gradually improving, and we can build more of the cars our
customers are waiting for, the repercussions on our results in
FY2021/22 are clear. CHIEF EXECUTIVE We are monitoring the
Ukraine/Russia conflict very closely. We have witnessed a rapidly
developing humanitarian crisis in Ukraine OFFICER’S STATEMENT and
its neighbouring countries. Our primary concern remains for the
wellbeing of our workforce, as well as those within our extended
network. I have been profoundly humbled by the compassionate
response of colleagues across our business, both directly helping
“As we transform our business, at pace and amid individual families
and supporting the ongoing work of the intense external pressures,
I am deeply proud of the International Federation of Red Cross and
Red Crescent Societies. resilience, energy and unity of our
people.” Despite the uncertain environment, I have been
tremendously encouraged by our achievements of the past 12 months.
We revealed two exceptional new models: New Range Rover and most
recently, the New Range Rover Sport. Both embody modern luxury and
have been loved by our customers around the
world.
By the end of March 2022, we had received
more than 45,500 Lennard Hoornik joined as Chief Commercial
Officer, to head all our customer orders for the New Range Rover.
Alongside sustained, brand and product marketing and go-to-market
strategy. significant demand for the Land
Rover Defender, this made a record order book during the year, and
of course we expect demand to Thomas Müller, our new Executive
Director of Product Engineering, remain very strong. brings
invaluable insight in agile principles, advanced driver assistance
systems and autonomous driving. And as we
work relentlessly on Jaguar’s renaissance as an all-electric modern luxury brand from
2025, I can assure you that we Reimagine also sees us collaborating
with leaders in their fields. are absolutely on track. I was
delighted to announce a partnership with NVIDIA—the world leader in
artificial intelligence, computing, connected car services,
Throughout 2021, we increased our capability as an agile, fully
data- and automated and autonomous driving systems. Together, we
can driven, digital business with the creation of InDigital, a key
pillar of accelerate our in-vehicle software strategy,
delivering modern luxury our Refocus transformation programme. Our
250 specialists focusing experiences and enabling a true leapfrog
in automotive technology. on analytics, data science, data
engineering and automation have already supported initiatives that
have delivered a return of over As we transform our business, at
pace and amid intense external Ł300 million value to our
business this fiscal year. pressures, I am deeply proud of the
resilience, energy and unity of our
people. Refocus also drives our quality
transformation to realise benchmark levels of customer
satisfaction. We have seen positive impacts Thanks to their
commitment, as well as to our growing ecosystem across all our key
quality metrics, reflected in improving positions for both within
and beyond the Tata Group, we have the ingredients to our brands
and products in key customer surveys. reimagine Jaguar Land Rover
and realise its unique potential. New leadership appointments have
strengthened our executive team as we push to bring to life more of
our vision, sooner. François Dossa, appointed to the role of
Executive Director, Strategy & Sustainability, will build
our capabilities in sustainability, new mobility THIERRY BOLLORÉ
services and digitalisation, creating new opportunities in
connectivity CHIEF EXECUTIVE OFFICER and clean mobility,
establishing control points on the new value chain Jaguar Land
Rover Automotive plc and driving our strategy towards technology
leadership. 13 June 2022 Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C
9
OUR STRATEGY As we accelerate Land Rover’s
electrification, the renaissance of Jaguar has also been moving at
pace. OUR REIMAGINE STRATEGY DRIVES OUR SINGLE Over the past 12
months, our Future Jaguar team have AND CLEAR VISION: TO BECOME THE
CREATOR OF determined to develop our own bespoke pure-electric THE
WORLD’S MOST DESIRABLE LUXURY VEHICLES architecture for Jaguar. AND
SERVICES, FOR THE MOST DISCERNING OF CUSTOMERS. Alongside its
product transformation, Jaguar is also creating a strong digital
culture, efficiently integrating technologies and analytics, to
allow the team to design a more rewarding emotional engagement
between the brand and the customer. This roadmap for the future of
Jaguar Land Rover puts quality We are truly excited about the
renaissance of Jaguar. and sustainability at the centre of
everything we do, directed by the simplification of our processes
and the rapid electrification of Our ambition to become net zero
carbon by 2039 throughout our vehicles, while creating unique
customer experiences and a our entire value chain requires a
transformation in the way positive societal impact. we design,
engineer, supply and manufacture our products. To secure our
pathway towards this ambition, we have defined and As we redefine
modern luxury, and with the worldwide customer committed to CO e
reduction targets by 2030, which have been 2 appetite for electric
vehicles, we are accelerating our Reimagine validated by the
Science Based Targets initiative (SBTi), aligning transformation
into a business that will deliver double-digit EBIT the business to
a 1.5-degree celsius
emissions reduction set out margins within five years and achieve
net zero carbon through by the Paris Agreement. our entire value
chain, including our products, supply chain and operations, by
2039. TRUE DIGITAL LEADER MODERN LUXURY Connectivity is a key
attribute of modern luxury. Through our Reimagine strategy and
Refocus programme, we are creating In 2021, we introduced the New
Range Rover, as the embodiment a step-change in connected
experiences for customers and of modern luxury, with breath-taking
modernity to its exterior accelerating our transformation into a
digital leader in the and a highly sophisticated, reductive
interior with an intuitive automotive industry. approach to
relevant technology. We will continue to drive forward connectivity
in and with our The New Range Rover embodies a philosophy that will
be vehicles, based on our truly market-leading capability
today. embedded across our products and our
customer experiences, acting as a key differentiator for Jaguar and
Land Rover, as part Through remote diagnostics and software-over-the-air updates,
of their transformation into modern luxury brands. we can already
predict, diagnose and update all major vehicle
systems. At the centre of this is
sustainability, in our vehicles and across the value chain, which
we will achieve through electrification; To date, we have completed
more than 3 million updates on decarbonising our supply chain,
manufacturing and non-
customer vehicles and through our Electric Vehicle Architecture,
manufacturing operations; closed-loop circularity; and in close we
can monitor nearly 17,000 data points to continually enhance
attention to the provenance of materials we select. our customer
experiences. AN ELECTRIFYING, SUSTAINABLE FUTURE For example, in
early 2022, we provided 200,000 customer vehicles, fitted with our
advanced Pivi Pro infotainment system, We believe in the modern
luxury of pure-electric propulsion that an over-the-air upgrade featuring
Amazon Alexa voice AI is near-silent, efficient and sustainable.
capability and Wireless Apple Car Play. The New Range Rover
introduces plug-in hybrid
electric We believe this ability for owners to add services and
experiences propulsion with a segment-leading official
electric-only range of to their connected vehicles will create
entirely new value for our over 100km. business. From 2024, a
pure-electric New Range Rover will join the family. COLLABORATING
FOR A CONNECTED FUTURE Over the next four years, Land Rover will
welcome six all- Such a
strong platform for connected services also allows us to electric
variants across two architectures – our flexible reimagine new
vehicle features. Collaboration and knowledge-Modular Longitudinal
Architecture (MLA) and Electric Modular sharing with industry
leaders in connected services, data and Architecture (EMA). This
will help us to meet unprecedented software development is a
cornerstone of our strategy. policy shifts and an exponential rise
in customer demand towards electric vehicles across our key
markets. We have formed a multi-year strategic partnership with
NVIDIA, As adoption increases, we expect 60 per cent of global
Land the leader in artificial intelligence and computing, to
jointly Rover sales to be pure-electric by
2030. develop and deliver next-generation
automated driving systems, plus AI-enabled services and experiences for
our customers.
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
11
From 2025, new Jaguar and Land Rover vehicles
will be built on the NVIDIA DRIVE™ software-defined platform –
delivering a wide spectrum of active safety, automated driving and
parking systems, as well as AI features inside the vehicle.
Together, we will redefine how our customers connect to, and enjoy
their vehicles, throughout their ownership, driving new
opportunities and business models for us and our partners. We will
continue to strive for strategic partnerships to drive innovation
and sustainability in line with our Reimagine strategy. REIMAGINING
FINANCE FOR CUSTOMERS Through our transformation programme,
Refocus, we are also forging strategic partnerships to enhance our
purchase experience. We have partnered
exclusively with BNP Paribas, to broaden competitive automotive
financing with new, innovative services across nine European
markets. Our ambition is to provide our
retail partner network and our customers with an expanded range of
financing solutions and insurance products by early 2023.
REDEFINING OUR PURPOSE Our company purpose sets why we want and
choose to exist: ‘live the exceptional with soul’. Through our
Reimagine strategy, we are changing to become the ‘proud creators
of modern luxury’, guided by a creator’s code—a set of co-created behaviours: customer love,
unity, integrity, growth and impact. Along
the way, the positive impact of sustainability and diversity and
inclusion will enable us to better understand and serve our
customers, fuel our innovation, and engage and inspire our
people. Together, we are shaping a culture
of unity, belonging, inclusion and respect, while implementing
progressive policies, benefits and support, and engaging with our
people to accelerate our progress. FOCUSED ON THE FUTURE With
Reimagine, we are transforming our business and our two unique
brands, with a value-creation approach; delivering modern luxury
experiences, quality and profit. We will deliver a new benchmark in
environmental, societal and community impact for a luxury business,
creating the world’s most desirable luxury vehicles, against a
canvas of true sustainability. We are
transforming into an agile, fully data-driven, digital company,
through our Refocus plan. Our commitment to agile ways of working
is streamlining our operations and returning value to our
business. Together, we are realising our
goals, steadfast in our ambition to be one of the most profitable
luxury manufacturers in the world. Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 13
REFOCUS Refocus will drive further
profitability in our business, as we aim to realise
Ł2.5 billion of value within three years. OUR REFOCUS
TRANSFORMATION PROGRAMME IS THE ENGINE ROOM POWERING OUR REIMAGINE
The programme contains five priorities focused on improving our
STRATEGY. operations and transforming our business. These are:
improved customer satisfaction, time to market, workforce
experience, CO e reduction and profitable
growth. Refocus has created significant
change within our business and 2 culture over the past year,
improving key quality metrics, laying These priorities are
established in ten separate pillars—six the foundations of an
agile, data-driven, digital business, and operational pillars and
four enabling pillars. During this fiscal year, delivering over
Ł1.5 billion of value during FY2021/22. we added our tenth
pillar, Sustainability. 1 2 3 4 5 6
PROGRAMME CUSTOMER & DELIVERED END-TO-END QUALITY
DELIVERY & MARKET CHINA COST PER CAR SUPPLY CHAIN
PERFORMANCE PERFORMANCE Efficient Reduced warranty Reduction in
Faster vehicle Increased profitable Increased profitable programme
spend vehicle cost delivery times market share market share
delivery AGILE ORGANISATION & CULTURE 7 Agile
Organisation, Leadership, Capability, Culture DIGITAL 8 Using
data & technology to power the transformation RESPONSIBLE
SPEND 9 Sustaining the cost improvements SUSTAINABILITY 10 Building
a regenerative ecosystem
DRIVING PROFITABLE CHANGE Through a digital
revolution in smart tools and processes we supported initiatives
that have delivered over Ł300 million value Our Quality pillar
has implemented new processes and to our business in FY2021/22,
supporting and providing solutions governance to improve quality
issues and warranty spend, as diverse as supply chain visibility to
mitigate the semiconductor resulting in an improvement to our
customer satisfaction, and crisis; databased failure mode
prediction; new and improved reducing warranty spend to Ł608 per
vehicle. customer offerings and customer journey digitisation; and
automation across the business for greater efficiency. In Programme
Delivery & Performance, we have trained more than 4,000 of
our people in agile ways of working, reducing RESPONSIBLE SPEND
product delivery times and time to market. An Agile Hub has been
established, facilitating team training and coaching, as well
Responsible Spend continues from the successful Charge+ as
redefining the company purpose in the mindset of modern programme.
We have remodelled our approach to spend and luxury. investment,
updating our purchasing processes, improving cost and time saving
allowing our teams to focus on adding value. In Delivered Cost Per
Car, we have continued to build on the successful cost reduction
initiatives of our Ignite programme SUSTAINABILITY AT OUR HEART –
now extended to 2025 – achieving Ł1,600 average per car saving,
without compromising quality. Through FY2021/22, we brought into
Refocus a dedicated Sustainability pillar to execute our
environmental sustainability We have also created a new Supply
Chain function within our strategy—Regenerate. business, focusing
on digitisation as well as building resilience and sustainability
within our operations. This work has included Regenerate comprises
eight distinct focus areas, redefining the our semiconductor crisis
response. way we design, engineer, manufacture and even sell
products and services. Together,
Customer & Market Performance (Pillar 5), which
revolutionises our customer journey, and China (Pillar 6) have
Pillar 10 acts as the operational engine to implement this
contributed over Ł800 million of value through measures
sustainability transformation through climate and circular
including newly digitised ordering for retailers, renewal services
actions across the company, powered by the adoption of agile for
customers and profit and mix optimisations. methodology. DIGITAL
TRANSFORMATION The transformation of our business through
Sustainability is supported by key executive appointments.
InDigital was launched in April in 2021 as part of our Refocus
plan. In just the past year, it has developed into a digital centre
of François Dossa was appointed to the role of Executive Director,
excellence, at the heart of Refocus, with 250 specialists focusing
Strategy & Sustainability, in June 2021 and Rossella
Cardone on analytics, data science, data engineering and
intelligent became Director, Sustainability in January
2022. automation. Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 15
OUR BUSINESS MODEL HOW OUR BUSINESS MODEL
CREATES VALUE Our new strategy will evolve our business model, to
ensure we redefine Jaguar Land Rover, as a value-led business and realise its
potential to generate sustainable, long-term value through
operational excellence. Raw Supply Customer Skills and Investment
materials chain insights people INPUTS INNOVATION, DIGITAL AND
TECHNOLOGY MOBILITY DESIGN, VEHICLE AND OTHER PROGRAMMES AND NEW
SERVICES ENGINEERING CUSTOMER SERVICE STRATEGIC NETWORK SOURCING
SUPPLY CHAIN, GLOBAL SALES LOGISTICS AND NETWORK MANUFACTURING
OPERATIONS FINANCIAL SERVICES PARTNERS OUTPUTS Modern Sustainable
Reduced Stronger Quality Technological luxury growth environmental
communities products innovation
impact
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
17
OUR PRODUCT Innovations and technologies that
ensure New Range Rover leads by example are protected by 200 new
patents filed up to AND INNOVATION the end of FY2021/22.
ACHIEVEMENTS SEGMENT-FIRST TECHNOLOGY OUR JOURNEY OF TRANSFORMATION
HAS SEEN Amongst its innovations, our New Range Rover debuted new
US LAUNCH BREATH-TAKING NEW PRODUCTS digital LED lighting
technology, with Dynamic Light Projection. AND ANNOUNCE EXCITING
STRATEGIC Within each headlight, a core module of 1.3 million
individually-PARTNERSHIPS, WHILE RISING TO MEET THE variable
digital micromirrors breaks the light into tiny pixels, to
CHALLENGES OF AN UNCERTAIN GLOBAL precisely shadow other road users
and maximise the amount of ENVIRONMENT. light on the road at all
times. At the rear, New Range Rover’s world-first, hidden-until-lit taillights have been
specially developed to meet our modernist THE NEW RANGE ROVER –
MODERN LUXURY design philosophy and use vivid red LEDs in
operation, yet form a distinctive Gloss Black graphic at the rear
when not in use. In October 2021, we revealed the New Range Rover,
a vehicle of breath-taking modernity, peerless refinement and
unmatched POWERFUL CONNECTIVITY
capability. Collaborating and sharing
knowledge with industry leaders Launched with a choice of two
wheelbases, four, five, or, for in connected services, data and
software development is a the first time, seven seats and a
flagship SV range offering cornerstone of our Reimagine strategy
and we announced key an exquisite interpretation of Range Rover
luxury and hand- strategic partnerships in this area in FY2021/22.
crafted personalisation, New Range Rover is a fully formed family
of vehicles, providing more customer choice and scope NVIDIA is the
world leader in automated and autonomous for personalisation than
ever before, with more than 1.6 million driving systems and
connected car services. Our new, long-term different configurations
available. partnership with NVIDIA will accelerate our in-vehicle software strategy,
delivering modern luxury experiences. Within six months of its
reveal, we had received more than 45,500 advance customer orders
for the New Range Rover, and Utilising our own world-leading
Electric Vehicle Architecture, production began earlier this year
at our factory in Solihull, UK. from 2025 new Jaguar and Land Rover
vehicles will be integrated with the NVIDIA
DRIVETM Hyperion computing and
sensing platform, powering advanced
technology features and and allergens, including SARS and
Covid-19 viruses. connected
experiences, able to be automatically refined and upgraded
throughout their lifetime, “over the air”. Enhancing our research
in this area, in 2021 we partnered with Google to deliver the first
all-electric Google Street
View vehicle, This year also saw us deliver the integration of
Amazon Alexa with the added ability to record air quality. A Jaguar
I-PACE, fitted voice AI
into Jaguar and Land Rover vehicles, contained in the with Cabin
Air Purification Pro and an additional sensor array, latest
upgrades to our award-winning Pivi Pro infotainment measured
street-by-street air quality in
Dublin, using Street View technology. mapping technology. The
combined abilities of Alexa and Pivi Pro make our vehicles It
recorded levels of nitrogen dioxide (NO ), carbon dioxide (CO ),
more intelligent than ever, and into powerful connected devices and
fine particles (PM2.5) and also helped 2 to update Google 2
supporting our customers lives. Maps. Our strategic alliance with
Amazon Alexa allows natural voice Google’s scientific research
partners will also analyse the data control of in-car media, navigation and phone
services, supported and develop maps of street-level air pollution.
by a rich media display, and connection to other Alexa-enabled
devices in smart homes. ON TRACK SUCCESS This upgrade also
demonstrated the connected power of Pivi Pro, Jaguar Racing
finished a close second in season seven of the ABB in being made
available to 200,000 existing customers directly FIA Formula E
World Championship, the most successful season through a
software-over-the-air update. so
far in its five-year
Formula E campaign, with eight podiums, two wins, one pole position
and 177 points scored. As part of our
Reimagine strategy, Pivi Pro represents a step-change in connected
services capability and will deliver a Formula E remains a key
priority for Jaguar Land Rover, allowing modern luxury experience
for all our customers. us to test and
develop new electric vehicle technologies in a high-performance
environment, and help shape our electric CLEANER CABIN AIR FOR
ENHANCED WELLBEING future. Cabin air
purification research is helping us to reimagine wellbeing Our
partnership with Tata Consultancy Services will see for our
customers, and to help make a positive societal impact. Jaguar TCS
Racing continue to be a global showcase for our electrification
technology and will support Jaguar’s renaissance Our Cabin Air
Purification Pro System, with PM2.5 Filtration, CO as an
all-electric brand from
2025. Management and nanoe™ X air ionisation technology, controls 2
the cabin air quality and significantly reduces odours, bacteria
Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I
V E P L C 19
OUR ENVIRONMENTAL AND more recycled content,
considering vehicle end-of-life from the SOCIAL
GOVERNANCE start. And we are supporting
customers to make sustainable choices AS AN OFFICIAL PARTNER OF THE
COP26 CLIMATE towards less impactful products across their entire
lifecycle, coupled with an increased focus on extending product
life, and CONFERENCE IN 2021, WE ANNOUNCED NEW increasing repair,
reuse and recycling options. SCIENCE-BASED
EMISSIONS TARGETS AND RENEWED OUR COMMITMENT
TO DELIVER A In Manufacturing Operations and Supply Chain, we are
leveraging SUSTAINABILITY-RICH VISION OF MODERN LUXURY. advanced
technologies to reduce energy consumption and waste in our plants
and offices. Through our committed
environmental and social principles, In addition, our Supplier
Environmental and Social Requirements we continue to stitch all the
threads of sustainability – web guide sets out our expectations for
our supply base. It from reducing vehicle emissions to circular
economy; from covers business ethics, environment, human rights and
working manufacturing processes to supply chain partners – with one
conditions, health and safety, and responsible supply chain team,
working globally across the business, the brands and the
management. customer experience. We also
engage with our supply base to enhance the level of And through our
policies towards our people, we are driving a sustainability data
we receive, to collaborate on sustainability positive societal
impact in our communities across the
world. goals, to share information and give
feedback so that we can build on the maturity of our suppliers’
sustainability journeys. OUR SUSTAINABILITY STRATEGY The execution
of our Regenerate strategy will enable us to Since COP26, in line
with our global Reimagine strategy, we achieve our approved Science
Based Target initiative (SBTi) have established a dedicated
Sustainability Office to lead the commitments by 2030, and to
achieve our net zero carbon sustainability transformation in Jaguar
Land Rover, positioning objective for 2039. sustainability at the
heart of our Reimagine vision and purpose. Between 2020 and 2030,
we will reduce emissions by 46 per Regenerate, our dedicated
sustainability strategy, sets the cent across vehicle manufacturing
and logistics, and by 54 per pathway to our ambition to be carbon
net zero by 2039. cent per vehicle, from
purchased goods, services, and use of products. The strategy
consists of eight distinct focus areas: electrification and battery
strategy; Materiality and sustainable products; Having committed to
these targets, we are now underway to zero impact manufacturing and
operations; responsible supply build a regenerative ecosystem and a
sustainability mindset chain management; customers and new business
models; throughout the business. This will help to ensure
coordination environment in decision-making; digitalisation for
sustainability; across departments and allow us to deliver and
report on and employees’ cultural shift for sustainability.
progress against these new targets going forward. These eight areas
will enable us to redefine the way we design, REDUCING OUR VEHICLE
EMISSIONS engineer, manufacture and even sell our products and
services. We are accelerating the reduction in our tailpipe CO
emissions. The transition to an electric future is integral to our
sustainability We currently offer electric vehicle technology
across 2 our entire strategy. Over the next four years, Land Rover
will welcome six Jaguar and Land Rover portfolio, including eight
plug-in hybrids
all-electric variants, with
the first arriving in 2024. In this time, (PHEV), 11 mild hybrids
(MHEV) and our all-electric
Jaguar Jaguar will have undergone a complete renaissance, emerging
as I-PACE. a pure-electric
modern luxury brand from 2025. By FY2025/26, we forecast that
approximately 27 per cent of Beyond EV transition, our Design
and Engineering teams are sales will be pure-electric, rising to
above 60 per cent by the end creating new luxury standards
using less impactful materials and of the
decade. JAGUAR LAND ROVER EV MIX
(wholesales) ICE/MHEV / HEV 30% 63% PHEV 10% 87% BEV 10% 60% 10%
27% 3% FY22 FY26 FY30
REDUCING OUR ENVIRONMENTAL
FOOTPRINT GLOBAL DATA OP ERAT I O N A L E N
E R G Y O P E R AT I O N A L WAT E R O P E R AT I O N A L C O N S U
M P T I O N ( M W h ) C O N S U M P T I O N ( m 3 ) WA S T E ( To n
n e s ) FY 2021/22: 1,133,506 FY 2021/22: 1,658,929 FY 2021/22:
30,008 FY 2020/21: 1,135,049 FY 2020/21: 1,336,479 FY 2020/21:
27,638 FY 2019/20: 1,358,225 FY 2019/20: 1,720,965 FY 2019/20:
37,043 O P E R AT I O N A L C A R B O N E M I S S I O N S T O N N E
S ( L O C AT I O N B A S E D ) 306,069 256,247 157,316 236,442
135,098 117,939 148,753 121,149 118,503 FY20 FY21 FY22 O P E R AT I
O N A L C A R B O N E M I S S I O N S T O N N E S ( M A R K E T B A
S E D ) 189,451 40,698 147,385 138,393 26,236 19,889 148,753
121,149 118,503 FY20 FY21 FY22 Scope 1 covers direct emissions
Scope 2 covers indirect emissions from the from owned or controlled
sources. generation of purchased electricity & steam. •
Energy data includes purchased gas, electricity & steam •
Waste data excludes metal and construction waste • Water data
includes mains water & borehole consumption • 50% of China
Joint Venture data due to financial control • Sites in scope:
Solihull, Halewood, Castle Bromwich, Engine Manufacturing Centre,
Gaydon, Whitley, Nitra, Brazil, China Joint Venture (50% data due
to financial ownership) • As per the GHG Protocol for Corporate
Reporting, a location-based method reflects the average emissions
intensity of grids on which energy consumption occurs (using a
grid-average emission factor); a market-based method reflects
emissions from electricity that the company has purposefully
chosen. UK STREAMLINED ENERGY AND CARBON REPORTING PARAMETER
2019-20 2020-21 2021-22 Energy consumption used to
calculate emissions: kWh 1,274,988,136 1,032,109,520 1,017,618,240
Emissions from combustion of gas tCO e (Scope 1) 135,999 105,102
99,872 2 Emissions from combustion of fuel, tCO2e, including
transport (Scope 1) 10,734 8,770 8,531 Emissions from business
travel in rental cars or employee-owned vehicles where company is
responsible for purchasing 2,640 369 632 the fuel (Scope 3)
Emissions from purchased electricity (Scope 2 location-based)
123,568 96,782 91,264 Total gross CO e based on above 272,941
211,023 200,299 2 Intensity ratio: tCO e/Łm 11.87 10.69 10.93 2 Our
data is compiled in accordance with the Greenhouse Gas In the last
year, we have continued to focus on reducing non-Protocol for Corporate Accounting
and Reporting, SECR CO e essential energy use, as well as further
improving transparency is calculated with a location based approach
using UK average 2 in usage data and capturing real time
consumption information. grid intensity conversion factors (BEIS
2021). Jaguar Land Rover The resulting data are showcasing our
progression made on continues to purchase 100% renewable-backed
electricity for waste with respect to energy. Changes to air
handling units, all core UK operations. shutdown process and
equipment replacement has significantly contributed to process
efficiency ameliorations. Annual Report 2021/22 J A G U A R L A N D
R O V E R A U T O M O T I V E P L C 21
MATERIALITY—REDEFINING MODERN LUXURY emission
energy storage unit powered by second-life Jaguar I-PACE batteries. Our customers want to
understand how their vehicle is made, what it is made from and the
provenance of materials used. The mobile Off Grid Battery Energy
Storage System (ESS) supplies zero-emission power where access to the
mains supply Materiality is our answer to this—an uncompromised
vision of is limited or unavailable, with a capacity of up to
125kWh – more innovation in materials, processes and technology
that promotes than enough to power a regular family home for a
week. social, environmental and economic values. Reusing vehicle
batteries will create new circular economy Our Materiality strategy
ensures materials used in our vehicles business models for Jaguar
Land Rover in energy storage and are sustainable, traceable,
respectful and without compromise, beyond. governed by seven
guiding principles: Circularity, Health & Wellbeing,
Lightweight, Performance, Provenance, Respectful, MAKING A
DIFFERENCE THROUGH GLOBAL BRAND and Responsible. PARTNERSHIPS We
have already pioneered innovative sustainable materials in Through
every partnership, we seek to make a positive Jaguar and Land Rover
vehicles. Our Kvadrat interior with natural contribution to people
and communities around the world. wool blend utilises 53 recycled
plastic bottles and is 58 per cent lighter than a leather
equivalent. The Red Cross Ultrafabrics PU, featured in the New
Range Rover, is a responsible Our partnership with the
International Federation of the Red alternative to leather and
represents a progressive approach to Cross and Red Crescent
Societies has endured since 1954. luxury materials. It offers all
the tactile qualities of leather but is Throughout this time, we
have facilitated life-saving work 30 per cent lighter and
generates only a quarter of the CO . through funding, vehicles and
expertise. 2 Our Colour and Materials team
continue to explore new Today, we work together helping people in
disaster preparedness, innovations in Materiality for future
products, led by an ethos of from reaching remote communities with
vaccination ‘aesthetics with ethics’. programmes, to helping
distribute tarpaulins for protection against monsoon
floods. HARNESSING BLOCKCHAIN TO TRACE OUR
SUPPLY During the Covid-19
pandemic, we supplied 267 vehicles to CHAIN the Red Cross, which
covered more than 500,000 miles helping people in
crisis. In understanding the provenance of
material through our supply chain, we have partnered with
blockchain technology firm In addition, we have a fleet of vehicles
supporting the Circulor, leading UK leather manufacturer Bridge of
Weir Leather International Federation of Red Cross Societies in
their efforts to Company and the University of Nottingham, to prove
the use of provide humanitarian aid to at-risk communities. traceability
technology in the leather supply chain. We
are also a member of Disaster Relief Alliance, making sure A
combination of GPS data, biometrics and QR codes were used that the
Red Cross is ready to support people in the immediate to digitally
verify the movement of leather at every step of the aftermath of
devastating crises around the world. Its Disaster process, from
farm to our own facilities. Fund assisted six major responses,
between April and September 2021. As well as tracking compliance,
the secure digital process can assess the carbon footprint of
supplied materials and could be Dream Fund deployed to trace a
range of commodities. Circulor is already using blockchain to
improve the traceability of minerals used for Cooperating with the
China Soong Ching Ling Foundation electric vehicle batteries.
(CSCLF), our Dream Fund is the first such activity in China’s
automotive industry dedicated to helping children and young This is
a key step in our journey to achieving net zero carbon people
achieve their potential. across our supply
chain, products and operations by 2039, enabled by leading-edge
digital capabilities. Over eight years, we have undertaken a host
of initiatives to improve education quality for rural children,
guided by the principle of “more equal access”. Our Land Rover
Never NEW LIFE FOR BATTERIES IN ENERGY STORAGE Stop Caring—Journey
for Vision Programme has provided comprehensive healthcare and
medical equipment in remote We are committed to redeploying and
reusing batteries from our regions of China. electric vehicles and
one significant use is in energy storage and demand management.
Volunteering for Education We have partnered with Pramac to develop
a portable zero- Our
sustained programme of education volunteering supports our position
as the largest investor in automotive research Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
23
and development in the UK, by reaching
enthusiastic young In Slovakia, our Nitra facility set up a testing
centre for our people with enquiring minds and a commitment to push
the employees and contractors, providing more than 40,000 tests
boundaries. alone. The Slovakian government acknowledged that
Jaguar Land Rover’s mass testing significantly contributed to
managing Through virtual work experience, school visits and
tailored a critical situation and protected the health of our
employees, programmes, we enthuse and inspire a future generation
of their families and communities. talent, with the aim of
overcoming the STEM skills shortage faced by the automotive
industry. Beyond testing, we managed a vaccination programme and
supplied masks and respirators for our employees. We also This
provides our employees with an opportunity to volunteer created a
hub of wellbeing support and information available and share their
experiences. to all employees throughout the pandemic, including
podcasts, resources, and factsheets to help them easily access
reliable Notwithstanding the Covid-19 restrictions in 2021, 213
information at a time of uncertainty. employee volunteers,
including a core team of apprentices and graduates, provided 881
hours of time to develop the Hybrid working programme, which has so
far reached 148 students. Hybrid working reflects our agile working
principles and in May 2021, as our employees returned to work in
line with the scaling INVESTING IN OUR PEOPLE AND COMMUNITIES back
of Covid-19 restrictions,
we formally implemented a hybrid working scheme. Our people are our
greatest asset and that is evidenced by their support to their
communities, both individually and through our With the trust
placed in our people, we have utilised technology collective
efforts as a company. to develop a comprehensive scheme that
empowers employees with the flexibility to manage their working
arrangements and Protecting our
people location. Throughout our response to
Covid-19, the health,
wellbeing and As well as enabling greater productivity and
efficiency, hybrid safety of our people and partners has been our
utmost priority working supports wellbeing, by giving employees
more control, and this has continued as colleagues have been
returning to choice and flexibility over their working day. offices
and workplaces around the world. We have committed to support our
people both in continued on-As part of our response to the
Covid-19 pandemic, we were
one site Covid-19 testing
and a dedicated workspace booking app, of the first businesses and
the largest in the UK, to introduce on- to help them get the most from
hybrid working arrangements. site Covid-19
testing. Activities within the community By
April 2022, we had performed 1.68 million temperature tests,
100,000 lateral flow tests, and over 1,000 PCR tests onsite. Our
team in Nitra, Slovakia established a partnership with Nitra
Volunteering Centre in December 2021 and organised a
collection for people in need during
December. the next five years. How they are implemented around the
globe will vary and will be driven by the needs of the countries we
Our manufacturing facility in Itatiaia, Rio de Janeiro joined
operate in. forces with Instituto Toré for a one-year community partnership
supporting and implementing two significant social responsibility
1. Shape a culture of unity, belonging, inclusion and respect
projects in their local area, aimed at delivering education and
skills on conservation and sustainable food
production. Educate, communicate and measure
inclusive behaviours regularly and systematically, improving the
employee experience In December 2021, employees from Jaguar Land
Rover’s UK for all. sites came together to collect for local
foodbanks, with the aim of supporting thousands of families who
continued to struggle as 2. Implement progressive policies,
practices, benefits and a result of the Covid-19 pandemic.
support The donation drive saw employees
across the business support Review and improve practices and
policies to remove barriers, their local charities and communities,
with more than 10,000 enable inclusion and realise equity. items
such as tinned food and cereals donated to help local families in
need, while employees also showed their support by 3. Engage our
employees and experts to accelerate progress donating just over
Ł2,000 to an online collection fund. Collaborate with our networks,
colleagues and experts to create Diversity & Inclusion
real, positive change. At Jaguar Land Rover we are committed to
fostering a more As part of our strategy, by 2026 we aim to have:
diverse, inclusive and unified culture that is representative of
our employees, our customers and the society in which we •
Globally, at least 30 per cent of all senior leadership live;
a culture where every one of our colleagues can bring their
positions held by females – we will aim to at least mirror
authentic self to work and feel empowered to reach their full this
representation at all levels of our business.
potential. • In the UK, at least 15 per
cent of all senior leadership There are tremendous benefits to an
environment where positions held by those from Black, Asian, and
minority everyone feels valued and included. Diversity of thought
and ethnic backgrounds—we will aim to at least mirror this
experience will be a key driver of our future success as a
business: representation at all levels of our business. we cannot
underestimate the positive impact that diversity and inclusion can
have on how we understand our customers, fuel • A score of over
80 per cent in our Inclusion Index, measuring our innovation
and, most importantly, engage and inspire our the percentage of
people who would recommend Jaguar most important asset, our people.
Land Rover as an inclusive employer. We have
identified three strategic pillars to achieve our goal, We will
continue to measure progress on a number of other which will shape
our global Diversity and Inclusion activity over metrics as part of
our regular employee surveys. Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C 25
OPERATING ENVIRONMENT Ukraine / Russia
conflict WE HAVE FACED A RANGE OF EXTERNAL Our primary focus
throughout the unfolding conflict in Ukraine has been the wellbeing
of our workforce, as well as those in our CHALLENGES DURING
FY2021/22, WHICH HAVE extended network. Colleagues based at our
Nitra manufacturing IMPACTED OUR BUSINESS. WHILE THE DISRUPTION
facility in Slovakia have provided border transportation and FROM
THESE EXTERNAL FACTORS LOOKS SET TO temporary accommodation to the
families of our Ukrainian colleagues, as well as helping them
integrate into the local CONTINUE INTO FY2022/23, DEMAND FOR OUR
community. In addition, we have mobilised a fleet of vehicles
PRODUCTS REMAINS STRONG AND WE REMAIN to the International
Federation of Red Cross and Red Crescent CONFIDENT THAT OUR
REIMAGINE STRATEGY WILL Societies to provide humanitarian aid to at
risk communities. POSITION OUR COMPANY FOR FUTURE
SUCCESS. Commercially, sales volumes in the
final quarter of FY2021/22 were not materially impacted by the
conflict, with Russia and Ukraine historically accounting for less
than 2.5 per cent of global sales. While new vehicle sales
into Russia have been paused since the end of February, strong
demand from customers in other markets can more than offset this
volume in the coming CHALLENGES year. Semiconductors &
other supply constraints The Ukraine conflict has so far only had a
limited impact on Supply constraints, particularly semiconductors,
restricted our production volume as a result of active management
of our parts ability to produce as many vehicles as we planned in
FY2021/22. supply chain. While we have a relatively small number of
parts These supply chain challenges limited our capacity to build
cars and commodities that are sourced from the affected countries,
in line with customer demand and our wholesale volumes for the it
is too early to say how future commodity supply and pricing year
were 294,182, down 15.4 per cent compared to the prior could
be impacted. year. The shortage of semiconductors is likely to
continue in the Global inflation coming year with gradual
improvement throughout FY2022/23. In response to these challenges,
we focused production on Inflationary pressures have been
increasing, with aluminium higher margin products and established
new processes to prices rising 61 per cent during the fiscal
year, while we also closely monitor our supply chain. Looking
further ahead, we have saw high volatility in gas prices across
Europe in the fourth engaged in strategic discussions with key
component suppliers quarter. This will impact our business, as some
prices we pay and chip producers to secure long-term supply
agreements for our suppliers are directly indexed to market rates,
leading to future product programmes, to increase our resilience.
increased material costs which could reduce our profit margin. This
increasing inflationary pressure could also flow
through
to consumer inflation expectations and drive
a response from The strategy section of this report discusses our
approach in more central banks in the coming year, which could
impact the pace of detail. These actions to transform our
organisation will support us future economic growth. in responding
to the external challenges. In the short term, we have a level of
protection from immediate Strong demand for great products
commodity price increases through our commodity hedging programme.
We also monitor the impact of changes in material FY2021/22 saw the
full global roll-out of New
Defender and the costs on our margins and may look to adjust sales
prices if we launch of New Range Rover. Demand for both of these
products cannot avoid passing cost increases to our consumers. has
led to a record-breaking order book of 168,471 at the end of the
year, with Defender making up 24 per cent of the order
Covid-19 bank (40,618
orders) and New Range Rover accounting for 27 per cent,
(45,584 orders ). The ongoing impacts of Covid-19 vary across the world as new
waves take hold and the risk of new variants remains a possibility.
The recent reveal of New Range Rover Sport aims to repeat the
FY2021/22 saw a continuous easing of restrictions in the UK,
success of the previous two product launches, and we have however,
across the globe responses vary, with China initiating already seen
a positive customer response to this exciting new large-scale
lockdowns and testing programmes in some regions model. during the
fourth quarter. Collaborations & partnerships Covid-19 poses risks to supply chains
and consumer demand where there are large-scale outbreaks or
lockdowns. We see Collaborations and partnerships are at the heart
of our Reimagine these risks generally reducing in the coming year,
though our strategy, and there have been some exciting new
partnerships supply chain could be impacted if any of our suppliers
were announced in FY2021/22. subject to lockdowns. In February
2022, we announced a new partnership with NVIDIA that will jointly
develop AI-powered
autonomous driving and connected services for all future vehicles
built on NVIDIA DRIVETM. OPPORTUNITIES That same month, we became
exclusive partners with BNP Paribas for financial services across
nine European markets, and Our strategy revealed the integration of
Amazon Alexa on all on all new and existing Jaguar and Land Rover
vehicles fitted with its advanced Our Reimagine strategy and
Refocus programme have set us on Pivi Pro infotainment system. an
exceptional journey of transformation. They have laid out a clear
vision and pathway to become proud creators of modern We will
continue to build on collaborations such as these to luxury.
deliver modern luxury experiences for our customers. Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
27
GLOBAL RETAIL SALES and overseas (down 2.8
per cent), as production volumes were limited by the semiconductor
supply shortage. As the year progressed, the shortage gradually
eased, and the third quarter RETAIL SALES1 BY REGION saw an
increase in production volumes compared to the second quarter. Our
retail sales were 376,381 vehicles in FY2021/22, down 63,207
vehicles (14.4 per cent) year-on-year. The decline was
Despite an easing of supply, retail sales in the China region were
primarily the result of the semiconductor supply shortage which
impacted in the fourth quarter by the reintroduction of
Covid-19 impacted
production from the second quarter. restrictions in March 2022.
Retail sales fell down in all markets year-on-year, including Total
retail sales from our China Joint Venture were 54,035 China (down
13.9 per cent), North America (down 17.6 per vehicles for
FY2021/22, down by 16.0 per cent from 64,319. cent), Europe
(down 9.1 per cent), UK (down 23.6 per cent) NOR T H A M E R I C A
U K OV E R S E A S FY 2021/22—91,305 FY 2021/22—63,438 FY
2021/22—53,785 FY 2020/21—110,805 FY 2020/21—82,995 FY
2020/21—55,322 (17.6)% D E C R E A S E (23.6)% D E C R E A S E
(2.8)% D E C R E A S E E U R O P E C H I N A FY 2021/22—72,068 FY
2021/22—95,785 FY 2020/21—79,260 FY 2020/21—111,206 (9.1)% D E C R
E A S E (13.9)% D E C R E A S E JAG U A R L A N D FY
2021/22—376,381 (14.4)% D E C R E A S E I N Y E A R ROV E R TOTA L
FY 2020/21—439,588 1 Please see note 3 of the financial statements
on page 76 for Alternative performance measures. “Jaguar Land Rover
retail sales represent vehicle sales made by retailers to end
customers and include the retail sale of vehicles produce. RETAIL
SALES BY POWERTRAIN 34% During FY2021/22, we continued to expand
electrification across our 13 nameplates, with PHEVs now available
on eight models 49% and MHEVs available on 11 models, as well as
the all-electric Jaguar
I-PACE. 55% In FY2021/22,
electrified vehicles totaled 66 per cent of our retail sales
including 3 per cent for the all-electric Jaguar I-PACE, 9 43% per cent PHEV and
55 per cent MHEV, and we expect the sales of electrified
vehicles to continue to increase in FY2022/23 and beyond. 4% 8% 4%
3% BEV PHEV MHEV ICE FY21 FY22
RETAIL SALES BY BRAND AND MODEL FAMILY
Against a backdrop of semiconductor supply issues, we prioritised
higher margin products. Our Range Rover family continued to Our
retail sales declined by 14.4 per cent year-on-year in constitute the
majority of our retail sales mix with 174,940 FY2021/22. Jaguar
retailed 77,381 vehicles (20.6 per cent vehicles
(46.5 per cent mix), followed by the Jaguar family with of
total retails, down 20.8 per cent) and Land Rover retailed 77,381
vehicles (20.6 per cent mix); the Discovery family 62,343
299,000 vehicles (79.4 per cent of total retails, down 12.6
per vehicles (16.6 per cent mix); and the award-winning
Defender, cent) compared to FY2020/21. which reached 61,717 retails
(16.3 per cent mix ). The semiconductor
supply shortage impacted sales of every model apart from the New
Defender and New Range Rover introduced in October 2021. FY
2021/22—174,940 FY 2021/22—61,717 FY 2021/22— 62,343 FY 2021/22—
77,381 FY 2020/21—213,006 FY 2020/21—45,244 FY 2020/21—83,669 FY
2020/21—97,669 (17.9)% DE CREA SE 36.4% INCREA SE (25.5)% DE CREA
SE (20.8)% DE CREA SE ORDER BANK BY MODEL The order bank for our
vehicles reached record highs in FY2021/22, with 168,471 orders at
the end of the year. Orders were highest for the New Range Rover
(45,584). NEW RANGE ROVER DEFENDER OTHER 250 168 200 155 150 125 81
110 87 100 81 92 41 50 37 33 46 29 31 0 Q1 Q2 Q3 Q4 Numbers in
thousands Annual Report 2021/22 J A G U A R L A N D R O V E R A U T
O M O T I V E P L C 29
In FY2021/22, we continued to see strong
customer demand for our products with a record order bank, however,
our sales were constrained by the industry-wide shortage of
semiconductors. While full year financial
results reflect the restricted sales volumes, the continuing
reduction in our breakeven point through revenue and cost
management under our Refocus transformation programme enabled us to
achieve positive margins and cash flow in the second half of the
fiscal year. In light of the rapidly
developing Ukraine/Russia conflict, we have suspended vehicle sales
in the region, and, while the full commercial effects are not yet
known, we remain primarily concerned with the wellbeing of our
people and our wider network. CHIEF
FINANCIAL Our retail sales were 376,381 and wholesales1 (excluding
sales OFFICER’S STATEMENT from our China joint venture) were
294,182 vehicles, down year-on-year
14.4 per cent and 15.4 per cent respectively as a result
of semiconductor supply constraints. “In
FY2021/22, we continued to see strong customer demand for our
products with a record order bank.” Of those retail sales,
66 per cent were electrified, compared to 51 per cent in
FY2020/21. Our order bank grew through the year to reach 168,471
units as at 31 March 2022 including 45,584 orders for the New
Range Rover and 40,618 for Defender. Revenues for the year were
Ł18.3 billion down 7 per cent year-on-
year, but average revenue per unit increased
compared to the prior million (GBP equivalent) of new bonds in the
second quarter and year reflecting the prioritisation of higher
margin products giving us a £625 million, five-year loan
backed by a £500 million UK Export a strong mix, particularly
in the Range Rover and Defender families. Finance guarantee in
December 2021. After repaying £556 million of existing debt,
we ended the year with total debt of £7.6 billion and a Our
loss before tax and exceptional items in FY2021/22 was £412 net
debt1 position of £3.2 billion. million. Adjusted EBITDA
margin1 was 10.3 per cent (2.5 percentage points lower
year-on-year) and adjusted EBIT
margin1 was (0.4) per Looking ahead, we expect the ongoing
challenges facing the cent (down 3 per cent year-on-year), driven by lower
wholesales, automotive industry to continue. However, with the
order book at offset by increased pricing opportunities, lower
incentive spending record levels and new products to come, expected
continuing gradual and a favourable mix. improvement in
semiconductor supply and the ongoing execution of the Reimagine
strategy and Refocus programme, we expect to build Refocus
delivered £1.5 billion of value, of which over
£300 million on the improvements in business performance we
have seen in the has been supported by our InDigital team,
demonstrating our mission second half of this year. to develop our
digital capability, to drive efficiency and ultimately underpin the
value creation of Refocus. We continued to invest in future
products with a total of £2 billion spent over the past year,
reinforcing our commitment to electrification as part of our
Reimagine strategy. Free cash flow1 after investment spending was
£(1.2) billion for the year as a whole of which £(1.3) ADRIAN
MARDELL billion was the result of working capital changes largely
driven by CHIEF FINANCIAL OFFICER lower production volumes
year-over-year. Jaguar Land Rover Automotive plc 13 June 2022
We continue to maintain strong liquidity with total liquidity of
£6.4 billion at the end of the fiscal year comprising total
cash and cash equivalents, deposits and investments of £4.4
billion1 and £2.0 billion undrawn revolving credit facility
(£1.5 billion after July 2022). We 1Please see note 3 of the
financial statements on page 76 for alternative issued around
£1.4 billion of new debt in FY2021/22 including £800
performance measures. Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C 31
OUR FINANCIAL PERFORMANCE CONSOLIDATED INCOME
STATEMENT Our revenue and profitability were
lower in FY2021/22 compared to the prior year largely due to the
limitations on production volumes caused by the global supply chain
semiconductor shortages. Since the low point during Q2, quarterly
improvements could be seen in free cash flow1, revenue and
profitability, primarily as a result of a favourable mix and
further cost efficiencies delivered by the Refocus programme.
REVENUE FY 2021/22 / Ł18.3bn Ł18.3bn Revenue was Ł18.3 billion
in FY2021/22, down 7.2 per cent from FY 2020/21 / Ł19.7bn
Ł19.7 billion in the prior year. Wholesales3, excluding the
China joint venture, declined across all key regions, down
15.4 per cent FY 2019/20 / Ł23.0bn year-on-year to 294,182 units,
except in the overseas region where wholesales grew 5 per cent
year-on-year. The reduction in
revenue was much lower than the decline in wholesales, reflecting
the strong favourable sales mix and higher average revenue per
vehicle during the year. ADJUSTED EBITDA1 Ł1.9bn FY 2021/22 /
Ł1.9bn / (10.3% margin) (10.3% margin) FY 2020/21 / Ł2.5bn / (12.8%
margin) Adjusted EBITDA was Ł1.9 billion1 (10.3 per cent
margin) in FY2021/22, Ł635 million lower than the Adjusted
EBITDA of Ł2.5 FY 2019/20 / Ł2.1bn / (8.9% margin) billion
(12.8 per cent margin) in the previous fiscal year. Lower
wholesales, material cost pressures due to price inflation and
continued reduction in capitalisation rate (reflecting the maturity
of engineering) were offset by a more favourable sales mix and
lower incentive spending (driven by lower inventory levels and
optimisation activity). ADJUSTED EBIT1 FY 2021/22 / Ł(66)m / (0.4%
margin) Ł(66)m (0.4% margin) Adjusted EBIT was Ł(66) million1
with a margin of (0.4) per cent FY 2020/21 / Ł514m / (2.6% margin)
in FY2021/22, Ł580 million lower compared to the Adjusted EBIT
of Ł514 million1 (2.6 per cent margin) in the prior year. This
FY 2019/20 / Ł26m / (0.1% margin) reflects the lower Adjusted
EBITDA impacted by volumes, price inflation and capitalisation rate
offset by favourable mix and lower incentive spending. LOSS BEFORE
TAX AND EXCEPTIONAL ITEMS (PBT) FY 2021/22 / Ł(0.4)bn Ł(0.4)bn PBT
excluding exceptional items was Ł(412) million1 in FY 2020/21
/ Ł0.6bn FY2021/22, Ł1,074 million than the prior year (profit
before tax and exceptional items of Ł662 million1). This reflects
the lower FY 2019/20 / Ł(0.4)bn EBIT, adverse exchange and
commodities valuations and higher net finance expense as a result
of the increase in indebtedness. LOSS AFTER TAX (PAT) FY 2021/22 /
Ł(0.8)bn Ł(0.8)bn FY 2020/21 / Ł(1.1)bn The loss after tax was
Ł822 million in FY2021/22, compared to the loss of
Ł1.1 billion in the prior year. A tax charge of Ł367 FY
2019/20 / Ł(0.5)bn million was recorded in FY2021/22, compared to a
Ł239 million tax charge in FY2020/21. The prior year profit
before tax includes non-recurring exceptional items of
Ł(1.5) billion compared to an exceptional item relating to our
business in Russia of Ł(43) million in FY2021/22. 1Please see
note 3 of the financial statements on page 76 for alternative
performance measures.
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
33
OUR FINANCIAL PERFORMANCE (CONTINUED) CAPITAL
STRUCTURE At 31 March 2022, we had Ł6.4 billion1 of total
liquidity, including cash and cash equivalents, financial deposits
of Ł4.4 billion1 and an undrawn committed revolving credit facility
(RCF) of Ł2.0 billion, which will reduce to Ł1.5 billion
in July 2022. Our total debt outstanding at 31 March 2022 was
Ł(7.6) billion2, giving a net debt1 position of Ł3.2 billion.
(Ł million) Debt maturity profile Gross Debt Ł7,597 Total liquidity
Ł6,413 502 2,015 undrawn committed credit 2,275 1,500 4,398 515
undrawn RCF Total cash undrawn RCF 849 229 125 4,820 732 781 977
849 919 339 533 381 381 Total CY22 CY23 CY24 CY25 CY26 CY27 CY28
CY29 Total Liquidity Debt Cash and financial deposits Bonds Banks
loans Leases (IFRS16) and other Note: CY refers to calendar year in
the debt maturity profile
above. LIQUIDITY
AND NET DEBT BORROWINGS AND INDEBTEDNESS Our total cash and cash
equivalents, deposits and At 31 March 2022, we had
Ł7.6 billion of debt outstanding, investments at 31 March
2022 were Ł4.4 billion1 (24.0 per comprising: cent of revenue),
compared to Ł4.8 billion1 at 31 March 2021 (24.2 per cent
of revenue). The balance at 31 March • Ł4.7 billion of
unsecured bonds (including Ł(66.6) 2022 comprised cash and cash
equivalents of Ł4.2 billion, million fair value adjustments
and Ł(21.3) million of net of which Ł445 million was held in
overseas subsidiaries, and capitalised fees) deposits and other
investments of Ł0.2 billion. Including the • Ł2.3 billion
of unsecured loans (including Ł(14.7) million undrawn revolving
credit facility of Ł2 billion through July of capitalised
fees) 2022 (Ł1.5 billion through March 2024), total liquidity
was • Ł570 million of leases accounted as debt Ł6.4 billion1
at 31 March 2022 versus Ł6.7 billion1 at the • under IFRS 16
end of the prior year. As a result of total indebtedness of •
Ł35 million of other debt. Ł6.4 billion and total cash
and cash equivalents, deposits and investments of Ł4.4 billion1,
net debt was Ł3.2 billion at Of the Ł7.6 billion of debt,
Ł1.6 billion is denominated 31 March 2022,
Ł1 billion greater than the net debt position in Pounds
Sterling, Ł2.3 billion in Euros, Ł2.9 billion in US of
Ł1.9 billion at the end of the prior year. Dollars and
Ł0.7 billion in Chinese Renminbi. The remaining
Ł0.1 billion of debt in other currencies relates to leases.
Net cash/(debt) at 31 March 2022 We have a well-balanced
profile of maturing debt, with 35 per cent maturing after five
years, 59 per cent in one to five years and the remaining
16 per cent maturing within 4,782 one year. We issued
Ł1.4 billion of new debt in FY2021/22, 4,398 including
$0.5 billion of new eight-year bond, €0.5 billion of new
seven-year bond, in July 2021 and a new Ł625 million five-year
amortising loan (backed by a UKEF guarantee) in December 2021.
During FY2021/22, we repaid a Ł400 FY21 FY22 million bond in
February 2022 and Ł156 million of the loans guaranteed by UKEF
which amortise throughout the year. (1,915) (3,199) (6,697) 1Please
see note 3 of the financial statements on page 76 for (7,597)
alternative performance measures. 2 Please see note 25 on page 104
for further disclosure on our Total cash Total debt Net cash/(debt)
loans and borrowings.
CONSOLIDATED CASH FLOW Free cash flow1 was
negative Ł1.2 billion in FY2021/22, after total investment
spending of Ł2.0 billion1 (compared to total investment spending of
Ł2.3 billion in the prior year). This is lower than the
Ł185 million positive free cash flow1 in the prior year. (Ł
million) 2,766 (1,336) (138) (2,036) (412) (1,156) (384) 772 PBT
EXCL. DEPRECIATION, WORKING TAX TOTAL FREE CHANGES CHANGE IN
EXCEPTIONAL AMORTISATION AND CAPITAL AND PAID INVESTMENT1 CASH
FLOW1 IN DEBT AND CASH AND ITEMS FY221 OTHER ACCRUALS OTHER
FINANCIAL DEPOSITS FREE CASH FLOW1 FY 2021/22 / Ł(1.2)bn Ł(1.2)bn
Free cash flow1 was negative Ł1.2 billion in FY2021/22 after
the Ł2.0 billion FY 2020/21 / Ł185m of total investment
spending, Ł1.3 billion of working capital outflows, Ł138 FY
2019/20 / Ł(759)m million paid in taxes and Ł402 million of
finance expenses and fees net of finance income. TOTAL PRODUCT AND
OTHER INVESTMENT1 Ł2.0bn FY 2021/22 / Ł2.0bn Investment spending in
FY2021/22 was Ł2.0 billion (11.1 per cent of FY 2020/21 /
Ł2.3bn revenue), compared with the Ł2.3 billion (11.9 per
cent of revenue) in the prior FY 2019/20 / Ł3.3bn fiscal year,
supported by our Refocus activity. Of the Ł2.0 billion
investment spending, Ł839 million was expensed through the
income statement and the remaining Ł1,197 million was
capitalised. Total engineering and product spending accounted for
Ł1.3 billion (63.6 per cent) of investment spending, while
tangible and other intangible assets accounted for the remaining
Ł0.7 billion (36.4 per cent). WORKING CAPITAL FY 2021/22 /
Ł1.3bn Ł1.3bn Working capital outflows (including non-cash accruals) were
Ł1.3 billion FY 2020/21 / Ł(24)m during the year, primarily
reflecting a Ł1.2 billion reduction in accounts FY 2019/20 /
Ł244m payable liabilities driven by lower volumes. CHANGE IN TOTAL
CASH AND CASH EQUIVALENTS, DEPOSITS FY 2021/22 / Ł4.4bn Ł4.4bn AND
INVESTMENTS FY 2020/21 / Ł4.8bn Cash and
cash equivalents, deposits and investments totalled Ł4.4 billion1
FY 2019/20 / Ł3.7bn at 31 March 2022, Ł384 million lower
than the Ł4.8 billion1 at the end of the previous year. The
decrease is explained by the Ł1.2 billion negative free cash
flow1 offset by Ł772 million primarily for net increase in
debt and other adjustments. Jaguar Land Rover issued around
Ł1.4 billion of new debt during the year including a
$500 million eight-year bond with a 5.50 per cent coupon
and €500 million seven-year bond with a 4.50 per cent
coupon in July 2021 followed by a new Ł625 million five-year
amortising loan (backed by a UKEF guarantee) in December 2021. In
addition, a Ł400 million bond was repaid in February 2022 and
Ł156 million of the UKEF backed loans amortised during the
year. Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M
O T I V E P L C 35
OUR APPROACH TO RISK OUR APPROACH TO RISK
RESPONSIBILITY FOR RISK We endeavour to manage and monitor risk
factors that could The Jaguar Land Rover Automotive plc Board is
ultimately impact our plan for long-term sustainable growth.
responsible for the management of risks facing our organisation.
However, the wider organisation is responsible for the proactive
DEFINING RISK day-to-day management and
control of those risks. The Jaguar Land Rover Limited Board of
Directors review key risks to monitor Risks are uncertain events
that could materially impact the progress of remediation actions,
whilst the Risk Management organisational objectives – both
adversely and favourably. We Committee provides oversight of
current and emerging risks at recognise that risk is inherent in
all business activities and must a detailed level that are reviewed
against acceptable levels of be balanced when assessing returns.
Successful management exposure. Principal risks and exceptions are
reported to the Audit of risk is therefore key to accomplishing our
strategic objectives. Committee regularly to assist in the decision
making process We utilise an Enterprise Risk Management (ERM)
framework to and ensure adequate controls are in place to provide
sufficient identify, assess, manage and continually monitor and
report on protection to the organisation. key risks that could
affect our business. OUR ENTERPRISE RISK MANAGEMENT RESPONSIBILITY
FRAMEWORK Jaguar Land Rover Automotive plc Board Audit Committee
Jaguar Land Rover Limited Board of Directors Risk Management
Committee FIRST LINE OF RISK DEFENCE SECOND LINE OF RISK DEFENCE
THIRD LINE OF RISK DEFENCE Business operations Control of risk
risks management Oversight ERM and and oversight confirmation
functions of controls Independent internal controls audit assurance
CHANGES TO OUR PRINCIPAL RISKS DURING FY2021/22 One risk has been
introduced into our principal risks: One risk has been removed from
our principal risks: • Electrification transformation • Rapid
technology change Mitigating actions are in place (as detailed on
pages 38 to 39) Plans and mitigating actions put in place have
proved effective in to address the formation, delivery and cohesion
of our product, reducing our overall exposure in these areas to
within acceptable business and service-related projects.
levels.
PRINCIPAL RISKS We identify, assess and rate
risks against a defined set of criteria, considering probability
and potential impact to the business. Our ten principal risks are
plotted and ranked in the heat map below: RANK Principal risk
Category 1 High 2 3 1 Supply chain disruptions Operational 4 Global
economic and geopolitical 5 2 Strategic environment 7 6 8 3 IT
systems and security Operational 9 10 PROBABILITY 4 Competitive
business efficiency Financial 5 Customer experience delivery
Operational 6 Manufacturing operations Operational Low IMPACT High
7 Brand positioning Strategic High exposure risks that are more
likely to materially impact our ability to achieve business
objectives 8 Electrification transformation Strategic Medium
exposure risks that could impact business objectives Environmental
regulations and unless monitored and managed 9 Legal and compliance
compliance Low exposure risks that are more unlikely to materialise
and impact our business objectives 10 Human capital Operational
MAJOR DEVELOPMENTS IMPACTING UPON OUR PRINCIPAL RISKS IN FY2021/22
Semiconductor shortage Economic and geopolitical factors Throughout
FY2021/22 the automotive industry has been Inflationary pressures
have been increasing with aluminium responding to the challenges of
the global shortage of prices rising 61 per cent during the
fiscal year, while we also saw semiconductors. This has been driven
by a combination of factors high volatility in gas prices across
Europe in the fourth quarter including supplier production
disruption, increased demand from linked to the conflict in
Ukraine. This will impact on our business, non-automotive sectors and the long
lead times required for as some prices we pay our suppliers are
directly indexed to suppliers to install additional production
capacity in response to market rates leading to increased material
costs which could demand. The impact of the shortages in the past
year has had reduce our profit margins. This increasing
inflationary pressure a significant impact our supply chain and our
ability to satisfy could also flow through to consumer inflation
expectations and customer demand leading to a reduction in our
retail volumes drive a response from central banks in the coming
year, which compared to FY2020/21. could impact upon the pace of
future economic growth. Looking ahead, we
expect gradual improvements in the In the near term, we have has a
level of protection from availability of semiconductors, driven by
increases in installed immediate commodity price increase through
our commodity production capacity at suppliers. Demand is expected
to remain hedging programme. We also monitor the impact of changes
in above supply for some time within automotive and other sectors,
material costs on our margins and may look to adjust sales prices
so the risk of supply chain disruption is expected to remain high.
if we cannot avoid passing cost increases to our consumers.
Covid-19 Reimagine The
impact of the Covid-19
pandemic on our business reduced Our new Reimagine strategy will
redefine our business and our in the past year as vaccines were
rolled out in many countries, vehicle portfolio, with a
value-led approach
delivering quality and while many businesses found ways to adapt to
the new ways of profit-over-volume. Whilst we are
confident that Reimagine will working that had been imposed upon
them. deliver a more profitable and
sustainable business, we remain aware of execution risks that such
a significant transformation The risk that we will see some level
of disruption on our business poses to our business. from
Covid-19 remains high as we
may continue to see localised lockdown actions imposed by
governments around the world, which could disrupt our global supply
chain or production facilities. Annual Report 2021/22 J A G U A R L
A N D R O V E R A U T O M O T I V E P L C 37
PRINCIPAL RISKS FINANCIAL CONSEQUENCES
MITIGATIONS/OPPORTUNITIES 4. Competitive business efficiency If our
business is unable to compete We have launched the Refocus
programme to Delivering on our business and strategic effectively
on cost we may experience support the delivery of our Reimagine
vision. This objectives is key to realising our planned lower than
expected returns on our operational transformation programme
includes a future profitability and cash generation future
investments, which may make focus on ensuring timely new product
delivery to through return on our investments. There us unable to
deliver on our financial market and management of the cost base of
the are risks inherent in the delivery of our objectives in the
future. This may also business, while also ensuring that we
maximise planned Reimagine strategy as we make limit our ability to
reduce net debt as profitability on our sales. We maintain strong
liquidity the investments to transition our product planned,
reducing our ability to raise in the business to ensure that we can
navigate any portfolio and increase the proportion of new debt and
invest further in new funding challenges that may arise in the
future. electric vehicles in the future. This includes products.
our assumptions around the level of customer demand for our
products and delivery of our products at a competitive
cost. STRATEGIC CONSEQUENCES
MITIGATIONS/OPPORTUNITIES 2. Global economic and geopolitical Our
international presence and global We continue to closely monitor
and risk assess environment sales profile means that our business
global developments, implementing mitigation plans We are exposed
to changes in the global could be significantly impacted by as
necessary and we continue to maintain a economic and geopolitical
environment, as the external environment, globally balanced sales
profile across our key sales regions. well as other external
factors including but or locally. Our global supply chain Our
diverse global customer base gives us the not limited to trade
tensions, protectionism, could also be negatively affected by
flexibility to react to regional changes in demand by wars,
terrorism, natural disasters, humani- disruption caused by external
factors adjusting our sales mix into other markets, while we tarian
challenges and pandemics that may in the future. As a result, our
business may adjust product features or content should we adversely
impact our business. could be adversely affected through face
supply challenges in the future. lower sales in each region. 7.
Brand positioning Our potential inability to successfully Under the
Reimagine strategy, both of our brands The automotive sector
remains competitive position, maintain and articulate the continue
our modern luxury vision to support with new entrants joining the
market, strength of our brands as well as our brand position in the
market, with Jaguar particularly the electric vehicle segment.
failing to develop new products and relaunching as an all-electric brand from 2025 Under the
Reimagine strategy, the business technologies that meet customer
targeting a more premium segment of the market. will target growth
in our most profitable preferences, or not being able to As part of
the Reimagine strategy we are increasing segments and continue to
drive our modern sufficiently invest in brand building, our
collaboration and partnerships both within luxury vision for both
the Jaguar and Land could impact demand for our products. the Tata
Group and with external organisations Rover brands. in a number of
areas to ensure we can meet our customer expectations. 8.
Electrification transformation Our potential inability to ensure
Our Reimagine strategy will deliver three platforms, Our
electrification transformation is a robust and effective transition
including a pure BEV for the Jaguar brand, a native fundamental to
our Reimagine strategy and towards electrification, could result in
BEV for EMA and a flex platform for MLA, enabling sustainable
future. It is vitally important non-compliance with environmental an
acceleration of our electrification transformation to ensure that
the product, business and regulations, an uncompetitive product and
our journey towards net zero carbon emissions service related
aspects of our business are portfolio and a deterioration in target
in 2039. Strategic options for our battery cohesive, timely and
relevant in the dynamic financial performance. requirements,
services and software have been external environment. evaluated and
are in the process of being integrated into delivery plans. We will
work with governments, service providers and infrastructure
operators to ensure our customers have seamless access to
world-class charging solutions. LEGAL & COMPLIANCE
CONSEQUENCES MITIGATIONS 9. Environmental regulations and
compliance We incur additional compliance We have committed to
approved science-based We are subject to a rapidly evolving costs
to avoid facing significant civil targets as part of our carbon
reduction strategy. This regulatory landscape with associated laws,
and regulatory penalties, and our will see us reduce absolute Scope
1 & 2 greenhouse regulations and policies that all impact our
competitors may gain an advantage gas (GHG) emissions by
46 per cent by FY30 from a facilities and vehicles. The
transition away by adopting new emissions-reducing FY20 base year.
We also commit to reduce Scope 3 from traditional fossil fuels to
renewable and fuel-efficient technologies before GHG emissions from
purchased goods and services energy sources—and the increasing pace
we do. Furthermore, we may incur and use of sold products by
54 per cent per car of that transition—creates particular
significant reputational damage, by FY30 from a FY20 base year.
These targets are compliance challenges, in particular tailpipe
which could materially impact our consistent with reductions
required to keep warming emissions for automotive companies and
brands and sales, if we fail to maintain to 1.5°C above
preindustrial levels. wider compliance requirements for carbon
environmental compliance. emissions produced during manufacturing
and other operations.
OPERATIONAL CONSEQUENCES
MITIGATIONS/OPPORTUNITIES 1. Supply chain disruptions Supply chain
disruptions, if not managed, An effective supply chain risk
management Our ability to supply components could have an adverse
effect on our pro-
framework enables early, proactive, engagement to our manufacturing
operations at duction volume, revenue and profitability, with our
suppliers to identify and mitigate potential the required time is
of paramount customer satisfaction and reputation. In disruptions.
A key component of our Refocus importance in achieving production
addition to the disruption caused by the transformation programme
focuses specifically on schedules and meeting consumer pandemic,
the associated supply con-
the resilience of our supply chain and the efficiency demand. The
Covid-19 pandemic straints
of semiconductors has impacted of launching our models to market.
We continue to continues to have an impact on our many industries
including automotive. maintain and develop strong partnerships with
key global supply base and our supply chain As the transition to
electrified vehicles strategic suppliers, including for
electrification to could be severely disrupted as a result
continues, the skills, processes and tech- ensure a stable future
supply of components. of any subsequent external shocks, nologies
required to ensure continuity industry specific and company factors
in of supply will change, so securing these the future. supply
chains is business critical. 3. IT system and security Successful
cyber-attacks could cause sig- Information risk and cyber
security are managed As technology is increasingly central nificant
business disruption, affecting our strategically, through a
cohesive programme of to our business, safeguarding our ability to
deliver products and services initiatives, to improve risk and
maturity of cyber information assets, ensuring privacy and for our
customers. In extreme situations capabilities. Significant
investment is driving reducing human risk are paramount. Like this
could affect the personal safety of measurable improvements in
cyber defence and other organisations, we are operating our
customers and colleagues. Regulatory other core security
capabilities, such as security in a perilous cyber climate, making
it and statutory requirements are increas- ecosystem, supply chain
security, risk governance a constant target for cyber crime. We
ing, and failure to meet these obligations, and cultural change.
strive to reduce cyber security risks and such as privacy and data
protection law, continue to deliver great experiences could result
in enforcement action, fines, for our customers and value for our
reputational and financial damage. shareholders. 5. Customer
Service delivery Inconsistent customer experience Market demand is
monitored daily to optimise To deliver a modern luxury customer
impacts the satisfaction and retention vehicle and parts deliveries
for our retailers and experience and optimise our sales and of
existing customers, and the attraction customers. Online channels
have been simplified to service channels, every customer must of
new customers. Failure to deliver an enhance the customer
experience. Retailer systems receive a seamless and consistent
exceptional sales and service experience and tools have been
enhanced, supporting Retailer hassle-free experience provided on
through online and physical retailer Sales, Service and Technician
representatives to their terms. We must know who our channels will
lead to a weakening in deliver a seamless and consistent
hassle-free customers are, anticipate their needs our competitive
positioning, potentially customer experience, increasing our sales
and and respect their privacy on their terms. impacting our
business and financial service customer satisfaction. Furthermore,
other Customers must be delighted at every performance as a result.
digital solutions have continued to evolve, such as step. Our
retailer partners reflect our our Software Over the Air (SOTA) and
Features Over brand strategy and vision, and must ef- The Air (FOTA) services now in
development, to help fectively communicate our values, with
strengthen the relationship with our retailers and trained and
capable representatives, to customers. continue to successfully
appeal to new and existing customers and drive high customer
satisfaction and retention. 6. Manufacturing
operations Any disruptions to our manufacturing Manufacturing works
closely with the Purchasing Manufacturing operations are at the
operations and losses in vehicle and Supply Chain functions to
monitor and manage heart of our value chain, and any losses
production could results in delays to suppliers that pose part
supply risks to production. to scheduled production will have a
both retailer and customer deliver, and We have embedded new data
analytics tools and detrimental effect on both financial potential
delays or loss of revenue in key processes to identify and manage
suppliers in high performance and customer satisfaction. regions,
including China, through loss of risk regions and apply safety
stock where feasible. The Covid-19 pandemic and Brexit have
sales. Having implemented multiple response measures to increased
our production continuity risk ensure our sites are Covid-19 safe working environ-exposure
and we continue to closely ments – a phased de-escalation approach is now monitor
the supply base and supply being adopted across our sites. A joint
approach with chain efficacy and ensure the health and
Manufacturing Operations, Employee Relations and safety and
wellbeing of our people and Human Resources with our LLP provider
seeks to there are ongoing threats to our cyber improve our
supplier and Trade Union relationships to security. minimise risk
of industrial action. There is an ongoing programme of Server
Estates protection and proposals for the replacement of Legacy IT
Systems and Equipment to reduce threats to our Cyber Security. 10.
Human capital If we fail to attract, retain, engage and A key
aspect of the Refocus transformation pro-To be successful, our business
requires develop a diverse workforce with critical gramme is to
develop an agile, capable organisation an engaged workforce, with
core skills and capabilities, our ability to deliver and culture
through changes to ways of working capabilities in new and emerging
innovative products and services will be and the introduction of a
new business purpose skill areas. The safety, wellbeing and
constrained and we will be prevented and supporting behaviours.
Leveraging our digital engagement of our employees is from
deploying the agility and speed capability and solutions through
InDigital enables a paramount and needs to be maintained of
delivery that is essential within the more efficient, focused and
productive workforce. in the face of a challenging external dynamic
automotive industry. Our Diversity and Inclusion strategy will make
the environment and through the most of the uniting power of our
differences and the transformation of our organisation. unique
qualities that each of our workforce brings. Annual Report 2021/22
J A G U A R L A N D R O V E R A U T O M O T I V E P L C
39
INTRODUCTION TO The Group remains committed
to ensuring effective governance is in place to deliver its core
values, as this is the foundation on GOVERNANCE which it manages
and controls its business and provides the platform for sustainable
profitability. STATEMENT OF CORPORATE GOVERNANCE SECTION 172
COMPANIES ACT 2006 ARRANGEMENT Wates Principles provides a
framework for the Group to not only For the year ended
31 March 2022, under the Companies demonstrate how the board
of Directors of Jaguar Land Rover (Miscellaneous Reporting)
Regulations 2018, Jaguar Land Rover Automotive plc (the ‘Board’ /
‘JLR plc Board’) makes decisions Automotive plc (the “Company”) and
its subsidiaries (collectively for the long term success of the
company and its stakeholders referred to as the “Group”) has
continued to apply the Wates (see Principle 6—Stakeholders, on page
51), but also having Corporate Governance Principles for Large
Private Companies regard to how the Board ensures the Group
complies with the (‘Wates Principles’) (published by the Financial
Reporting Council requirements of Section 172 (1)(a) to
(f) of the Companies Act (‘FRC’) in December 2019 and are
available on the FRC website). 2006. Our reporting against the
Wates Principles has been The following section summarises how the
Group has applied included below. the principles over the past
year. During 2022, the Board Members have welcomed new Directors
The Group’s website contains further supporting information on who
collectively are continuing to review, challenge and strive the
Wates Principles. towards changes to implement and demonstrate the
Group’s improving engagement with its employees and stakeholders.
SECTION 172 DECISIONS a) the likely consequences of The Board
annually approves the five-year plan and monitors its
implementation throughout the any decision in the long term year.
External factors are also considered such as economic, political
and ongoing challenges within the market as a part of the
five-year plan to ensure
both financial and operating strategy is set at sustaining and
achieving the long term success of the Group. To further enhance
and support the long term strategy, the Group entered into a number
of debt funding arrangements during the financial year. See page 35
b) the interests of the At Jaguar Land Rover, we are passionate
about our people. They are at the heart of our business. company’s
employees We are committed to fostering a diverse, inclusive
culture that is representative of the society in which we live; a
culture in which every one of our employees can bring their
authentic self to work and reach their full potential. We aim to as
part of a five-year plan:
•shape a culture of unity, belonging, inclusion and respect;
•implement progressive policies, benefits and support; and •engage
our employees to accelerate our progress. The Directors understand
the importance of the Group’s employees to the long-term success of
the business. The Group regularly communicates to its employees
through presentations, internal group-wide emails and newsletters.
A pulse survey undertaken annually allows employees to formally
provide feedback to further support the long term plans of the
Group in addition to informal feedback sessions held during the
year with various Executive Directors. Learning and development
continues to be an important area of support to employees through
both training days and e-learning modules. Internal networks
to support wellbeing have been created to provide and create
communities to discuss and share support on mental health, general
wellbeing and advice on the coronavirus outbreak. We proudly
support the growing number of active diversity and inclusion
employee-led networks both
in the UK and Overseas. These include Pride, REACH, Armed Forces,
Gender Equality, Shine, Disability and a number of religious
groups. See page 25
SECTION 172 DECISIONS c) the need to foster
the The Directors understand the importance of the Group’s supply
chain in delivering the long-term company’s business plans of the
Group. The Group’s principal risks and uncertainties set out risks
that can impact the relationships with suppliers, long-term success
of the Group and how these risks interact with our stakeholders.
Our suppliers customers and others of production and non-production goods and services play
an integral role in our business and help us to operate globally.
For example, we have engaged in strategic discussions with key
component suppliers and chip producers to secure long-term supply
agreements for future product programmes, to increase our
resilience. The Group has key objectives and principles which are
set out clearly in the Global Supplier Management policy. Ensuring
this policy is followed to achieve consistent and best practice in
our relationships with our suppliers, in addition to ensuring
ethical behaviour, sustainability and health and safety is
considered critical to the success of our business relationships.
The Directors monitor the Group’s engagement with their customers
through the use of various Customer Experience Insight tools which
helps collate feedback from time of vehicle purchase onwards. This
process is run internally and enables both the Group and Retailers
globally to help improve customer engagement. Other regular
customer feedback mechanisms exists through a variety of syndicated
surveys to provide and offer external and independent feedback. The
Directors actively seek information on the interaction with
stakeholders and employees to ensure that they have sufficient
information to reach appropriate conclusions about the risks faced
by the Group. d) the impact of the Further information on the
Group’s initiatives and commitment to the environment and society
can company’s operations on the be found from page 20. community
and environment See page 20 e) The desirability of the At Jaguar
Land Rover we are passionate about our people. We are committed to
fostering a more company maintaining a diverse, inclusive and
unified culture that is representative of our customers and the
society in reputation for high standards which we live; a culture
where every one of our employees can bring their authentic self to
work of business conduct and feel empowered to reach their full
potential. We have identified three strategic pillars to achieve
our goal, which will shape our global D+I activity over the next
five years:—Shape a culture of unity, belonging, inclusion and
respect—Implement progressive policies, practices, benefits and
support—Engage our employees and experts to accelerate progress
Collaborate with our networks, The Board has also approved the
Group’s policies on anti-slavery and human trafficking and
anti-bribery and corruption in addition to the gender pay gap
report which is issued annually. All can be found on the Group’s
website. f) The need to act fairly as The Group is owned by Tata
Motors Limited (“TML”) and collectively are committed to continuing
to between members of build future growth through new models
through a roadmap that provides a clear direction for the the
company business and our two brands. There is close collaboration
and knowledge-sharing with Tata Group companies to enhance
sustainability and reduce emissions as well as sharing best
practice in next-generation technology, data and software
development leadership. Annual Report 2021/22 J A G U A R L A N D R
O V E R A U T O M O T I V E P L C 41
WATES PRINCIPLE 1 – PURPOSE AND LEADERSHIP
The Board continues to proactively consider the impact to the
Business as a response to a variety of factors such as the Covid
The board of Directors of Jaguar Land Rover Automotive pandemic,
and global shortage of semiconductor computer plc the ‘Board’
rigorously challenges strategy, performance, chips. All factors are
considered and discussed carefully whilst responsibility and
accountability so that every decision made is considering demand
and impact on business plan. of the highest quality. This Corporate
Governance Report includes further information The Board actively
ensures through committee meetings about the Board, areas of focus
for the Board, and the structure and careful consideration of all
economic, geopolitical and and role of its committees.
environmental factors that the appropriate strategy and decisions
are made. Details of individual directors’ attendance of Board
meetings in 2022 are shown in the following table: The Board has
built and strengthened the Group’s strategic vision through the
Reimagine strategy and Refocus programme discussed from page 10.
Maximum no. of Principal Board No. of Principal Board Percentage of
Principal Board NAME OF DIRECTOR Meetings director could attend
Meetings director attended Meetings attended Chief Executive
Officer and Executive Director Thierry Bolloré 7 7 100%
Non-Executive Director
Natarajan Chandrasekaran 7 7 100% (Chairman) Pathamadai Balaji 7 7
100% Nasser Mukhtar Munjee 7 7 100% Charles Nichols* 1 1 100%
Al-Noor Ramji* 1 1 100%
Andrew Robb 7 7 100% Hanne Sorensen 7 7 100% Prof. Sir Ralf Speth 7
7 100% (Vice Chairman) * Appointed 24 January 2022 WATES
PRINCIPLE 2—BOARD COMPOSITION The Board continues to work on
creating a more diverse board of directors and recognises this as a
challenge in the automotive We continuously evaluate the balance of
skills, experience, sector. There are strategies in place which
encourage diversity knowledge and independence of the Group’s
directors. The Board throughout the workplace with opportunities
for employees comprises a separate Chairman and Chief Executive
Officer to to progress to senior levels. Further there have been
two new ensure that the balance of responsibilities,
accountabilities and additions to the board during FY22. decision
making across the Group are effectively maintained. The size and
composition of the Board is considered to be appropriate with all
members contributing to a wide variety of experience.
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
43
LEADERSHIP JAGUAR LAND ROVER AUTOMOTIVE PLC
BOARD NATARA J AN THIERRY PAT H A M A D A I CHANDRA SEKARAN B O L
LO R É B A L AC H A N D R A N B A L A J I N O N—E X E C U T I V E D
I R E C T O R C H I E F E X E C U T I V E N O N—E X E C U T I V E D
I R E C T O R A N D C H A I R M A N O F F I C E R Appointed
February 2017 Appointed September 2020 Appointed December 2017 C H
A R L E S N I C H O L S A L- N O O R R A M J I N A S S E R M U K
H TA R M U N J E E N O N—E X E C U T I V E N O N—E X E C U T I V E
D I R E C T O R D I R E C T O R N O N—E X E C U T I V E I N D E P E
N D E N T D I R E C T O R Appointed February 2012 Appointed January
2022 Appointed January 2022 A N D R E W M . R O B B H A N N E S O R
E N S E N P R O F S I R R A L F D S P E T H N O N—E X E C U T I V E
I N D E P E N D E N T N O N—E X E C U T I V E K B E F R E n g F R S
D I R E C T O R D I R E C T O R N O N—E X E C U T I V E V I C E C H
A I R M A N Appointed April 2009 Appointed August 2018 Appointed
September 2020
JAGUAR LAND ROVER LIMITED BOARD OF DIRECTORS
THIERRY B O L LO R É N I G E L B L E N K I N S O P N I C K C O L L
I N S C H I E F E X E C U T I V E E X E C U T I V E D I R E C T O R
, E X E C U T I V E D I R E C T O R , O F F I C E R C O M PA N Y Q
U A L I T Y A N D V E H I C L E P R O G R A M M E S C U ST O M E R
S AT I S FA C T I O N F R A N Ç O I S D O S S A L E N N A R D H O O
R N I K H A N N O K I R N E R E X E C U T I V E D I R E C T O R , C
H I E F C O M M E R C I A L E X E C U T I V E D I R E C T O R , ST
R AT E GY O F F I C E R TATA G R O U P S Y N E R GY & S U
STA I N A B I L I T Y P R O G R A M M E S A D R I A N M A R D E L L
P R O F E S S O R T H O M A S M Ü L L E R C H I E F F I N A N C I A
L G E R RY M c G OV E R N O B E E X E C U T I V E D I R E C T O R O
F F I C E R C H I E F C R E AT I V E O F P R O D U C T O F F I C E
R E N G I N E E R I N G 1 Q I N G PA N H A N N E S O R E N S E N D
AV E W I L L I A M S P R E S I D E N T, N O N—E X E C U T I V E E X
E C U T I V E D I R E C T O R , J A G U A R L A N D R O V E R D I R
E C T O R H U M A N R E S O U R C E S C H I N A 1 Appointed April
2022 S t a r t i n g J u l y 2 0 2 2 A biography for each Executive
Director can be found by clicking the E X E C U T I V E D I R E C T
O R , pictures above, or by visiting our Group’s website. I N D U
ST R I A L O P E R AT I O N S Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C
45
WATES PRINCIPLE 3 – DIRECTOR RESPONSIBILITIES
core areas of focus on a regular basis. See page 48 for further
information. Effective risk management is central to achieving the
Group’s strategic objectives and is a core responsibility of the
JLR plc In this section, you will find information about the
induction and Board and its committees. In this section, you will
find information development of directors across the Group, as well
as the key about the responsibilities and focus of the JLR plc
Board and considerations when measuring the effectiveness of the
JLR plc the Audit, Remuneration and Disclosure Committees. Good
Board and its committees. governance is achieved through effective
committees tackling AUDIT COMMITTEE JLR PLC BOARD
NOMINATIONS & REMUNERATION COMMITTEE Reviews the integrity
of the The JLR plc Board provides supervision and guidance to the
financial statements, relationship Group’s management, particularly
with respect to corporate Determines the overall with the external
auditors and governance, business strategies and growth plans. It
also remuneration policy and strategy effectiveness of internal
considers the identification of risks and their mitigation to
ensure transparency and financial controls. strategies, entry into
new businesses, product launches, alignment with the Group’s short
demand fulfilment and capital expenditure requirements, as and
long-term strategic goals. For more information see page 48 well as
the review of business plans and targets. For more information see
page 50 For more information see page 48 JAGUAR LAND ROVER LIMITED
BOARD OF DIRECTORS The work of the Board of Directors complements,
enhances and supports the work of the JLR plc Board, with the Board
of Directors operating under the direction and authority of the
Chief Executive Officer to support in the execution of the Group’s
strategy, including evaluating the Group’s performance against
budget and forecast. The Board of Directors is also responsible for
overseeing the implementation of appropriate risk assessment
processes and controls to identify, manage and mitigate the
principal risks to the Group, and in doing so, provide support to
the boards of directors of other Group
companies. COMPLIANCE COMMITTEE DISCLOSURE
COMMITTEE OTHER EXAMPLES OF MANAGEMENT COMMITTEES: Provides
oversight of Jaguar Land Supports the Jaguar Land Rover plc Rover’s
management to review and Board and Audit Committee in review- •
Risk Management Committee assess its various compliance risks. ing
and approving the final form of • Product Committee Oversees and
assesses appropriate- quarterly and annual statements relat- •
Health and Safety Committee ness of the adequacy, effectiveness ing
to the performance of the Group. • Security Committee and maturity
of the many compli- • Unusual Events Committee ance programmes. For
more information • Financial Risk and Assurance Committee see page
49 • Financial Risk Committee THE KEY MATTERS CONSIDERED BY THE JLR
PLC BOARD DURING FY2021/22 INCLUDED: TOPIC /
ACTIVITY ACTIONS PROGRESS STRATEGY Review of the business and
Analysed the automotive industry trends There has been a focus by
the Board to transition through Reimagine to focus on operating
model and retail outlook and assessed the critical areas of the
Group’s operational strategy and wider environmental impact.
potential impact on the Group Decarbonising the supply chain
function to ensure a new working approach has led Reviewed the
Group’s performance to greater focus on digitisation as well as
building resilience and sustainability within against its
competitors the Group’s operations. This work has included our
response to the semiconductor crisis. We continue to launch new and
refreshed products, including the launch of the long wheel-base
Range Rover Evoque and refreshed long-wheel base Jaguar XFL from
the China joint venture, Chery Jaguar Land Rover. The company
continues to increase the electrification of its models with 12 of
13 nameplates having an electrified option. Economic and
geopolitical factors have been assessed in detail including the
impact of the Ukraine conflict. Inflationary pressures have
increased during the financial year through increasing prices of
commodities and high volatility in gas prices. The Board recognises
the complex inter-relationship of these factors and continues to
review and assess them closely.
TOPIC / ACTIVITY ACTIONS PROGRESS STRATEGY
Monitoring opportunities for Supported continued investment to
Reimagine strategy which was introduced during FY2021/22 to achieve
net zero acquisitions and new revenue promote sustainable business
growth over carbon emissions by 2039 through electrification of
both the Land Rover and streams the long term Jaguar brands,
continues to make progress and has strengthened its structure and
capability with a number of new executive appointments on the Board
as well as Used cash to implement ongoing new partnerships such as
with NVIDIA to jointly develop and deliver next-generation
programmes to support business growth automated driving systems.
Reviewed and approved, where This has further been bolstered by
Refocus which further drives quality, financial appropriate, the
business cases for growth, sustainability and digitalisation.
internally developed future business Discussion of the Group’s
Considered and approved the Group’s debt The Refocus transformation
programme aimed to achieve Ł1 billion of value in capital
structure and financial funding arrangements FY2021/22. YTD the
Group has achieved Ł1.5 billion. strategy Reviewed a number of
opportunities in the Issuance of $500m Senior Notes due July 2029
at a coupon of 5.5 per cent per fiscal year annum Issuance of
€500m Senior Notes due July 2028 at a coupon of 4.5 per cent
per annum Addition of Ł80m to existing RCF facility increasing to
Ł2.015bn Addition of Ł190m to RCF extension (now Ł1.5bn) Addition
of new Ł625m amortising 5-year loan 80 per cent guaranteed
by UK Export Finance and syndicated to 12 banks. RISK MANAGEMENT
AND INTERNAL CONTROL Review the Group’s principal Clearly
articulated the Group’s approach Agreed Group-level risks and a
robust set of mitigating activities, which are regularly risks and
the effectiveness of to risk monitored internal control systems and
risk management Reviewed and updated approach to Further developed
the Group’s approach to risk identify and manage principal risks
Considered movements in key risks resulting from changes to
likelihood or business Continuing assessment of significant impact
and emerging risks, including geopolitical uncertainty and the
impact of Brexit LEADERSHIP AND PEOPLE Review composition of
Discussed the composition of the JLR The Board of Management and
Senior Director’s Forum is in place and continually the JLR plc
Board and its plc Board and its committees, including monitored
committees succession planning Review the development Ongoing
commitment to maintaining a Due to the strength of succession
planning built into the business, recent changes of people and
talent in the balance of appropriate skills and experi- surrounding
Board positions has been appropriately addressed Group, including
succession ence among the Board of Management planning for senior
roles and associated committees Discuss the results of the
Conducted a thorough review of Pulse Continued focus on engagement
and development of employees through offering a employee engagement
survey surveys to identify areas for improvement wide range of
training courses and devise strategic actions arising from it
Encouraged interaction between The Group has recently introduced
gender targets to focus attention on increasing employees across
the Group representation of females in the business. By 2026, the
aim is globally to achieve at least 30 per cent of all senior
leadership positions held by females. GOVERNANCE, STAKEHOLDERS AND
SHAREHOLDERS Review the Group’s purpose, Considered sustainability,
including the Reviewed developments in corporate governance and
considered key legal and goal, vision and values Group’s impact on
the community and the regulatory updates environment Monitored and
addressed regular Health and Safety updates Encourage strong
Actively supported engagement Ongoing discussions at all levels of
the business with shareholders engagement with investors
opportunities and stakeholders Engagement with other stakeholders
based on feedback Regularly reviewed and acted upon feedback from
key stakeholders FINANCIAL PERFORMANCE Assessment of the Group’s
Evaluated the Group’s performance Reviewed and approved the latest
five-year business plan for the Group financial performance against
budget and forecast Approved the Annual Report Reviewed the
quarterly and annual results and associated presentations to
investors Annual Report 2021/22 J A G U A R L A N D R O V E R A U T
O M O T I V E P L C 47
EFFECTIVENESS INDUCTION, DEVELOPMENT AND
SUPPORT THE JAGUAR LAND ROVER AUTOMOTIVE PLC BOARD All new
directors receive a full, formal and tailored induction upon
joining the JLR plc Board. The JLR plc Board calendar is also
planned to enable directors to visit the increasing number of The
Jaguar Land Rover Automotive PLC Board will continue to Jaguar Land
Rover geographic locations. Directors are briefed on consider the
core areas described previously, but in particular a wide range of
topics throughout the year. will focus on: These topics range from
those with particular relevance to • Continued development of the
Group’s product pipeline through the business of the Group, such as
global automotive demand, Reimagine and Refocus to provide all
nameplates in electric form to more general matters such as
developments in corporate by end of the decade, thereby seeking to
capitalise on segment governance. We recognise that our directors
have a range of growth; experience, and so we encourage them to
attend external seminars and briefings that will assist them
individually. •Shortage of semiconductor chips which have during
the year constrained sales though strong demand remains for
vehicles; EVALUATION • Ongoing aim to achieve zero carbon emissions
across supply The JLR plc Board continuously assesses its
effectiveness in the chains, products and operations; following
areas: —Closer collaboration with the Tata Group to share • The
flow and quality of information to and from the JLR plc best
practice in next-generation technology, data and Board to ensure
effective communication; software development; and •
Decision-making process and culture; and —To become a more agile
business with a simplified manufacturing operation • The outcome
and impact of decisions made by the JLR plc Board. • Consideration
of the evolving economic, political and market conditions; The JLR
plc Board and Audit Committee also provide direct feedback to
management committees during the year. • Developing people and the
workforce of tomorrow; and COMMITTEES SUPPORTING ACCOUNTABILITY •
Ongoing review and monitoring of external risk factors, considering
their impact on the future of the Group in light AUDIT COMMITTEE of
upcoming changes in both the political and economic Composition of
the Audit Committee environment. HOW WE DIVIDE UP OUR
RESPONSBIILITIES Andrew Robb, Chairman Nasser Munjee P. B. Balaji
Chairman of the JLR plc Board Hanne Sorensen Charles Nichols (from
18 March 2022) Responsible for leading the JLR plc Board, its
effectiveness and governance. Also sets the agenda to take full
account of Role of the Audit Committee the issues and concerns of
the directors and ensures effective links between external
stakeholders, the JLR plc Board and • Monitors the integrity of the
financial statements, including the management. review of
significant financial reporting issues and judgements alongside the
findings of the external auditor. Non-executive directors • Oversees the
relationship with the external auditor, external Constructively
challenge the Chief Executive Officer and monitor audit process,
nature and scope of the external audit and the the delivery of the
Group’s strategy within the risk and controls appointment,
effectiveness, independence and fees of the environment set by the
JLR plc Board. external auditor. Chief Executive Officer • Monitors
and reviews the effectiveness of Corporate Audit, ensuring
coordination with the activities of the external auditor.
Responsible for the day-to-day leadership,
management and control of the Group, recommending the Group
strategy to • Reviews the effectiveness of the Group’s systems for
internal the JLR plc Board, and implementing the Group’s strategy
and financial control, financial reporting and risk management.
decisions of the JLR plc Board.
MAIN ACTIVITIES OF THE AUDIT COMMITTEE DURING
THE and act in accordance with any changes in regulations and best
YEAR practice relating to the tenure of the external auditor.
Financial reporting To help safeguard KPMG’s objectivity,
independence and effectiveness, the Group has a non-audit services policy which During
the year, the Audit Committee met with the external sets out the
circumstances and financial limits within which the auditor and
management as part of the FY2021/22 annual external auditor may be
permitted to provide certain non-audit and quarterly reporting
approval process a total of five times. services. This policy sets
a presumption that KPMG should only The Audit Committee reviewed
the draft financial statements be engaged for non-audit services where there is an
obvious and considered a number of supporting papers. This included
and compelling reason to do so (for example, their skills and
reviewing information presented by management on significant
experience or ability to provide the services) and provided such
accounting judgements to ensure all issues raised were properly
work does not impair their independence or objectivity and dealt
with; reviewing presentation and disclosure of material has no
impact on the audited financial statements. It prohibits to ensure
adequacy, clarity and completeness; reviewing the KPMG from
providing certain services, including legal, valuation,
documentation prepared to support the going concern statement
actuarial and internal audit. The Audit Committee approves all
given on page 54; and reviewing external audit reports. The key
non-audit services before
they are performed. matters considered in the year were: going
concern, impairment of long life assets, capitalisation of product
development assets, Non-audit fees paid to KPMG in the year
totalled Ł1.1 million valuation of defined benefit plan
obligations, cut off of new (2021: Ł1.2 million), representing
20 per cent of the fees paid for vehicle revenue recognition
for UK and US components and audit and audit-related assurance
services. management override of controls. Corporate Audit Internal
controls During the year, the Audit Committee reviewed the adequacy
The Audit Committee reviewed the effectiveness of financial of the
Corporate Audit function, the Corporate Audit charter, reporting,
internal control over financial reporting and risk staffing and
seniority of the official heading the function, management
procedures within the Group, with particular reporting structure,
budget, coverage and the frequency of regard given to compliance
with the provisions of section 404 corporate audits, the structure
of Corporate Audit and approval of the Sarbanes-Oxley Act and other
relevant regulations. The of the audit plan. reviews also
considered any potential material weaknesses or significant
deficiencies in the design or operation of the Group’s DISCLOSURE
COMMITTEE internal control over financial reporting, which are
reasonably Composition of the Disclosure Committee: likely to
adversely affect the Group’s ability to record, process and report
financial data, including that of systems controls. The Chief
Financial Officer and his direct reports Audit Committee received
reports from the external auditor, Business Assurance and Corporate
Audit with respect to these Matters considered during the year
matters. • Reviewed and updated the terms of reference of the
Disclosure External Audit Committee The Audit Committee reviewed
the significant audit issues • Reviewed the audit and control
findings from the external affecting the Group with the external
auditor and how they have auditor been addressed in the financial
statements. The Audit Committee also evaluated the external auditor
by reviewing the firm’s • Reviewed areas of key management
judgement and significant independence, its internal quality
control procedures and any transactions, including their
presentation and disclosure in both material issues raised by the
most recent quality control or peer the quarterly and annual
financial statements review of audit firms. This included the
findings of any enquiry or investigation carried out by government
or professional bodies • Reviewed new disclosures in both the
quarterly and annual with respect to one or more independent audits
performed by financial statements for appropriateness the external
auditor within the last five years. • Considered the impact of new
accounting standards on the KPMG, the external auditors, have
completed their fifth year Group in post. Section 139(2) of
the Indian Companies Act, 2013, mandates that all listed companies
rotate their auditors once the auditor has served as an auditor for
a period of 10 or more consecutive years. Under these regulations,
the Group will be required to retender the audit by no later than
2027 and the Committee will keep the external auditor tender under
review Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O
M O T I V E P L C 49
ACCOUNTABILITY elements align with the design
of the Company’s remuneration policy for the wider organisation.
Any decisions the Nominations and Remuneration Committee makes in
relation to executive WATES PRINCIPLE 4—OPPORTUNITY AND RISK
remuneration will be made with clear understanding of the
developments to pay and conditions for the wider workforce. In
addition to the matters referred to throughout this report on risk
management, please also refer to page 36 which includes Executive
remuneration consists of: a list of all emerging and principal
risks including mitigations relevant to the Group. Fixed elements:
See pages 37 for assessment and categorisation of principal •
Salary. Designed to recruit and retain individuals with the risks
and actions to mitigate. necessary knowledge, skills and experience
to deliver the Group’s strategic objectives. Salary is reviewed
annually WATES PRINCIPLE 5—REMUNERATION and benchmarked against
comparable roles in appropriate comparator groups. In accordance
with Wates Principle 5, the Nominations and Remuneration Committee
of Jaguar Land Rover Automotive plc • Retirement benefits. The
Group has a number of defined Board ensures that appropriate senior
management is recruited benefit pension schemes that are closed to
new employees. to deliver on the Group’s objectives. The
Nominations and Executives who are members of these schemes will
continue to Remuneration Committee has clearly defined Terms of
Reference accrue benefits, but most executives now elect to receive
a cash and is responsible for remuneration strategy, recruitment
and allowance in lieu of retirement benefits. long term incentive
plans for senior executives. • Other benefits. Executives are
eligible to participate in the NOMINATIONS AND REMUNERATION
COMMITTEE Group’s management car programme, medical arrangements,
and life insurance and disability plans. Composition of the
Nominations and Remuneration Committee: Performance-related
elements: Andrew Robb, Chairman • The Global Bonus Plan is an
annual bonus plan which focusses on Natarajan Chandrasekaran the
Company’s key operational priorities. It rewards achievement of
short-term financial and operational objectives. Hanne Sorensen The
challenging business environment and semiconductor In addition to
the Committee members, the Chief Executive shortages experienced
during the year meant that previously Officer is invited to attend
meetings, except where there is agreed metrics had become
irrelevant. In recognition of the shift a conflict of interest. The
Nominations and Remuneration in the operational context and
consequent business priorities Committee is supported by the
Executive Director, Human for the second half of the financial
year, the NRC took the Resources and the HR Director, Global
Reward & Mobility. unusual decision to amend some of the
bonus metrics for the second half of the year. The financial and
retail metrics were Role of the Nominations and Remuneration
Committee replaced by metrics aligned to the key priorities
supporting JLR in stabilising the business, setting the Company up
for a fast The Nominations and Remuneration Committee (NRC)
recovery and securing future profits. The customer satisfaction is
responsible for the structure, appointments, removals, metric
remained a bonus scheme metric for the entire financial succession,
performance and compensation of the Jaguar year. This change in
metrics has allowed JLR to keep employees Land Rover Automotive plc
Board and the Jaguar Land Rover motivated during the challenging
year, encouraging employee Management Board. retention and
rewarding employees for the actions delivered to strengthen the
Company’s future. The Committee’s
involvement in all aspects of nominations and remuneration ensures
that all decisions in terms of Board • The Strategic Bonus Plan
replaced the Company’s previous appointments are made in a fair,
equal and balanced way. long-term incentive scheme in the
FY2021/22. The previous plan design of setting metrics three years
in advance of During FY2021/22 the Committee has continued to
support vesting proved unrealistic and inflexible in the changing
market the reconfiguration of Jaguar Land Rover Limited’s Executive
conditions and was not effective in focusing senior leaders on
Board. This saw Jaguar Land Rover announce four departures the
strategic drivers for long term sustainability and success. The of
previous Board members and make two new appointments NRC approved
the introduction of this new bonus scheme last during the course of
the financial year with further new Board year, which rewards the
progress and transformation necessary Members to join during 2022.
to achieve the Company’s strategic targets. The metrics are set
annually against a longer-term glidepath which ensures that they
Remuneration policy can be adjusted to evolving priorities and
external conditions whilst also ensuring good governance and
accountability for The remuneration policy is designed to attract,
retain and long-term improvements. The plan metrics focus on
Financial motivate executives of the highest quality, encouraging
them Health, Brand Health, Digitalisation and Sustainability and to
deliver exceptional business performance aligned to Jaguar reward
the collaborative effort and steps senior leadership make Land
Rover’s strategy and the objective of delivering long-term towards
implementing the Reimagine strategy and delivering sustainable
growth. Its structure and individual remuneration
results.
EXECUTIVE REMUNERATION 2021/22 There is
linkage between Jaguar Land Rover business strategy and the
performance related elements of remuneration. The graphics show the
change in the Global Bonus metrics for the second half of the
financial year. 10% 20 % 25% 30% 10% 30% 30% BONUS BONUS
PERFORMANCE PERFORMANCE STRATEGIC BONUS MEASURES MEASURES
PERFORMANCE First Half of Second Half of MEASURES the Year the Year
25% 25 % 25 % 25% 20 % 25% Customer Satisfaction
Customer Satisfaction Financial Health (Net Debt) Production Volume
(Stabilise) EBIT Margin Variable Profit per Unit (Faster Recovery)
Brand Health (First Preference) Cash Flow Quality New Range Rover
(Future Profit) Digitalisation (Financial Contribution of Digital
Initiatives) Wholesale Volume New Range Rover Retail Volume (Future
Profit) Sustainability (Tailpipe Emissions) The overall objective
is to deliver executive pay in line with a market median range for
target performance, with enhanced reward opportunity to reflect
exceptional business performance. Overall remuneration is balanced,
with the majority linked to business performance. 18% 33% 32% 35%
Target Executive Maximum 5% Executive Remuneration Remuneration 9%
26% 42% Base salary Annual Bonus Base salary Annual Bonus Benefits
Strategic Bonus Benefits Strategic Bonus WATES PRINCIPLE 6 –
STAKEHOLDER RELATIONSHIPS strategic direction. Brand and reputation
including existing and AND ENGAGEMENT future relationships with
shareholders, customers, suppliers, employment interaction and
communication with customers The Jaguar Land Rover Automotive plc
Board continues to and suppliers are set out on page 41.
Maintaining strong promote accountability and transparency with all
stakeholders relationships with shareholder and bond investors is
crucial to and shareholders and effectively communicates the
Group’s achieving the Group’s aims. Annual Report 2021/22 J A G U A
R L A N D R O V E R A U T O M O T I V E P L C
51
INVESTOR RELATIONS approach to taxation
matters and the conduct of our tax affairs. These principles apply
equally to all companies within the Jaguar ENGAGEMENT Land Rover
Group, across all areas of our business activity and in all our
territories of operation. SOLE
SHAREHOLDER JAGUAR LAND ROVER WILL CONDUCT
ITS TAX AFFAIRS IN A WAY THAT: Jaguar Land Rover Automotive plc
(and its subsidiaries) is a wholly owned subsidiary of Tata Motors
Limited (held through 1. Is compliant with all legal and regulatory
obligations and TML Holdings Pte. Ltd. (Singapore)) and a
significant majority which adheres to the principles set out in the
Jaguar Land of the Jaguar Land Rover Automotive plc Board also
reside as Rover Code of Conduct and Tata Code of Conduct; directors
on the board of Tata Motors Limited. Although we 2. Is aligned with
the Group’s overall business strategy and operate on a stand-alone,
arm’s length basis, we maintain an growth objectives; open and
collaborative strategic relationship with Tata Motors 3.
Proactively seeks to enhance shareholder value and Limited and plan
to increase our collaboration in numerous areas optimise tax cost
on a sustainable basis; going forward. 4. Is governed, managed and
controlled within an appropriate risk management framework; BOND
INVESTORS, LOAN AND OTHER CREDIT 5. Is appropriately resourced and
seeks to maximise operating
PROVIDERS efficiencies through the suitable
use of automation and technology-based solutions; and As at
31 March 2022, we had approximately Ł4.7 billion of
listed 6. Maintains good, open, honest and professional working
unsecured bonds outstanding (31 March 2021: Ł4.3 billion) and
relationships with tax authorities globally and seeks to take
Ł2.3 billion of loans (31 March 2021: Ł1.8 billion). We
maintain a leading role in relation to matters of governmental tax
regular dialogue with our bond investors and relationship banks
policy relevant to Jaguar Land Rover. (some of whom provide support
for loans and other credit facilities) through the quarterly
publication of operational and Each principle is commented on
further below: financial results on the Group’s website
(www.jaguarlandrover. com) supported by live broadcasts. The
investor relations team 1. Tax compliance also attends various
credit conferences held throughout the year and our annual capital
markets day where investors, banks This is considered the most
fundamental and important of our and other credit providers have
the opportunity to meet with six principles. Jaguar Land Rover will
always seek to comply with Jaguar Land Rover senior management in
person to discuss the all applicable tax laws, both in terms of the
letter and the spirit Company’s strategy and aspirations. of the
law, and to satisfy its global tax compliance obligations in a
timely and accurate manner. CREDIT RATING
AGENCIES In addition, we adhere to the
Jaguar Land Rover Code of Conduct As at 31 March 2022, Jaguar
Land Rover Automotive plc had and the Tata Code of Conduct, which
set out the high, ethical a credit rating of B+ (stable outlook)
from S&P and B1 (stable standards of business behaviour
expected from all companies outlook) from Moody’s. and employees
within our Group. JAGUAR LAND ROVER’S Jaguar Land Rover has zero
tolerance to the evasion of tax, including the evasion of tax by
third parties associated with our APPROACH TO TAX business. 2.
Business alignment INTRODUCTION Jaguar Land Rover always aligns its
tax affairs with the genuine Jaguar Land Rover’s business is
significant and our operations business activities being undertaken
by the organisation. We do are large and complex. As a result, we
operate through multiple not engage in any form of tax avoidance or
artificial tax structuring companies, with activities, employees
and assets located in and we do not operate or use any offshore tax
havens. All Jaguar numerous countries around the world. This, in
turn, naturally Land Rover Group subsidiaries are located in
countries where the drives an inherent level of complexity in our
tax affairs. business has significant physical and economic
operations (i.e. employees, offices and revenue generating
activity). In relation to tax matters, just as for any other area
of our business, Jaguar Land Rover always strives to be a good,
responsible 3. Enhancing shareholder value corporate citizen and we
are committed to complying with all applicable tax laws, both in
letter and in spirit. We aim to be fair, As a commercial
organisation, Jaguar Land Rover will always honest, transparent and
ethical in our conduct and for everything seek to effectively
manage its tax liabilities, just as for any other we do to stand
the test of public scrutiny. business cost. In so doing, we always
adhere to relevant tax laws and, in relation to transactions within
the Group, we always seek JAGUAR LAND ROVER’S KEY TAX PRINCIPLES to
ensure that these are conducted on an arm’s length basis in
accordance with Organisation for Economic Co-operation and The Jaguar Land Rover
Automotive plc Board has formally Development (OECD) principles.
adopted six key principles in relation to Jaguar Land
Rover’s
Where governments or fiscal authorities have
introduced APPROVAL OF STRATEGIC particular tax reliefs, credits,
incentives or exemptions to encourage specific types of economic
activity (for example, REPORT investment in research and
development), we will always seek to ensure that Jaguar Land Rover
claims the appropriate level of The Strategic Report on pages 4 to
36 was approved by the benefit for which it qualifies. Jaguar Land
Rover Automotive plc Board and authorised for 4. Governance and
risk management issue on 13 June 2022 and signed on its behalf
by: Tax risks arising within the Group are identified, assessed and
managed by the central Tax function on an ongoing basis. A detailed
tax update is taken to the Jaguar Land Rover Automotive plc Board
on an annual basis and tax risks are reported quarterly to the
Financial Risk and Assurance Committee. The Jaguar Land Rover Tax
Director also meets with the Chief Financial Officer on THIERRY
BOLLORÉ a biweekly basis to provide updates on all tax matters
affecting CHIEF EXECUTIVE OFFICER the Group. Jaguar Land Rover
Automotive plc 13 June 2022 Jaguar Land Rover actively seeks
to minimise risk in relation to tax matters. We do this through a
variety of processes and controls including, for example, tax risk
assessments and health-check exercises for subsidiaries, online
monitoring of compliance processes and an active Advance Pricing
Agreement programme. 5. Tax resource Responsibility for the
day-to-day management of Jaguar
Land Rover’s tax affairs rests with our central Tax function, led
by the Jaguar Land Rover Tax Director. The function comprises an
appropriate blend of tax professionals with the necessary
qualifications, training, skills and experience required to
effectively undertake their roles. The Tax function also advises
the Jaguar Land Rover Automotive plc Board in relation to setting
Group tax strategy and policy. In addition to the central Tax
function, the business also has dedicated tax professionals
embedded within the finance teams of key non-UK subsidiaries. Where appropriate,
we look to implement technology-based solutions to streamline
processes, drive efficiency and manage risk. 6. Relationships with
governments and authorities In our dealings with tax authorities
globally, including HMRC in the UK, we always look to maintain
good, open, honest and professional working relationships, to
engage proactively in relation to tax matters and to resolve any
areas of dispute or differences of opinion as quickly as possible
in order to reduce uncertainty and manage risk. We also actively
engage in dialogue with governments, either directly or through
appropriate representative bodies, in relation to matters of tax
policy which affect our business. Jaguar Land Rover Automotive plc
regards this document and its publication as complying with its
duty under Para 19(2), Sch 19, FA16. Annual Report 2021/22 J A G U
A R L A N D R O V E R A U T O M O T I V E P L C 53
DIRECTOR’S REPORT on research and development
activities as disclosed in note 11 to the consolidated financial
statements on page 85. The directors present their report and the
audited consolidated financial statements of the Group for the year
ended 31 March Financial instruments 2022. Jaguar Land Rover
Automotive plc is a public limited company incorporated under the
laws of England and Wales. The disclosures required in relation to
the use of financial The business address of the directors and
senior management instruments by the Group and Company, together
with details of the Group is Abbey Road, Whitley, Coventry, CV3
4LF, England, of the Group’s and Company’s treasury policy and
management, United Kingdom. are set out in note 35 to the
consolidated financial statements on pages 119 to 133 and in note
52 on pages 147 to 151 of the parent company financial statements.
Future developments Future developments impacting the Group are
disclosed in the Employee information Strategic report from page
10. The average number of employees within the Group is disclosed
in note 7 to the consolidated financial statements on page
Dividends 83. Apart from determining that an individual has the
ability to carry out a particular role, the Group does not
discriminate The Directors proposed no dividend for the year ended
31 March in any way. It endeavours to retain employees if they
become 2022. (For the year ended 31 March 2021 and 2020:
ŁNil). disabled, making reasonable adjustments to their role and,
if necessary, looking for redeployment opportunities within the
Group. The Group also ensures that training, career development
Directors and promotion opportunities are available to all
employees irrespective of gender, race, age or disability.
Biographies of the directors currently serving on the JLR plc Board
are set out on page 44. Employee involvement Directors’ indemnities
Details of how the Group involves its employees are contained in
the Strategic report on pages 24 to 25, which are incorporated The
Group has made qualifying third-party indemnity provisions by
reference into this report. for the benefit of its directors during
the year; these remain in force at the date of this report.
Political involvement and contributions Material interests in
shares The Group respects an employee’s right to use their own time
and resources to participate as individual citizens in political
Jaguar Land Rover Automotive plc is a wholly owned subsidiary and
governmental activities of their choice. The Group itself of Tata
Motors Limited, held through TML Holdings Pte. Ltd. operates under
legal limitations on its ability to engage in (Singapore).
political activities and, even where there are no legal
restrictions, the Group does not typically make contributions to
political candidates or political parties, or permit campaigning on
its Share capital property by political candidates (including those
who work for the Group) or persons working on their behalf. There
have not Share capital remains unchanged. See note 29 to the
consolidated been any political donations in any of the periods
covered by financial statements on page 108 for further details.
these financial statements. Corporate Governance Statement Going
concern The Corporate Governance Statement is set out from page 40
The Group’s business activities, together with the factors likely
to and is incorporated by reference into this report. affect its
future development, performance and position, are set out in the
Strategic report. The financial position of the Group, including
details of the Group’s liquidity, available financing Branches
facilities and the maturity of facilities is described on page 34.
The Group has 10 branches that exist and operate outside of the In
addition, note 35 to the consolidated financial statements UK,
based in China and the United Arab Emirates. includes the Group’s
objectives, policies and processes for managing its exposures to
interest rate risk, foreign currency Research and development risk,
credit risk and liquidity risk; and gives details of the Group’s
financial instruments and hedging activities. The Group is
committed to an ongoing programme of expenditure
The Group has assessed the projected cash
flows of the Group for the year ended 31 March 2022. The
statement sets out the for the twelve-month period from the date of
authorisation of steps that the Group has taken to address the risk
of slavery the financial statements (the ‘going concern assessment
period’) and human trafficking occurring within its own operations
and and has carried out a reverse stress test against this base
case its supply chains. This statement can be found on the
corporate to determine the performance level that would result in a
breach website at www.jaguarlandrover.com. of covenants. The base
case takes into account the Group’s expectations of Whistleblowing
policy the continued supply chain challenges related to
semiconductor shortages, the diminishing impacts of the
COVID-19 pandemic The
Group’s whistleblowing policy encourages employees to and
prevailing financial conditions including inflationary report, in
confidence and anonymously if preferred, concerns pressures. The
reverse stress test scenario models the impact about suspected
impropriety or wrongdoing in any matters of a sustained reduction
of wholesale volumes over a twelve- affecting the business. An
independent hotline exists to facilitate month period. this
process. Any matters reported are thoroughly investigated and
escalated to the Unusual Events Committee. Within the going concern
assessment period there is a £1 billion minimum quarter-end liquidity covenant attached
to the Group’s UKEF loans for the entire period and to the RCF
facility from July Diversity policy 2022. Diversity management
continues to form a core part of the Details of the scenarios and
assumptions used in the assessment Group’s business strategy. We
rely on the diversity of our as at 31 March 2022 are set out
in note 1 to the consolidated employees to form the foundation of a
strong and dynamic financial statements on page 72. company. See
page 25 for further details. The Group
forecasts sufficient funds to meet its liabilities as they fall due
throughout the going concern assessment period, Greenhouse gas
emissions without breaching any relevant covenants nor the need for
any mitigating actions, new funding, or drawing on its RCF facility
The Group is committed to reducing greenhouse gas emissions and
considers the stress test scenario so remote as to not be and
continues to invest heavily in this activity. See pages 20 to
plausible. Consequently, the directors consider that adequate 21
for further details. resources exist for the Group and parent
company to continue operating for the going concern assessment
period. Accordingly, the directors continue to adopt the going
concern basis in STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN
RESPECT preparing these consolidated and parent company financial
OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS statements. The
directors are responsible for preparing the Annual Report and the
Group and parent Company financial statements in Events after the
balance sheet date accordance with applicable law and
regulations. Full details of significant
events since the balance sheet date are Company law requires the
directors to prepare Group and parent disclosed in note 41 on page
139 to the consolidated financial Company financial statements for
each financial year. Under that statements. law they are required
to prepare the Group financial statements in accordance with
UK-adopted international
accounting standards and applicable law and they have elected to
prepare Code of Conduct the parent Company financial statements on
the same basis. Directors and employees are required to comply with
the Jaguar Under company law the directors must not approve the
financial Land Rover Code of Conduct, which is intended to help
them put statements unless they are satisfied that they give a true
and the Group’s ethical principles into practice. The Code of
Conduct fair view of the state of affairs of the Group and parent
Company clarifies the basic principles and standards they are
required and of the Group’s profit or loss for that period. In
preparing each to follow and the behaviour expected of them. The
Code of of the Group and parent Company financial statements, the
Conduct can be found at www.jaguarlandrover.com. directors are
required to: Employees, contract staff,
third parties with whom the Group has • select suitable accounting
policies and then apply them a business relationship (such as
retailers, suppliers and agents), consistently; and any member of
the public may raise ethical and compliance concerns to the Group’s
global helpline or via group.compliance@ • make judgements and
estimates that are reasonable, relevant jaguarlandrover.com. and
reliable; • state whether they have been prepared in accordance
with UK-Slavery and human
trafficking statement adopted international accounting
standards; Pursuant to section 54 of the
Modern Slavery Act 2015, the • assess the Group and parent
Company’s ability to continue as a Group has published a slavery
and human trafficking statement going concern, disclosing, as
applicable, matters related to going Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 55
concern; and • use the
going concern basis of accounting unless they either intend to
liquidate the Group or the parent Company or to cease operations,
or have no realistic alternative but to do
so. The directors are responsible for
keeping adequate accounting records that are sufficient to show and
explain the parent Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the
parent Company and enable them to ensure that its financial
statements comply with the Companies Act 2006. They are responsible
for such internal control as they determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them
to safeguard the assets of the Group and to prevent and detect
fraud and other irregularities. Under
applicable law and regulations, the directors are also responsible
for preparing a Strategic Report and a Directors’ Report that
complies with that law and those
regulations. The directors are responsible
for the maintenance and integrity of the corporate and financial
information included on the Company’s website. Legislation in the
UK governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Auditor A resolution to reappoint KPMG LLP as auditor of the Group
is to be proposed at the 2022 Tata Motors Limited Annual General
Meeting. Acknowledgement The directors wish to convey their
appreciation to all employees for their continued commitment,
effort and contribution in supporting the delivery of the Group’s
performance. The directors would also like to extend their thanks
to all other key stakeholders for their continued support of the
Group and their confidence in its management. The Annual Report
contains a number of links that signpost to complimentary
information. This complimentary information does not form part of
the Annual Report. The Annual Report on pages 1 to 153, consisting
of the Strategic Report, the Directors Report, and the Financial
Statements, was approved by the JLR plc Board and authorised for
issue on 13 June 2022 and signed on its behalf by: THIERRY
BOLLORÉ CHIEF EXECUTIVE OFFICER Jaguar Land Rover Automotive plc
13 June 2022
Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C
57
INDEPENDENT AUDITOR’S REPORT INDEPENDENT
AUDITOR’S REPORT TO THE MEMBERS OF JAGUAR LAND ROVER AUTOMOTIVE
PLC 1. OUR OPINION IS
UNMODIFIED We have audited the financial
statements of Jaguar Land Rover Automotive plc (“the Company”) for
the year ended 31 March OVERVIEW 2022 which comprise the
Consolidated Income Statement, Materiality: Ł80m (2021: Ł80m)
Consolidated Statement of Comprehensive Income and Group financial
Expense, Consolidated Balance Sheet, Consolidated Statement
statements as a 0.4% of Group Revenue of Changes in Equity,
Consolidated Cash Flow Statement, the whole (2021: 0.4% of Group
Revenue) parent Company Balance Sheet, the parent Company
Statement of Changes in Equity, the parent
Company Cash Flow Statement, Coverage 80% and the related notes,
including the parent Company and Group (2021:82%) of Group revenue
accounting policies. Key audit matters vs 2021 Recurring risks
Impairment of In our opinion: property plant and • the financial
statements give a true and fair view of the state equipment,
intangible, and right-of
use non-of the Group’s and
of the parent Company’s affairs as at 31 current assets March 2022
and of the Group’s loss for the year then ended; Going concern
Capitalisation of • the Group financial statements have been
properly prepared product engineering in accordance with the
requirements of UK-adopted
costs international accounting standards; Valuation of defined
benefit plan • the parent Company financial statements have been
properly obligations prepared in accordance with UK-adopted international accounting
standards and as applied in accordance with the Parent Company
Recoverability of key audit matter parent Company provisions of the
Companies Act 2006; and investment in subsidiaries and • the
financial statements have been prepared in accordance intra- group
debtors with the requirements of the Companies Act 2006. 2. KEY
AUDIT MATTERS: INCLUDING OUR ASSESSMENT OF Basis for opinion RISKS
OF MATERIAL MISSTATEMENT We conducted our
audit in accordance with International Key audit matters are those
matters that, in our professional Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. judgement, were of most significance in
the audit of the financial Our responsibilities are described
below. We have fulfilled our statements and include the most
significant assessed risks of ethical responsibilities under, and
are independent of the Group material misstatement (whether or not
due to fraud) identified in accordance with, UK ethical
requirements including the FRC by us, including those which had the
greatest effect on: the Ethical Standard as applied to listed
entities. We believe that the overall audit strategy; the
allocation of resources in the audit; and audit evidence we have
obtained is a sufficient and appropriate directing the efforts of
the engagement team. These matters basis for our opinion. were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In arriving at our
audit opinion above, the key audit matters, in decreasing order of
audit significance, were as follows:
The risk Our response Impairment of
Forecast-based assessment We performed the tests below rather than
seeking property plant to nature rely on any balance of the Group’s
is controls because the and equipment, The Group holds a
significant amount obtain audit of the
evidence primarily such that through we
would the detailed expect to intangible, and
of property, plant and equipment, right-of-use intangible assets
and right-of-use procedures
described. Our procedures included: non-current assets on its balance sheet
and the Evaluated historical assets cash generating unit of which
these • forecasting Historical accuracy: accuracy of
discounted cash assets form a part is at
risk of being Risk vs 2021 impaired. comparing flow forecasts, them
including to the actual key assumptions, results. by (Carrying
value In particular, there are execution risks of plant property
and equip —associated with the Group’s transition • Historical
appropriateness comparison: of the Group’s Assessed key the
assumptions to Battery Electric Vehicles
(‘BEV’) and ment, right intangible, -of-use resulting from its
previously announced used comparing in the those, discounted where
cash appropriate, flow forecasts to historical by ‘Reimagine’
strategy. In addition, non assets -current there are other
headwinds facing the terminal trends in value terminal capital
value expenditure variable profit . and Group and the industry,
including the Ł11,687 million; continuation of semi-conductor
and million) 2021: Ł12,391 other supply constraints, production •
appropriateness Our industry expertise: of the
Group’s Assessed estimated the value
constraints, cost inflationary pressures, Refer to note 19.
COVID-related lockdowns and the in multiples use amount to market
by comparing multiples the of comparative implied
trading conflict in
Ukraine. companies specialists. with the
assistance of our
valuation The
effect of these matters is that, as part of our risk assessment, we
determined that the calculation of Assessed appropriateness and
critically of the challenged Group’s assumptions the used the value
in use of property, plant and equipment, intangible assets, and
assumption in the cash flow of sales projections volumes by to
comparing externally a derived key right-of-use assets has a high
degree of estimation uncertainty, with a potential data. range of
reasonable outcomes greater than our materiality for the financial
Compared term growth the rate Group’s to external discount
benchmark rate and long data- and statements as a whole, and
possibly many times that amount. The financial comparative discount
rate companies calculation and using re—the performed capital asset
the statements note 19 disclose the sensitivities estimated by the
Group. pricing specialists model . with the assistance of our
valuation • Sensitivity analysis on key analysis: assumptions,
Performed to independently a sensitivity estimate of the Group’s a
range Reimagine for comparison, strategy taking and risks account
facing the industry. • reconciliation
Comparing valuations: between the Assessed estimated the Group’s
market overall capitalisation market of capitalisation the Group,
by of reference the Tata Motors to the recoverable Limited Group
amount and compared of the cash to generating the estimated unit .
• Impairment Group’s estimated reversal: value Assessed in use was
whether indicative the of an impairment reversal. • of Assessing
the Group’s transparency: disclosures Assessed in the financial the
adequacy reflects statements the reasonably
and ensured possible that the changes disclosure in the key
recoverable assumptions amount that erode compared the headroom to
the cash in generating unit carrying value to nil. Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
59
INDEPENDENT AUDITOR’S REPORT The risk Our
response Going Concern Disclosure quality: We considered whether
these risks could in the plausibly going concern affect the
liquidity or covenant compliance Risk vs
2021 Note 2 of the financial period that,
individually by assessing and the collectively, degree of could
downside result assumption in a
liquidity statements explains how Refer to
note 2 the Directors have formed a and or covenant projected issue,
cash taking and facilities into account (a reverse the Group’s
stress test) current . Our judgement that it
is appropriate to adopt the going concern basis procedures also
included: of preparation for the Group and parent Company. That
judgement • Assessment management’s of process management’s to
produce process: forecasts, Evaluated
including is based on an evaluation of the
inherent risks to the Group’s and to the determine assessment the
of risks internal to the and business, external and factors the
process used the parent Company’s business model and how those
risks might management used to complete the reverse stress test.
affect the Group and parent Company’s financial resources • Funding
Company assessment: financing facilities Agreed available current
Group by obtaining and parent or ability to
continue operations over the going concern period of relevant new
loan facility agreements agreements in order . Inspected to
determine existing covenants and assessment (a period of at least a
year from the date of approval of attached. the financial
statements). • Key critically dependency challenged assessment:
management Evaluated on whether and the The risks most likely to
adversely affect the Group and parent flows, key assumptions which
the Directors underpinning have the used forecast to support cash
the Company’s available financial resources
and compliance with to Directors’ assess whether going concern the
Group basis can of preparation meet its financial and covenant
thresholds over the going concern period were: and commitments
consistent as with they the fall external due, were environment
realistic, achievable and other the impact of semiconductor
shortages on the Group’s supply include matters sales identified
volumes, in the including audit. The the key variable assumptions
profit chain and production capacity; the diminishing impacts of
the optimisation inflation in variable strategy, profit together .
with material cost COVID-19
pandemic and the impact of inflationary
pressures on material costs. • flow
Historical forecasting comparisons: accuracy Evaluated of the Group
the historical by comparing cash Whilst these risks could have well
historical as assessing cash flows the to accuracy actual results
of key reported, assumptions as adversely affected available
financial resources and previously applied. compliance with
covenant thresholds, as explained in • Benchmarking appropriateness
assumptions: of the Group’s Assessed key assumptions the used note
2 the Directors carried out a reverse stress test which in to the
externally cash flow derived forecasts data, by with benchmarking
particular focus them on ultimately
demonstrated that an implausible downside with sales forecast sales
volumes. volumes significantly lower than both the base case and
actual • Sensitivity key assumptions analysis: underlying
Considered the Group’s sensitivities cash over flow the experience
through COVID-19 and
semiconductor shortages level forecasts of available and their
financial impact resources on the covenant . test and the was a
liquidity required level in that order would to result breach in
financing covenants. • to Our critically sector experience:
challenge the We key used assumptions our industry made specialists
by the The risk for our audit was Directors in their forecast cash
flows. whether or not those risks were such that they amount to a •
Assessing concern disclosure transparency: in note Considered 2 to
the financial whether statements the going material uncertainty
that may cast significant doubt about the assessment gives a full
and of going accurate concern, description including of the the
Directors’ identified ability to continue as a going concern. Had
they been such, risks and related sensitivities. then required that
to fact be would disclosed have . been
The risk Our response Capitalisation
Accounting treatment Our procedures
included: of product engineering costs There is a key judgement in
• Control in relation operation: to the Directors’ Tested controls
assessment including as to determining whether the nature Risk vs
2021 of the product engineering costs capitalisation whether
product . engineering costs are eligible for satisfy the criteria
for capitalisation ( 2021: Ł457 Ł million;—to ‘Intangible Assets:
Product judgements llion) 769 mi development
in progress’ and when • Personnel made by the interviews: Directors
around Corroborated the timing of this capitalisation should
commence. Refer to note 19. Given the products with material
engineering commencement costs of through capitalisation
discussions of product with capitalised project engineering
costs during the current period, and the
project level
staff. Group’s
stage in development cycle more generally in the current period, •
the Our Directors’ sector experience: judgements Critically
regarding assessed product the risk of
satisfaction of IAS 38 capitalisation requirements is less being
engineering eligible costs for capitalisation identified by against
the Directors both the as associated with the future economic
viability as in previous periods but accounting practical
application standards of and these our standards experience in of
other primarily related to the allocation of
directly attributable expenditure. companies. The financial
statements (note 19) • engineering Tests of details: costs For
identified a sample by of the product
Directors as disclose that had the value of
central overheads not been identified by being nature eligible was
consistent for capitalisation, with the agreed description that of
their the the Directors as being eligible
for capitalisation it would have reduced the account timing to of
which recognition those costs was appropriate were recorded, . and
million the amount (2021: capitalised Ł80 million) by. Ł52 •
Assessing of the Group’s transparency: disclosures Assessed in
respect the of the adequacy key of the
judgements costs capitalised made relating and the to point the
nature at which capitalisation
commences. Annual Report 2021/22 J A G U A R
L A N D R O V E R A U T O M O T I V E P L C 61
INDEPENDENT AUDITOR’S REPORT The risk Our
response Valuation of Subjective valuation Our procedures included:
defined benefit plan obligations Small changes in the key • Control
assumptions Operation: applied Tested in the controls valuation
over and the assumptions and estimates,
being Risk vs 2021 the discount rate, inflation rate and
assumptions inspected the used Group’s by its annual actuarial
validation expert of . the mortality/life expectancy, used to (
2021: Ł7,522 Ł8,432 million; value the
Group’s pension obligation Tested the
Group’s controls operating over (before deducting scheme assets)
million) would have a significant effect competence selection and
and monitoring objectivity of .its actuarial expert for on the
amount of the Groups’ net Refer to note 32. defined benefit plan
asset. The Challenged, risk is that these assumptions • the
Benchmarking support of our assumptions: own actuarial specialists,
with the are inappropriate resulting in an inappropriate valuation
of plan key liabilities, assumptions being the applied discount to
the rate, valuation inflation of rate
the obligations. derived and mortality/
data. life expectancy against externally The effect of these
matters is that, as part of our risk
assessment, Considered we determined that
valuation • Assessing adequacy of transparency: the Group’s
disclosures inthe respect of of the pension
obligation has a high degree of estimation the plan sensitivity
asset to these of the assumptions Groups’ net defined benefit
uncertainty, of reasonable with outcomes a potential greater
range than statements our materiality as a
whole, for the and financial possibly financial many times
statements that amount (note . The 32) disclose the Group the
. sensitivity estimated by The risk Our
response Recoverability of Low risk, high value We performed the
tests below rather because than seeking parent Company nature to
rely on of the any balance of the group’s is such controls
that the investment in The carrying amount
of the evidence primarily through we
would detailed expect
to subsidiaries and parent Company’s
investment in obtain audit included: the
intra-group its subsidiary, which acts as an procedures described.
Our procedures debtors intermediate holding company for Risk vs
2021 the rest of the parent Company’s • of Tests the of parent
detail: Company’s Compared only the investment carrying
amount subsidiaries, represents 19% (2021:
Investment in sub- 21%) of
the parent Company’s with assessed the subsidiary’s 100% of the
draft intra balance -group debtor sheet
and assets. The carrying amount of million;
sidiaries 2021: (Ł1,655 the intra-group debtors balance balance an
approximation to identify of whether its minimum its net
recoverable assets, being comprises the
remaining 81% (2021: Ł1,655 million) 79%). amount, was in excess of
its carrying amount. Intra tors (-Ł group 7,015 deb mi-—Their recoverability is not at a
high • Assessing performed subsidiary as part of the audits: group
Assessed audit over the the work risk of
significant misstatement or llion; million 2021: Ł6,038 subject to
significant judgement. subsidiaries’ profits and net
assets. However, due to their materiality •
amount Comparing of the valuations: investment Compared in the
subsidiary the carrying to and in the context of the parent Company
financial statements this the of its Group’s ultimate estimated
parent, adjusted market capitalisation to exclude
the is considered to be one of the areas
that had the greatest effect on our liabilities of companies of the
outside parent the Company Group, and being net an
assets overall parent Company audit.
investment approximation . of the
recoverable amount of the
3. OUR APPLICATION OF MATERIALITY AND AN
OVERVIEW The components within the scope of our work accounted for
the OF THE SCOPE OF OUR AUDIT percentages illustrated on the
following page. Materiality for the Group
financial statements as a whole was The remaining 20% (2021: 18%)
of total Group revenue, 15% set at Ł80 million (2021: Ł80
million), determined with reference (2021: 10%) of the total
profits and losses that made up Group to a benchmark of Group
revenue of Ł18,320 million (2021: loss before tax, 15% (2021:
11%) of the total profits and losses Ł19,731 million) of which it
represents 0.4% (2021: 0.4%). that made up Group loss before
exceptional items and tax and 16% (2021: 11%) of total Group assets
are represented by 30 We consider Group revenue to be the most
appropriate (2021:29) reporting components, none of which
individually benchmark, as it provides a more stable measure year
on year represented more than 2% (2021: 4%) of any of total Group
than Group profit or loss before tax. revenue, total profits and
losses that made up Group loss before tax, total profits and losses
that made up Group loss before Materiality for the parent Company
financial statements as a exceptional items and tax or total Group
assets. whole was set at Ł64 million (2021: Ł36 million),
determined with reference to a benchmark of the parent Company
total For the residual components, we performed analysis at an
assets of Ł8,678 million (2021: Ł7,694 million), of which it
aggregated Group level to re- examine our assessment that
represents 0.7% (2021: 0.5%). there were no significant risks of
material misstatement within these. In line
with our audit methodology, our procedures on individual account
balances and disclosures were performed The Group team instructed
component auditors as to the to a lower threshold, performance
materiality, so as to reduce significant areas to be covered,
including the relevant risks to an acceptable level the risk that
individually immaterial detailed above and the information to be
reported back. The misstatements in individual account balances add
up to a Group team approved the component materialities, which
material amount across the financial statements as a whole. ranged
from Ł6 million to Ł71 million (2021: Ł12 million to
Ł65 million), having regard to the mix of size and risk profile of
the Performance materiality was set at 65% (2021: 65%) of Group
across the components. materiality for the financial statements as
a whole, which equates to Ł52 million (2021: Ł52 million) for
the group and Ł42 The work on 5 of the 8 (2021: 5 of the 8)
components was million (2021: Ł23 million) for the parent company.
We applied performed by component auditors and the rest, including
the this percentage in our determination of performance materiality
audit of the parent Company, was performed by the Group team. based
on the level of identified control deficiencies during the The
Group team visited 1 (2021: 0) component location to assess prior
period. the audit risk and strategy, as planned visits to the
majority of component locations were prevented by movement
restrictions We agreed to report to the Audit Committee any
corrected or relating to the coronavirus pandemic. Video and
telephone uncorrected identified misstatements exceeding
Ł4 million conference meetings were also held with these
component (2021: Ł4 million) in addition to other identified
misstatements auditors and all others that were not physically
visited. At these that warranted reporting on qualitative grounds.
visits and meetings, the findings reported to the Group team were
discussed in more detail, and any further work required by Of the
Group’s 38 (2021: 37) reporting components, we subjected the Group
team was then performed by the component auditor. 4 (2021: 4) to
full scope audits for group purposes and 4
(2021: 4) to specified risk-focused audit
procedures. The latter were not We were able to rely upon the
Group’s internal control over individually financially significant
enough to require a full scope financial reporting in several areas
of our audit, where our controls audit for group purposes but did
present specific individual risks testing supported this approach,
which enabled us to reduce the that needed to be addressed. scope
of our substantive audit work; in the other areas the
scope of the audit work performed was fully
substantive. The 4 (2021: 4) components subjected to specified
risk-focused audit procedures are as follows: • Revenue—3
components (2021: 3) • Material & other cost of sales—3
components (2021: 3) • Property, plant & equipment—1
component (2021: 1) • Depreciation—1 component (2021: 1) •
Inventories—3 components (2021: 3) • Cash & cash
equivalents—3 components (2021: 3) • Accounts receivable—3
components (2021: 3) • Accounts payable—1 component (2021: 2)
Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I
V E P L C 63
INDEPENDENT AUDITOR’S REPORT Group Revenue
Group Materiality Ł18,320m (2020: Ł19,731m)
Ł80m (2021:
Ł80m) Ł80m Whole
financial statements materiality (2021:
Ł80m) Ł52m Whole
financial statements performance materiality (2021:
Ł52m) Ł71m Range of
materiality at 8 (2021: 8) components (Ł6m-71m) (2021: Ł12m to Ł65m) Revenue
Group materiality Ł4m Misstatements reported to the audit committee
(2021: Ł4m) Group Revenue Group total assets
5% 6% 6% 80% 84% 63% (2021: 82%) 77% 26% (2021: 89%) 74% 79% Total
profits and losses that Total profits and losses that made up Group
loss before tax made up Group loss before exceptional items and tax
17% 73% 19% 18% 85% 85% (2021: 90%) 18% (2021: 89%) 70% 67% 67%
Full scope for group audit purposes 2022 Specified risk-focused
audit procedures 2021 Specified risk-focused audit procedures 2022
Residual components Full scope for group audit purposes
2021
4. GOING CONCERN performance targets for
management and Directors. The Directors have prepared the financial
statements on • Using analytical procedures to identify any unusual
or the going concern basis as they do not intend to liquidate
unexpected relationships. the Group or the Company or to cease
their operations, and as they have concluded that the Group and the
Company’s • Our forensic specialists assisted us in identifying key
fraud financial position means that this is realistic. They have
also risks. This included attending a risk assessment meeting
concluded that there are no material uncertainties that could with
the engagement team. have cast significant doubt over their ability
to continue as a going concern for at least a year from the date of
approval We communicated identified fraud risks throughout the
audit of the financial statements (“the going concern period”).
team and remained alert to any indications of fraud throughout the
audit. An explanation of how we evaluated management’s assessment
of going concern is set out in the related key audit matter in This
included communication from the Group audit team to section 2 of
this report. component audit teams of relevant fraud risks
identified at the Group level and request to component audit teams
to report to Our conclusions based on this work: the Group audit
team any instances of fraud that could give rise to a material
misstatement at the Group level. • we consider that the directors’
use of the going concern basis of accounting in the preparation of
the financial As required by auditing standards, and taking into
account statements is appropriate; possible pressures to meet
profit targets, we perform procedures to address the risk of
management override of controls and the • we have not identified,
and concur with the directors’ risk of fraudulent revenue
recognition, in particular: the risk assessment that there is not,
a material uncertainty related that Group and component management
may be in a position to events or conditions that, individually or
collectively, may to make inappropriate accounting entries; the
risk of bias in cast significant doubt on the Group’s or Company’s
ability to accounting estimates and judgements; and the risk that
new continue as a going concern for the going concern period;
vehicle revenue is overstated through recording revenues in the and
incorrect period. • we found the going concern disclosure in note 2
to be We also identified fraud risks related to inappropriate
acceptable capitalisation of development costs and inappropriate
impairment assumptions in relation to the value in use estimate,
However, as we cannot predict all future events or conditions in
response to possible pressures to meet profit targets. and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time Our response in respect
of the identified fraud risk related they were made, the above
conclusions are not a guarantee that to inappropriate impairment
assumptions is set out in the the Group or the Company will
continue in operation. procedures described in the key audit matter
disclosure in section 2 of this report including specifically our
critical challenge 5. FRAUD AND BREACHES OF LAWS AND REGULATIONS –
of management’s estimates with reference to external data. ABILITY
TO DETECT Our response in respect of the identified fraud risk
related to inappropriate capitalisation of product engineering
costs was Identifying and responding to risks of material
misstatement predominantly through our testing of journal entries
as described due to fraud in the following paragraphs. To identify
risks of material misstatement due to fraud (“fraud In determining
the audit procedures we took into account the risks”) we assessed
events or conditions that could indicate an results of our
evaluation and testing of the operating effectiveness incentive or
pressure to commit fraud or provide an opportunity of the
Group-wide fraud risk management controls. to commit fraud. Our
risk assessment procedures included: We also performed procedures
including: • Enquiring of Directors, the audit committee, internal
audit and certain senior managers as to the Group’s high-level •
Identifying journal entries to test for all relevant full scope
policies and procedures to prevent and detect fraud, components
based on risk criteria tailored for the risks at including the
internal audit function, and the Group’s each component and
comparing the identified entries to channel for “whistleblowing”,
as well as whether they supporting documentation. Examples of the
criteria applied have knowledge of any actual, suspected or alleged
fraud. include those posted by senior finance management, those
posted and approved by the same user, those posted to • Reading
Board and audit committee minutes. unusual accounts, and those
moving costs from accounts ineligible for capitalisation to
accounts that are eligible as • Considering remuneration incentive
schemes and capitalised project engineering costs. Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
65
INDEPENDENT AUDITOR’S REPORT • Assessing
whether the judgements made in making with these laws and
regulations to enquiry of the Directors accounting estimates are
indicative of a potential bias. and other management and inspection
of regulatory and legal correspondence, if any. Therefore if a
breach of operational • Assessing when revenue was recognised,
particularly regulations is not disclosed to us or evident from
relevant focusing on revenue recognised in the days before the year
correspondence, an audit will not detect that breach. end date, and
whether it was recognised in the correct year. Context of the
ability of the audit to detect fraud or breaches • Critically
assessing the Directors’ judgements regarding of law or regulation
identified product engineering development costs capitalised in
relation to against both the accounting Owing to the inherent
limitations of an audit, there is an standards and our experience
of practical application of unavoidable risk that we may not have
detected some material these standards in other companies.
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance Work on the
fraud risks was performed by a combination of with auditing
standards. For example, the further removed non-component auditors and the group
audit team. compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely Identifying and responding to risks of material misstatement
the inherently limited procedures required by auditing standards
due to non-compliance with
laws and regulations would identify it. We
identified areas of laws and regulations that could reasonably In
addition, as with any audit, there remained a higher risk of be
expected to have a material effect on the financial statements
non-detection of fraud, as
these may involve collusion, forgery, from our general commercial
and sector experience, and intentional omissions,
misrepresentations, or the override of through discussion with the
Directors and other management internal controls. Our audit
procedures are designed to detect (as required by auditing
standards), and from inspection of the material misstatement. We
are not responsible for preventing Group’s regulatory and legal
correspondence and discussed with non-compliance or fraud and cannot be
expected to detect non-the
Directors and other management the policies and procedures
compliance with all laws and regulations. regarding compliance with
laws and regulations. We communicated identified laws and
regulations throughout our 6. WE HAVE NOTHING TO REPORT ON THE
OTHER team and remained alert to any indications of non-compliance INFORMATION IN THE
ANNUAL REPORT throughout the audit. This included communication
from the Group audit team to component audit teams of relevant laws
The Directors are responsible for the other information presented
and regulations identified at the Group level, and a request for in
the Annual Report together with the financial statements. Our
component auditors to report to the group team any instances
opinion on the financial statements does not cover the other of
non-compliance with laws
and regulations that could give rise information and, accordingly,
we do not express an audit opinion to a material misstatement at
the Group level. or, except as explicitly stated below, any form of
assurance conclusion thereon. The potential effect of these laws
and regulations on the financial statements varies considerably.
Our responsibility is to read the other information and, in doing
so, consider whether, based on our financial statements Firstly,
the Group is subject to laws and regulations that directly audit
work, the information therein is materially misstated affect the
financial statements including financial reporting or inconsistent
with the financial statements or our audit legislation (including
related companies legislation), distributable knowledge. Based
solely on that work we have not identified profits legislation,
taxation legislation, and pension legislation material
misstatements in the other information. and we assessed the extent
of compliance with these laws and regulations as part of our
procedures on the related financial Strategic report and directors’
report statement items. Based solely on our
work on the other information: Secondly, the Group is subject to
many other laws and regulations where the consequences of
non-compliance could • we
have not identified material misstatements in the have a material
effect on amounts or disclosures in the financial strategic report
and the directors’ report; statements, for instance through the
imposition of fines or litigation. We identified the following
areas as those most likely • in our opinion the information given
in those reports for the to have such an effect: product
compliance, environmental, financial year is consistent with the
financial statements; health and safety, data protection laws,
bribery and corruption, and employment law, and export controls,
recognising the nature of the Group’s
activities and its legal form. Auditing standards • in our opinion
those reports have been prepared in limit the required audit
procedures to identify non-compliance accordance with the
Companies Act 2006.
7. WE HAVE NOTHING TO REPORT ON THE OTHER 9.
THE PURPOSE OF OUR AUDIT WORK AND TO WHOM WE MATTERS ON WHICH WE
ARE REQUIRED TO REPORT BY OWE OUR RESPONSIBILITIES
EXCEPTION This report is made solely to the
Company’s members, as a body, Under the Companies Act 2006, we are
required to report to you in accordance with Chapter 3 of Part 16
of the Companies Act if, in our opinion: 2006. Our audit work has
been undertaken so that we might state to the Company’s members
those matters we are required • adequate accounting records have
not been kept by the to state to them in an auditor’s report and
for no other purpose. parent Company, or returns adequate for our
audit have not To the fullest extent permitted by law, we do not
accept or been received from branches not visited by us; or assume
responsibility to anyone other than the Company and the Company’s
members, as a body, for our audit work, for this • the parent
Company financial statements are not in report, or for the opinions
we have formed. 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. We have nothing to report in these
respects. 8. RESPECTIVE RESPONSIBILITIES
Simon Haydn-Jones (Senior Statutory Auditor) for and on behalf of
KPMG LLP, Statutory Auditor Directors’
responsibilities Chartered
Accountants As explained more fully in their
statement set out on pages 55 One Snowhill and 56, the Directors
are responsible for: the preparation of the Snow Hill Queensway
financial statements including being satisfied that they give
Birmingham a true and fair view; such internal control as they
determine is B4 6GH necessary to enable the preparation of
financial statements that are free from material misstatement,
whether due to fraud 13 June 2022 or
error; assessing the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern; and using the going concern basis of accounting
unless they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic alternative
but to do so. Auditor’s
responsibilities Our objectives are to
obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to
fraud or error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance, but does not
guarantee that an audit conducted in accordance with ISAs (UK) will
always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if,
individually or in aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of the
financial statements. A fuller description of our responsibilities
is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities. Annual Report 2021/22 J A
G U A R L A N D R O V E R A U T O M O T I V E P L C 67
FINANCIAL STATEMENTS CONSOLIDATED INCOME
STATEMENT Year ended 31 March (Ł millions) Note 2022 2021 2020
Revenue 5 18,320 19,731 22,984 Material and other cost of sales*
4,6 (11,239) (12,335) (14,684) Employee costs* 4,7 (2,265) (2,141)
(2,568) Other expenses* 4,10 (3,701) (3,589) (5,238) Exceptional
items 4 (43) (1,523) (29) Other income 9 200 195 174 Engineering
costs capitalised 11 455 727 1,369 Depreciation and amortisation 13
(1,944) (1,976) (1,910) Foreign exchange gain/(loss) and fair value
adjustments 13 140 331 (249) Finance income 12 9 11 52 Finance
expense (net) 12 (369) (251) (209) Share of loss of equity
accounted investments 15 (18) (41) (114) Loss before tax (455)
(861) (422) Income tax expense 14 (367) (239) (47) Loss for the
year (822) (1,100) (469) Attributable to: Owners of the Company
(818) (1,101) (471) Non-controlling interests (4) 1 2
*‘Material and other cost of sales’, ‘Employee costs’ and ‘Other
expenses’ exclude the exceptional items explained in note 4. The
notes on pages 72 to 139 are an integral part of these consolidated
financial statements. CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME AND EXPENSE Year ended 31 March (Ł millions) Note 2022
2021 2020 Loss for the year (822) (1,100) (469) Items that will not
be reclassified subsequently to profit or loss: Remeasurement of
net defined benefit obligation 32 707 (751) 983 Income tax related
to items that will not be reclassified 14 (92) 143
(155) 615 (608) 828 Items that may be
reclassified subsequently to profit or loss: (Loss)/gain on cash
flow hedges (net) (896) 546 304 Currency translation differences 24
(41) 21 Income tax related to items that may be reclassified 14 205
(103) (57) (667) 402 268 Other comprehensive
(expense)/income net of tax (52) (206) 1,096 Total comprehensive
(expense)/income attributable to shareholder (874) (1,306) 627
Attributable to: Owners of the Company (870) (1,307) 625
Non-controlling interests
(4) 1 2 The notes on pages 72 to 139 are an integral part of these
consolidated financial statements.
CONSOLIDATED BALANCE SHEET As at
31 March (Ł millions) Note 2022 2021 2020 Non-current assets Investments in
equity accounted investees 15 321 316 362 Other non-current investments 16 30 22 37
Other financial assets 17 185 341 257 Property, plant and equipment
18 6,253 6,461 6,814 Intangible assets 19 4,866 5,387 6,278
Right-of-use assets 36 568 543
568 Pension asset 32 434—408 Other non-current assets 20 35 32 23 Deferred
tax assets 14 336 397 523 Total non-current assets 13,028 13,499 15,270
Current assets Cash and cash equivalents 21 4,223 3,778 2,271
Short-term deposits and other investments 175 1,004 1,393 Trade
receivables 722 863 833 Other financial assets 19 394 477 383
Inventories 23 2,781 3,022 3,468 Other current assets 20 493 448
477 Current tax assets 20 80 9 Assets classified as held for sale 4
— Total current assets 8,812 9,672 8,834 Total assets 21,840 23,171
24,104 Current liabilities Accounts payable 24 5,144 6,308 6,499
Short-term borrowings 25 1,779 1,206 526 Other financial
liabilities 26 870 746 1,073 Provisions 27 989 1,161 944 Other
current liabilities 28 674 638 716 Current tax liabilities 116 100
100 Total current liabilities 9,572 10,159 9,858 Non-current liabilities Long-term
borrowings 25 5,248 4,972 4,817 Other financial liabilities 26 871
625 778 Provisions 27 1,112 1,188 1,355 Retirement benefit
obligation 32 25 387 28 Other non-current liabilities 28 404 461 533
Deferred tax liabilities 14 105 116 179 Total non-current liabilities 7,765 7,749
7,690 Total liabilities 17,337 17,908 17,548 Equity attributable to
shareholders Ordinary shares 29 1,501 1,501 1,501 Capital
redemption reserve 29 167 167 167 Other reserves 30 2,835 3,586
4,880 Equity attributable to shareholders 4,503 5,254 6,548
Non-controlling interests —
9 8 Total equity 4,503 5,263 6,556 Total liabilities and equity
21,840 23,171 24,104 The notes on pages 72 to 139 are an integral
part of these consolidated financial statements. These consolidated
financial statements were approved by the JLR plc Board and
authorised for issue on 13 June 2022. They were signed on its
behalf by: THIERRY BOLLORÉ CHIEF EXECUTIVE OFFICER COMPANY
REGISTERED NUMBER: 06477691 Annual Report 2021/22 J A G U A R L A N
D R O V E R A U T O M O T I V E P L C
69
FINANCIAL STATEMENTS CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY Ordinary Capital Other Equity Non- Total (Ł millions) shares
redemption reserves attributable to controlling equity reserve
shareholder interests Balance at 1 April 2021 1,501 167 3,586
5,254 9 5,263 Loss for the year — (818) (818) (4) (822) Other
comprehensive expense for the year — (52) (52)—(52) Total
comprehensive expense — (870) (870) (4) (874) Amounts removed from
hedge reserve and recognised in inventory — 147 147—147 Income tax
related to amounts removed from hedge reserve and recognised in
inventory — (28) (28)—(28) Disposal of subsidiaries — — (5) (5)
Balance at 31 March 2022 1,501 167 2,835 4,503—4,503 Balance
at 1 April 2020 1,501 167 4,880 6,548 8 6,556 (Loss)/profit
for the year — (1,101) (1,101) 1 (1,100) Other comprehensive
expense for the year — (206) (206)—(206) Total comprehensive
(expense)/ — (1,307) (1,307) 1 (1,306) income Amounts removed from
hedge reserve and recognised in inventory — 16 16—16 Income tax
related to amounts removed from hedge reserve and recognised in
inventory — (3) (3)—(3) Balance at 31 March 2021 1,501 167
3,586 5,254 9 5,263 Balance at 1 April 2019 1,501 167 4,305
5,973 6 5,979 Adjustment on initial application of — (23) (23) (23)
IFRS 16 (net of tax)—Adjusted balance at 1 April 2019 1,501
167 4,282 5,950 6 5,956 (Loss)/profit for the year — (471) (471) 2
(469) Other comprehensive income for the —1,096 1,096—1,096
year—Total comprehensive income — 625 625 2 627 Amounts removed
from hedge reserve and recognised in inventory — (33) (33)—(33)
Income tax related to amounts removed from hedge reserve and
recognised in inventory — 6 6—6 Balance at 31 March 2020 1,501
167 4,880 6,548 8 6,556 The notes on pages 72 to 139 are an
integral part of these consolidated financial
statements.
CONSOLIDATED CASH FLOW STATEMENT Year ended
31 March (Ł millions) Note 2022 2021 2020 Cash flows from
operating activities Cash generated from operations 38 572 2,536
2,399 Dividends received 15 — 67 Income tax paid (138) (210) (152)
Net cash generated from operating activities 434 2,326 2,314 Cash
flows from investing activities Investment in equity accounted
investments—(1) (67) Purchases of other investments (4) (4) (11)
Proceeds from sale of other investments—22 -Investment in other
restricted deposits (41) (57) (35) Redemption of other restricted
deposits 39 55 31 Movements in other restricted deposits (2) (2)
(4) Investment in short-term deposits and other investments (1,104)
(3,169) (4,010) Redemption of short-term deposits and other
investments 1,935 3,512 3,659 Movements in short-term deposits and
other investments 831 343 (351) Purchases of property, plant and
equipment (712) (1,050) (1,281) Proceeds from sale of property,
plant and equipment 7 8 1 Net cash outflow relating to intangible
asset expenditure (481) (799) (1,511) Finance income received 8 14
50 Acquisition of subsidiaries (net of cash acquired) — (3)
Disposal of subsidiaries (net of cash disposed) (10) — Net cash
used in investing activities (363) (1,469) (3,177) Cash flows from
financing activities Finance expenses and fees paid (402) (313)
(262) Proceeds from issuance of borrowings 2,095 1,953 1,602
Repayment of borrowings (1,347) (749) (939) Payments of lease
obligations (71) (79) (72) Net cash generated from financing
activities 275 812 329 Net increase/(decrease) in cash and cash
equivalents 346 1,669 (534) Cash and cash equivalents at beginning
of year 21 3,778 2,271 2,747 Effect of foreign exchange on cash and
cash equivalents 99 (162) 58 Cash and cash equivalents at end of
year 21 4,223 3,778 2,271 The notes on pages 72 to 139 are an
integral part of these consolidated financial statements. Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 71
FINANCIAL STATEMENTS NOTES (FORMING PART OF
THE CONSOLIDATED FINANCIAL STATEMENTS) 1 Background and operations
The Group had available liquidity of Ł6.4 billion at
31 March Jaguar Land Rover Automotive plc (“the Company”) and
its 2022, including Ł4.4 billion of cash and cash equivalents
and the subsidiaries are collectively referred to as “the Group” or
“JLR”. Group’s undrawn Ł2.0 billion revolving credit facility.
Within the The Company is a public limited company incorporated and
going concern assessment period there is Ł1 billion minimum
domiciled in the United Kingdom. The address of its registered
quarter-end liquidity
covenant attached to the Group’s UKEF office is Abbey Road,
Whitley, Coventry, CV3 4LF, England, United loans for the entire
period and to the RCF facility from July 2022, Kingdom. and a
reduction in the RCF facility to Ł1.5 billion from July 2022.
Further details of the Group’s available financing facilities and
The Company is a subsidiary of Tata Motors Limited, India and the
maturity of facilities is described on page 34. acts as an
intermediate holding company for the Jaguar Land Rover business.
The principal activity during the year was the The Group has
assessed its projected cash flows over the design, development,
manufacture and marketing of high- going concern assessment period.
This base case uses the performance luxury saloons, specialist
sports cars and four- most recent Board-approved forecasts that
include the going wheel-drive off-road vehicles. concern assessment
period; taking into account the Group’s expectations of the
continued supply chain challenges related These consolidated
financial statements have been prepared to semiconductor shortages,
the diminishing impacts of the in Pound Sterling (GBP) and
rounded to the nearest million GBP COVID-19 pandemic and prevailing
financial conditions including (Ł million) unless otherwise stated.
Results for the year ended the impact of inflationary pressures on
material costs. The Group and as at 31 March 2020 have been
disclosed solely for the saw a gradual improvement in chip supply
during the quarter information of the users. ended 31 March
2022 leading to improved production and wholesale volumes compared
to the previous two quarters. This 2 Accounting information and
policies is expected to continue through the year ending
31 March 2023 although the situation remains uncertain.
Statement of compliance The base case assumes an improvement in
wholesale volumes in These consolidated and parent company
financial statements the going concern assessment period compared
to the previous have been prepared in accordance with UK-adopted international twelve months,
reflecting gradual improvement in semiconductor accounting
standards. supply, and proactive management of semiconductor
supplies to maximise production of higher margin products. The
Company has taken advantage of section 408 of the Companies Act
2006 and, therefore, the separate financial The Group has also
carried out a reverse stress test against the statements of the
Company do not include the income statement base case to determine
the decline in wholesale volume over a or the statement of
comprehensive income of the Company on twelve-month period that
would result in a liquidity level that a stand-alone basis.
breaches financing covenants. The reverse stress test assumes
continued supply constraints resulting in demand that exceeds Basis
of preparation supply over the twelve-month period and assumes
optimisation of supply to maximise production of higher margin
products. The consolidated financial statements have been prepared
on a historical cost basis except for certain financial
instruments, In order to reach a liquidity level that breaches
covenants, it would which are measured at fair value at the end of
each reporting require a sustained decline in wholesale volumes of
more than period as explained in the accounting policies in note
35. The 60% compared to the base case over a twelve-month period.
balance sheet and accompanying notes as at 31 March 2020 The
reverse stress test reflects the variable profit impact of the have
been disclosed solely for the information of the users. wholesale
volume decline, and assumes all other assumptions are held in line
with the base case. It does not reflect other Going concern
potential upside measures that could be taken in such a reduced
volume scenario; or any new funding. The Financial Statements have
been prepared on a going concern basis, which the Directors
consider to be appropriate for the The Group does not consider this
scenario to be plausible reasons set out below. given that the
stress test volumes are significantly lower than the volumes
achieved during both the peak of the COVID-19 The Directors have assessed
the financial position of the Group pandemic and the worst quarter
of semiconductor shortages. as at 31 March 2022, and the
projected cash flows of the Group The Group has a record order bank
as at 31 March 2022 and for the twelve-month period from the
date of authorisation of is confident that it can significantly
exceed reverse stress test the financial statements (the ‘going
concern assessment period’). volumes.
arrangement whereby the parties that have
joint control of the The Group has considered the impact of severe
but plausible arrangement have rights to the net assets of the
arrangement. downside scenarios and the expected wholesale volumes
under each of these scenarios is much higher than under the reverse
Associates are those entities over which the Group has significant
stress test. influence. Significant influence is the power to
participate in the financial and operating policy decisions of the
investee but is not The Directors, after making appropriate
enquiries and taking control or joint control of those policies.
Significant influence is into consideration the risks and
uncertainties facing the Group, presumed to exist when the Group
holds between 20 and 50 per consider that the Group and parent
company have adequate cent of the voting power of the investee
unless it can be clearly financial resources to continue in
operational existence demonstrated that this is not the case.
throughout the Going Concern Assessment Period, meeting their
liabilities as they fall due. Accordingly, the Directors continue
to The results, assets and liabilities of joint ventures and
associates adopt the going concern basis in preparing these
consolidated are incorporated in these financial statements using
the equity and parent company financial statements. method of
accounting as described in note 15. Accounting policies Use of
estimates and judgements Accounting policies are included in the
relevant notes to the The preparation of financial statements in
conformity with IFRS consolidated financial statements on pages 72
to 139. The requires the use of judgements, estimates and
assumptions accounting policies below are applied throughout the
financial that affect the reported amounts of assets and
liabilities at the statements. date of the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Those that Climate change are significant to the Group are
discussed separately below. In the preparation of these
consolidated financial statements, Judgements the Group has
considered the potential effects of climate change, related
regulatory requirements and of the targets set In the process of
applying the Group’s accounting policies, out in the Group’s
Strategic Report. Where relevant, these are management has made the
following judgements, which have a included within assumptions and
estimates used to determine significant effect on the amounts
recognised in the consolidated the carrying value of assets and
liabilities at 31 March 2022. In financial statements:
particular, the Group has considered the impact on the future cash
flows used in the impairment assessment of its cash- Revenue
recognition: The Group uses judgement to determine generating unit
(see note 19); and on its provisions for the costs when control of
its goods, primarily vehicles and parts, pass to of compliance with
emission regulations (see note 27). the customer. This is assessed
with reference to indicators of control, including the risks and
rewards of ownership and legal Basis of consolidation title with
reference to the underlying terms of the customer contract. Refer
to note 5 for further information. Subsidiaries The consolidated
financial statements include Jaguar Land Rover Assessment of
cash-generating units: The Group has Automotive plc and its
subsidiaries. Subsidiaries are entities determined that there is
one cash-generating unit. This is on controlled by the Company.
Control exists when the Company the basis that there are no smaller
groups of assets that can (a) has power over the investee,
(b) is exposed or has rights to be identified with certainty
that generate specific cash inflows variable return from its
involvement with the investee and (c) that are independent of
the inflows generated by other assets or has the ability to affect
those returns through its power to direct groups of assets. Refer
to note 19 for further information. relevant activites of the
investee. Relevant activites are those activities that
significantly affect an entity’s returns. In assessing Alternative
performance measures (APMs) and exceptional control, potential
voting rights that currently are exercisable are items: The Group
exercises judgement in determining the taken into account, as well
as other contractual arrangements adjustments to apply to IFRS
measurements in order to that may influence control. Intercompany
transactions and derive APMs that provide additional useful
information on the balances including unrealised profits are
eliminated in full on underlying trends and in classifying items as
exceptional items. consolidation. Refer to notes 3 and 4 for
further information. Joint ventures and associates (equity
accounted investments) Capitalisation of product engineering costs:
The Group applies A joint arrangement is an arrangement of which
two or more judgement in determining at what point in a vehicle
programme’s parties have joint control. Joint control is the
contractually agreed life cycle the recognition criteria under IAS
38 are satisfied. Refer sharing of control of an arrangement, which
exists only when to note 19 for further information. decisions
about the relevant activities require the unanimous consent of the
parties sharing control. A joint venture is a joint Deferred tax
asset recognition: The extent to which deferred Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
73
FINANCIAL STATEMENTS tax assets can be
recognised is based on an assessment of the supplies, and other
expenses incurred for product development availability of future
taxable income against which the deductible undertaken by the
Group. temporary differences and tax loss carry-forwards can be
utilised. The Group has exercised judgement in determining the
Material and other cost of sales as reported in the consolidated
jurisdictions in which deferred tax assets have not been fully
income statement is presented net of the impact of realised
recognised. This has been done based on forecast profitability
foreign exchange relating to derivatives hedging cost exposures.
and historical results of the companies in which the deferred tax
assets arise. Refer to note 14 for further information. Foreign
currency Estimates and assumptions The Company has a functional
currency of GBP. The presentation currency of the consolidated
financial statements is GBP. The areas where assumptions and
estimates are significant to the financial statements are as
described below. The estimates and Transactions in currencies other
than the functional currency of associated assumptions are based on
historical experience and the entity are recorded at the exchange
rate prevailing on the date various other factors that are believed
to be reasonable under the of transaction. Foreign currency
denominated monetary assets circumstances, the results of which
form the basis of making the and liabilities are remeasured into
the functional currency at the judgements about carrying values of
assets and liabilities that exchange rate prevailing on the balance
sheet date. Exchange are not readily apparent from other sources.
Actual results may differences are recognised in the consolidated
income statement differ from these estimates. Significant estimates
are those that as “Foreign exchange gain/(loss) and fair value
adjustments”. have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within
the next year. For the purposes of presenting consolidated
financial statements, Other estimates are those that may affect
carrying amounts in the assets and liabilities of the Group’s
foreign operations (non-the
longer term. GBP functional currency) are translated at exchange
rates prevailing on the balance sheet date. Income and expense
items Significant estimates are translated at the average exchange
rates for the period. Exchange differences arising, if any, are
recognised in other Impairment of intangible and tangible fixed
assets: The Group comprehensive income and accumulated in equity.
has intangible assets with indefinite lives and therefore tests
annually whether intangible and tangible fixed assets have
Impairment suffered any impairment. Refer to note 19 for further
information on the key assumptions and sensitivities used in the
testing these Property, plant and equipment and intangible assets
assets for impairment. At each balance sheet date, the Group
assesses whether there is any indication that any property, plant
and equipment and Retirement benefit obligation: The present value
of the post- intangible assets with finite lives may be impaired.
If any such employment benefit obligations depends on a number of
factors impairment indicator exists, the recoverable amount of an
asset and assumptions, including discount rate, inflation and
mortality is estimated to determine the extent of impairment, if
any. assumptions. Refer to note 32 for details of these assumptions
Where it is not possible to estimate the recoverable amount of and
sensitivities. an individual asset, the Group estimates the
recoverable amount of the cash generating unit to which the asset
belongs. Other estimates Intangible assets with indefinite useful
lives and intangible assets Product warranties: refer to note 27
for further information. not yet available for use are tested for
impairment annually, or earlier if there is an indication that the
asset may be impaired. Variable marketing expense: refer to note 5
for further information. Recoverable amount is the higher of fair
value less costs of sale and value in use. In assessing value in
use, the estimated future Impairment in equity accounted investees:
refer to note 15 for cash flows are discounted to their present
value using a pre-tax
further information. discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset (or cash Restructuring: refer to note 27 for further
information. generating unit) for which the estimates of future
cash flows have not been adjusted. Cost recognition If the
recoverable amount of an asset (or cash-generating unit) Costs and
expenses are recognised when incurred and are is estimated to be
less than its carrying amount, the carrying classified according to
their nature. amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss is recognised
Expenditures are capitalised, where appropriate, in accordance
immediately in the consolidated income statement. with the policy
for internally generated intangible assets and represent employee
costs, stores and other manufacturing An asset (or cash-generating
unit) impaired in prior years is
reviewed at each balance sheet date to
determine whether there • Annual improvements to IFRS standards
2018-2020 cycle; is any indication of a reversal of impairment
losses recognised in prior years. • Amendments to IAS 16 Property,
Plant and Equipment – Proceeds before intended use; New accounting
policy pronouncements • IFRS 17 Insurance Contracts; and
(a) Standards, revisions and amendments to standards and
interpretations not significant to the Jaguar Land Rover Group •
Amendments to IFRS 17 and IFRS 19 Initial Application of and
applied for the first time in the year ending 31 March 2022
IFRS 17 and IFRS 9—Comparative Information. The following
amendments and interpretations have been The Group is currently
assessing the impact of these adopted by the Group in the year
ending 31 March 2022. pronouncements on the consolidated
financial statements. • Amendments to IFRS 9 Financial Instruments,
IAS 39 (c) Standards, revisions and amendments to standards and
Financial Instruments: Recognition and Measurement, IFRS
interpretations not yet endorsed by the UK and not yet adopted 7
Financial Instruments, IFRS 4 Insurance Contracts and by the Group
IFRS 16 Leases: Disclosures – Interest rate benchmark reform; and
The following pronouncements, issued by the IASB, have not yet been
endorsed by the UK, are not yet effective and have not yet •
Amendments to IFRS 16 Leases – COVID-19 related rent been adopted by
the Group. concessions beyond 30 June 2021. • Amendments to
IAS 1 Presentation of Financial Statements The adoption of these
amendments and interpretations has not – Classification of
liabilities as current or non-current; had a significant impact
on the consolidated financial statements. • Amendments to IAS 1
Presentation of Financial Statements (b) Standards, revisions
and amendments to standards and – disclosure of accounting
policies; interpretations not yet effective and not yet adopted by
the Group • Amendments to IAS 8 Accounting Policies, Changes in
Accounting Estimates and Errors – definition of accounting The
following pronouncement, issued by the IASB and endorsed estimates;
and by the UK, is not yet effective and has not yet been adopted by
the Group. This amendment is effective for annual report periods •
Amendments to IAS 12 Deferred Tax related to Assets and beginning
on or after 1 January 2022. Liabilities arising from a Single
Transaction. • Amendments to IFRS 3 Business Combinations –
Reference to the conceptual framework; • Amendments to IAS 37
Provisions, Contingent Liabilities and Contingent Assets – Onerous
contracts – cost of fulfilling a contract; Annual Report 2021/22 J
A G U A R L A N D R O V E R A U T O M O T I V E P L C 75
FINANCIAL STATEMENTS 3 Alternative
Performance Measures In reporting financial information, the Group
presents alternative performance measures (“APMs”) that are not
defined or specified under the requirements of IFRS. The Group
believes that these APMs, which are not considered to be a
substitute for or superior to IFRS measures, provide stakeholders
with additional helpful information on the performance of the
business. The APMs used within this Annual Report are defined
below. Alternative performance Definition measure Adjusted EBITDA
Adjusted EBITDA is defined as profit before: income tax expense;
exceptional items; finance expense (net of capitalised interest)
and finance income; gains/losses on debt and unrealised
derivatives, realised derivatives entered into for the purpose of
hedging debt, and equity or debt investments held at fair value;
foreign exchange gains/losses on other assets and liabilities,
including short-term deposits and cash and cash equivalents; share
of profit/loss from equity accounted investments; depreciation and
amortisation. Adjusted EBIT Adjusted EBIT is defined as for
adjusted EBITDA but including share of profit/loss from equity
accounted investments, depreciation and amortisation. Profit/(loss)
before tax and Profit/(loss) before tax excluding exceptional
items. exceptional items Free cash flow Net cash generated from
operating activities less net cash used in automotive investing
activities, excluding investments in consolidated entities and
movements in financial investments, and after finance expenses and
fees paid. Financial investments are those reported as cash and
cash equivalents, short-term deposits and other investments, and
equity or debt investments held at fair value. Total product and
other investment Cash used in the purchase of property, plant and
equipment, intangible assets, investments in equity accounted
investments and other trading investments, acquisition of
subsidiaries and expensed research and development costs. Working
capital Changes in assets and liabilities as presented in note 38.
This comprises movements in assets and liabilities excluding
movements relating to financing or investing cash flows or
non-cash items that are not
included in adjusted EBIT or adjusted EBITDA. Total cash and cash
equivalents, Defined as cash and cash equivalents, short-term
deposits and other investments, marketable securities deposits and
investments and any other items defined as cash and cash
equivalents in accordance with IFRS. Available liquidity Defined as
total cash and cash equivalents, deposits and investments plus
committed undrawn credit facilities. Net debt Total cash and cash
equivalents, deposits and investments less total interest-bearing
loans and borrowings. Retail sales Jaguar Land Rover retail sales
represent vehicle sales made by dealers to end customers and
include the sale of vehicles produced by our Chinese joint venture,
Chery Jaguar Land Rover Automotive Company Ltd. Wholesales
Wholesales represent vehicle sales made to retailers or other
external customers. The Group recognises revenue on wholesales. The
Group uses adjusted EBITDA as an APM to review and Free cash flow
is considered by the Group to be a key measure in measure the
underlying profitability of the Group on an ongoing assessing and
understanding the total operating performance of basis for
comparability as it recognises that increased capital the Group and
to identify underlying trends. expenditure year on year will lead
to a corresponding increase in depreciation and amortisation
expense recognised within the Total product and other investment is
considered by the Group to consolidated income statement. be a key
measure in assessing cash invested in the development of future new
models and infrastructure supporting the growth The Group uses
adjusted EBIT as an APM to review and measure of the Group. the
underlying profitability of the Group on an ongoing basis as this
excludes volatility on unrealised foreign exchange Working capital
is considered by the Group to be a key measure transactions. Due to
the significant level of debt and currency in assessing short-term
assets and liabilities that are expected derivatives held,
unrealised foreign exchange can distort the to be converted into
cash within the next 12-month period. financial performance
of the Group from one period to another.
Total cash and cash equivalents, deposits and
investments and available liquidity are measures used by the Group
to assess liquidity and the availability of funds for future spend
and investment. Exceptional items are defined in note 4.
Reconciliations between these alternative performance measures and
statutory reported measures are shown below and on the next page.
Adjusted EBIT and Adjusted EBITDA Year ended 31 March (Ł
millions) Note 2022 2021 2020 Adjusted EBITDA 1,896 2,531 2,050
Depreciation and amortisation (1,944) (1,976) (1,910) Share of loss
of equity accounted investments 15 (18) (41) (114) Adjusted EBIT
(66) 514 26 Foreign exchange gain on derivatives 13—14 15
Unrealised gain/(loss) on commodities 13 48 137 (78) Foreign
exchange (loss)/gain and fair value adjustments on loans 13 (141)
314 (135) Foreign exchange gain/(loss) on economic hedges of loans
13 91 (143) 29 Foreign exchange gain/(loss) on balance sheet, cash
and deposits 13 12 64 (50) revaluation Finance income 12 9 11 52
Finance expense (net) 12 (369) (251) (209) Fair value gain/(loss)
on equity investments 13 4 2 (43) (Loss)/profit before tax and
exceptional items (412) 662 (393) Exceptional items 4 (43) (1,523)
(29) Loss before tax (455) (861) (422) Free cash flow Year ended
31 March (Ł millions) 2022 2021 2020 Net cash generated from
operating activities 434 2,326 2,314 Purchases of property, plant
and equipment (712) (1,050) (1,281) Net cash outflow relating to
intangible asset expenditure (481) (799) (1,511) Proceeds from sale
of property, plant and equipment 7 8 1 Investment in equity
accounted investees—(1) (67) Acquisition of subsidiaries (net of
cash acquired) — (3) Disposal of subsidiaries (net of cash
disposed) (10) —Finance expenses and fees paid (402) (313) (262)
Finance income received 8 14 50 Free cash flow (1,156) 185 (759)
Total product and other investments Year ended 31 March (Ł
millions) Note 2022 2021 2020 Purchases of property, plant and
equipment 712 1,050 1,281 Net cash outflow relating to intangible
asset expenditure 481 799 1,511 Engineering costs expensed 11 839
489 421 Investment in equity accounted investees—1 67 Purchases of
other investments 4 4 11 Acquisition of subsidiary (net of cash
acquired) — 3 Total product and other investments 2,036 2,343 3,294
Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I
V E P L C 77
FINANCIAL STATEMENTS Total cash and cash
equivalents, deposits and investments As at (Ł millions) 2022 2021
2020 Cash and cash equivalents 4,223 3,778 2,271 Short-term
deposits and other investments 175 1,004 1,393 Total cash and cash
equivalents, deposits and investments 4,398 4,782 3,664 Available
liquidity As at 31 March (Ł millions) Note 2022 2021 2020 Cash
and cash equivalents 4,223 3,778 2,271 Short-term deposits and
other investments 175 1,004 1,393 Committed undrawn credit
facilities 25 2,015 1,938 1,935 Available liquidity 6,413 6,720
5,599 Net debt As at (Ł millions) 2022 2021 2020 Cash and cash
equivalents 4,223 3,778 2,271 Short-term deposits and other
investments 175 1,004 1,393 Interest-bearing loans and borrowings
(7,597) (6,697) (5,884) Net debt (3,199) (1,915) (2,220) Retail and
wholesales Year ended 31 March (units) 2022 2021 2020 Retail
sales 376,381 439,588 508,659 Wholesales 294,182 347,632 475,952 4
Exceptional items • Costs associated with provisions and related
reversals arising from a significant one-off event not in the normal
Exceptional items are disclosed separately in the consolidated
course of business. income statement and excluded from adjusted
EBIT and adjusted EBITDA measures to support the reader’s
understanding of the The exceptional items recognised in the year
ended 31 March performance of the Group. 2022 comprise: The
Group considers qualitative and quantitative factors to •
Ł43 million in relation to customer liabilities arising from
determine whether a transaction or event is exceptional, including
sanctions imposed against Russia by many countries, the expected
size, nature and frequency of the transaction or preventing the
shipment of vehicles and certain parts to the event, and any
precedent for similar items in previous years. market. Items that
are considered exceptional may include the following: • Updates to
the assessment of the impact of the Group’s Reimagine strategy
relating to the exceptional items • Costs associated with
significant restructuring events; recognised during the year ended
31 March 2021. • Impairments or
reversals of impairments arising from an impairment assessment of
the Group’s cash-generating unit in accordance with IAS 36; •
Defined benefit past service costs or credits arising from scheme
amendments; and
The exceptional items recognised in the year
ended 31 March • An update of Ł9 million to the past
service cost recognised 2021 comprise: due to the requirement to
equalise male and female members’ benefits for the inequalities
within guaranteed • Asset write-downs of Ł952 million in
relation to models minimum pension (‘GMP’) earned between
17 May 1990 cancelled under the Group’s Reimagine strategy.
See notes and 5 April 1997 based on new information. See note
32. 18 and 19. The exceptional item recognised in the year ended
31 March • Restructuring costs of Ł562 million comprising
2020 comprises restructuring costs of Ł29 million relating to
a Group restructuring programme that commenced during the • Costs
of Ł534 million resulting from the Group’s year ended
31 March 2019. This included a past service pension Reimagine
strategy comprising accruals to settle legal cost of
Ł4 million. obligations on work performed to date and
provisions for redundancies and other third party obligations. See
The tables below set out the exceptional items (expense/ note 27.
Included within the restructuring costs is a (credit)) recorded in
the years ended 31 March 2022, 2021 and defined benefit past
service cost of Ł7 million. See note 2020 and the impact on
the consolidated income statement if
32. these
items were not disclosed separately as exceptional items. • Costs
of Ł28 million resulting from a separate redundancy programme
during the year. See note 27. Material and Year ended 31 March
2022 (Ł millions) Other expenses Employee costs other cost of sales
Excluding exceptional items 3,701 2,265 11,239 Restructuring
costs—asset write-downs 7 —Restructuring costs—employee and third
party obligations (73) (16) 82 Other 43 — Including exceptional
items 3,678 2,249 11,321 Material and Year ended 31 March 2021
(Ł millions) Note Other expenses Employee costs other cost of sales
Excluding exceptional items 3,589 2,141 12,335 Restructuring
costs—asset write-downs 952 —Restructuring costs—employee and third
party obligations 252 116 194 Pension past service cost
32—9—Including exceptional items 4,793 2,266 12,529 Year ended
31 March 2020 (Ł millions) Other expenses Employee costs
Excluding exceptional items 5,238 2,568 Restructuring costs (3) 32
Including exceptional items 5,235 2,600 Included in “Income tax
expense” in the consolidated income statement for the year ended
31 March 2022 is Łnil in respect of exceptional items (2021,
2020: credit of Ł6 million). Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C
79
FINANCIAL STATEMENTS 5 Revenue Revenue
recognition As described in note 37, the Group operates with a
single automotive reporting segment, principally generating revenue
Revenue comprises the consideration earned by the Group in from the
sales of vehicles, parts and accessories. respect of the output of
its ordinary activities. It is measured based on the contract
price, which is the consideration specified in the The sale of
vehicles also can include additional services provided contract
with the customer and excludes amounts collected on to the customer
at the point of sale, for which the vehicle and behalf of third
parties, and net of settlement discounts, bonuses, services are
accounted for as separate performance obligations, rebates and
sales incentives. The Group’s primary customers as they are
considered separately identifiable. The contract from the sale of
vehicles, parts and accessories are retailers, fleet transaction
price is allocated among the identified performance and corporate
customers, and other third-party distributors. The obligations
based on their stand-alone selling prices. Where the Group
recognises revenue when it transfers control of a good or
stand-alone selling price is not readily observable, it is
estimated service to a customer, thus evidencing the satisfaction
of the using an appropriate alternative approach. associated
performance obligation under that contract. Significant Nature,
timing of satisfaction of performance obligations, and significant
payment terms revenue areas Vehicles, parts, The Group recognises
revenue on the sale of vehicles, parts and accessories at the point
of “wholesale”, which is determined and accessories by the
underlying terms and conditions of the contract with the customer
as to when control transfers to them. The principle (and other of
control under IFRS 15 considers which party has the ability to
direct the use of an asset and to obtain substantially all of the
goods) remaining economic benefits. Determining the transfer of
control with regards to the sale of goods is primarily driven by: •
The point at which the risks and rewards of ownership pass to the
customer; • The point at which the customer takes physical
possession of the good or product; • The point at which the
customer accepts the good or product; • The point at which the
Group has a present right to payment for the sale of the good or
product; and • The point at which legal title to the good or
product transfers to the customer. In the vast majority of cases,
the sale of the relevant good is recognised at the point of
dispatch (at release to the carrier responsible for transportation
to the customer) or the point of delivery to the customer,
depending on individual contractual arrangements. In some
instances, revenue may be recognised on a bill-and-hold basis where
vehicles, for example, are sold to the customer but are retained in
the Group’s possession at a vehicle holding compound on behalf of
the customer ahead of being physically transferred to them at a
future time. Such arrangements meet the criteria for bill-and-hold arrangements under
IFRS 15 to ensure that the customer has obtained the ultimate
control of the product when revenue is recognised. The reason for
the bill-and-hold is substantive (as
the customer requests JLR to retain possession, usually due to a
lack of available space at their own premises), the vehicles are
identifiable as separately belonging to the customer (on the basis
that each vehicle has a unique Vehicle Identification Number), the
vehicle must be ready for physical transfer to the customer (which
it is, given that it is fully built and safety-checked off the
manufacturing line) and the Group does not have the ability to use
the vehicle or direct it
elsewhere. The
Group operates with financing partners across the world that
provide wholesale financing arrangements to the retail network for
vehicle sales, which enables cash settlement to occur immediately
(usually within two working days) for purchases from the Group. For
the sale of parts and accessories, the Group typically receives
payment in line with the invoice payment terms stipulated and
agreed with its customers, which are usually 30 days.
Significant Nature, timing of satisfaction of
performance obligations, and significant payment terms revenue
areas Sales incentives The costs associated with providing sales
support and incentives (variable marketing expense) are considered
to be variable components of consideration, thus reducing the
amount of revenue recognised by the Group. Under IFRS 15, the Group
ensures that variable consideration is recognised to the extent of
the amount to which it expects to be entitled. To meet this
principle, the Group constrains its estimate of variable
consideration to include amounts only to the extent that it is
highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the associated
uncertainty associated is subsequently resolved. The Group
estimates the expected sales incentive by market and considers
uncertainties including competitor pricing, ageing of dealer stock
and local market conditions. The constraint on variable
consideration is estimated with reference to historical accuracy,
current market conditions and a prospective assessment considering
relevant geopolitical factors, including global stock positions for
both the Group and its third party dealer network reflecting the
pipeline of vehicle inventory for sale to end customers. Variable
consideration received for contracts with multiple performance
obligations is allocated to all such obligations only when
applicable. For example, with the sale of a vehicle, the cost of
the incentive provided is allocated entirely to the vehicle as its
purpose is to incentivise the sale of the vehicle rather than
support any additional obligations. Scheduled Scheduled maintenance
contracts sold with a vehicle provide the end customer with the
benefit of bringing their vehicle to a maintenance dealership for
the routine maintenance required to maintain compliance for
warranty purposes. contracts The majority of plans sold by the
Group are complimentary with the vehicle, thus payment is received
at the same time as the proceeds from the vehicle sale, at which
point the amount is recognised as a contract liability based on the
stand-alone selling price, which is measured using a cost-plus
approach. Revenue is recognised over the life of the plan based on
the expected performance of the services from the point of a
vehicle being retailed to an end customer and aligned to the
expected profile of costs to fulfil those services based on
historical information. Telematics Telematics features provide a
service to the customer typically aligned to the warranty period of
the vehicle, allowing a vehicle to connect and interact with an end
customer’s mobile phone. The Group typically receives payment
relating to telematics features at the same time as the proceeds
from the vehicle sale, at which point the amount is recognised as a
contract liability based on the stand-alone selling price. For
optional features, this is measured at the observable option price
and for standard-fit features is measured using a cost-plus basis.
The stand-alone selling price for telematics subscription renewals
is measured at the renewal price offered to the customer. Revenue
is recognised on a straight-line basis over the term of the service
from the point of the vehicle being retailed to an end customer in
line with the expected costs to fulfil those services. Warranty
Vehicles and parts sold by the Group include a standard warranty to
guarantee the vehicle complies with agreed-upon considerations
specifications for a defined period of time. Where the warranty
offering to the end customer exceeds the standard market as a
service expectation for similar products, or provides a service in
excess of the assurance that the agreed-upon specification is met,
the Group considers this to constitute a service to the end
customer and therefore a separate performance obligation. Revenue
is recognised on a straight-line basis over the contractual period
to which the warranty service relates, up to which point it is
recognised as a contract liability. Repurchase Some contracts with
customers include an option or obligation for the Group to
repurchase the product sold (including arrangements repurchasing a
product originally sold as part of an amended product). Such
instances are common in the Group’s arrangements with third-party
fleet customers or in contract manufacturing arrangements that the
Group is party to. The Group does not recognise revenue on the
original sale, as it retains ultimate control of that product. The
related inventory continues to be recognised on the Group’s
consolidated balance sheet. The consideration received from the
customer is treated as a liability. Where the contractual
repurchase price is less than the original sale price, the
transaction is accounted for as a lease and where the contractual
repurchase price is more than or equal to the original sale price
the transaction is accounted for as a financing arrangement.
Revenue recognised under such lease arrangements is outside of the
scope of IFRS 15 and instead is recognised in line with IFRS 16
Leases. Revenue relating to the good or product is recognised only
when it is sold by the Group with no repurchase obligation or
option attached. Returns Vehicle sales do not typically include
allowances for returns or refunds, although in some markets there
is legislative requirement obligations, for Jaguar Land Rover as an
automotive manufacturer to repurchase or reacquire a vehicle if
quality issues arise that have been refunds and remedied a number
of times and where the owner no longer wishes to own the vehicle as
a result. similar obligations Regarding other goods, where rights
of return may be prevalent, the Group estimates the level of
returns based on the historical data for specific products,
adjusted as necessary to estimate returns for new products. Revenue
is not recognised for expected returns—instead the Group recognises
a refund liability and asset where required. Annual Report 2021/22
J A G U A R L A N D R O V E R A U T O M O T I V E P L C
81
FINANCIAL STATEMENTS The Group’s revenues are
summarised as follows: Year ended 31 March (Ł millions) 2022
2021 2020 Revenue recognised for sales of vehicles, parts and
accessories 17,159 18,775 22,436 Revenue recognised for services
transferred 324 314 306 Revenue—other 762 753 807 Total revenue
from contracts with customers 18,245 19,842 23,549 Realised revenue
hedges 75 (111) (565) Total revenue 18,320 19,731 22,984 “Revenue –
other” includes sales of goods other than vehicles, parts and
accessories. Revenue disaggregation The following table presents
the Group’s revenue, disaggregated and major product categories.
All revenue is generated from the by primary geographical market,
timing of revenue recognition Group’s single automotive operating
segment. Year ended 31 March 2022 (Ł millions) UK US China
Rest of Rest of Total Europe World Revenue Revenue recognised for
sales of vehicles, parts and accessories 2,377 4,104 4,166 3,221
3,291 17,159 Revenue recognised for services transferred 108 101 7
24 84 324 Revenue—other 679 6 64 3 10 762 Total revenue from
contracts with customers 3,164 4,211 4,237 3,248 3,385 18,245
Realised revenue hedges—109 (61)—27 75 Total revenue 3,164 4,320
4,176 3,248 3,412 18,320 Year ended 31 March 2021 (Ł millions)
UK US China Rest of Rest of Total Europe World Revenue Revenue
recognised for sales of vehicles, parts and accessories 3,008 4,663
4,546 3,551 3,007 18,775 Revenue recognised for services
transferred 126 95 5 10 78 314 Revenue—other 656 3 85 2 7 753 Total
revenue from contracts with customers 3,790 4,761 4,636 3,563 3,092
19,842 Realised revenue hedges—(97) (75)—61 (111) Total revenue
3,790 4,664 4,561 3,563 3,153 19,731 Year ended 31 March 2020
(Ł millions) UK US China Rest of Rest of Total Europe World Revenue
Revenue recognised for sales of vehicles, parts and accessories
3,875 5,889 3,374 4,745 4,553 22,436 Revenue recognised for
services transferred 63 91 75 11 66 306 Revenue—other 786 4 5 1 11
807 Total revenue from contracts with customers 4,724 5,984 3,454
4,757 4,630 23,549 Realised revenue hedges—(370) (166)—(29) (565)
Total revenue 4,724 5,614 3,288 4,757 4,601
22,984
Contract liabilities As at 31 March (Ł
millions) 2022 2021 2020 Ongoing service obligations 681 766 846
Liabilities for advances received 122 61 50 Total contract
liabilities 803 827 896 Revenue that is expected to be recognised
within five years or less. This is because revenue resulting from
those sales will be related to performance obligations that are
unsatisfied (or recognised in a short-term period. The services
included with the partially unsatisfied) amounted to
Ł803 million at 31 March vehicle sale are to be
recognised as revenues in subsequent years 2022 (2021:
Ł827 million, 2020: Ł896 million). but represent an
insignificant portion of expected revenues in comparison. “Ongoing
service obligations” mainly relate to long-term service and
maintenance contracts, extended warranties and The movement in
contract liabilities relates solely to revenue telematics services.
“Liabilities for advances received” primarily recognised from
balances held at the beginning of the year of relate to
consideration received in advance from customers for
Ł385 million (2021: Ł364 million, 2020: Ł392 million) and
products not yet wholesaled, at which point the revenue will
increases due to cash received for performance obligations be
recognised. “Ongoing service obligations” and “Liabilities for
unsatisfied at the year end of Ł361 million (2021:
Ł295 million, advances received” are both presented within
“Other liabilities” 2020: Ł397 million). in the consolidated
balance sheet. Revenue recognised in the year from performance
obligations The Group applies the practical expedient in IFRS
15.121 and satisified in the previous year is Ł13 million
(2021: Ł100 million, does not disclose information about
remaining performance 2020: Ł33 million). obligations that have an
original expected duration of one year 6 Material and other cost of
sales Year ended 31 March (Ł millions) 2022 2021 2020 Changes
in inventories of finished goods and work-in-progress 279 469 121
Purchase of products for sale 1,172 1,029 1,105 Raw materials and
consumables used 9,654 10,838 13,498 Realised purchase hedges 134
(1) (40) Total material and other cost of sales 11,239 12,335
14,684 7 Employee numbers and costs Year ended 31 March (Ł
millions) 2022 2021 2020 Wages and salaries—employee costs 1,626
1,545 1,833 Wages and salaries—agency costs 95 73 175 Total wages
and salaries 1,721 1,618 2,008 Social security costs and benefits
312 288 312 Pension costs 232 235 248 Total employee costs 2,265
2,141 2,568 Employee costs in the year ended 31 March 2022
includes Ł14 million (2021: Ł188 million, 2020: Ł10
million) credit in relation to employees placed on furlough under
the UK Coronavirus Job Retention Scheme. Average employee numbers
for the year ended 31 March Non-agency Agency Total 2022
Manufacturing 17,268 751 18,019 Research and development 7,893 394
8,287 Other 9,430 295 9,725 Total employee numbers 34,591 1,440
36,031 Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O
M O T I V E P L C 83
FINANCIAL STATEMENTS Average employee numbers
for the year ended 31 March Non-agency Agency Total 2021
Manufacturing 18,231 754 18,985 Research and development 8,158 556
8,714 Other 9,527 317 9,844 Total employee numbers 35,916 1,627
37,543 Average employee numbers for the year ended 31 March
Non-agency Agency Total
2020 Manufacturing 18,833 1,219 20,052 Research and development
7,965 1,411 9,376 Other 9,733 626 10,359 Total employee numbers
36,531 3,256 39,787 8 Directors’ emoluments Year ended
31 March (Ł) 2022 2021 2020 Directors’ emoluments 4,001,943
5,509,867 3,459,163 (Decrease)/increase of long-term incentive
scheme amounts receivable (30,253) 479,444 803,472 Post-employment
benefits—1,164,478 349,442 The aggregate of emoluments received in
the year and amounts There were no directors who were members of a
defined benefit accrued under the bonus schemes of the highest paid
director pension scheme or a defined contribution scheme during the
was Ł3,652,103 (2021: Ł3,962,991, 2020: Ł4,099,544), years ended
31 March 2022, 2021 and 2020. together with a cash allowance
in lieu of pension and medical benefits of Łnil (2021: Ł1,164,478,
2020: Ł349,442). During LTIP cash payments received by directors
during the year ended the year, the value of LTIP awards accrued
has increased by Łnil 31 March 2022 were Ł686,000 (2021:
Ł421,000, 2020: Łnil). (2021: Ł479,444, 2020: Ł803,472), which will
become payable in future periods. 9 Other income Government grants
are recognised when there is reasonable cost of the asset and
amortised over the useful life of the asset. assurance that the
Group will comply with the relevant conditions Government grants
related to income are presented as an offset and the grant will be
received. against the related expenditure, and government grants
that are awarded as incentives with no ongoing performance
obligations Government grants are recognised in the consolidated
income to the Group are recognised as other income in the period in
statement, either on a systematic basis when the Group which the
grant is received. recognises, as expenses, the related costs that
the grants are intended to compensate or immediately, if the costs
have already Sales tax incentives received from governments are
recognised been incurred. in the consolidated income statement at
the reduced tax rate, and revenue is reported net of these sales
tax incentives. Government grants related to assets are deducted
from the Year ended 31 March (Ł millions) 2022 2021 2020 Grant
income 68 81 66 Commissions 17 20 14 Other 115 94 94 Total other
income 200 195 174 During the year ended 31 March 2022,
Ł42 million (2021: Ł40 due to receive and for which there are
no ongoing financial or million, 2020: Ł12 million) was recognised
in “Other income” operating conditions attached. by a foreign
subsidiary as an incentive for continuing trading in that country
for the foreseeable future. This includes amounts received as cash
in the year and amounts that the subsidiary is
10 Other expenses Year ended 31 March (Ł
millions) Note 2022 2021 2020 Stores, spare parts and tools 86 88
112 Freight cost 485 499 611 Works, operations and other costs
1,722 1,714 2,471 Repairs 28 23 38 Power and fuel 158 72 87 Rent,
rates and other taxes 37 31 32 Insurance 23 19 23 Write-down of
property, plant and equipment 18 3 —Write-down of intangible assets
19 9 40 -Product warranty 748 706 1,131 Publicity 402 397 733 Total
other expenses 3,701 3,589 5,238 11 Engineering costs capitalised
Year ended 31 March (Ł millions) 2022 2021 2020 Total
engineering costs incurred 1,294 1,216 1,790 Engineering costs
expensed (839) (489) (421) Engineering costs capitalised 455 727
1,369 Interest capitalised in engineering costs capitalised 41 88
105 Research and development grants capitalised (39) (46) (48)
Total internally developed intangible additions 457 769 1,426
Engineering costs capitalised of Ł455 million (2021 :
Ł727 million, as a Research and Development Expenditure Credit
(“RDEC”) 2020: Ł1,369 million) comprises Ł236 million (2021:
Ł345 incentive on qualifying expenditure. During the year ended
31 million, 2020: Ł471 million) included in “Employee costs”
and March 2022, Ł39 million (2021: Ł46 million, 2020: Ł47
million) Ł219 million (2021: Ł382 million, 2020: Ł898
million) included of the RDEC – the proportion relating to
capitalised product in “Other expenses” in the consolidated income
statement. development expenditure and other intangible assets –
has been offset against the cost of the respective assets. The
remaining During the year ended 31 March 2022,
Ł73 million (2021: Ł87 Ł34 million (2021:
Ł41 million, 2020: Ł55 million) of the RDEC million, 2020:
Ł102 million) was recognised by a UK subsidiary has been recognised
as “Other income”. 12 Finance income and expense Year ended 31
March (Ł millions) 2022 2021 2020 Finance income 9 11 52 Total
finance income 9 11 52 Interest expense on lease liabilities (45)
(44) (45) Total interest expense on financial liabilities other
than lease (365) (296) (250) liabilities measured at amortised cost
Interest income on derivatives designated as a fair value 7 7 3
hedge of financial liabilities Unwind of discount on provisions
(10) (16) (31) Interest capitalised 44 98 114 Total finance expense
(net) (369) (251) (209) The capitalisation rate used to calculate
borrowing costs eligible During the year ended 31 March 2022 the
Group issued no debt for capitalisation was 4.6 per cent
(2021: 4.3 per cent, 2020: 4.2 at a premium (2021: no debt
issued at a premium, 2020: one per cent). tranche of debt issued at
a premium of Ł9 million). Annual Report 2021/22 J A G U A R L A N D
R O V E R A U T O M O T I V E P L C 85
FINANCIAL STATEMENTS 13 Loss before tax
Expense/(income) in loss before tax includes the following: Year
ended 31 March (Ł millions) 2022 2021 2020 Foreign exchange
loss/(gain) and fair value adjustments on loans 141 (314) 135
Foreign exchange (gain)/loss on economic hedges of loans (91) 143
(29) Foreign exchange gain on derivatives—(14) (15) Foreign
exchange (gain)/loss on balance sheet, cash and deposits
revaluation (11) (64) 50 Other foreign exchange (gain)/loss (43) 57
(8) Realised gain on commodities (84)—(5) Unrealised (gain)/loss on
commodities (48) (137) 78 Fair value (gain)/loss on equity
investments (4) (2) 43 Depreciation of right-of-use assets 87 94 92
Depreciation of property, plant and equipment 863 898 929
Amortisation of intangible assets (excluding internally generated
development costs) 76 88 101 Amortisation of internally generated
development costs 918 896 788 Expenses related to short-term leases
10 9 13 Expenses related to low-value assets, excluding short-term
leases of low-value 9 7 7
assets Charge/(credit) for changes in lease payments arising from
COVID-19 rent conces- 1 (3)
-sions (Profit)/loss on disposal of property, plant, equipment and
software (1) (1) 20 Exceptional items 43 1,523 29 Auditor
remuneration (see below) 5 6 7 The following table sets out the
auditor remuneration for the year (rounded to the nearest Ł0.1
million): Year ended 31 March (Ł millions) 2022 2021 2020 Fees
payable to the Company’s auditor and its associates for the audit
of the parent company and consolidated financial statements 0.1 0.1
0.1 Fees payable to the Company’s auditor and its associates for
other services:—Audit of the Company’s subsidiaries 4.2 4.5 5.6
Total audit fees 4.3 4.6 5.7 Audit-related assurance services 0.8
0.8 0.8 Other assurance services 0.3 0.4 0.3 Total non-audit fees 1 .1 1.2 1.1 Total audit
and related fees 5.4 5.8 6.8 14 Taxation Income tax expense
comprises current and deferred taxes. tax consequences of temporary
differences between the Income tax expense is recognised in the
consolidated income carrying values of assets and liabilities and
their respective statement, except when related to items that are
recognised tax bases, and unutilised business loss and depreciation
carry-outside of profit or loss (whether in other comprehensive
income forwards and tax credits. Such deferred tax assets and
liabilities or directly in equity) or where related to the initial
accounting for are computed separately for each taxable entity and
for each a business combination. In the case of a business
combination, taxable jurisdiction. Deferred tax assets are
recognised to the the tax effect is included in the accounting for
the business extent that it is probable that future taxable income
will be combination. Current income taxes are determined based on
available against which the deductible temporary differences,
respective taxable income of each taxable entity and tax rules
unused tax losses, depreciation carry-forwards and unused tax
applicable for respective tax jurisdictions. credits could be
utilised. The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the Deferred tax assets and
liabilities are recognised for the future extent that it is no
longer probable that sufficient taxable profits
Deferred tax assets and liabilities are
measured based on the tax Tax provisions are recognised for
uncertain tax positions where rates that are expected to apply in
the year when the asset is a risk of an additional tax liability
has been identified and it is realised or the liability is settled,
based on the tax rates and tax probable that the Group will be
required to settle that tax. laws that have been enacted or
substantively enacted by the Measurement is dependent on
management’s expectations of balance sheet date. the outcome of
decisions by tax authorities in the various tax jurisdictions in
which the Group operates. This is assessed on a Current and
deferred tax assets and liabilities are offset when case-by-case basis using
in-house experts,
professional firms there is a legally enforceable right to set off
current tax assets and previous experience. Where no provision is
required the against current tax liabilities and when they relate
to income exposure is disclosed as a contingent liability in note
33 unless taxes levied by the same taxation authority and the Group
the likelihood of an outflow of economic benefits is remote.
intends to settle its current tax assets and liabilities on a net
basis. Judgement is required in assessing the impact of any legal
or economic limits or uncertainties in various tax jurisdictions.
The extent to which deferred tax assets can be recognised is based
on an assessment of the probability that future taxable income will
be available against which the deductible temporary differences and
tax loss carry-forwards can be utilised. Amounts recognised in the
consolidated income statement: Year ended 31 March (Ł
millions) 2022 2021 2020 Current tax expense Current year 226 155
178 Adjustments for prior years (5) 2 3 Current tax expense 221 157
181 Deferred tax expense/(credit) Origination and reversal of
temporary differences 149 92 (164) Adjustments for prior years (3)
(12) (11) Write-down of deferred tax assets — (8) Rate changes—2 49
Deferred tax expense/(credit) 146 82 (134) Total income tax expense
367 239 47 Annual Report 2021/22 J A G U A R L A N D R O V E R A U
T O M O T I V E P L C 87
FINANCIAL STATEMENTS Amounts recognised in
the consolidated statement of other comprehensive income: Year
ended 31 March (Ł millions) 2022 2021 2020 Deferred tax
expense/(credit) on actuarial gains/losses on retirement 134 (143)
186 benefits Deferred tax (credit)/expense on change in fair value
of cash flow hedges (170) 103 58 Deferred tax credit on rate
changes (77)—(32) (113) (40) 212 Total tax expense 254 199 259
Reconciliation of effective tax rate: Year ended 31 March (Ł
millions) 2022 2021 2020 Loss for the year (822) (1,100) (469)
Total income tax expense 367 239 47 Loss before tax (455) (861)
(422) Income tax credit using the tax rates applicable to
individual entities of (20) (131) (59) 4.4% (2021: 15.2%, 2020:
14.0%) Non-deductible
expenses 33 62 28 Unrecognised or written-down deferred tax assets
331 285 9 Changes in tax rates—2 49 Overseas unremitted earnings 28
23 6 Tax on share of profit of equity accounted investments 3 8 22
Over provided in prior years (8) (10) (8) Total income tax expense
367 239 47 The net underlying statutory tax rate represents the
blended accounting write-down of assets not qualifying for tax
relief. The average of the tax rates suffered on profits and losses
earned in charge of Ł285 million in relation to “Unrecognised
or written-our various
countries of operation. The current position reflects down deferred
tax assets” arises as a result of the inability to the fact that
statutory tax rates applicable in profitable non-UK fully recognise UK deferred tax
assets arising in the year. The subsidiaries are higher than the UK
tax rate applied to UK losses. “Over provided in prior years”
credit of Ł10 million arises as a result of the finalisation
of prior year tax submissions with global Included within
“Unrecognised or written-down deferred tax tax authorities. assets”
for the year ended 31 March 2022 is a charge of
Ł331 million as a result of the inability to fully recognise
UK deferred Included within “Over provided in prior years” for the
year ended tax assets arising in the year. The “Over provided in
prior years” 31 March 2020 is Ł7 million credit relating
to revisions of prior credit of Ł8 million arises as a result
of the finalisation of year estimates of tax positions in various
jurisdictions, principally prior year tax submissions with global
tax authorities and the the UK, to bring them into line with the
latest estimates and conclusion of certain tax risks. currently
filed tax positions. Included within “Changes in tax rates” is a
Ł49 million charge for the impact of the change in the
Included within “Non-deductible expenses” for the year
ended UK Statutory rate from 17 per cent to 19 per cent
on deferred 31 March 2021 is a charge of Ł45 million
relating to the tax assets and liabilities.
Impact of Future Rate Changes March 2021, and
was substantively enacted on 24 May 2021. The UK Finance Act
2016 was enacted during the year ended 31 Accordingly, UK deferred
tax has been provided at a rate of 25 March 2017, which
included provisions for a reduction in the UK per cent on assets
(2021, 2020: 19 per cent) and 25 per cent on corporation tax
rate to 17 per cent with effect from 1 April 2020.
liabilities (2021, 2020: 19 per cent), recognising the applicable
tax rate at the point when the timing difference is expected to
Subsequently a change to the main UK corporation tax rate, reverse.
announced in the Budget on 11 March 2020, was substantively
enacted for IFRS purposes on 17 March 2020. The rate
applicable Deferred tax assets and liabilities from 1 April
2020 now remains at 19 per cent, rather than the previously
enacted reduction to 17 per cent. A further change Significant
components of deferred tax assets and liabilities for to the main
UK corporation tax rate from 19 to 25 percent with the year
ended 31 March 2022 are as follows: effect from 1 April
2023 was announced in the Budget on 3 Recognised Recognised
Reclassified (Ł millions) Opening in profit or in other from other
Foreign Closing balance loss comprehen- equity reser- exchange
balance sive income ves Deferred tax assets Property,
plant & equipment 767 321 ——1,088 Expenses deductible in
future periods 260 (43) — 11 228 Derivative financial instruments
(24) (28) 205 (28)—125 Retirement benefits 72 20 (92) — -Unrealised
profit in inventory 103 (30) ——73 Tax loss 65 (46) ——19 Other 51
(51) — — Total deferred tax asset 1,294 143 113 (28) 11 1,533
Deferred tax liabilities Intangible assets 902 188 ——1,090 Overseas
unremitted earnings 111 (6) ——105 Compensated absence and
retirement —107 ——107 benefits Total deferred tax liability 1,013
289 ——1,302 Presented as deferred tax asset* 397 336 Presented as
deferred tax liability* (116) (105) *For balance sheet presentation
purposes, deferred tax assets and deferred tax liabilities are
offset to the extent that they relate to the same taxation
authority and are expected to be settled on a net basis. At
31 March 2022, deferred tax assets of Ł336 million (2021:
At 31 March 2022 the group had unused tax losses and other
Ł397 million, 2020: Ł523 million) have been recognised in
temporary differences amounting to Ł3,746 million (2021:
relation to deductible temporary differences, including unused
Ł2,693 million, 2020: Ł1,660 million) for which no deferred
tax tax losses, on the basis that it is probable that future
taxable asset has been recognised on the basis of forecast
profitability of profits will be available against which those
deductible temporary the companies in which the deferred tax assets
arise. These tax differences can be utilised. losses are due to
expire as follows: As at 31 March (Ł millions) 2022 2021 2020
No expiry 3,742 2,676 1,645 2027 or later 4 17 15 Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
89
FINANCIAL STATEMENTS All deferred tax assets
and deferred tax liabilities at 31 March 2022, 2021 and 2020
are presented as non-current. Significant components of
deferred tax assets and liabilities for the year ended
31 March 2021 were as follows: Recognised Recognised in
Reclassified (Ł millions) Opening in profit or other from other
Foreign Closing balance loss comprehensive equity reserves exchange
balance income Deferred tax assets Property, plant &
equipment 635 132 ——767 Expenses deductible in future periods 377
(100) — (17) 260 Derivative financial instruments 70 12 (103)
(3)—(24) Retirement benefits (74) 3 143 — 72 Unrealised profit in
inventory 125 (22) ——103 Tax loss 219 (153) — (1) 65 Other 145 (94)
——51 Total deferred tax asset 1,497 (222) 40 (3) (18) 1,294
Deferred tax liabilities Intangible assets 1,043 (141) ——902
Overseas unremitted earnings 110 1 ——111 Total deferred tax
liability 1,153 (140) ——1,013 Presented as deferred tax asset* 523
397 Presented as deferred tax liability* (179) (116) *For balance
sheet presentation purposes, deferred tax assets and deferred tax
liabilities are offset to the extent that they relate to the same
taxation authority and are expected to be settled on a net basis.
Significant components of deferred tax assets and liabilities for
the year ended 31 March 2020 were as follows: Adjustment
Adjusted Recognised Recognised Reclassified (Ł millions) Opening on
initial Opening in profit or in other from other Foreign Closing
balance application balance loss comprehen- equity reserves
exchange balance of IFRS 16 sive income Deferred tax assets
Property, plant & equipment 544 3 547 87 — 1 635 Expenses
deductible in future 325—325 51 — 1 377 periods Derivative
financial instruments 134—134 (14) (56) 6—70 Retirement benefits
113—113 (32) (155) — (74) Unrealised profit in inventory 120—120 6
(1) — 125 Tax loss 78—78 141 ——219 Other 126—126 19 ——145 Total
deferred tax asset 1,440 3 1,443 258 (212) 6 2 1,497 Deferred tax
liabilities Intangible assets 928—928 115 ——1,043 Overseas
unremitted earnings 101—101 9 ——110 Total deferred tax liability
1,029—1,029 124 ——1,153 Presented as deferred tax asset* 512 523
Presented as deferred tax (101) (179) liability* *For balance sheet
presentation purposes, deferred tax assets and deferred tax
liabilities are offset to the extent that they relate to the same
taxation authority and are expected to be settled on a net
basis.
15 Investments in equity accounted investees
An interest in an associate or joint venture is accounted for
Dividends are recognised when the right to receive payment is using
the equity method from the date the investee becomes established.
an associate or a joint venture and is recognised initially at
cost. The carrying value of investment in associates and joint
Impairment of equity accounted investments ventures includes
goodwill identified on date of acquisition, net of any accumulated
impairment losses. The consolidated The requirements of IAS 28
Investments in Associates and financial statements include the
Group’s share of profits or Joint ventures are applied to determine
whether it is necessary losses, other comprehensive income and
equity movements of to recognise any impairment loss with respect
to the Group’s equity accounted investments, from the date that
joint control investment in a joint venture or an associate. When
necessary, or significant influence commences until the date that
joint the entire carrying amount of the investment (including
goodwill) control or significant influence ceases. When the Group’s
share is tested for impairment in accordance with IAS 36 Impairment
of losses exceeds its interest in an equity accounted investment,
of assets as a single asset by comparing its recoverable amount the
carrying amount of that interest (including any long-term (the
higher of value in use and fair value less costs of disposal)
interests in the nature of net investments) is reduced to nil with
its carrying amount. Any impairment loss recognised forms and the
recognition of further losses is discontinued except to part of the
carrying amount of the investment. Any reversal of the extent that
the Group has incurred constructive or legal that impairment loss
is recognised in accordance with IAS 36 obligations or has made
payments on behalf of the investee. to the extent that the
recoverable amount of the investment subsequently increases. When
the Group transacts with a joint venture or associate of the Group,
profits and losses are eliminated to the extent of the Group’s
interest in its joint venture or associate. (A) Associates
Details of the Group’s associates as at 31 March 2022 are as
follows: Principal place of Name of Proportion of business and
Principal activity Registered office address investment voting
rights country of incorporation Jaguar Cars Finance 280
Bishopsgate, London, EC2M 4RB, 49.9% England & Wales
Non-trading Limited England
Business and domestic 84 Kirkland Avenue, Ilford, Essex, England,
Synaptiv Limited 33.3% England & Wales software
development IG5 0TN Holding company and Driveclubservice Pte. 22
Sin Ming Lane, #06-76,
Midview City, 25.1% Singapore mobility application Limited
Singapore 573969 owner/licensor Unit A, 9/F, D2 Place ONE, 9 Cheung
Yee Driveclub Limited 25.8% Hong Kong Vehicle leasing Street, Lai
Chi Kok, Kowloon, Hong Kong Manufacture and development of The
Priory Barn Priory Road, Wolston, ARC V Limited 15.0%
England & Wales electrified vehicle Coventry, United
Kingdom, CV8 3FX technology Annual Report 2021/22 J A G U A R L A N
D R O V E R A U T O M O T I V E P L C
91
FINANCIAL STATEMENTS Except for Driveclub
Limited and ARC V Limited, the proportion The aggregate summarised
financial information in respect of of voting rights disclosed in
the table above is the same as the Group’s immaterial associates
that are accounted for using the Group’s interest in the ordinary
share capital of each undertaking. equity method is set out below.
The Group has no material associates as at 31 March 2022. As
at 31 March (Ł millions) 2022 2021 2020 Carrying amount of the
Group’s interests in associates ——Year ended 31 March (Ł
millions) 2022 2021 2020 Group’s share of loss and total
comprehensive expense — (2) in associates (B) Joint ventures
Details of the Group’s material joint venture as at 31 March
2022 are as follows: Principal place of Name of Proportion of
business and Principal Registered office address investment voting
rights country of activity incorporation Room 1102, Binjiang
International Plaza, No Chery Jaguar Land Manufacture 88 Tonggang
Road, Rover Automotive 50.0% China and assembly of Changshu
Economic and Technical Company Ltd. vehicles Development Zone,
Suzhou City, Jiangsu Province, China Chery Jaguar Land Rover
Automotive Company Ltd. is a limited The joint venture is accounted
for using the equity method and liability company whose legal form
confirms separation between is a private company and there are no
quoted market prices the parties to the joint arrangement. There is
no contractual available for its shares. arrangement or any other
facts or circumstances that indicate that the parties to the joint
control of the arrangement have The following tables sets out the
summarised financial rights to the assets or obligations for the
liabilities relating to the information of the Group’s individually
material joint venture, arrangement. Accordingly, Chery Jaguar Land
Rover Automotive Chery Jaguar Land Rover Automotive Company Ltd.,
after Company Ltd. is classified as a joint venture. Chery Jaguar
Land adjusting for material differences in accounting policies:
Rover Automotive Company Ltd. is not publicly listed.
As at 31 March (Ł millions) 2022 2021
2020 Cash and cash equivalents 391 323 278 Current financial
liabilities (excluding trade and other (447) (501) (584) payables
and provisions) Non-current
financial liabilities (excluding trade and other (39) (5) (82)
payables and provisions) Current assets 629 566 599 Current
liabilities (1,380) (1,364) (1,348) Non-current assets 1,443 1,446 1,570
Non-current liabilities
(42) (13) (82) Net assets of material joint venture 650 635 739
Year ended 31 March (Ł millions) 2022 2021 2020 Revenue 1,669
1,820 1,295 Loss for the year (36) (83) (224) Total comprehensive
expense (36) (83) (224) The above total comprehensive expense
includes the following: Depreciation and amortisation (181) (201)
(201) Interest income 5 7 14 Interest expense (net) (17) (20) (25)
Income tax credit 20 31 56 A reconciliation of the summarised
financial information to the carrying amount of the Group’s
material joint venture recognised in the consolidated balance sheet
is given below: As at 31 March (Ł millions) 2022 2021 2020 Net
assets of material joint venture 650 635 739 Share of net assets of
material joint venture 325 318 370 Other consolidation adjustments
(5) (3) (8) Carrying amount of the Group’s material joint venture
320 315 362 As at 31 March 2022, an adjustment of
Ł5 million (2021: Ł3 Ltd. of Łnil (2021: Łnil, 2020: Ł67
million). million, 2020: Ł8 million) has been made to derecognise
profit that has not yet been realised on goods sold by the Group to
During the year ended 31 March 2022, the Group increased its
Chery Jaguar Land Rover Automotive Company Ltd.. investment in
Chery Jaguar Land Rover Automotive Company Ltd. by Łnil (2021:
Łnil, 2020: Ł67 million). During the year ended 31 March 2022,
the Group received a dividend from Chery Jaguar Land Rover
Automotive Company Annual Report 2021/22 J A G U A R L A N D R O V
E R A U T O M O T I V E P L C 93
FINANCIAL STATEMENTS Details of the Group’s
immaterial joint ventures as at 31 March 2022 are as follows:
Principal place of Name of Proportion of business and Principal
activity Registered office address investment voting rights country
of incorporation Jaguar Land Rover Vehicle sales and Emil Frey
Strasse, 5745 Safenwill 30.0% Switzerland Switzerland Ltd
distribution Inchcape JLR Europe 22a St James’s Square, London,
United 30.0% UK Vehicle distribution Limited Kingdom, SW1Y 5LP The
summarised financial information in respect of the Group’s
immaterial joint ventures accounted for using the equity method is
set out below: As at 31 March (Ł millions) 2022 2021 2020
Carrying amount of the Group’s interests in immaterial 1 1 -joint
ventures As at 31 March (Ł millions) 2022 2021 2020 Group’s
share of loss and total comprehensive expense of — -immaterial
joint ventures (C) Summary of carrying amount of the Group’s
investment in equity accounted investees As at 31 March (Ł
millions) 2022 2021 2020 Carrying amount of material joint venture
320 315 362 Carrying amount of immaterial joint ventures 1 1
-Carrying amount of immaterial associates ——Carrying amount of the
Group’s interests in equity 321 316 362 accounted investees Year
ended 31 March (Ł millions) 2022 2021 2020 Share of loss of
material joint venture (18) (41) (112) Share of loss of immaterial
joint ventures — -Share of loss of immaterial associates — (2)
Share of loss of equity accounted investees (18) (41) (114) Year
ended 31 March (Ł millions) 2022 2021 2020 Currency
translation differences – material joint venture 26 (11) 1 Share of
other comprehensive income/(expense) of 26 (11) 1 equity accounted
investees
16 Other non-current investments The Group’s
other investments comprise equity investments of companies and are
designated as fair value through profit and 10 per cent or
less of the ordinary share capital of the investee loss financial
instruments. As at 31 March (£ millions) 2022 2021 2020
Investment in Lyft Inc — 17 Other investments 30 22 20 Total 30 22
37 During the year ended 31 March 2022, the Group invested £4
ordinary share capital, and during the year ended 31 March
2022 million (2021: £4 million, 2020: £11 million) in
other investments. no dividends were received (2021, 2020: no
dividends). A fair value gain of £4 million was recognised
during the year (2021: gain of £2 million, 2020: loss of £1
million). Disclosure of the valuation techniques applied in
calculating the fair value of these other non-equity accounted investments is The
Group has no additional rights or influence over any of these
included in note 35(A). equity investments other than the voting
rights attached to the 17 Other financial
assets As at 31 March (£ millions) 2022 2021 2020 Non-current Restricted cash 10 8 7
Derivative financial instruments 98 249 142 Warranty reimbursement
and other receivables 63 73 102 Other 14 11 6 Total non-current other financial assets 185
341 257 Current Restricted cash 13 12 12 Derivative financial
instruments 185 281 241 Warranty reimbursement and other
receivables 72 70 87 Accrued income 39 26 14 Other 85 88 29 Total
current other financial assets 394 477 383 Other financial assets
pledged as collateral against borrowings are disclosed in note 25.
Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I
V E P L C 95
FINANCIAL STATEMENTS 18 Property, plant and
equipment Property, plant and equipment is stated at cost of
acquisition or Interest cost incurred for constructed assets is
capitalised up construction less accumulated depreciation and
accumulated to the date the asset is ready for its intended use,
based on impairment, if any. Land is not depreciated. borrowings
incurred specifically for financing the asset or the weighted
average rate of all other borrowings, if no specific Cost includes
purchase price, non-recoverable taxes and duties,
borrowings have been incurred for the asset. labour cost and direct
overheads for self-constructed assets and other direct costs
incurred up to the date the asset is ready for Depreciation is
charged on a straight-line basis over the its intended use.
estimated useful lives of the assets. Estimated useful lives of the
assets are as follows: Class of property, plant and equipment
Estimated useful life (years) Buildings 20 to 40 Plant, equipment
and leased assets 3 to 30 Vehicles 3 to 10 Computers 3 to 6
Fixtures and fittings 3 to 20 The depreciation period for property,
plant and equipment with for its intended use. Assets under
construction include capital finite useful lives is reviewed at
least at each year end. Changes advances. Depreciation is not
recorded on heritage assets as the in expected useful lives are
treated as changes in accounting Group considers their residual
value to approximate their cost. estimates. An item of property,
plant and equipment is derecognised on Assets held under leases are
depreciated over their expected disposal or when it is withdrawn
from use and no future economic useful lives on the same basis as
owned assets or, where shorter, benefits are expected from its
disposal. Any gain or loss arising the term of the relevant lease.
Freehold land is measured at cost from derecognition is included in
profit or loss. and is not depreciated. Residual values are
reassessed on an annual basis. An annual review of the carrying
value of heritage assets is performed as the assets are held at
cost and not depreciated. Depreciation is not recorded on assets
under construction until Any write-down in the carrying value of
heritage assets is construction and installation are complete and
the asset is ready recognised immediately in the consolidated
income statement.
Land and Plant and Compu- Fixtu- Leased
Heritage Under (£ millions) buildings equip- Vehicles ters res and
assets vehicles construc- Total ment fittings tion Cost Balance at
1 April 2019 2,261 8,765 9 164 125 32 54 706 12,116 Adjustment
on initial (9) — — (32) — (41) application of IFRS 16 Adjusted
opening balance 2,252 8,765 9 164 125—54 706 12,075 Additions — 8
26 12 — 1,218 1,264 Assets acquired on acqui- 1 — — ——1 sition
Transfers 285 895 — ——(1,180) -Disposals—(20) (1) (2) (2)—(1) (11)
(37) Foreign currency translation 18 19—1 ——(1) 37 Balance at
31 March 2020 2,556 9,659 16 189 135—53 732 13,340 Additions —
6—2 — 828 836 Transfers 27 606 — ——(633) -Disposals (5) (15) (3)
(1) (3)—(4)—(31) Impairment—asset write— — — — (237) (237) downs
Foreign currency translation (22) (28)—(1) (1) — 1 (51) Balance at
31 March 2021 2,556 10,222 19 187 133—49 691 13,857 Additions
1 — 12 11 — 657 681 Transfers 52 1,057 1 — — (1,110) -Disposals (1)
(84) (4) (5) (8)—(1)—(103) Impairment—asset write— — — — (7) (7)
downs Assets classified as held for (8) — ——(2)—(10) sale Foreign
currency translation—1 (1)—(2) ——(2) Balance at 31 March 2022
2,600 11,196 15 194 134—46 231 14,416 Depreciation and impairment
Balance at 1 April 2019 287 5,135 5 81 71 14 31—5,624
Adjustment on initial appli— — — (14) — (14) cation of IFRS 16
Adjusted opening balance 287 5,135 5 81 71—31—5,610 Depreciation
charge for the 112 792 2 14 9 ——929 year Disposals—(14)—(1) (1)
——(16) Foreign currency translation 2 1 — — — 3 Balance at
31 March 2020 401 5,914 7 94 79—31—6,526 Depreciation charge
for the 110 761 4 15 8 ——898 year Disposals (3) (15) (2) (1) (3)
——(24) Impairment—asset write- 4 2 — — — 6 downs Foreign currency
translation (2) (5)—(2) (1) ——(10) Balance at 31 March 2021
510 6,657 9 106 83—31—7,396 Depreciation charge for the 111 728 2
14 8 ——863 year Disposals (1) (84) (1) (5) (6) ——(97) Assets
classified as held for (6) — — ——(6) sale Impairment—asset write— —
——3—3 downs Foreign currency translation ——2 2 ——4 Balance at
31 March 2022 614 7,301 10 117 87—34—8,163 Net book value At
31 March 2020 2,155 3,745 9 95 56—22 732 6,814 At
31 March 2021 2,046 3,565 10 81 50—18 691 6,461 At
31 March 2022 1,986 3,895 5 77 47—12 231 6,253 Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
97
FINANCIAL STATEMENTS As part of the Group’s
review of the carrying value of property, Group’s Reimagine
strategy. The write-down expense has been plant and equipment,
Ł3 million (2021: Łnil, 2020: Łnil) of recognised in
‘exceptional items’ in the consolidated income heritage vehicles
have been written down and recognised as an statement. expense
within “Other expenses”. Asset write-downs for the year ending
31 March 2022 include Ł7 million (2021:
Ł243 million, 2020: Łnil) in relation to the 19 Intangible
assets Intangible assets purchased, including those acquired in
business supportable. If not, the change in the useful life
assessment from combinations, are measured at acquisition cost,
which is the indefinite to finite is made on a prospective basis.
For intangible fair value on the date of acquisition, where
applicable, less assets with finite lives, amortisation is provided
on a straight-line accumulated amortisation and accumulated
impairment, if any. basis over the estimated useful lives of the
acquired intangible Intangible assets with indefinite lives are
reviewed annually to assets as per the estimated amortisation
periods below: determine whether an indefinite life assessment
continues to be Class of intangible asset Estimated
amortisation period (years) Software 2 to 8 Patents and
technological know-how 2 to
12 Customer related – retailer network 20 Intellectual property
rights and other intangibles 3 to indefinite The amortisation for
intangible assets with finite useful lives is all other borrowings,
if no specific borrowings have been incurred reviewed at least at
each year end. Changes in expected useful for the asset. Product
engineering cost is amortised over the life lives are treated as
changes in accounting estimates. of the related product, being a
period of between two and ten years. Capitalised development
expenditure is measured at cost Capital work-in-progress includes
capital advances. Customer- less accumulated amortisation and
accumulated impairment related intangibles acquired in a business
combination consist loss, if any. Amortisation is not recorded on
product engineering of dealer networks. Intellectual property
rights and other in progress until development is complete.
intangibles mainly consist of brand names, which are considered to
have indefinite lives due to the longevity of the brands. The Group
undertakes significant levels of research and development activity,
and for each vehicle programme a Internally generated intangible
assets periodic review is undertaken. The Group applies judgement
in determining at what point in a vehicle programme’s life cycle
Research costs are charged to the consolidated income the
recognition criteria under IAS 38 are satisfied and estimates
statement in the year in which they are incurred. the proportion of
central overhead allocated. If a later point had been used then
this would have had the impact of reducing the Product engineering
costs incurred on new vehicle platforms, amounts capitalised as
product engineering costs. If central engines, transmission and new
products are recognised as overheads had not been allocated it
would have reduced the intangible assets – when feasibility has
been established, the amount capitalised by Ł52 million (2021:
Ł80 million, 2020: Group has committed technical, financial
and other resources to Ł117 million). complete the development and
it is probable that the asset will generate 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
Patents Intellectual Product Product (Ł
millions) Software and tech- Customer property rights development
development Total nological related and other—completed—in progress
know-how intangibles Cost
Balance at 1 April 2019 691 147 61 651 6,973 1,990 10,513
Additions—externally purchased 111 — ——111 Additions—internally
developed — ——1,426 1,426 Additions—on acquisition ——2 — 2
Transfers — — 944 (944) -Disposals (2) ——(345)—(347) Foreign
exchange 2 — (1) — 1 Balance at 31 March 2020 802 147 61 652
7,572 2,472 11,706 Additions—externally purchased 73 — ——73
Additions—internally developed — ——769 769 Transfers — — 1,404
(1,404) -Disposals (1) ——10—9 Impairment—asset write-downs —
——(749) (749) Balance at 31 March 2021 874 147 61 652 8,986
1,088 11,808 Additions—externally purchased 25 — ——25
Additions—internally developed — ——457 457 Transfers — — 987 (987)
-Disposals (5) — (2) (955)—(962) Impairment—asset write-downs —
——(9) (9) Balance at 31 March 2022 894 147 61 650 9,018 549
11,319 Amortisation and impairment Balance at 1 April 2019 433
147 40 162 4,104—4,886 Amortisation for the year 96—2 3 788—889
Disposals (2) ——(345)—(347) Balance at 31 March 2020 527 147
42 165 4,547—5,428 Amortisation for the year 82—2 4 896—984
Disposals (1) ——10—9 Balance at 31 March 2021 608 147 44 169
5,453—6,421 Amortisation for the year 71—2 3 918—994 Disposals (5)
— (2) (955)—(962) Balance at 31 March 2022 674 147 46 170
5,416—6,453 Net book value At 31 March 2020 275—19 487 3,025
2,472 6,278 At 31 March 2021 266—17 483 3,533 1,088 5,387 At
31 March 2022 220—15 480 3,602 549 4,866 Asset write-downs for
the year ending 31 March 2022 include that no one group of
assets has been determined to generate Łnil (2021:
Ł709 million, 2020: Łnil) in relation to the Group’s cash
inflows that are largely independent. In response to the Reimagine
strategy. The Reimagine related write-down expense annual
requirement of IAS 36, management performed an has been recognised
in ‘exceptional items’ in the consolidated impairment assessment as
at 31 March 2022. income statement. For the current year
assessment, the recoverable value was Impairment testing determined
using the value in use (“VIU”) approach outlined in IAS 36. No
impairment was identified as the CGU recoverable The directors are
of the view that the operations of the Group, amount exceeded its
carrying amount by Ł0.6 billion (2021: excluding equity
accounted investments, represent a single Ł2.7 billion, 2020:
Ł0.4 billion). The reduction in the headroom cash-generating unit
(“CGU”). This is because of the degree of has been driven by the
risks facing the business as discussed integrated development and
manufacturing activities is such in further detail below. The
impairment loss recorded in the Annual Report 2021/22 J A G U A R L
A N D R O V E R A U T O M O T I V E P L C
99
FINANCIAL STATEMENTS previous years was not
reversed because the underlying reasons (ii) involve a
significant amount of judgement and estimation; and for the
increased headroom (including the unwind of the discount rate and
the impact of depreciation and amortisation of impaired
(iii) drive significant changes to the recoverable amount when
assets) do not support this. flexed under reasonably possible
outcomes. The Group has considered it appropriate to undertake the
The directors’ approach and key assumptions used to determine
impairment assessment with reference to the Group approved the
Group’s CGU VIU were as follows: business plan that was in effect
as at the reporting date. The business plan includes a five-year
cash flow forecast and contains • Variable profit per unit and
volumes – the approach to growth rates that are primarily a
function of the Group’s Cycle determining the forecast variable
profit per unit and Plan assumptions, historical performance and
management’s volumnes is based on consideration of historical
performance expectation of future market developments through to
2026/27. and Group Cycle Plan assumptions, along with the impact of
risks on future cashflows discussed above. Due to the In
forecasting the future cash flows, management have given importance
of product mix to the business’ cash flow and due consideration to
recent performance and variable profit profit optimisation efforts,
the directors consider variable optimisation efforts and have
adjusted some of the assumptions profit per unit and volumes to be
key assumptions. The in the business plan, in line with the
requirements of IAS 36, to variable profit per unit and volumes
included in the business take into account possible variations in
the amount or timing of plan are largely driven by an updated
portfolio as a result future cashflows. In doing so, management has
considered other of the Reimagine strategy announced in the
previous year, risks, outlined on pages 36 to 39, that impact
future cashflows, which especially results in a change in product
portfolio in namely: the outer years of the business plan. •
near-term supply challenges related to global chip shortages •
Terminal value capital expenditure – the 5-year cash flows which has
significantly impacted the Group in FY22; timing and amount are
based on the latest Cycle Plan. The terminal value has been derived
based on the directors • economical and geopolitical factors
increasing inflationary best estimate of a maintenance level of
capital expenditure pressures; which has been derived from
depreciation and amortisation expectations and funding requirements
in responses to • disruption on our business from Covid-19 as we continue longer-term
industry trends, and risks, which are anticipated to see localised
lockdown actions imposed by governments in the VIU calculation. Due
to the significance of terminal around the world; and value capital
expenditure the directors consider this to be a key assumption. •
execution risks associated with our ‘Reimagine’ strategy, with its
supporting transformation plan ‘Refocus’, detailed • Discount rate
– the approach to determining the discount on pages 14 to 15, which
includes a dedicated environmental rate is based on the Capital
Asset Pricing Model and a sustainability strategy- ‘Regenerate’.
market participant after tax cost of debt. These inputs are based
on a typical build up approach. The discount rate is Climate risk
regarded as a key assumption as it is the rate which drives the
discounted cashflows used to determine the VIU of the Consideration
of climate risk is inherent in the development our CGU. forecast
cash flows, principally underpinned by the transition to Battery
Electric Vehicles as part of our Reimagine strategy. In The Group
used a long-term growth rate of 1.7 per cent (2021, executing
this strategy, the Group recognises that there are risks 2020: 1.9
per cent) to extrapolate cash flow projections beyond that may
result in variations to the forecast cash flows, and as the period
covered by the business plan and a pre-tax discount such these risks have
been taken into account in the execution rate of 13.4 per cent
(2021: 13.6 per cent, 2020: 12.5 per cent). risk adjustments
noted above. The VIU is sensitive to certain assumptions, such as
Sales, Key assumptions General & Administration
(“SG&A”) costs, due to the relative total value but involve
limited judgement and estimation and The directors consider the
assumptions that impact the value in significant changes are not
considered reasonably possible and use are those to which:
therefore are not considered to be key assumptions. (i) the
recoverable amount is most sensitive;
Sensitivity to reasonably possible changes to
key assumptions As a significant portion of the recoverable amount
lies in the Management considers the variable profit and volumes
VIU terminal value, management have focussed disclosures on
assumptions to be interdependent as movement in one reasonably
possible changes that impact the terminal value. assumption will
impact the other. For example, the profit optimisation efforts
discussed above will likely result in higher Given the inherent
uncertainty about how risk may arise, and average variable profit
per unit with lower volumes whereas a the interaction of volumes
and cost management, management focus on volumes would likely see a
reduction in the average consider a net impact on terminal period
cash flows to be the variable profit per unit. Consequently, the
terminal value variable best means of indicating the sensitivity of
the model to such profit sensitivity below incorporates sensitivity
in volumes via changes in the terminal period. the impact on
variable profit. The value of key assumptions used to calculate the
recoverable amount are as follows: As at 31 March 2022 2021
2020 Pre-tax discount rate
13.4% 13.6% 12.5% Terminal value variable profit* (%GVR) 24.8%
21.4% 19.7% Terminal value capital expenditure (%GVR) 10.0% 8.9%
9.1% *Based on forecast variable profit per unit and volumes The
table below shows the amount by which the value assigned to the key
assumptions must change for the recoverable amount of the CGU to be
equal to its carrying amount: 2022 2021 2020 Revised as- % Change Revised as- % Change Revised as- % Change As at 31 March* sumption
in assump tion—sumption in assump tion—sumption in assump
tion—Pre-tax discount rate
14.6% 8.4% n/a n/a n/a n/a Terminal value variable profit (%GVR)
24.4% (1.7)% 20.1% (6.3)% 19.5% (0.9)% Terminal value capital
expenditures (%GVR) 10.3% 3.5% 10.2% 15.1% 9.3% 1.9% Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
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FINANCIAL STATEMENTS 20 Other assets As at
31 March (Ł millions) 2022 2021 2020 Non-current Prepaid expenses 24 17 8
Research and development credit 2 4 -Other 9 11 15 Total
non-current other assets 35
32 23 Current Recoverable VAT 204 200 228 Prepaid expenses 208 120
139 Research and development credit 63 104 85 Other 18 24 25 Total
current other assets 493 448 477 21 Cash and cash equivalents Cash
and cash equivalents comprise cash on hand, demand deposits and
highly liquid investments with an original maturity of up to three
months that are readily convertible into known amounts of cash and
that are subject to an insignificant risk of changes in value. As
at 31 March (Ł millions) 2022 2021 2020 Cash and cash
equivalents 4,223 3,778 2,271 Cash and cash equivalents includes
Ł33 million (2021, 2020: Łnil) which is not available for use
by the wider group. 22 Allowances for trade and other receivables
Year ended 31 March (Ł millions) 2022 2021 2020 At beginning
of year 7 11 12 Charged during the year 4 6 11 Receivables written
off during the year as uncollectable (6) (1) (4) Unused amounts
reversed (1) (9) (8) At end of year 4 7 11 Trade receivables with a
contractual amount of Ł1 million (2021: Łnil, 2020: Ł2
million) that were written off during the year are still subject to
enforcement activity. Trade receivables pledged as collateral
against borrowings are disclosed in note 25.
23 Inventories Inventories are valued at the
lower of cost and net realisable Inventories include vehicles sold
subject to repurchase value. Costs of raw materials and consumables
are ascertained arrangements. These vehicles are carried at cost to
the Group on a first-in,
first-out basis. Costs,
including fixed and variable and are amortised in changes in stocks
and work-in-progress to production
overheads, are allocated to work-in-progress and their
residual values (i.e. estimated second-hand sale value) over
finished goods, determined on a full absorption cost basis. Net the
term of the arrangement. realisable value is the estimated selling
price in the ordinary course of business less estimated cost of
completion and selling expenses. As at 31 March (£ millions)
2022 2021 2020 Raw materials and consumables 135 110 104
Work-in-progress 488 371 388
Finished goods 2,129 2,525 2,977 Inventory basis adjustment 29 16
(1) Total inventories 2,781 3,022 3,468 Inventories of finished
goods include £361 million (2021: £406 sales, employee costs,
depreciation and production overheads million, 2020: £466 million)
relating to vehicles sold to rental recognised within other
expenses. car companies, fleet customers and others with guaranteed
repurchase arrangements. During the year, the Group recorded an
inventory write-down expense of £11 million (2021:
£16 million, 2020: £28 million). Cost of inventories
(comprising the cost of purchased products The write-down is
included in “Material and other cost of sales”. and the costs of
conversion) recognised as an expense during the year amounted to
£12,499 million (2021: £13,917 million, Inventories
pledged as collateral against borrowings are disclosed 2020:
£16,902 million), including material and other cost of in note 25.
24 Accounts payable As at 31 March (£ millions) 2022 2021 2020
Trade payables 3,616 4,238 3,723 Liabilities to employees 168 171
143 Liabilities for expenses 929 1,392 1,950 Capital creditors 431
507 683 Total accounts payable 5,144 6,308 6,499 Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
103
FINANCIAL STATEMENTS 25 Interest-bearing
loans and borrowings As at 31 March (Ł millions) 2022 2021
2020 Short-term borrowings Bank loans 599 572 -Current portion of
long-term EURO MTF listed debt 779 399 299 Current portion of
long-term loans 401 235 225 Other secured — 2 Total short-term
borrowings 1,779 1,206 526 Long-term borrowings EURO MTF listed
debt 3,953 3,921 3,562 Bank loans 1,260 1,037 1,241 Other unsecured
35 14 14 Total long-term borrowings 5,248 4,972 4,817 Lease
obligations 570 519 541 Total debt 7,597 6,697 5,884 Euro MTF
listed debt Details of the tranches of bonds repaid in the year
ended 31 The bonds are listed on the Luxembourg Stock Exchange
March 2021 are as follows: multilateral trading facility (“EURO
MTF”) market. Details of the tranches of the bonds outstanding at
31 March 2022 are as • Ł300 million Senior Notes due 2021
at a coupon of 2.750 follows: per cent per annum – issued January
2017 • $500 million Senior Notes due 2023 at a coupon of 5.625
Details of the tranches of the bonds repaid in the year ended
31 per cent per annum – issued January 2013 March 2020 as
follows: • Ł400 million Senior Notes due 2023 at a coupon of
3.875 per cent per annum – issued February 2015 •
$500 million Senior Notes due 2019 at a coupon of 4.250 •
€650 million Senior Notes due 2024 at a coupon of
2.200 per cent per annum – issued October 2014 per cent
per annum – issued January 2017 • $500 million Senior Notes
due 2020 at a coupon of 3.500 • $500 million Senior Notes due
2027 at a coupon of 4.500 per cent per annum – issued March
2015 per cent per annum – issued October 2017 •
€500 million Senior Notes due 2026 at a coupon of 4.500
Syndicated loan per cent per annum – issued September 2018 In
October 2018, a $1 billion syndicate loan was issued with a •
€500 million Senior Notes due 2024 at a coupon of 5.875 coupon
rate of LIBOR + 1.900 per cent per annum, due in the per cent
per annum – issued November 2019 following tranches: •
€500 million Senior Notes due 2026 at a coupon of
6.875 per cent per annum – issued November 2019 •
$199 million due October 2022 • $700 million Senior Notes
due 2025 at a coupon of 7.750 • $798 million due January
2025 per cent per annum – issued October 2020 •
$650 million Senior Notes due 2028 at a coupon of 5.875
$3 million of this loan was reaid during the year ended
31 March per cent per annum – issued December 2020 2022. •
$500 million Senior Notes due 2029 at a coupon of
5.500 per cent per annum – issued July 2021 The contractual
cash flows of interest-bearing debt (excluding • €500 million
Senior Notes due 2028 at a coupon of 4.500 leases) are set out on
the next page, including estimated interest per cent per annum –
issued July 2021 payments and assuming the debt will be repaid at
the maturity date. Details of the tranches of the bonds repaid in
the year ended 31 March 2022 are as follows: •
Ł400 million Senior Notes due 2022 at a coupon of
5.000 per cent per annum – issued January 2014
As at 31 March (Ł millions) 2022 2021
2020 Due in 1 year or less 2,104 1,492 765 2nd and 3rd years 2,508
1,270 2,039 4th and 5th years 1,899 3,198 2,145 More than 5 years
1,800 1,383 1,441 Total contractual cash flows 8,311 7,343 6,390
Factored receivables facility factoring facility in China of which
Łnil is drawn down (2021: Ł19 million, 2020: Łnil). During the
year ended 31 March 2021, the Group extended its factored
receivables facility to a $500 million facility ending Undrawn
Facilities March 2023. Under the terms of the facility, the Group
de-recognises factored
receivables in accordance with IFRS 9 as As at 31 March 2022,
the Group has a fully undrawn revolving there are no recourse
arrangements. credit facility of Ł2,015 million (2021, 2020:
Ł1,935 million). There is a reduction in the RCF facility to
Ł1,500 million from UK export finance facility July 2022. The
facility will be available until March 2024 and includes a covenant
requiring the Group to maintain a minimum During the year ended
31 March 2020, the Group entered and liquidity of
Ł1 billion. drew down in full a Ł625 million five-year
amortising loan facility backed by a Ł500 million guarantee
from UK Export Finance. The Group’s fleet buyback facility matured
in December 2021 During the year ended 31 March 2022, the
Group repaid Ł125 and had Ł3 million undrawn on this facility
as at 31 March 2021 million (2021: Ł125 million,
2020: Ł52 million) of this loan. (Łnil at 31 March 2020).
During the year ended 31 March 2022, During the year ended
31 March 2022, the Group entered and the Group repaid the
Ł110 million drawn on this facility. drew down in full an
additional Ł625 million five-year amortising loan facility.
The group repaid Ł31 million of this additional facility
Collateral pledged against borrowings in the year ended
31 March 2022 (2021, 2020: Łnil). These loans include a
covenant requiring the Group to maintain a minimum Inventory of
Łnil (2021: Ł138 million, 2020: Ł127 million), trade liquidity
of Ł1 billion. receivables with a carrying amount of Łnil
(2021: Ł19 million, 2020: Łnil) and other financial assets
with a carrying of Ł13 China borrowings million (2021:
Ł13 million, 2020: Łnil) are pledged as collateral/ security
against borrowings. During the year ended 31 March 2021, the
Group entered into a 3-year
RMB 5 billion syndicated revolving loan facility subject to an
annual confirmatory review. The facility is fully drawn at
31 March 2022 and is equivalent to Ł599 million at
31 March 2022 exchange rates. In addition the Group entered
into a parts Annual Report 2021/22 J A G U A R L A N D R O V E R A
U T O M O T I V E P L C 105
FINANCIAL STATEMENTS 26 Other financial
liabilities As at 31 March (£ millions) 2022 2021 2020 Current
Lease obligations 62 65 73 Interest accrued 95 84 65 Derivative
financial instruments 445 238 453 Liability for vehicles sold under
a repurchase arrangement 267 359 479 Other 1—3 Total current other
financial liabilities 870 746 1,073 Non-current Lease obligations 508 454
468 Derivative financial instruments 338 169 310 Other 25 2—Total
non-current other financial
liabilities 871 625 778 27 Provisions A provision is recognised if,
as a result of a past event, the Provisions are held for product
warranty, legal and product Group has a present legal or
constructive obligation that can be liabilities, residual risks,
environmental liabilities, other employee estimated reliably, and
it is probable that an outflow of economic benefit obligations and
restructuring. benefits will be required to settle the obligation.
When the effect of the time value of money is material, provisions
are determined by discounting the expected future cash flows using
a pre-tax rate that
reflects current market assessments of the time value of money and
the risks specific to the liability. As at 31 March (£
millions) 2022 2021 2020 Current Product warranty 604 643 731 Legal
and product liability 252 198 124 Provisions for residual risk 12
24 61 Provision for environmental liability 3 3 6 Other employee
benefits obligations—10 7 Restructuring 118 283 15 Total current
provisions 989 1,161 944 Non-current Product warranty 1,026
1,042 1,155 Legal and product liability 40 71 54 Provision for
residual risk 19 42 114 Provision for environmental liability 23 23
17 Other employee benefits obligations 4 10 15 Total non-current provisions 1,112 1,188
1,355
Year ended 31 March 2022 Product Legal
and Residual Environmental Other employee (Ł millions) warranty
product liability risk liability benefits obliga- Restructuring
Total tions Opening balance 1,685 269 66 26 20 283 2,349 Provisions
made during the year 745 259 4 3 3 82 1,096 Provisions used during
the year (719) (134) (1) (1) (14) (220) (1,089) Unused amounts
reversed in the year (91) (105) (38) (2) (4) (23) (263) Impact of
unwind of discounting 10 — ——10 Foreign currency translation—3 —
(1) (4) (2) Closing balance 1,630 292 31 26 4 118 2,101 Product
warranty provision The Group notes that changes in the automotive
environment regarding the increasing impact of battery electric
vehicles The Group provides product warranties on all new vehicle
sales presents its own significant challenges, particularly due to
the in respect of manufacturing defects, which become apparent lack
of maturity and historical data available at this time to in the
stipulated policy period dependent on the market in help inform
estimates for future warranty claims, as well as which the vehicle
purchase occurred. The estimated liability for any associated
recoveries from suppliers due to such claims. product warranty is
recognised when products are sold or when The Group offers
warranties of up to eight years on batteries new warranty
programmes are initiated. in electric vehicles. The related
provisions are made with the Group’s best estimate at this time to
settle such obligations Provisions are recognised for the costs of
repairing manufacturing in the future, but will be required to be
continually refined as defects, recall campaigns, customer goodwill
(representing the sufficient, real-world data becomes available.
Group’s constructive obligation to its customers when managing
those warranty claims) and the Group’s other obligations under
Legal and product liability provision the warranty. A legal and
product liability provision is maintained in respect of Assumptions
are made on the type and extent of future warranty compliance with
regulations and known litigations that impact claims based on
experience of the frequency and extent of the Group. The provision
primarily relates to motor accident vehicle faults and defects
historically. The estimates also include claims, consumer
complaints, dealer terminations, employment assumptions on the
amounts of potential repair costs per vehicle cases, personal
injury claims and compliance with emission and the effects of
possible time or mileage limits and are regularly regulations. The
timing of outflows will vary as and when claims adjusted to reflect
new information. The timing of outflows will are received and
settled, which is not known with certainty. vary as and when a
warranty claim will arise. Depending on the relevant jurisdiction,
the Group recognises The Group’s calculation methodology uses
historical data provisions for non-compliance with legal emissions
requirements. corrected for experience as information becomes
available as The measurement of the provision considers the sales
volume well as individual campaign assumptions (such as scope,
uptake in that jurisdiction and the fee or cost per the applicable
rates and repair costs). This can lead to changes in the carrying
legislation. The Group aims to mitigate non-compliance risk by value of
provisions as assumptions are updated over the life of purchasing
emission credits or participation in emission pools. each warranty;
however there are no individual assumptions that The associated
provision is re-measured to
consider any such can be reasonably expected to move over the next
financial year mitigations. Included within “unused amounts
reversed in the to such a degree that it would result in a material
adjustment to year” is Ł51 million related to the expected
costs of compliance the warranty provision. with emission
regulations, and Ł42 million related to potential costs
associated with the Group’s battery end-of-life obligations. The
discount on the warranty provision is calculated using a risk-free
discount rate as the risks specific to the liability, such as
Residual risk provision inflation, are included in the base
calculation. In certain markets, the Group is responsible for the
residual risk The Group also has back-to-back contractual
arrangements arising on vehicles sold by retailers under leasing
arrangements. with its suppliers in the event that a vehicle fault
is proven The provision is based on the latest available market
expectations to be a supplier’s fault. Estimates are made of the
expected of future residual value trends. The timing of the
outflows will be reimbursement claims based upon historical levels
of recoveries at the end of the lease arrangements, being typically
up to three by supplier, adjusted for inflation and applied to the
population years. of vehicles under warranty at the balance sheet
date. Supplier reimbursement claims are presented as separate
assets within These assessments were performed with reference to
both “Other financial assets” in note 17. Supplier recoveries are
internal and external market inputs. recognised only when the Group
considers there to be virtual certainty over the reimbursement,
which also requires historical evidence to support. Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
107
FINANCIAL STATEMENTS Environmental liability
provision programmes. Amounts are also included in relation to
legal and constructive obligations made to third parties in
connection with This provision relates to various environmental
remediation costs cancellations under the group’s Reimagine
strategy. such as asbestos removal and land clean-up. The timing of when these
costs will be incurred is not known with certainty. The estimated
liability for restructuring activities is recognised when the Group
has reason to believe there is a legal or Other employee benefit
obligations constructive obligation arising from restructuring
actions taken. This provision relates to the LTIP scheme for
certain employees The amount provided at the reporting date is
calculated based and other amounts payable to employees. on
currently available facts and certain estimates for those
obligations (see note 4, Exceptional items). These estimates are
Restructuring provision established using historical experience
based on the settlement costs for similar liabilities, with proxies
being used where no The restructuring provision includes amounts
for third party direct comparison exists. obligations arising from
Group restructuring programmes. This includes amounts payable to
employees following the The amounts and timing of outflows will
vary as and when announcement of the Group’s Reimagine strategy in
the year restructuring obligations are progressed with third
parties. ending 31 March 2021 as well as other Group
restructuring 28 Other liabilities As at
31 March (Ł millions) 2022 2021 2020 Current Liabilities for
advances received 122 61 50 Ongoing service obligations 286 315 324
VAT 95 122 169 Other taxes payable 161 120 148 Other 10 20 25 Total
current other liabilities 674 638 716 Non-current Ongoing service obligations
395 451 522 Other 9 10 11 Total non-current other liabilities 404 461
533 29 Capital and reserves The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company. As at
31 March (Ł millions) 2022 2021 2020 Authorised, called up and
fully paid 1,500,642,163 ordinary shares of Ł1 each 1,501 1,501
1,501 Total ordinary share capital 1,501 1,501 1,501 The capital
redemption reserve of Ł167 million (2021, 2020: Ł167 million)
was created in March 2011 on the cancellation of share
capital.
30 Other reserves The movement of reserves is
as follows: Translation Hedging Cost of Retained Total other (Ł
millions) reserve reserve hedging earnings reserves reserve Balance
at 1 April 2021 (357) 136 1 3,806 3,586 Loss for the year
——(818) (818) Remeasurement of defined benefit obligation ——707 707
(Loss)/gain on effective cash flow hedges—(842) 31—(811) Income tax
related to items recognised in other comprehensive income—197 (8)
(92) 97 Cash flow hedges reclassified to profit and loss—(67)
(18)—(85) Income tax related to items reclassified to profit or
loss—13 3—16 Amounts removed from hedge reserve and recognised in
inventory—134 13—147 Income tax related to amounts removed from
hedge reserve and recognised in inventory—(25) (3)—(28) Currency
translation differences 24 ——24 Balance at 31 March 2022 (333)
(454) 19 3,603 2,835 Of which: Amounts related to continuing hedges
n/a (444) 19 n/a (425) Amounts related to discontinued hedges
n/a (10)—n/a (10) Balance at 1 April 2020 (316) (286)
(33) 5,515 4,880 Loss for the year ——(1,101) (1,101) Remeasurement
of defined benefit obligation ——(751) (751) Gain on effective cash
flow hedges—400 37—437 Income tax related to items recognised in
other comprehensive income—(76) (6) 143 61 Cash flow hedges
reclassified to profit and loss—116 (7)—109 Income tax related to
items reclassified to profit or loss—(22) 1—(21) Amounts removed
from hedge reserve and recognised in inventory—5 11—16 Income tax
related to amounts removed from hedge reserve and recognised in
inventory—(1) (2)—(3) Currency translation differences (41) ——(41)
Balance at 31 March 2021 (357) 136 1 3,806 3,586 Of which:
Amounts related to continuing hedges n/a 129 1 n/a 130 Amounts
related to discontinued hedges n/a 7—n/a 7 Balance at 1 April
2019 (337) (506) (33) 5,181 4,305 Adjustment on initial application
of IFRS 16 (net of tax) ——(23) (23) Adjusted balance at
1 April 2019 (337) (506) (33) 5,158 4,282 Loss for the year
——(471) (471) Remeasurement of defined benefit obligation ——983 983
Loss on effective cash flow hedges—(334) — (334) Gain/(loss) on
effective cash flow hedges of inventory—82 (7)—75 Income tax
related to items recognised in other comprehensive income—49 1
(155) (105) Cash flow hedges reclassified to profit and loss—571
(8)—563 Income tax related to items reclassified to profit or
loss—(109) 2—(107) Amounts removed from hedge reserve and
recognised in inventory—(48) 15—(33) Income tax related to amounts
removed from hedge reserve and recog— 9 (3)—6 nised in inventory
Currency translation differences 21 ——21 Balance at 31 March
2020 (316) (286) (33) 5,515 4,880 Of which: Amounts related to
continuing hedges n/a (249) (32) n/a (281) Amounts related to
discontinued hedges n/a (37) (1) n/a (38) Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
109
FINANCIAL STATEMENTS 31 Dividends During the
year ended 31 March 2022 no ordinary share dividends were
proposed or paid (2021, 2020: Łnil). 32 Employee benefits Pension
Schemes Past service cost, including curtailment gains and losses,
The Group operates several defined benefit (‘DB’) pension is
generally recognised in profit or loss in the period of plan plans;
these include two large and one smaller defined benefit amendment.
Net interest is calculated by applying the discount plan in the UK.
The UK DB plans are administered by a separate rate at the
beginning of the period to the net defined benefit trustee, the
assets of the plans are generally held in separate liability,
adjusted for expected cashflows during the period. From funds
selected and overseen by the trustee. These plans were the year
ending 31 March 2020, at the point a past service cost
contracted out of the state second pension (S2P) scheme until is
incurred, re-measurement of
the income statement cost is 5 April 2016. The plans provide
benefits for members including a considered and will be
re-calculated if there is a
material change. monthly pension after retirement based on salary
and service as set out in the rules of each plan. The Group
presents these defined benefit costs within “Employee costs” in the
consolidated income statement (see note 7). Contributions to the
plans by the Group take into consideration the results of actuarial
valuations. Separate defined contribution plans are available to
all other employees of the Group. Costs in respect of these plans
are The UK defined benefit plans were closed to new joiners in
charged to the consolidated income statement as incurred. April
2010. The Group also operates a number of small benefit
arrangements worldwide (the liabilities for these amount to
Post-retirement Medicare scheme around 0.5% of the Group total).
Under these unfunded schemes, employees of some subsidiaries
receive medical benefits subject to certain limits of amount, For
defined benefit plans, the cost of providing benefits is periods
after retirement and types of benefits, depending on determined
using the projected unit credit method, with actuarial their grade
and location at the time of retirement. Employees updates being
carried out at the end of each reporting period. separated from the
Group as part of an early separation scheme, on medical grounds or
due to permanent disablement, may Defined benefit costs are split
into four categories: also be covered under the scheme. The
applicable subsidiaries (and therefore, the Group) account for the
liability for the • Current service cost, past service cost and
gains and losses post-retirement medical scheme based on an annual
actuarial on curtailments and settlements; valuation where
appropriate. • Net interest cost; Actuarial gains and losses
Actuarial gains and losses relating to retirement benefit plans •
Administrative expenses; and are recognised in the consolidated
statement of comprehensive income in the year in which they arise.
• Remeasurements. Remeasurement comprising actuarial gains and
losses, the effect of the asset ceiling and the return on plan
assets (excluding interest) is recognised immediately in the
consolidated balance sheet with a charge or credit to the
consolidated statement of comprehensive income in the period in
which they occur. Remeasurement recorded in the statement of
comprehensive income is not recycled.
Measurement date liabilities, although this
is expected to be partially offset by an The measurement date of
all retirement plans is 31 March. increase in the value of the
schemes’ assets, specifically the bond holdings and interest rate
hedging instruments. The trustee of the pension schemes is required
by law to act in the interest of the members and of all relevant
stakeholders in the Inflation risk schemes and is responsible for
the investment policy with regard to the assets of the schemes and
all other governance matters. Some of the Group’s pension
obligations are linked to inflation, The board of the trustee must
be composed of representatives and higher inflation will lead to
higher liabilities (although, in most of the Group and scheme
participants in accordance with each cases, caps on the level of
inflationary increases are in place to scheme’s regulations.
protect the schemes against high inflation). As noted above, the
schemes hold a significant proportion of assets in index-linked
Through its defined benefit pension schemes, the Group is gilts,
together with other inflation hedging instruments and also exposed
to a number of risks, the most significant of which are assets that
are more closely correlated with inflation. However, detailed
below. an increase in inflation may still create a deficit or
increase an existing deficit to some degree. Asset volatility Life
expectancy The schemes’ liabilities are calculated using a discount
rate set with reference to corporate bond yields; if the schemes’
assets The majority of the schemes’ obligations are to provide
benefits underperform against these corporate bonds, this will
create or for the life of the member, so increases in life
expectancy will increase a deficit. The defined benefit schemes
hold a significant result in an increase in the schemes’
liabilities. This is particularly proportion of equity-type assets,
which are expected to significant in the UK defined benefit
schemes, where inflationary outperform corporate bonds in the
long-term although introduce increases result in higher sensitivity
to changes in life expectancy. volatility and risk in the
short-term. The following tables set out the disclosures pertaining
to the The UK schemes hold a substantial level of index-linked
gilts and retirement benefit amounts recognised in the consolidated
other inflation and interest rate hedging instruments in order to
financial statements prepared in accordance with IAS 19: reduce the
volatility of assets compared to the liability value, although
these will lead to asset value volatility. As the schemes mature,
the Group intends to reduce the level of investment risk by
investing more in assets for which expected income is a better
match for the expected benefit outgo. However, the Group believes
that due to the long-term nature of the schemes’ liabilities and
the strength of the supporting group, a level of continuing
equity-type investments is currently an appropriate element of the
Group’s long-term strategy to manage the schemes efficiently.
Changes in bond yields A decrease in corporate bond yields will
increase the schemes’ Annual Report 2021/22 J A G U A R L A N D R O
V E R A U T O M O T I V E P L C 111
FINANCIAL STATEMENTS Change in present value
of defined benefit obligation Year ended 31 March (Ł millions)
2022 2021 2020 Defined benefit obligation at beginning of year
8,432 7,788 8,648 Current service cost 116 131 133 Past service
cost—16 4 Interest expense 176 166 203 Actuarial losses/(gains)
arising from: Changes in demographic
assumptions 10 (21) 7 Changes in financial
assumptions (705) 869 (526) Experience
adjustments (3) (75) (139) Exchange differences on foreign
schemes—(2) 1 Member contributions 2 1 2 Benefits paid (506) (441)
(545) Defined benefit obligation at end of year 7,522 8,432 7,788
Change in present value of scheme assets Year ended 31 March
(Ł millions) 2022 2021 2020 Fair value of schemes’ assets at
beginning of year 8,045 8,168 7,981 Interest income 170 170 190
Remeasurement gain on the return of plan assets, excluding amounts
included in interest income 9 22 325 Administrative expenses (27)
(22) (16) Exchange differences on foreign schemes—(1) -Employer
contributions 238 148 231 Member contributions 2 1 2 Benefits paid
(506) (441) (545) Fair value of schemes’ assets at end of year
7,931 8,045 8,168 The actual return on the schemes’ assets for the
year ended 31 March 2022 was Ł179 million (2021:
Ł192 million, 2020: Ł515 million). Amounts recognised in the
consolidated income statement consist of: Year ended 31 March
(Ł millions) 2022 2021 2020 Current service cost 116 131 133 Past
service cost—16 4 Administrative expenses 27 22 16 Net interest
cost (including onerous obligations) 6 (4) 13 Components of defined
benefit cost recognised in the consolidated 149 165 166 income
statement
Amounts recognised in the consolidated
statement of comprehensive income consist of: Year ended
31 March (Ł millions) 2022 2021 2020 Actuarial (losses)/gains
arising from: Changes in demographic
assumptions (10) 21 (7) Changes in financial
assumptions 705 (869) 526 Experience
adjustments 3 75 139 Remeasurement gain on the return of schemes’
assets, excluding amounts 9 22 325 included in interest income
Remeasurement gain/(loss) on net defined benefit obligation 707
(751) 983 Amounts recognised in the consolidated balance sheet
consist of: As at 31 March (Ł millions) 2022 2021 2020 Present
value of unfunded defined benefit obligations (2) (2) (2) Present
value of funded defined benefit obligations (7,520) (8,430) (7,786)
Fair value of schemes’ assets 7,931 8,045 8,168 Net retirement
benefit obligation 409 (387) 380 Presented as non-current asset 434—408 Presented as
non-current liability (25)
(387) (28) The most recent valuations of the defined benefit
schemes for of CPIH from 2030 (following its consultation on RPI
Reform). As accounting purposes were carried out at 31 March
2022 by a a result of this and changing market conditions, the gap
between qualified independent actuary. For the UK schemes this is
based RPI and CPI has been updated to reflect RPI reform by having
a on membership data as at 31 March 2021 for the
JPP & LRPS gap of 1.2% p.a. up to 2030 and no gap
thereafter. In addition and 5 April 2018 for the smaller JEPP.
The present value of the the inflation risk premium (IRP) has been
updated from an IRP of defined benefit liability, and the related
current service cost and 0.2% p.a. up to 2030 and 0.5% post 2030 to
an IRP of 0.3% p.a. past service cost, were measured using the
projected unit credit up to 2030 and 0.5% post 2030, reflecting
market conditions at method. The asset valuations are taken from
the asset custodian the 31 March 2022 year end. for each
scheme together with the balance of the Trustee bank accounts. The
principal assumptions used in accounting for the pension schemes
are set out below: In November 2020 the UK government announced
that the calculation of RPI would be amended to mirror the
calculation Year ended 31 March 2022 2021 2020 Discount rate
2.8% 2.1% 2.4% Expected rate of increase in benefit revaluation of
covered employees 2.2% 2.1% 2.0% RPI inflation rate 3.5% 3.1% 2.6%
Annual Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I
V E P L C 113
FINANCIAL STATEMENTS For the valuation at
31 March 2022, the mortality assumptions • For the Jaguar
Executive Pension Plan, an average scaling used are the
Self-Administered Pension Schemes (‘SAPS’) factor of 94 per
cent has been used for male members and mortality base table, S2PxA
tables (“Light” tables for members an average scaling factor of
84 per cent has been used for of the Jaguar Executive Pension
Plan). female members. • For the Jaguar Pension Plan, scaling
factors of 101 per cent For the valuation at 31 March
2020, the mortality assumptions to 115 per cent have been used
for male members and used were the SAPS mortality base table, S2PxA
tables (“Light” scaling factors of 103 per cent to
118 per cent have been tables for members of the Jaguar
Executive Pension Plan). used for female members. • For the Jaguar
Pension Plan, scaling factors of 111 per cent • For the Land
Rover Pension Scheme, scaling factors of 105 to 117 per cent
have been used for male members and per cent to 117 per cent
have been used for male members scaling factors of 101 per
cent to 112 per cent have been and scaling factors of
100 per cent to 116 per cent have used for female
members. been used for female members. • For the Land Rover Pension
Scheme, scaling factors of 107 • For the Jaguar Executive Pension
Plan, scaling factors of 93 per cent to 111 per cent have
been used for male members per cent to 97 per cent have been
used for male members and scaling factors of 101 per cent to
109 per cent have and scaling factors of 91 per cent to
96 per cent have been been used for female members. used for
female members. • For the Jaguar Executive Pension Plan, an average
scaling For the valuation at 31 March 2021, the mortality
assumptions factor of 94 per cent has been used for male
members and used were the SAPS mortality base table, S2PxA tables
(“Light” an average scaling factor of 84 per cent has been
used for tables for members of the Jaguar Executive Pension Plan).
female members. • For the Jaguar Pension Plan, scaling factors of
111 per cent For the 2022 year end calculations there is an
allowance for to 117 per cent have been used for male members
and future improvements in line with the CMI
(2021) projections and scaling factors of 101 per cent to
112 per cent have been an allowance for long-term improvements
of 1.25 per cent per used for female members. annum and a
smoothing parameter of 7.5 (2021: CMI (2020) projections with
1.25 per cent per annum improvements and • For the Land Rover
Pension Scheme, scaling factors of 107 a smoothing parameter of
7.5, 2020: CMI (2019) projections per cent to 111 per
cent have been used for male members with 1.25 per cent per
annum improvements and a smoothing and scaling factors of
101 per cent to 109 per cent have parameter of 7.5). been
used for female members. The assumed life expectancies on
retirement at age 65 are: As at 31 March (years) 2022 2021
2020 Retiring today: Males 21.6 21.0
21.0 Females 23.8 23.3 23.2 Retiring in 20
years: Males 23.0 22.4
22.5 Females 25.7 25.2 25.2
A past service cost of Ł9 million was
recognised in the year The sensitivity analysis below is based on a
change in an ended 31 March 2021 following a further High
Court ruling, assumption while holding all other assumptions
constant. In published on 20 November 2020, that provided
clarification practice, this is unlikely to occur, and changes in
some of the on the obligations of pension plan trustees to equalise
past assumptions may be correlated. When calculating the
sensitivity transfer values allowing for the effect of unequal
Guaranteed of the defined benefit obligation to significant
actuarial Minimum Pensions (‘GMP’) between 17 May 1990 and
5 April assumptions, the same method (present value of the
defined 1997 (“GMP equalisation”). The Group had previously
recognised benefit obligation calculated with the projected unit
credit a past service cost of Ł17 million in the year ended
31 March method at the end of the reporting period) has been
applied 2019, following the High Court ruling in 2018 in respect of
GMP as when calculating the pension liability recognised within the
equalisation, and has retained this allowance at 31 March 2022
consolidated balance sheet. but adjusted for the passage of time
and to reflect the estimated impact of changes in market
conditions. The methods and types of assumptions used in preparing
the sensitivity analysis did not change compared to previous
periods. A further past service cost of Ł7 million was also
recognised in the year ended 31 March 2021. This reflected
benefit improvements for certain members as part of the Group
restructuring programme that commenced in the year ended
31 March 2021. A past service cost of Ł4 million was
recognised in the year ended 31 March 2020. This reflected
benefit improvements for certain members as part of the Group
restructuring programme that commenced in the year ended
31 March 2019. All past service costs are recognised in
‘exceptional items’ in the consolidated income statement. See Note
4 for further information. Assumption Change in assumption Impact
on scheme liabilities Impact on service cost Discount rate
Increase/decrease by 0.25% Decrease/increase by c.Ł341 million
Decrease/increase by Ł6 million Inflation rate
Increase/decrease by 0.25% Increase/decrease by c.Ł176 million
Increase/decrease by Ł1 million Increase/decrease in life
expectancy Mortality Increase/decrease by c.Ł267 million
Increase/decrease by Ł3 million by 1 year Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
115
FINANCIAL STATEMENTS The fair value of
schemes’ assets is represented by the following major categories:
As at 31 March 2022 2021 2020 (Ł millions) Quoted Unquo- Total
% Quoted Unquo- Total % Quo- Unquo- Total % ted ted* ted** ted
Equity instruments Information technology—127 127 2%—134 135 2% 73
51 124 1% Energy—18 18 — 11 11—6 4 10 -Manufacturing—96 96 1%—75 75
1% 41 29 70 1% Financials—41 41 1%—48 48 1% 27 18 45 1% Other—173
173 2%—267 267 3% 147 102 249 3% —455 455 6%—535 535 7% 294 204 498
6% Debt instruments Government bonds 1,813 65 1,878 23% 1,625 88
1,712 21% 1,841 103 1,944 24% Corporate bonds (investment grade)
1,149 310 1,459 18% 1,340 243 1,583 20% 1,131 462 1,593 19%
Corporate bonds (Non investment grade)—973 973 12%—1,061 1,061
13%—750 750 9% 2,962 1,348 4,310 53% 2,965 1,392 4,357 54% 2,972
1,315 4,287 52% Property funds UK—307 307 4%—304 304 4%—273 273 3%
Other—240 240 3%—201 201 3%—239 239 3% —547 547 7%—505 505 7%—512
512 6% Cash and cash equivalents 75 363 438 6% 74 192 265 3% 51 627
678 8% Other Hedge funds—506 506 6%—496 496 6%—475 475 6% Private
markets—998 998 13%—824 824 10%—562 562 7% Alternatives—462 462
6%—641 641 8%—594 594 7% —1,966 1,966 25%—1,961 1,961 24%—1,631
1,631 20% Derivatives Foreign exchange contracts—(35) (35) — 15 15
— (35) (35) -Interest rate and inflation swaps—250 250 3%—361 361
4%—545 545 7% Equity protection derivatives — ——48 48 1%—52 52
1%—215 215 3%—424 424 5%—562 562 8% Total 3,037 4,894 7,931 100%
3,039 5,009 8,048 100% 3,317 4,851 8,168 100% *The comparative has
been restated to reflect reclassification to unquoted for equity
instruments. **Restated following a review of the measurement and
presentation requirements for unquoted assets. As at 31 March
2022, the schemes held Gilt Repos. The net value of an asset. In
assigning the level JLR balances consistency of these transactions
is included in the value of government between asset holdings,
consistency from year to year and bonds in the table above. The
gross value of the funding obligation manager/other assessments.
JLR designates level 1 to direct for the Repo transactions is
Ł1,462 million at 31 March 2022 holdings of liquid assets
where an active market exists. (2021: Ł2,057 million, 2020:
Ł2,639 million). JLR assigns an accounting level (1, 2 or 3) to
asset holdings in order to reflect the level of judgement involved
in the valuation
Custodian accounts where underlying assets
are regularly traded 29 April 2020. or where comparable assets
have traded values are designated level 2, for example derivatives
(including net value of swaps) The average duration of the benefit
obligations at 31 March and some property holdings. Assets
which are not designated as 2022 is 17.5 years (2021, 2020: 19.0
years). level 1 or 2 are designated as level 3. Level 1 assets
are reported as quoted, level 2 and 3
unquoted. Repo obligations are noted The
expected net periodic pension cost for the year ended 31
separately. March 2023 is expected to be Ł113 million. The
Group expects to pay Ł117 million to its defined benefit
schemes, in total, for Private Equity holdings have been measured
using the most the year ended 31 March 2023 (excluding member
contributions recent valuations, adjusted for cash and currency
movements through salary sacrifice). between the last valuation
date and 31 March 2022. Given the movements in listed equity
markets, the valuation of Private Defined contribution schemes
Equity holdings may vary significantly. The value of the Private
Equity holdings in the JLR UK Plans included above is Ł661 The
Group’s contribution to defined contribution schemes for the
million as at 31 March 2022 (2021: Ł453 million, 2020:
Ł342 year ended 31 March 2022 was Ł83 million (2021,
2020: Ł86 million). million). Jaguar Land Rover contributes towards
the UK defined benefit 33 Commitments and contingencies schemes.
The 5 April 2018 statutory funding valuations were completed
in December 2018. As a result of these valuations In the normal
course of business, the Group faces claims and it is intended to
eliminate the pension scheme funding deficits assertions by various
parties. The Group assesses such claims over the 10 years to
31 March 2028. JLR has taken legal advice and assertions and
monitors the legal environment on an ongoing considering the
documentation of the UK schemes and the basis, with the assistance
of external legal counsel wherever regulatory environment. This
confirmed the recoverability of necessary. The Group records a
liability for any claims where a any surplus in the scheme and JLR
has based its accounting potential loss is probable and capable of
being estimated and judgement on this advice. discloses such
matters in its financial statements, if material. For potential
losses that are considered possible, but not probable, In line with
the schedule of contributions agreed following the the Group
provides disclosure in the consolidated financial 2018 statutory
funding valuations, the current ongoing Group statements but does
not record a liability unless the loss contributiation rate for
defined benefit accrual is c.21 per cent becomes probable.
Such potential losses may be of an uncertain of pensionable
salaries in the UK. The 2021 statutory funding timing and/or
amount. valuations are expected to be completed by 30 June
2022. The
following is a description of claims and contingencies where
Deficit contributions are paid in line with the schedule of a
potential loss is possible, but not probable. Management
contributions at a rate of Ł60 million per year until
31 March believes that none of the contingencies described
below, either 2024 followed by Ł25 million per year until
31 March 2028. individually or in aggregate, would have a
material adverse effect Contributions previously due for April, May
and June 2020 on the Group’s financial condition, results of
operations or cash have been re-spread over the year ended
31 March 2022. This flows. agreement is reflected in the
Schedule of Contributions dated As at 31 March (Ł millions)
2022 2021 2020 Litigation and product related matters 25 23 40
Other taxes and duties 75 50 44 Commitments: • Plant and equipment
735 862 1,217 • Intangible assets 15 16 14 • Other 470 270 376
Pledged as collateral/security against the borrowings and
commitments: • Inventory—138 127 • Trade receivables—19—• Other
financial assets 13 13—Annual Report 2021/22 J A G U A R L A N D R
O V E R A U T O M O T I V E P L C 117
FINANCIAL STATEMENTS Litigation and product
related matters Joint venture The Group is involved in legal
proceedings, both as plaintiff and Stipulated within the joint
venture agreement for Chery Jaguar as defendant. There are claims
and potential claims against the Land Rover Automotive Company
Ltd., and subsequently Group which management has not recognised,
as settlement amended by a change to the Articles of Association of
Chery is not considered probable. These claims and potential claims
Jaguar Land Rover Automotive Company Ltd. is a commitment pertain
to motor accident claims, consumer complaints, for the Group to
contribute a total of CNY 5,000 million of capital. employment
and dealership arrangements, replacement of parts Of this amount,
CNY 3,475 million has been contributed as at 31 of vehicles
and/or compensation for deficiency in the services by March 2022.
The outstanding commitment of CNY 1,525 million the Group or
its dealers. translates to Ł183 million at the 31 March
2022 exchange rate. The Group has provided for the estimated cost
of repair The Group’s share of capital commitments of its joint
venture following the passenger safety airbag issue in the United
States, at 31 March 2022 is Ł16 million (2021:
Ł42 million, 2020: Ł69 China, Canada, Korea, Taiwan, Australia
and Japan. The Group million) and contingent liabilities of its
joint venture 31 March recognises that there is a potential
risk of further recalls in the 2022 is Łnil (2021, 2020: Łnil).
future and considers such events on a case-by-case basis as the
relevant facts and circumstances materialise, provided it can 34
Capital management reliably estimate the amount and timing of any
potential future costs associated with this warranty issue. The
Group’s objectives when managing capital are to ensure the going
concern operation of all subsidiary companies within Other taxes
and duties the Group and to maintain an efficient capital structure
to support ongoing and future operations of the Group and to meet
Contingencies and commitments include tax contingent liabilities
shareholder expectations. which mainly relate to tax audits and tax
litigation
claims. The
Group issues debt, primarily in the form of bonds, to meet
Commitments anticipated funding requirements and maintain
sufficient liquidity. The Group also maintains certain undrawn
committed The Group has entered into various contracts with vendors
credit facilities to provide additional liquidity. These
borrowings, and contractors for the acquisition of plant, equipment
and together with cash generated from operations, are loaned
intangible assets; and various civil contracts of a capital nature.
internally or contributed as equity to certain subsidiaries as
Commitments and contingencies also includes other contingent
required. Surplus cash in subsidiaries is pooled (where
practicable) liabilities, the timing of any outflow will vary as
and when claims and invested to satisfy security, liquidity and
yield requirements. are received and settled, which is not known
with certainty. The capital structure and funding requirements are
regularly The remaining financial commitments, in particular the
purchase monitored by the JLR plc Board to ensure sufficient
liquidity commitments and guarantees, are of a magnitude typical
for the is maintained by the Group. All debt issuance and capital
industry. distributions are approved by the JLR plc Board. As at
31 March (Ł millions) 2022 2021 2020 Short-term debt 1,841
1,271 599 Long-term debt 5,756 5,426 5,285 Total debt* 7,597 6,697
5,884 Equity attributable to shareholders 4,503 5,254 6,548 Total
capital 12,100 11,951 12,432 *Total debt includes lease obligations
of Ł570 million (2021: Ł519 million, 2020: Ł541
million).
35 Financial instruments This section gives
an overview of the significance of financial financial assets when
and only when its business model for instruments for the Group and
provides additional information managing those assets changes. on
balance sheet items that contain financial instruments. Financial
assets are classified into three categories: Recognition and
derecognition Financial assets at amortised cost are non-derivative financial A financial
instrument is any contract that gives rise to a financial assets
with contractual cash flows that consist solely of asset of one
entity and a financial liability or equity instrument payments of
principal and interest and which are held with of another entity.
Financial instruments are recognised on the intention of collecting
those contractual cash flows. the balance sheet when the Group
becomes a party to the Subsequently, these are measured at
amortised cost using the contractual provisions of the instrument.
effective interest method less impairment losses, if any. These
include cash and cash equivalents, contract assets and other The
Group derecognises a financial asset only when the financial
assets. contractual rights to the cash flows from the asset expire
or it transfers the financial asset and substantially all the risks
Financial assets at fair value through other comprehensive and
rewards of ownership of the asset to another entity. If the income
are non-derivative
financial assets with contractual cash Group neither transfers nor
retains substantially all the risks and flows that consist solely
of payments of principal and interest and rewards of ownership and
continues to control the transferred which are held with the
intention of collecting those contractual asset, the Group
recognises its retained interest in the asset and cash flows as
well as to sell the financial asset. Subsequently, an associated
liability for amounts it may have to pay. If the Group these are
measured at fair value, with unrealised gains or losses retains
substantially all the risks and rewards of ownership of a being
recognised in other comprehensive income apart from transferred
financial asset, the Group continues to recognise the any expected
credit losses or foreign exchange gains or losses, financial asset
and also recognises a collateralised borrowing for which are
recognised in profit or loss. This category can also the proceeds
received. Any gain or loss arising on derecognition include
financial assets that are equity instruments which have is
recognised in profit or loss. When a financial instrument is been
irrevocably designated at initial recognition as fair value
derecognised, the cumulative gain or loss in equity (if any) is
through other comprehensive income. For these assets, there is
transferred to the consolidated income statement. no expected
credit loss recognised in profit or loss. Financial assets are
written off when there is no reasonable Financial assets at fair
value through profit or loss are financial expectation of recovery.
The Group reviews the facts and assets with contractual cash flows
that do not consist solely circumstances around each asset before
making a determination. of payments of principal and interest. This
category includes Financial assets that are written off could still
be subject to derivatives, embedded derivatives separated from the
host enforcement activities. contract and investments in certain
convertible loan notes. Subsequently, these are measured at fair
value, with unrealised Financial liabilities are derecognised when
they are extinguished, gains or losses being recognised in profit
or loss, with the that is when the obligation is discharged,
cancelled or has exception of derivative instruments designated in
a hedging expired. relationship, for which hedge accounting is
applied. Initial measurement Classification and measurement –
financial liabilities Initially, a financial instrument is
recognised at its fair value. Financial liabilities are classified
as subsequently measured Transaction costs directly attributable to
the acquisition or at amortised cost unless they meet the specific
criteria to be issue of financial instruments are recognised in
determining the recognised at fair value through profit or loss.
carrying amount, if it is not classified as at fair value through
profit or loss. Transaction costs of financial instruments carried
Other financial liabilities are measured at amortised cost using at
fair value through profit or loss are expensed in profit or loss.
the effective interest method. Subsequently, financial instruments
are measured according to Financial liabilities at fair value
through profit or loss include the category in which they are
classified. derivatives and embedded derivatives separated from the
host contract as well as financial liabilities held for trading.
Classification and measurement – financial assets Subsequent to
initial recognition, these are measured at fair value with gains or
losses being recognised in profit or loss. Embedded Classification
of financial assets is based on the business model derivatives
relating to prepayment options on senior notes are in which the
instruments are held as well as the characteristics not considered
as closely related and are separately accounted of their
contractual cash flows. The business model is based unless the
exercise price of these options is approximately equal on
management’s intentions and past pattern of transactions. on each
exercise date to either the amortised cost of the senior Financial
assets with embedded derivatives are considered in notes or the
present value of the lost interest for the remaining their entirety
when determining whether their cash flows are term of the senior
notes. solely payment of principal and interest. The Group
reclassifies Annual Report 2021/22 J A G U A R L A N D R O V E R A
U T O M O T I V E P L C 119
FINANCIAL STATEMENTS Impairment account when
pricing the asset or liability at the measurement date. Subsequent
to initial recognition, the Group determines The Group recognises a
loss allowance in profit or loss for the fair value of financial
instruments that are quoted in active expected credit losses on
financial assets held at amortised cost markets using the quoted
bid prices (financial assets held) or or at fair value through
other comprehensive income. Expected quoted ask prices (financial
liabilities held) and using valuation credit losses are forward
looking and are measured in a way that techniques for other
instruments. Valuation techniques include is unbiased and
represents a probability-weighted amount, takes the discounted cash
flow method and other valuation models. into account the time value
of money (values are discounted using the applicable effective
interest rate) and uses reasonable Hedge accounting and supportable
information. The Group uses foreign currency forward contracts,
foreign Lifetime expected credit losses are calculated for assets
that currency options and borrowings denominated in foreign were
deemed credit impaired at initial recognition or have currency to
hedge its risks associated with foreign currency subsequently
become credit impaired as well as those where fluctuations relating
to highly probable forecast transactions. credit risk has increased
significantly since initial recognition. The Group designates these
foreign currency forward contracts, foreign currency options and
borrowings denominated in foreign The Group adopts the simplified
approach to apply lifetime currency in cash flow hedging
relationships. expected credit losses to trade receivables and
contract assets. Where credit risk is deemed low at the reporting
date or to have The Group uses cross-currency interest rate swaps
to convert not increased significantly, credit losses for the next
12 months some of its foreign currency denominated fixed-rate borrowings are calculated.
to GBP floating-rate borrowings. Hedge accounting is applied using
both fair value and cash flow hedging relationships. The Credit
risk is determined to have increased significantly when designated
risks are foreign currency and interest rate risks. the probability
of default increases. Such increases are relative and assessment
may include external ratings (where available) Derivative contracts
are stated at fair value on the consolidated or other information
such as past due payments. Historic data balance sheet at each
reporting date. and forward-looking information are both
considered. Objective evidence for a significant increase in credit
risk may include At inception of the hedge relationship, the Group
documents where payment is overdue by 90 or more days as well as
other the economic relationship between the hedging instrument and
information about significant financial difficulties of the
borrower. the hedged item, including whether changes in the cash
flows of the hedging instrument are expected to offset changes in
the Equity instruments cash flows of the hedged item. The Group
documents its risk management objective and strategy for
undertaking its hedging An equity instrument is any contract that
evidences residual transactions. The Group designates only the
intrinsic value of interests in the assets of the Group after
deducting all of its foreign exchange options in the hedging
relationship. The Group liabilities. Equity instruments issued by
the Group are recorded designates amounts excluding foreign
currency basis spread at the proceeds received, net of direct issue
costs. in the hedging relationship for both foreign exchange
forward contracts and cross-currency interest rate swaps. Changes
in Investments in equity instruments are measured at fair value;
the fair value of the derivative contracts that are designated and
however, where a quoted market price in an active market is not
effective as hedges of future cash flows are recognised in the
available, equity instruments are measured at cost (investments
cash flow hedge reserve within other comprehensive income (net in
equity instruments that are not held for trading). The Group of
tax), and any ineffective portion is recognised immediately in has
not elected to account for these investments at fair value the
consolidated income statement. through other comprehensive income.
Changes in both the time value of foreign exchange options
Determination of fair value and foreign currency basis spread of
foreign exchange forwards and cross-currency interest rate swaps
are recognised in other Fair value is the price that would be
received to sell an asset or paid comprehensive income (net of tax)
in the cost of hedging reserve to transfer a liability in an
orderly transaction between market to the extent that they relate
to the hedged item (the “aligned” participants at the measurement
date, regardless of whether value). that price is directly
observable or estimated using another valuation technique. The fair
value of a financial instrument on Changes in the fair value of
contracts that are designated in a fair initial recognition is
normally the transaction price. value hedge are taken to the
consolidated income statement. They offset the change in fair
value, attributable to the hedged In estimating the fair value of
an asset or liability, the Group risks, of the borrowings
designated as the hedged item. takes into account the
characteristics of the asset or liability if market participants
would take those characteristics into
Hedge accounting is discontinued when the
hedging instrument At 31 March 2021, the Group’s hedging
relationship exposures expires or is sold, terminated, exercised or
no longer qualifies were indexed to GBP LIBOR and the Group’s
non-hedged for hedge
accounting. Amounts accumulated in equity are relationship
exposures were indexed to GBP LIBOR and USD reclassified to the
consolidated income statement in the periods LIBOR. On
31 December 2021, the ICE Benchmark Administration in which
the forecast transactions affect profit or loss or as an (IBA), the
FCA-regulated and
authorised administrator of LIBOR, adjustment to a non-financial item (e.g. inventory)
when that ceased to publish a number of IBOR benchmarks including
GBP item is recognised on the balance sheet. These deferred amounts
LIBOR. Most USD LIBORs will cease to be published after June are
ultimately recognised in profit or loss as the hedged item 2023.
affects profit or loss (for example through cost of goods sold).
During the year ended 31 March 2022, the Group converted its
If the forecast transaction is no longer expected to occur, the
LIBOR exposures to risk-free rates in advance of the cessation net
cumulative gain or loss in equity, including deferred costs date.
This conversion included loans and derivatives which have of
hedging, is immediately transferred and recognised in the been
converted using fallback provisions. A number of derivatives
consolidated income statement. which were converted using fallback
provisions have not yet transitioned to RFR due to the timing of
reprice dates. Loans held Interest rate benchmark reform by the
Group that reference USD LIBOR will continue to do so until June
2023. The expected impact of financial instruments A reform of
major interest rate benchmarks is being undertaken yet to
transition is immaterial for the Group. globally, including the
replacement of some interbank offered rates (‘IBORs’) with
alternative risk-free rates (‘RFR’). As a result of the fallback
provision, the Group consider its The Group has adopted Interest
Rate Benchmark Reform exposure to interest rate benchmark reform at
31 March 2022 (Phase 2) Amendments to IFRS 9, IAS 39, IFRS 7,
IFRS 4 to be minimal. The following table shows the total amounts
of and IFRS 16 (effective 1 January 2022). The amendments
exposures to IBOR which have yet to transition and those with
permit modifications to asset and liability values as a direct
appropriate fallback language at 1 April 2021 and at
31 March consequence of the interest rate benchmark reform,
and which 2022. The amounts of financial assets and financial
liabilities are are made on an economically equivalent basis (i.e.
where the shown at their carrying amounts and derivatives are shown
at basis for determining contractual cash flows is the same), by
their notional amounts: only updating the effective interest rate.
The amendments also provide relief from specific hedge accounting
requirements. GBP
LIBOR
USD LIBOR Total amount of Amount with Total amount of Amount with
As at (Ł millions) contracts not yet appropriate fall- contracts
not yet appropriate fall-transitioned back clause transitioned back
clause 31 March 2022 Financial liabilities—carrying value
Syndicated loan — (753) (753) UKEF facility — —
Derivatives—notional amount Cross currency interest rate
swaps—hed- (380)
(380)—-ged Cross currency
interest rate swaps—non (539) (539) hedged 1 April 2021
Financial liabilities—carrying value Syndicated loan — (719) -UKEF
facility (443) ——Derivatives—notional amount Cross currency
interest rate swaps—hed-
(825) — -ged Cross currency
interest rate swaps—non (539) hedged Annual Report 2021/22 J A
G U A R L A N D R O V E R A U T O M O T I V E P L C 121
FINANCIAL STATEMENTS (A) Financial
assets and liabilities The following table shows the carrying
amount and fair value of each category of financial assets and
liabilities as at 31 March 2022: Fair Value Through Profit and
Loss Derivatives Derivatives in As at 31 March 2022 (Ł
millions) Amorti- Financial other than in hedging rela- Total carr-
Total fair sed cost assets hedging rela- tionship ying value value
tionship Cash and cash equivalents 4,223 ——4,223 4,223 Short-term
deposits and other investments 175 ——175 175 Trade receivables 722
——722 722 Investments—30 — 30 30 Other financial assets—current
209—128 57 394 394 Other financial assets—non-current 87—85 13 185 185
Total financial assets 5,416 30 213 70 5,729 5,729 Accounts payable
5,144 ——5,144 5,144 Short-term borrowings 1,779 ——1,779 1,778
Long-term borrowings* 5,248 ——5,248 5,216 Other financial
liabilities—current 425—29 416 870 870 Other financial liabilities—non-current 533—52 286 871
901 Total financial liabilities 13,129—81 702 13,912 13,909 *
Included in the long-term borrowings shown in other financial
liabilities is Ł801 million that is designated as the hedged
item in a fair value hedge relationship. Included within this
figure is Ł(67) million of fair value adjustments as a result
of the hedge relationship. The following table shows the carrying
amount and fair value of each category of financial assets and
liabilities as at 31 March 2021: Fair Value Through Profit and
Loss Derivatives Derivatives in As at 31 March 2021 (Ł
millions) Amorti- Financial other than in hedging rela- Total carr-
Total fair sed cost assets hedging rela- tionship ying value value
tionship Cash and cash equivalents 3,778 ——3,778 3,778 Short-term
deposits and other investments 1,004 ——1,004 1,004 Trade
receivables 863 ——863 863 Investments—22 — 22 22 Other financial
assets—current 196—73 208 477 477 Other financial assets—non-current 92—42 207 341 341
Total financial assets 5,933 22 115 415 6,485 6,485 Accounts
payable 6,308 ——6,308 6,308 Short-term borrowings 1,206 ——1,206
1,217 Long-term borrowings* 4,972 ——4,972 5,136 Other financial
liabilities—current 508—67 171 746 746 Other financial liabilities—non-current 456—65 104 625
688 Total financial liabilities 13,450—132 275 13,857 14,095 *
Included in the long-term borrowings shown in other financial
liabilities is Ł784 million that is designated as the hedged
item in a fair value hedge relationship. Included within this
figure is Ł1 million of fair value adjustments as a result of
the hedge relationship.
The following table shows the carrying amount
and fair value of each category of financial assets and liabilities
as at 31 March 2020: Fair Value Through Profit and Loss
Derivatives Derivatives in As at 31 March 2020 (Ł millions)
Amorti- Financial other than in hedging rela- Total carr- Total
fair sed cost assets hedging rela- tionship ying value value
tionship Cash and cash equivalents 2,271 ——2,271 2,271 Short-term
deposits and other investments 1,393 ——1,393 1,393 Trade
receivables 833 ——833 833 Investments—37 — 37 37 Other financial
assets—current 142—153 88 383 383 Other financial assets—non-current 115—9 133 257 257
Total financial assets 4,754 37 162 221 5,174 5,174 Accounts
payable 6,499 ——6,499 6,499 Short-term borrowings 526 ——526 512
Long-term borrowings* 4,817 ——4,817 3,859 Other financial
liabilities—current 620—204 249 1,073 1,073 Other financial
liabilities—non-current
468—48 262 778 778 Total financial liabilities 12,930—252 511
13,693 12,721 * Included in the long-term borrowings shown in other
financial liabilities is Ł891 million that is designated as
the hedged item in a fair value hedge relationship. Included within
this figure is Ł45 million of fair value adjustments as a
result of the hedge relationship. Offsetting Certain financial
assets and financial liabilities are subject to Derivative
financial assets and financial liabilities are subject to
offsetting where there is currently a legally enforceable right
master netting arrangements whereby in the case of insolvency, to
set off recognised amounts and the Group intends to either
derivative financial assets and financial liabilities can be
settled settle on a net basis or to realise the asset and settle
the liability on a net basis. simultaneously. Annual Report 2021/22
J A G U A R L A N D R O V E R A U T O M O T I V E P L C
123
FINANCIAL STATEMENTS The following table
discloses the amounts that have been offset in arriving at the
consolidated balance sheet presentation and the amounts that are
available for offset only under certain conditions as at
31 March 2022: Amounts subject to a master netting arrangement
Gross Gross amount of Net amount Cash Net amount As at
31 March 2022 (Ł millions) amount recognised set presented in
the Financial collateral after recognised off in the balance
balance sheet instruments (received) / offsetting sheet pledged
Financial assets Derivative financial assets 283—283 (275)—8 Cash
and cash equivalents 4,381 (158) 4,223 — 4,223 4,664 (158) 4,506
(275)—4,231 Financial liabilities Derivative financial liabilities
783—783 (275)—508 Short-term borrowings 1,937 (158) 1,779 — 1,779
2,720 (158) 2,562 (275)—2,287 The following table discloses the
amounts that have been offset in arriving at the consolidated
balance sheet presentation and the amounts that are available for
offset only under certain conditions as at 31 March 2021:
Amounts subject to a master netting arrangement Gross Gross amount
of Net amount Cash Net amount As at 31 March 2021 (Ł millions)
amount recognised set presented in the Financial collateral after
recognised off in the balance balance sheet instruments (received)
/ offsetting sheet pledged Financial assets Derivative financial
assets 530—530 (362)—168 Cash and cash equivalents 3,995 (217)
3,778 — 3,778 4,525 (217) 4,308 (362)—3,946 Financial liabilities
Derivative financial liabilities 407—407 (362)—45 Short-term
borrowings 1,423 (217) 1,206 — 1,206 1,830 (217) 1,613 (362)—1,251
The following table discloses the amounts that have been offset in
arriving at the consolidated balance sheet presentation and the
amounts that are available for offset only under certain conditions
as at 31 March 2020: Amounts subject to a master netting
arrangement Gross Gross amount of Net amount Cash Net amount As at
31 March 2020 (Ł millions) amount recognised set presented in
the Financial collateral after recognised off in the balance
balance sheet instruments (received) / offsetting sheet pledged
Financial assets Derivative financial assets 383—383 (377)—6 Cash
and cash equivalents 2,981 (710) 2,271 — 2,271 3,364 (710) 2,654
(377)—2,277 Financial liabilities Derivative financial liabilities
763—763 (377)—386 Short-term borrowings 1,236 (710) 526 — 526 1,999
(710) 1,289 (377)—912
Fair value hierarchy similarly fair valued by
discounting expected future contractual cash flows. Option
contracts on foreign currency are entered into Financial
instruments held at fair value are required to be on a zero cost
collar basis and fair value estimates are calculated measured by
reference to the following levels: from standard Black-Scholes
options pricing methodology, using prevailing market interest rates
and volatilities. The estimate • Quoted prices in an active market
(Level 1): this level of of fair values for cross-currency swaps is
calculated using hierarchy includes financial instruments that are
measured discounted estimated future cash flows. Estimates of the
future by reference to quoted prices (unadjusted) in active markets
floating-rate cash flows are based on quoted swap rates, future for
identical assets or liabilities; prices, interbank borrowing rates
(“LIBOR”) and risk free rates (“SONIA”). • Valuation techniques
with observable inputs (Level 2): this level of hierarchy includes
financial assets and liabilities Additionally, a credit valuation
adjustment/debit value measured using inputs other than quoted
prices included adjustment is taken on derivative financial assets
and liabilities within Level 1 that are observable for the
asset or liability, and is calculated by discounting the fair value
gain or loss on either directly (i.e. as prices) or indirectly
(i.e. derived from the financial derivative using credit default
swap (“CDS”) prices prices); and quoted for the counterparty or
Jaguar Land Rover respectively. CDS prices are obtained from
Reuters. • Valuation techniques with significant unobservable
inputs (Level 3): this level of hierarchy includes financial assets
The long-term borrowings are held at amortised cost. The fair and
liabilities measured using inputs that are not based on value of
the listed debt for disclosure purposes is determined observable
market data (unobservable inputs). Fair values using Level 1
valuation techniques, based on the closing price are determined in
whole or in part using a valuation model as at 31 March 2022
on the Luxembourg Stock Exchange based on assumptions that are
neither supported by prices multilateral trading facility (“EURO
MTF”) market, for unsecured from observable current market
transactions in the same listed bonds. For bank loans, Level 2
valuation techniques are instrument nor based on available market
data. used. Recent transaction values Fair values of cash and cash
equivalents, short-term deposits, trade receivables and payables,
and other financial assets and The pricing of recent investment
transactions is the main input liabilities (current and
non-current excluding
derivatives and of valuations performed by the Group. The Group’s
policy is to lease obligations) are assumed to approximate to cost
due to use observable market data where possible for its valuations
the short-term maturing of the instruments and as the impact of
and, in the absence of portfolio company earnings or revenue
discounting is not significant. to compare, or of relevant
comparable businesses’ data, recent transaction prices represent
the most reliable observable inputs. Other investments that are not
equity accounted for are recognised at fair value. Where there is
an active quoted market, Alternative valuation methodologies the
fair value is determined using Level 1 valuation techniques,
based on the closing price at year end. The valuation of such
Alternative valuation methodologies are used by the Group for
investments as at 31 March 2022 is Łnil (2021: Łnil, 2020: Ł17
reasons specific to individual assets. At 31 March 2022, the
million). Where there is no active quoted market, the fair values
alternative technique used was net asset value, representing have
been determined using Level 3 valuation techniques and
100 per cent of alternatively valued assets. the closing
valuation as at 31 March 2022 is Ł30 million (2021:
Ł22 million, 2020: Ł20 million). The fair value gain
recognised in There has been no change in the valuation techniques
adopted in the consolidated income statement for Level 3
investments for either current or prior financial years as
presented. There were no the year ended 31 March 2022 is
Ł4 million (2021: gain of Ł2 transfers between fair value
levels in the years ended 31 March million, 2020: loss of Ł1
million). 2022, 2021 and 2020. Of the financial assets held at
31 March 2022 and classified as The financial instruments that
are measured subsequent to Level 3, 96 per cent (2021:
94 per cent, 2020: 93 per cent) were initial recognition at
fair value are classified as Level 2 fair value valued using
recent transaction values and 4 per cent (2021: measurements,
as defined by IFRS 13, being those derived from 6 per cent,
2020: 7 per cent) were valued using an alternative inputs other
than quoted prices that are observable. These technique. valuation
techniques maximise the use of observable market data where it is
available and rely as little as possible on entity- Management uses
its best judgement in estimating the specific estimates. Fair
values of forward derivative financial fair value of its financial
instruments. However, there are assets and liabilities are
estimated by discounting expected inherent limitations in any
estimation technique. Therefore, for future contractual cash flows
using prevailing market interest substantially all financial
instruments, the fair value estimates rate curves from Reuters.
Commodity swap contracts are presented above are not necessarily
indicative of all the amounts Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C 125
FINANCIAL STATEMENTS that the Group could
have realised in a sales transaction as of the functional currency
of the respective consolidated entities. the respective dates. The
estimated fair value amounts as at 31 March 2022, 2021 and
2020 have been measured as at Considering the countries and
economic environment in which the respective dates. As such, the
fair values of these financial the Group operates, its operations
are subject to risks arising instruments subsequent to the
respective reporting dates may from fluctuations in exchange rates
in those countries. The risks be different from the amounts
reported at each year end. primarily relate to fluctuations in
US Dollar, Chinese Yuan and Euro against the functional
currency of the Company and its (B) Financial risk management
subsidiaries. The Group is exposed to foreign currency exchange
rate, Foreign exchange risk on future transactions is mitigated
through commodity price, interest rate, liquidity and credit risks.
The the use of derivative contracts. The Group is also exposed to
Group has a risk management framework in place, which fluctuations
in exchange rates that impact the valuation of monitors all of
these risks as discussed below. This framework is foreign currency
denominated assets and liabilities of its National approved by the
JLR plc Board. Sales Companies and also foreign currency
denominated balances on the Group’s consolidated balance sheet at
each Foreign currency exchange rate risk reporting period end. In
addition to the derivatives designated in hedging relationships as
detailed in section (C), the Group The fluctuation in foreign
currency exchange rates may have enters into foreign currency
contracts as economic hedges of a potential impact on the
consolidated income statement, recognised foreign currency debt.
the consolidated statement of comprehensive income, the
consolidated balance sheet, the consolidated statement of The
following table sets forth information relating to foreign changes
in equity and the consolidated cash flow statement, currency
exposure as at 31 March 2022: where any transaction references
more than one currency or where assets/liabilities are denominated
in a currency other than As at 31 March 2022 (Ł millions)
US Dollar Chinese Yuan Euro Others Financial assets 1,640 393
1,036 420 Financial liabilities (3,557) (1,148) (4,220) (279) Net
exposure (liability)/asset (1,917) (755) (3,184) 141 A10%
appreciation/depreciation of the currency would result in
additional gain/(loss): Impact on net income before tax for
financial assets 164/(164) 39/(39) 104/(104) n/a Impact on net
income before tax for financial liabilities (356)/356 (115)/115
(422)/422 n/a Impact on other comprehensive income for financial
assets and ——n/a liabilities The following table sets forth
information relating to foreign currency exposure as at
31 March 2021: As at 31 March 2021 (Ł millions)
US Dollar Chinese Yuan Euro Others Financial assets 1,726 342
1,118 311 Financial liabilities (3,267) (1,192) (4,259) (349) Net
exposure liability (1,541) (850) (3,141) (38) A 10%
appreciation/depreciation of the currency would result in
additional gain/(loss): Impact on net income before tax for
financial assets 173/(173) 34/(34) 111/(111) n/a Impact on net
income before tax for financial liabilities (327)/327 (119)/119
(426)/426 n/a Impact on other comprehensive income for financial
assets and ——n/a liabilities
The following table sets forth information
relating to foreign currency exposure as at 31 March 2020: As
at 31 March 2020 (Ł millions) US Dollar Chinese Yuan Euro
Others Financial assets 1,785 484 1,205 409 Financial liabilities
(2,791) (523) (4,312) (412) Net exposure liability (1,006) (39)
(3,107) (3) A 10% appreciation/depreciation of the currency would
result in additional gain/(loss): Impact on net income before tax
for financial assets 178/(178) 48/(48) 120/(120) n/a Impact on net
income before tax for financial liabilites (279)/279 (52)/52
(431)/431 n/a Impact on other comprehensive income for financial
assets and ——n/a liabilities Commodity price risk some of its
issued debt from foreign currency denominated fixed-rate debt to
GBP floating-rate debt. The derivative instruments The Group is
exposed to commodity price risk arising from the and the foreign
currency fixed-rate debt may be designated in a purchase of certain
raw materials such as aluminium, copper, hedging relationship.
platinum and palladium. This risk is mitigated through the use of
derivative contracts and fixed-price contracts with suppliers. The
As at 31 March 2022, short-term borrowings of
Ł401 million derivative contracts are not hedge accounted and
are measured (2021: Ł253 million, 2020: Ł225 million) and
long-term at fair value through profit or loss. borrowings of
Ł1,260 million (2021: Ł1,037 million, 2020: Ł1,260
million) were subject to a variable interest rate. An The total
fair value gain on commodities of Ł131 million
increase/decrease of 100 basis points in interest rates at the
(2021: gain of Ł137 million, 2020: loss of Ł74 million) has
balance sheet date would result in an impact of Ł17 million
been recognised in “Foreign exchange gain/(loss) and fair (2021:
Ł13 million, 2020: Ł15 million) in the consolidated value
adjustments” in the consolidated income statement. income
statement. The amounts reported do not reflect the purchasing
benefits received by the Group (which are included within “Material
and The risk estimates provided assume a parallel shift of 100
basis other cost of sales”). points in interest rates across all
yield curves. This calculation also assumes that the change occurs
at the balance sheet date A 10 per cent
appreciation/depreciation of all commodity prices and has been
calculated based on risk exposures outstanding underlying such
contracts would have resulted in a gain/loss of as at that date.
The year-end balances are
not necessarily Ł52 million (2021: Ł41 million, 2020: Ł49
million). representative of the average debt outstanding during the
year. Interest rate risk Liquidity risk Interest rate risk is the
risk that changes in market interest rates Liquidity risk is the
risk that the Group will not be able to meet its will lead to
changes in interest income and expense for the Group. financial
obligations as they fall due. In addition to issuing long-term
fixed-rate bonds, the Group The Group’s policy on liquidity risk is
to maintain sufficient has other facilities in place that are
primarily used to finance liquidity in the form of cash and undrawn
borrowing facilities to working capital and are subject to variable
interest rates. When meet the Group’s operating requirements with
an appropriate undertaking a new debt issuance, the JLR plc Board
will consider level of headroom. the fixed/floating interest rate
mix of the Group, the outlook for future interest rates and the
appetite for certainty of funding costs. The Group uses
cross-currency interest rate swaps to convert Annual Report 2021/22
J A G U A R L A N D R O V E R A U T O M O T I V E P L C
127
FINANCIAL STATEMENTS The following are the
undiscounted contractual maturities of financial liabilities,
including estimated interest payments: Carrying Contractual 1 year
1 to <2 2 to <5 5 years As at 31 March 2022 (Ł millions)
amount cash flows or less years years and over Financial
liabilities Accounts payable 5,144 5,144 5,144 — -Long-term
borrowings and accrued interest 5,315 6,447 246 1,045 3,356 1,800
Short-term borrowings and accrued interest 1,793 1,833 1,833 —
-Lease obligations 570 944 103 85 195 561 Other financial
liabilities 307 325 293 32 —Derivative financial instruments 783
1,065 510 278 275 2 Total contractual maturities 13,912 15,758
8,129 1,440 3,826 2,363 Carrying Contractual 1 year 1 to <2 2 to
<5 5 years As at 31 March 2021 (Ł millions) amount cash
flows or less years years and over Financial liabilities Accounts
payable 6,308 6,308 6,308 — -Long-term borrowings and accrued
interest 4,972 6,075 230 1,265 3,198 1,382 Short-term borrowings
and accrued interest 1,206 1,239 1,239 — -Lease obligations 519 840
103 85 201 451 Other financial liabilities 445 390 383 7
—Derivative financial instruments 407 461 255 115 91—Total
contractual maturities 13,857 15,313 8,518 1,472 3,490 1,833
Carrying Contractual 1 year 1 to <2 2 to <5 5 years As at
31 March 2020 (Ł millions) amount cash flows or less years
years and over Financial liabilities Accounts payable 6,499 6,499
6,499 — -Long-term borrowings and accrued interest 4,817 5,828 218
739 3,430 1,441 Short-term borrowings and accrued interest 526 536
536 — -Finance lease obligations 541 903 112 90 208 493 Other
financial liabilities 547 513 498 11 4 -Derivative financial
instruments 763 894 491 272 131—Total contractual maturities 13,693
15,173 8,354 1,112 3,773 1,934 Credit risk Credit risk is the risk
of financial loss to the Group if a counterparty made with any
single counterparty depending on their published to a financial
instrument fails to meet its contractual obligation. external
credit rating. The majority of the Group’s credit risk pertains to
the risk of financial loss arising from counterparty default on
cash To a lesser extent the Group has an exposure to counterparties
investments. on trade receivables and other financial assets. The
Group seeks to mitigate credit risk on sales to third parties
through the use of The carrying amount of financial assets
represents the maximum payment at the point of delivery, credit
limits, credit insurance credit exposure. None of the financial
instruments of the Group and letters of credit from banks that meet
internal rating criteria. result in material concentrations of
credit risks. Financial assets All Group cash is invested according
to strict credit criteria and actively monitored by Group Treasury
in conjunction with the None of the Group’s cash equivalents,
including term deposits current market valuation of derivative
contracts. To support this, with banks, are past due or impaired.
Regarding other financial the JLR plc Board has implemented an
investment policy that assets that are neither past due nor
impaired, there were no places limits on the maximum cash
investment that can be indications as at 31 March 2022 (2021
and 2020: no indications) that defaults in payment obligations will
occur.
The Group has reviewed trade and other
receivables not yet due Trade receivables past due and impaired are
set out below: and not impaired and no material issues have been
identified. As at 31 2022 2022 Net 2021 2021 Net 2020 2020 Net
March (Ł 2022 Gross impairment carrying 2021 Gross impairment
carrying 2020 Gross impairment carrying millions) value value value
Not yet due 640 (2) 638 747 (2) 745 675 (2) 673 Overdue <3
months 74—74 88—88 141 (1) 140 Overdue 3-6 months 8—8 10—10 10 (1) 9 Overdue
>6 months 4 (2) 2 25 (5) 20 18 (7) 11 Total 726 (4) 722 870 (7)
863 844 (11) 833 Included within trade receivables is Łnil (2021:
Ł19 million, 9 as well as the Group’s risk management
objectives. 2020: Łnil) of receivables that are part of a debt
factoring arrangement. These assets do not qualify for de-recognition due Commodity
derivatives are not hedge accounted. Foreign to the recourse
arrangements in place. The related liability of Łnil currency
forward contracts, foreign currency options and foreign (2021:
Ł19 million, 2020: Łnil) is in short-term borrowings. Both
currency denominated borrowings may be designated as hedging the
asset and associated liability are classified as amortised cost.
instruments in a cash flow hedge relationship against forecast
foreign currency transactions to mitigate foreign currency
Off-balance sheet financial
arrangements exchange risk associated with those transactions. At
31 March 2022, Jaguar Land Rover Limited (a subsidiary In
addition, the Group uses cross-currency interest rate swaps of the
Company) had sold Ł191 million equivalent of trade to hedge
its foreign currency exchange risk associated with receivables
under its debt factoring facility, which was renewed recognised
borrowings. These instruments may be designated during the year
ended 31 March 2021 to a $500 million facility in both
cash flow and fair value hedging relationships, or may expiring
March 2023. be economic hedges of debt. The Group also manages
foreign exchange risk on recognised borrowings using FX swaps.
(C) Derivatives and hedge accounting The Group utilises FX
spot & FX swap contracts to manage operational
requirements. The Group’s operations give rise to revenue, raw
material purchases and borrowings in currencies other than the
Group’s The gain/(loss) on the derivatives that are not designated
in presentation currency of GBP. The Group forecasts these hedging
relationships, whose fair value movements are recognised
transactions over the medium term and enters into derivative in
‘Foreign exchange gain/(loss) and fair value adjustments’ in
contracts to mitigate the resulting foreign currency exchange the
consolidated income statement, is as follows: risk, interest rate
risk and commodity price risk. The Group’s risk management strategy
allows for hedge accounting when the derivatives meet the hedge
accounting criteria as set out in IFRS Year
ended 31 March (Ł millions) 2022 2021 2020 Commodity
derivative contracts 131 137 (74) Foreign currency derivative
contracts 72 (77) 27 Interest rate derivative contracts 25
(47)—Total gain/(loss) 228 13 (47) In all cases the Group uses a
hedge ratio of 1:1. The critical terms derivative portfolio that
are sensitive to changes in foreign of the derivative contracts are
aligned with those of the hedged exchange rates (including the
impact to the fair value adjustment item. The Group allows a
maximum hedging term of five years of foreign currency borrowings
designated as the hedged item for forecast transactions. The
Group’s risk management policy in a fair value hedge relationship)
would have resulted in the allows for decreasing levels of hedging
as the forecasting horizon approximate additional (loss)/gain shown
in the table on the increases. following page: A 10 per cent
depreciation/appreciation in Sterling against the foreign currency
underlying contracts within the Group’s Annual Report 2021/22 J A G
U A R L A N D R O V E R A U T O M O T I V E P L C 129
FINANCIAL STATEMENTS As at 31 March (Ł
millions) 2022 2021 2020 10% depreciation in Sterling against the
foreign currency: In other comprehensive income (1,119) (571) (547)
In the consolidated income statement 476 299 64 10% appreciation in
Sterling against the foreign currency: In other comprehensive
income 959 480 554 In the consolidated income statement (369) (231)
(36) The following table sets out the change in the Group’s
exposure to interest rate risk as a result of hedge accounted
cross-currency interest rate swaps: Foreign currency receivable
Reporting currency payable average interest rate average interest
rate % % % % % % Outstanding contracts 2022 2021 2020 2022 2021
2020 Cross currency interest rate swaps < 1 year — — —Between
1-5 years 4.500 — SONIA +
4.777 —>5 years 4.500 4.500 4.500 LIBOR + 2.033 LIBOR + 3.235
LIBOR + 3.235 The following table shows the impact that would
result from interest rate derivatives and any related hedging
relationships given an increase/decrease of 100 basis points in
interest rates at the balance sheet date: As at 31 March (Ł
millions) 2022 2021 2020 100 basis points depreciation in interest
rates In the consolidated income statement (22) (1) (7) 100 basis
points appreciation in interest rates In the consolidated income
statement 21 1 4 Cash flow hedges The Group uses foreign currency
options, foreign currency forward It is anticipated that the hedged
sales will take place over the contracts and recognised foreign
currency borrowings as the next one to five years, at which time
the amount deferred in hedging instruments in cash flow hedge
relationships of hedged equity will be reclassified to revenue in
the consolidated income sales and purchases. The time value of
options and the foreign statement. currency basis spread of foreign
exchange forward contracts are excluded from the hedge relationship
and are recognised in other It is anticipated that the hedged
purchases will take place over comprehensive income as a cost of
hedging to the extent they the next one to five years, at which
time the amount deferred relate to the hedged item (the aligned
value). Additionally, the in equity will be included in the
carrying amount of the raw Group uses cross-currency interest rate
swaps as the hedging materials. On sale of the finished product,
the amount previously instrument of the foreign exchange risk of
recognised foreign deferred in equity and subsequently recognised
in inventory currency borrowings. will be reclassified to material
and other cost of sales in the consolidated income statement.
Changes in the fair value of foreign currency contracts, to the
extent determined to be an effective cash flow hedge, are The
foreign currency borrowings designated as the hedged item
recognised in the consolidated statement of comprehensive mature in
January 2026 and October 2027, at which time the income, and the
ineffective portion of the fair value change is amount deferred in
equity will be reclassified to the consolidated recognised in the
consolidated income statement. There is not income statement.
generally expected to be significant ineffectiveness from cash flow
hedges.
The table below sets out the timing profile
of the hedge accounted derivatives: Carrying value assets / As at
31 March Average strike rate Nominal amounts (liabilities)
2022 2021 2020 2022 2021 2020 2022 2021 2020 Outstanding contracts
Łm Łm Łm Łm Łm Łm Cash flow hedges of foreign exchange risk on
forecast transactions Derivative instruments Sell—USD <1 year
0.7604 0.7596 0.7229 2,882 2,833 1,766 5 136 (157) Between
1-5 years 0.7361 0.7654
0.7649 3,734 3,096 5,098 (77) 172 (190) Sell—Chinese Yuan <1
year 0.1094 0.1098 0.1086 2,819 1,647 1,601 (235) 12 (59) Between
1-5 years 0.1123 0.1088
0.1096 3,521 629 1,189 (126) 11 (20) Buy—Euro <1 year 0.8875
0.9069 0.9109 2,892 2,695 2,635 (111) (136) 1 Between 1-5 years 0.8860 0.9010 0.9101 1,254
1,899 3,384 (5) (81) (17) Other currencies <1 year 873 1,145 905
(17) 24 55 Between 1-5
years 870 846 1,238 (28) 7 39 Total cash flow hedges of foreign
exchange risk on forecast
transactions 18,845 14,790 17,816 (594) 145
(348) Hedges of foreign exchange risk on recognised debt Cross
currency interest rate swaps USD < 1 year — — — — -Between
1-5 years — — — — ->5
years 0.7592 0.7592 0.7592 380 380 380 1 7 57 EUR < 1 year — — —
— -Between 1-5 years 0.8912
— 446 — (39) —>5 years—0.8912 0.8912—446 446—(14) 3 Total cash
flow hedges of foreign exchange risk on recognised debt 826 826 826
(38) (7) 60 The line items in the consolidated balance sheet that
include the above derivative instruments are “Other financial
assets” and “Other financial liabilities”. Annual Report 2021/22 J
A G U A R L A N D R O V E R A U T O M O T I V E P L C
131
FINANCIAL STATEMENTS The following table sets
out the effect of the Group’s cash flow hedges on the financial
performance of the Group: Year ended 31 March (Ł millions)
2022 2021 2020 Fair value (loss)/gain of foreign currency
derivative contracts recognised in (816) 446 (254) hedging reserves
Fair value loss of foreign currency borrowings recognised in
hedging reserves — (7) Fair value gain/(loss) of derivatives
hedging foreign currency borrowings 5 (9) 2 recognised in hedging
reserves (Loss)/gain recognised in other comprehensive income in
the year (811) 437 (259) Gain/(loss) reclassified from cash flow
hedging reserve and recognised in 75 (112) (565) ‘Revenue’ in the
income statement Gain reclassified from cash flow hedging reserve
and recognised in Foreign exchange gain/(loss) and fair value
adjustments’ in the income statement on 10 3 -account of forecast
transactions no longer expected to occur Gain reclassified from
cost of hedging reserve and recognised in Foreign exchange
gain/(loss) and fair value adjustments’ in the income statement on
— 2 account of forecast transactions no longer expected to occur
Gain/(loss) reclassified to profit and loss in the year 85 (109)
(563) Net change in the hedged item used for assessing hedge
effectiveness (762) 534 172 Gain/(loss) on derivatives not hedge
accounted, recognised in ‘Foreign 72 (77) 27 exchange gain/(loss)
and fair value adjustments’ in the income statement Fair value
hedges Changes in the fair value of foreign currency contracts that
are The Group uses cross-currency interest rate swaps as the
designated in fair value hedging relationships are recognised in
hedging instrument in a fair value hedge of foreign exchange and
the consolidated income statement. Changes in the fair value
interest rate risks of foreign currency denominated debt. The of
the underlying hedged item (long-term borrowings) for the
derivatives convert foreign currency USD fixed-rate borrowings hedged risks are
recognised in the same income statement line. to GBP floating-rate
debt.
The fair value of the cross-currency interest
rate swaps, included in “Derivatives in hedging relationship” in
section (A), are as follows: As at 31 March (Ł millions) 2022
2021 2020 Other financial assets—current — -Other financial
assets—non-current 1 7 60
Total financial assets 1 7 60 Other financial liabilities—current —
-Other financial liabilities—non-current 39 14—Total
financial liabilities 39 14—The following amounts have been
recognised in relation to fair value hedges in the consolidated
income statement: Year ended 31 March (Ł millions) 2022 2021
2020 Net gain/(loss) in the hedged item used for assessing hedge
effectiveness, taken to the consolidated income statement in
‘Foreign exchange gain/(loss) and fair value adjustments’ 51 108
(78) Fair value changes in the derivative instruments used in
assessing hedge effectiveness, taken to the consolidated income
statement in ‘Foreign exchange gain/(loss) and fair value
adjustments’ (36) (58) 61 Ineffectiveness recognised in the
consolidated income statement in 15 50 (17) ‘Foreign exchange
gain/(loss) and fair value adjustments’ 36 Leases • The Group has
the right to direct the use of the asset. The Group has this right
when it has the decision making At inception of a contract, the
Group assesses whether a rights that are most relevant to changing
how and for contract is, or contains a lease. A contract is, or
contains, a what purposes the asset is used. In rare cases where
the lease if the contract conveys the right to control the use of
an decision about how and for what purpose the asset is used
identified asset for a period of time in exchange for
consideration. is predetermined, the Group has the right to direct
the use To assess whether a contract conveys the right to control
the of the asset if either: use of an identified asset, the Group
assesses whether: • The Group has the right to operate the asset;
or • The contract involves the use of an identified asset – this
may be specified explicitly or implicitly, and should be physically
• The Group designed the asset in a way that distinct or represent
substantially all of the capacity of a predetermines how and for
what purposes it will be physically distinct asset. If the supplier
has a substantive used. substitution right, then the asset is not
identified; At inception or on reassessment of a contract that
contains a • The Group has the right to substantially all of the
economic lease component, the Group allocates the consideration in
the benefits from the use of the asset throughout the period of
contract to each lease component on the basis of their relative
use; and stand-alone prices. Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C 133
FINANCIAL STATEMENTS The Group recognises a
right-of-use asset and a lease
liability at Changes to lease payments for such leases are
accounted for as the lease commencement date. The right-of-use asset is initially
if they are not lease modifications. measured at cost, which
comprises of the initial amount of the lease liability adjusted for
any lease payments made at or before The Group leases a number of
buildings, plant and equipment, IT the commencement date, plus any
initial direct costs incurred hardware and software assets, certain
of which have a renewal and an estimate of costs to dismantle and
remove the underlying and/or purchase options in the normal course
of the business. asset or to restore the underlying asset or the
site on which it is Extension and termination options are included
in a number of allocated, less any lease incentives received.
leases across the Group. These are used to maximise operational
flexibility in terms of managing the assets used in the Group’s The
right-of-use asset is
subsequently depreciated using the operation. The majority of
extension and termination options straight-line method over the
shorter of the useful life of the held are exercisable only by the
Group and not by the respective leased asset and the expected lease
term. If ownership of the lessor. The Group assesses at lease
commencement whether it leased asset is automatically transferred
at the end of the lease is reasonably certain to exercise the
extension or termination term or the exercise of a purchase option
is reflected in the lease option. The Group re-assesses whether it is reasonably
certain payments, the right-of-use asset is amortised
on a straight-line to exercise options if there is a significant
event or significant basis over the expected useful life of the
leased asset. change in circumstances within its control. The
Group’s leases mature between 2022 and 2052. The lease liability is
initially measured at the present value of the lease payments that
are not paid at the commencement There are no leases with residual
value guarantees. date, discounted using the interest rate implicit
in the lease or, if that rate cannot be readily determined, the
Group’s
incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as a
discount rate. The lease liability is measured at amortised cost
using the effective interest method. It is remeasured when there is
a change in future lease payments. The Group has elected not to
recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12
months or less and leases of low value assets. The Group recognises
the lease payments associated with these leases as an expense on a
straight-line basis over the lease term. Lease payments include
fixed payments, i.e. amounts expected to be payable by the Company
under residual value guarantee, the exercise price of purchase
options and lease payments in relation to lease extension options,
if the Company is reasonably certain to exercise purchase or
extension options, and payment of penalties for terminating the
lease if the lease term considered reflects that the Company shall
exercise a termination option. The Group applies the practical
expedient to not assess whether rent concessions occurring as a
direct consequence of the COVID-19 pandemic that meet the
following conditions are lease modifications: • The change in lease
payments results in revised consideration that is substantially the
same, or less than the consideration for the lease immediately
preceding the change; • Any reduction in lease payments affects
only payments originally due on or before 30 June 2022; and •
There no substantive changes to other terms and conditions of the
lease.
Leases as a lessee Information about leases
for which the Group is a lessee is presented below. Right-of-use assets Land and
Plant and Fixtures and Ł millions Computers Vehicles Other Total
buildings equipment fittings Balance at 31 March 2022 504 6 41
3 13 1 568 Balance at 31 March 2021 475 6 45 3 12 2 543
Balance at 31 March 2020 483 7 56 6 13 3 568 Depreciation
charge for the year 87 60 4 17 3 1 2 ended 31 March 2022
Depreciation charge for the year 63 7 17 5 1 1 94 ended
31 March 2021 Depreciation charge for the year 92 62 8 17 3 1
1 ended 31 March 2020 Additions to right-of-use assets during the
year ended 31 March 2022 was Ł131 million (2021:
Ł70 million, 2020: Ł83 million). The Group has entered into a
sale and leaseback transaction in the current year. The transfer of
the Group asset did not satisfy the sale requirements of IFRS 15
and, therefore, is still retained on the Group balance sheet. A
financial liability was recognised equal to the transfer proceeds
of Ł33 million in accordance with IFRS 9 in borrowings in note
25. The lessee accounting principles described above under IFRS 16
have been applied to the leaseback transaction, with the right of
use asset of Ł94 million recognised in land and buildings.
Lease liabilities The maturity analysis of the contractual
undiscounted cash flows is as follows: As at 31 March (Ł
millions) 2022 2021 2020 Less than one year 103 103 112 Between one
and five years 280 286 298 More than five years 561 451 493 Total
undiscounted lease liabilities 944 840 903 Included in undiscounted
lease liability maturities above is Ł1 million (2021:
Ł15 million, 2020: Łnil) in relation to leases committed but
not yet commenced at the balance sheet date. The following amounts
are included in the consolidated balance sheet: As at 31 March
(Ł millions) 2022 2021 2020 Current lease liabilities 62 65 73
Non-current lease
liabilities 508 454 468 Total lease liabilities 570 519 541 The
following amounts are recognised in the consolidated income
statement: Year ended 31 March (Ł millions) 2022 2021 2020
Interest expense on lease liabilities 45 44 45 Expenses related to
short-term leases 10 9 13 Expenses related to low-value assets, excluding 9 7 7
short-term leases of low-value assets Expense/(credit) in
lease payments arising from COVID-19 rent concessions 1 (3)—Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 135
FINANCIAL STATEMENTS The following amounts
are recognised in the consolidated cash flow statement: Year ended
31 March (Ł millions) 2022 2021 2020 Cash payments for the
principal portion of lease 71 79 72 liabilities (within ‘payments
of lease obligations’) Cash payments for interest expense related
to lease liabilities (within 45 44 45 ‘finance expenses and fees
paid’) Total cash outflow for leases 116 123 117 Leases as a lessor
The majority of the leases where the Group is a lessor are in The
maturity analysis of lease payments, showing the relation to
vehicles. The Group classifies these as operating undiscounted
lease payments to be received after the reporting leases, because
they do not transfer substantially all of the risks date, are as
follows: and rewards incidental to the ownership of the assets. As
at 31 March (Ł millions) 2022 2021 2020 Less than one year 4 3
5 Between one and five years 3 2 2 More than five years 12 11 11
Total undiscounted lease payments to be received 19 16 18 37
Segmental reporting Operating segments are defined as components of
the Group manufacture and marketing of vehicles including financing
about which separate financial information is available that is
thereof, as well as sale of related parts and accessories and
evaluated regularly by the chief operating decision-maker, or
services from which the Group derives its revenues. The Group
decision-making group, in deciding how to allocate resources and
has only one operating segment, so no separate segment report in
assessing performance. is given. The Group operates in the
automotive segment. The automotive The geographic spread of sales
by customer location and nonsegment includes all activities
relating to design, development, current assets is as disclosed
below: Rest of Rest of (Ł millions) UK US China Total Europe World
31 March 2022 Revenue 3,164 4,320 3,248 3,412 4,176 18,320
Non-current assets 10,311
60 982 203 131 11,687 31 March 2021 Revenue 3,790 4,664 3,563
3,153 4,561 19,731 Non-current assets 10,932 53 1,047 218
141 12,391 31 March 2020 Revenue 4,724 5,614 4,757 4,601 3,288
22,984 Non-current assets
12,028 58 1,196 209 169 13,660
38 Notes to the Consolidated Cash Flow
Statement (A) Reconciliation of loss for the year to cash
generated from operating activities Year ended 31 March (Ł
millions) Note 2022 2021 2020 Loss for the year (822) (1,100) (469)
Adjustments for: Depreciation and amortisation 1,944 1,976 1,910
Write-down of tangible assets 10 3 —Write-down of intangible assets
10 9 40 -(Profit)/loss on disposal of assets 13 (1) (1) 20 Foreign
exchange and fair value loss/(gain) on loans 13 141 (314) 135
Income tax expense 14 367 239 47 Finance expense (net) 12 369 251
209 Finance income 12 (9) (11) (52) Foreign exchange (gain)/loss on
economic hedges of loans 13 (91) 143 (29) Foreign exchange gain on
derivatives 13—(14) (15) Foreign exchange loss/(gain) on balance
sheet revaluation 89 (272) 122 Foreign exchange (gain)/loss on
other restricted deposits (2) 1 2 Foreign exchange (gain)/loss on
short-term deposits (2) 46 (14) Foreign exchange (gain)/loss on
cash and cash equivalents (99) 162 (58) Unrealised (gain)/loss on
commodities 13 (48) (137) 78 (Gain)/loss on matured revenue
hedges—(6) 81 Share of loss of equity accounted investments 15 18
41 114 Fair value (gain)/loss on equity investments 13 (4) (2) 43
Exceptional items 4 43 1,523 29 Other non-cash adjustments 3 (5) 2 Cash flows
from operating activities before changes in assets and liabilities
1,908 2,560 2,155 Trade receivables 154 (61) 541 Other financial
assets 8 (35) 44 Other current assets (13) 54 112 Inventories 254
459 147 Other non-current
assets (433) 397 (420) Accounts payable (1,166) 11 (652) Other
current liabilities 27 (53) 49 Other financial liabilities (95)
(130) (19) Other non-current liabilities and retirement
benefit obligation 287 (477) 355 Provisions (359) (189) 87 Cash
generated from operations 572 2,536 2,399 Annual Report 2021/22 J A
G U A R L A N D R O V E R A U T O M O T I V E P L C
137
FINANCIAL STATEMENTS (B) Reconciliation
of movements of liabilities to cash flows arising from financing
activities Lease Interest (Ł millions) Borrowings Total obligations
accrued Balance at 1 April 2019 4,480 31 33 4,544 Cash flows
Proceeds from issue of financing 1,602 — 1,602 Repayment of
financing (939) (72)—(1,011) Arrangement fees paid (9) — (9)
Interest paid—(45) (185) (230) Non-cash movements Adjustment on
initial application of IFRS 16—499—499 Issue of new finance
leases—79—79 Interest accrued—45 214 259 Reclassification of
long-term debt — —Foreign exchange 148 4 3 155 Fee amortisation 10
— 10 Reclassification of long-term debt fees — —Long-term
borrowings revaluation in hedge reserve 11 — 11 Fair value
adjustment on loans 40 — 40 Balance at 31 March 2020 5,343 541
65 5,949 Cash flows Proceeds from issue of financing 1,953 — 1,953
Repayment of financing (749) (79)—(828) Arrangement fees paid (11)
— (11) Interest paid—(44) (249) (293) Non-cash movements Issue of new
leases—71—71 Interest accrued—44 271 315 Reclassification of
long-term debt — —Foreign exchange (323) (14) (3) (340) Fee
amortisation 11 — 11 Fair value adjustment on loans (46) — (46)
Balance at 31 March 2021 6,178 519 84 6,781 Cash flows
Proceeds from issue of financing 2,095 — 2,095 Repayment of
financing (1,347) (71)—(1,418) Arrangement fees paid (13) — (13)
Interest paid—(45) (322) (367) Non-cash movements Issue of new
leases—136—136 Lease terminations—(27)—(27) Interest accrued—45 331
376 Foreign exchange 169 13 2 184 Fee amortisation 11 — 11 Fair
value adjustment on loans (66) — (66) Balance at 31 March 2022
7,027 570 95 7,692 Included within ‘finance expenses and fees paid’
in the consolidated cash flow statement is Ł22 million (2021:
Ł9 million, 2020: Ł25 million) of cash interest paid relating
to other assets and liabilities not included in the reconciliation
above. 39 Related party transactions Limited and subsidiaries,
joint ventures and associates of Tata Motors Limited. The Group
routinely enters into transactions Tata Sons Private Limited is a
company with significant influence with its related parties in the
ordinary course of business, over the Group’s ultimate parent
company Tata Motors Limited. including transactions for the sale
and purchase of products with The Group’s related parties therefore
include Tata Sons Private its joint ventures, and IT and
consultancy services received from Limited, subsidiaries and joint
ventures of Tata Sons Private subsidiaries of Tata Sons Private
Limited.
All transactions with related parties are
conducted under normal The table below summarises related party
transactions and terms of business and all amounts outstanding are
unsecured balances not eliminated in the consolidated financial
statements. and will be settled in cash. Transactions and balances
with the Group’s own subsidiaries are eliminated on consolidation.
Tata Sons Private Immediate or ultimate parent Associates and (Ł
millions) Joint ventures Limited, its subsidiaries and its
subsidiaries, joint their subsidiaries and joint ventures ventures
and associates 31 March 2022 Sale of products 263—2 26
Purchase of goods 39 — 82 Services received — 152 72 Services
rendered 97 — 1 Trade and other receivables 30 — 25 Accounts
payable — 16 30 31 March 2021 Sale of products 284—2 15
Purchase of goods — 1 72 Services received—1 123 68 Services
rendered 111 — 1 Trade and other receivables 48—1 32 Accounts
payable — 13 43 31 March 2020 Sale of products 217—2 54
Purchase of goods — 1 120 Services received—3 150 91 Services
rendered 111 — 1 Dividends received 67 — -Investments in the year
67 6 —Trade and other receivables 67—1 20 Accounts payable — 11 48
Compensation of key management personnel Year ended 31 March
(Ł millions) 2022 2021 2020 Short-term benefits 20 15 10
Post-employment benefits—2 -Other long-term employee benefits (1) 2
3 Compensation for loss of office 5—1 Total compensation of key
management personnel 24 19 14 40 Ultimate parent company and parent
company of Copies of the Tata Motors Limited, India consolidated
financial larger group statements can be obtained from the Company
Secretary, Tata Motors Limited, Bombay House, 24, Homi Mody Street,
The immediate parent undertaking is TML Holdings Pte.
Mumbai-400001, India. Ltd. (Singapore), which is the parent for the
smallest group to consolidate these financial statements. The
ultimate parent 41 Subsequent events undertaking and controlling
party is Tata Motors Limited, India, which is the parent of the
largest group to consolidate these There have been no material
subsequent events between the financial statements. balance sheet
date and the date of signing this report. Copies of the TML
Holdings Pte. Ltd. (Singapore) consolidated financial statements
can be obtained from the Company Secretary, TML Holdings Pte. Ltd.,
9 Battery Road #15-01 MYP
Centre, Singapore 049910. Annual Report 2021/22 J A G U A R L A N D
R O V E R A U T O M O T I V E P L C 139
FINANCIAL STATEMENTS PARENT COMPANY FINANCIAL
STATEMENTS PARENT COMPANY BALANCE SHEET As at 31 March (Ł
millions) Note 2022 2021 2020 Non-current assets Investments 42 1,655
1,655 1,655 Other financial assets 43 5,288 4,964 4,770 Other
non-current assets 44 4—1
Total non-current assets
6,947 6,619 6,426 Current assets Other financial assets 43 1,727
1,074 958 Other current assets 44 4 1 1 Cash and cash equivalents
——Total current assets 1,731 1,075 959 Total assets 8,678 7,694
7,385 Current liabilities Other financial liabilities 46 85 82 65
Deferred finance income 6 1 2 Short-term borrowings 47 1,180 524
424 Current tax liabilities 4 5 5 Total current liabilities 1,275
612 496 Non-current
liabilities Long-term borrowings 47 5,280 4,959 4,759 Deferred
finance income 37 33 34 Total non-current liabilities 5,317 4,992
4,793 Total liabilities 6,592 5,604 5,289 Equity attributable to
equity holders of the parent Ordinary shares 48 1,501 1,501 1,501
Capital redemption reserve 48 167 167 167 Retained earnings 418 422
428 Equity attributable to equity holders of the parent 2,086 2,090
2,096 Total liabilities and equity 8,678 7,694 7,385 The notes on
pages 142 to 153 are an integral part of these financial
statements. The Company has elected to take the exemption under
section They were signed on its behalf by: 408 of the Companies Act
2006 from presenting the parent company income statement. The loss
for the Company for the year was Ł4 million (2021: loss of
Ł6 million, 2020: loss of Ł21 million). THIERRY BOLLORÉ These
parent company financial statements were approved by CHIEF
EXECUTIVE OFFICER the JLR plc Board and authorised for issue on
13 June 2022. COMPANY REGISTERED NUMBER:
06477691
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
Capital Ordinary share Retained (£ millions) redemption Total
equity capital earnings reserve Balance at 1 April 2021 1,501
167 422 2,090 Loss for the year — (4) (4) Total comprehensive
expense — (4) (4) Dividend — — Balance at 31 March 2022 1,501
167 418 2,086 Balance at 1 April 2020 1,501 167 428 2,096 Loss
for the year — (6) (6) Total comprehensive expense — (6) (6)
Dividend — — Balance at 31 March 2021 1,501 167 422 2,090
Balance at 1 April 2019 1,501 167 449 2,117 Loss for the year
— (21) (21) Total comprehensive expense — (21) (21) Dividend — —
Balance at 31 March 2020 1,501 167 428 2,096 The notes on
pages 142 to 153 are an integral part of these financial
statements. PARENT COMPANY CASH FLOW STATEMENT Year ended
31 March (£ millions) 2022 2021 restated* 2020 restated* Cash
flows from operating activities Loss for the year (4) (6) (21)
Adjustments for: Income tax expense — 1 Allowances for other
financial assets 3 7 24 Finance income (319) (259) (223) Finance
expense 320 257 222 Cash flows (used in)/generated from operating
activities before changes in —(1) 3 assets and liabilities Other
financial assets—3 (5) Other current liabilities 4 (2)—Net cash
used in operating activities 4—(2) Cash flows from investing
activities Finance income received 323 236 198 Loans made to
subsidiaries (1,417) (1,034) (1,486) Repayments of loans by
subsidiaries 558 425 826 Dividends received —— Net cash used in
investing activities (536) (373) (462) Cash flows from financing
activities Finance expenses and fees paid (327) (236) (196)
Proceeds from issuance of borrowings 1,417 1,034 1,486 Repayment of
borrowings (558) (425) (826) Net cash generated from financing
activities 532 373 464 Net change in cash and cash equivalents ——
Cash and cash equivalents at beginning of year ——Cash and cash
equivalents at end of year ——*The Company has been presenting cash
flows relating to loans to its subsidiaries as “cash flows from
operating activities”. The Company has changed the presentation of
these cash flows to be “cash flows from investing activities” from
the year ended 31 March 2022 as the directors consider this
presentation to better reflect the underlying nature of the
transactions, and accordingly reclassified the comparative amounts
for the prior periods. The notes on pages 142 to 153 are an
integral part of these financial statements. Annual Report 2021/22
J A G U A R L A N D R O V E R A U T O M O T I V E P L C
141
FINANCIAL STATEMENTS NOTES TO THE PARENT
COMPANY FINANCIAL STATEMENTS 42 Investments Investments consist of
the following: As at 31 March (Ł millions) 2022 2021 2020 Cost
of unquoted equity investments at beginning and end of year 1,655
1,655 1,655 The Company has not made any investments or disposals
of The Company has the following 100 per cent direct interest
in investments in the year. the ordinary shares of a subsidiary
undertaking: Subsidiary undertaking Principle place of business and
country Registered office address of incorporation Abbey Road,
Whitley, Coventry, CV3 4LF, Jaguar Land Rover Holdings Limited
England and Wales England The shareholding above is recorded at
acquisition value in the Company’s accounts. Details of the
indirect subsidiary undertakings are as follows: Name of company
Shareholding Principle place of business and Registered office
country of incorporation address Jaguar Land Rover Limited 100%
England and Wales Abbey Road, Whitley, Coventry, CV3 4LF, England
Jaguar Land Rover North America, LLC. 100% USA 100 Jaguar Land
Rover Way, Mahwah, NJ 07495, USA Jaguar Land Rover Deutschland GmbH
100% Germany Campus Kronberg 7, 61476, Kronberg im Taunus, Germany
Jaguar Land Rover Belux N.V. 100% Belgium Generaal Lemanstraat 47,
2018 Antwerpen, Belgium Jaguar Land Rover Austria GmbH 100% Austria
Siezenheimer Strasse 39a, 5020 Salzburg, Austria Jaguar Land Rover
Italia SpA 100% Italy Via Alessandro Marchetti, 105—00148, Roma,
Italy Jaguar Land Rover Australia Pty Ltd 100% Australia 189
O’Riordan Street, Mascot, 2020, NSW, Australia Jaguar Land Rover
Espana SL 100% Spain Torre Picasso, Plaza Pablo Ruiz Picasso, 1 –
Planta 42, 28020 Madrid, Spain Jaguar Land Rover Nederland BV 100%
Holland PO Box 40, Stationsweg 8, 4153 RD Beesd, Netherlands Jaguar
Land Rover Portugal -Veiculos e Pecas, Lda. 100% Portugal Rua. Do
Pólo Sul Nº2—3ºB-3, Parque
das Naçoes, 1990- 273, Lisboa, Portugal Jaguar Land Rover (China)
Investment Co., Ltd 100% China 11F, No.06 (Building D) The
(formerly Jaguar Land Rover Automotive Trading New Bund World Trade
(Shanghai) Co. Ltd) Center (Phase II), Lane 227 Dongyu Road, Pudong
New District, Shanghai 200126, China
Name of company Shareholding Principle place
of business and Registered office address country of incorporation
Shanghai Jaguar Land Rover Automotive Service Co. Ltd 100% China
11F, No.06 (Building D) The New Bund World Trade Center (Phase II),
Lane 227 Dongyu Road, Pudong New District, Shanghai 20012, China
Jaguar Land Rover Japan Limited 100% Japan 3-13 Toranomon 4-chome, Minato-ku, Tokyo, Japan, 45 Jaguar Land
Rover Korea Co. Limited 100% Korea 25F West Mirae Asset Center 1
Building 67 Suha-dong, Jung-gu Seoul 100-210, Korea Jaguar Land Rover Canada
ULC 100% Canada 75 Courtneypark Drive West, Unit 3 Mississauga, ON
L5W 0E3,Canada Jaguar Land Rover France SAS 100% France Z.A. Kleber
– Batiment Ellington, 165 Boulevard de Valmy, 92706 Colombes,
Cedex, France Jaguar e Land Rover Brasil Indústria e Comércio de
100% Brazil Avenida Ibirapuera 2.332, Veículos LTDA Torre I—10º
andar- Moema, 04028-002,
São Paulo, SP, Brazil Jaguar Land Rover Limited Liability Company
100% Russia 28B, Building 2 Mezhdunarodnoe Shosse 141411, Moscow,
Russian Federation Jaguar Land Rover (South Africa) Holdings
Limited 100% England and Wales Abbey Road, Whitley, Coventry, CV3
4LF, England Jaguar Land Rover (South Africa) (Pty) Limited 100%
South Africa Simon Vermooten Road, Silverton, Pretoria 0184, South
Africa Jaguar Land Rover India Limited 100% India Nanavati
Mahalaya, 3rd floor, 18, Homi Mody Street, Mumbai, Maharashtra,
India 400001 Daimler Transport Vehicles Limited (dormant) 100%
England and Wales Abbey Road, Whitley, Coventry, CV3 4LF, England S
S Cars Limited (dormant) 100% England and Wales Abbey Road,
Whitley, Coventry, CV3 4LF, England The Lanchester Motor Company
Limited (dormant) 100% England and Wales Abbey Road, Whitley,
Coventry, CV3 4LF, England The Daimler Motor Company Limited
(dormant) 100% England and Wales Abbey Road, Whitley, Coventry, CV3
4LF, England Jaguar Land Rover Pension Trustees Limited (dormant)
100% England and Wales Abbey Road, Whitley, Coventry, CV3 4LF,
England JLR Nominee Company Limited (non-trading) 100% England and Wales
Abbey Road, Whitley, Coventry, CV3 4LF, England Jaguar Cars Limited
(dormant) 100% England and Wales Abbey Road, Whitley, Coventry, CV3
4LF, England Land Rover Exports Limited (non-trading) 100% England and Wales
Abbey Road, Whitley, Coventry, CV3 4LF, England Land Rover Ireland
Limited (non-trading) 100%
Ireland c/o LK Shields Solicitors, 39/40 Upper Mount Street, Dublin
2, Ireland Jaguar Cars South Africa (Pty) Ltd (dormant) 100% South
Africa Simon Vermooten Road, Silverton, Pretoria 0184, South Africa
Jaguar Land Rover Slovakia s.r.o. 100% Slovakia Horné lúky, 4540/1,
949 01 Nitra, Slovakia Jaguar Land Rover Singapore Pte. Ltd 100%
Singapore 138 Market Street, CapitaGreen, Singapore, 048946 Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 143
FINANCIAL STATEMENTS Name of company
Shareholding Principle place of business and Registered office
address country of incorporation Jaguar Racing Limited 100% England
and Wales Abbey Road, Whitley, Coventry, CV3 4LF, England
In-Car Ventures Limited
100% England and Wales Abbey Road, Whitley, Coventry, CV3 4LF,
England InMotion Ventures Limited 100% England and Wales Abbey
Road, Whitley, Coventry, CV3 4LF, England InMotion Ventures 2
Limited 100% England and Wales Abbey Road, Whitley, Coventry, CV3
4LF, England InMotion Ventures 3 Limited 100% England and Wales
Abbey Road, Whitley, Coventry, CV3 4LF, England Jaguar Land Rover
Colombia SAS (dormant) 100% Colombia CL 67735 OFE, 1204 Bogotan
Cundinamarka 1 3192 900, Colombia Jaguar Land Rover México,
S.A.P.I. de C.V. 100% Mexico Av. Javier Barros Sierra No.540 Piso 7
Oficina 703, Col. Santa Fe la Fe Del., Alvaro Obregón, México, D.F.
C.P. 01210 Jaguar Land Rover Servicios México, S.A. de C.V. 100%
Mexico Av. Javier Barros Sierra No.540 Piso 7 Oficina 703, Col.
Santa Fe la Fe Del., Alvaro Obregón, México, D.F. C.P. 01210 Jaguar
Land Rover Taiwan Company LTD 100% Taiwan 12F, No. 40, Sec. 1,
Chengde Road, Datong Dist., Taipei, City 103, Taiwan (R.O.C.)
Jaguar Land Rover Ireland (Services) Limited 100% Ireland C/o LK
Shields Solicitors 39/40 Upper Mount Street Dublin 2 Ireland Jaguar
Land Rover Classic USA LLC (dormant) 100% USA 251 Little Falls
Drive, Wilmington, Delaware, USA Jaguar Land Rover Classic
Deutschland GmbH 100% Germany Ringstraße 38, 45219 Essen, Germany
Jaguar Land Rover Hungary KFT 100% Hungary Regus Capital Square,
Vaci ut 76, 1133, Budapest, Hungary Jaguar Land Rover (Ningbo)
Trading Co., Ltd. 100% China Office Building 12, No.1 Meishan Salt,
Beilun District, Ningbo, Zhejiang Province, China Jaguar Land Rover
Ventures Limited 100% England and Wales Abbey Road, Whitley,
Coventry, CV3 4LF, England Bowler Motors Limited 100% England and
Wales Abbey Road, Whitley, Coventry, CV3 4LF, England Details of
the indirect holdings in equity accounted investments are given in
note 15 to the consolidated financial statements.
43 Other financial assets As at 31 March
(Ł millions) 2022 2021 2020 Non-current Receivables from
subsidiaries 5,288 4,964 4,770 Current Receivables from
subsidiaries 1,727 1,074 958 Ł5,288 million (2021:
Ł4,964 million, 2020: Ł4,770 million) of under terms matching
the external interest-bearing loans and non-current receivables from
subsidiaries and Ł1,260 million borrowings given in note 47.
(2021: Ł599 million, 2020: Ł487 million) of current
receivables from subsidiaries comprise of loans to indirect
subsidiaries 44 Other assets As at 31 March (Ł millions) 2022
2021 2020 Non-current
Prepaid expenses 4—1 Current Prepaid expenses 4 1 1 45 Deferred tax
assets and liabilities As at 31 March 2022, 2021 and 2020 the
Company has recognised no deferred tax assets or liabilities. 46
Other financial liabilities As at 31 March (Ł millions) 2022
2021 2020 Current Interest accrued 84 79 62 Other 1 3 3 Total
current other financial liabilities 85 82 65 47 Interest-bearing
loans and borrowings As at 31 March (Ł millions) 2022 2021
2020 EURO MTF listed debt 4,020 3,922 3,518 Bank loans 1,260 1,037
1,241 Long-term borrowings 5,280 4,959 4,759 Current portion of
EURO MTF listed debt 779 399 299 Current portion of long-term bank
loans 401 125 125 Short-term borrowings 1,180 524 424 Annual Report
2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P L C
145
FINANCIAL STATEMENTS Euro MTF listed debt
Details of the tranches of the bond repaid in the year ended
31 March 2020 are as follows: The bonds are listed on the
Luxembourg Stock Exchange multilateral trading facility (“EURO
MTF”) market. • $500 million Senior Notes due 2019 at a coupon
of 4.250 per cent per annum – issued October 2014 Details of
the tranches of the bonds outstanding at 31 March •
$500 million Senior Notes due 2020 at a coupon of 3.500 2022
are as follows: per cent per annum – issued March 2015 •
$500 million Senior Notes due 2023 at a coupon of 5.625
Syndicated loan per cent per annum – issued January 2013 •
Ł400 million Senior Notes due 2023 at a coupon of 3.875 In
October 2018, a $1 billion syndicate loan was issued with a
per cent per annum – issued February 2015 coupon rate of LIBOR +
1.900 per cent per annum, due in the • €650 million
Senior Notes due 2024 at a coupon of 2.200 following tranches: per
cent per annum – issued January 2017 • $500 million Senior
Notes due 2027 at a coupon of 4.500 • $199 million due October
2022 per cent per annum – issued October 2017 •
$798 million due January 2025 • €500 million Senior Notes
due 2026 at a coupon of 4.500 per cent per annum – issued
September 2018 $3 million of this loan was repaid during the
year ended 31 March • €500 million Senior Notes due 2024
at a coupon of 5.875 2022. per cent per annum – issued November
2019 • €500 million Senior Notes due 2026 at a coupon of 6.875
UK export finance facility per cent per annum – issued November
2019 • $700 million Senior Notes due 2025 at a coupon of 7.750
During the year ended 31 March 2020, the Company entered per
cent per annum – issued October 2020 and drew down in full a
Ł625 million five-year amortising loan • $650 million
Senior Notes due 2028 at a coupon of 5.875 facility backed by a
Ł500 million guarantee from UK Export per cent per annum –
issued December 2020 Finance. During the year ended 31 March
2022, the Company • $500million Senior Notes due 2029 at a coupon
of 5.500 repaid Ł125 million (2021: Ł125 million, 2020:
Ł52 million) of per cent per annum – issued July 2021 this loan.
During the year ended 31 March 2022, the Company •
€500 million Senior Notes due 2028 at a coupon of 4.500
entered and drew down in full an additional Ł625 million
five-per cent per annum –
issued July 2021 year amortising loan facility. The Company repaid
Ł31 million of this additional facility in the year ended
31 March 2022 (2021, Details of the tranches of the bond
repaid in the year ended 31 2020: Łnil). March 2022 are as follows:
The contractual cash flows of interest-bearing debt (excluding •
Ł400 million Senior Notes due 2022 at a coupon of 5.000
leases) are set out below, including estimated interest payments
per cent per annum – issued January 2014 and assuming the debt will
be repaid at the maturity date: Details of the tranches of the bond
repaid in the year ended 31 March 2021 are as follows: •
Ł300 million Senior Notes due 2021 at a coupon of
2.750 per cent per annum – issued January 2017 As at
31 March (Ł millions) 2022 2021 2020 Due in 1 year or less
1,494 798 660 2nd and 3rd years 2,508 2,134 2,035 4th and 5th years
1,899 2,326 2,141 More than 5 years 1,800 1,377 1,435 Total
contractual cash flows 7,701 6,635
6,271
48 Capital and reserves As at 31 March
(Ł millions) 2022 2021 2020 Authorised, called up and fully paid
1,500,642,163 ordinary shares of Ł1 each 1,501 1,501 1,501 Total
ordinary share capital 1,501 1,501 1,501 The holders of ordinary
shares are entitled to receive dividends The capital redemption
reserve of Ł167 million (2021, 2020: as declared from time to
time and are entitled to one vote per Ł167 million) was created in
March 2011 on the cancellation of share at meetings of the Company.
share capital. 49 Dividends During the year ended 31 March
2022 no ordinary share dividends were proposed or paid (2021, 2020:
Łnil). 50 Commitments and contingencies The Company had no
commitments or contingencies at 31 March 2022, 2021 or 2020.
51 Capital management As at 31 March (Ł millions) 2022 2021
2020 Long-term debt 5,280 4,959 4,759 Short-term debt 1,180 524 424
Total debt 6,460 5,483 5,183 Equity attributable to shareholder
2,086 2,090 2,096 Total capital 8,546 7,573 7,279 52 Financial
instruments This section gives an overview of the significance of
financial are disclosed in note 35 to the consolidated financial
statements. instruments for the Company and provides additional
information on balance sheet items that contain financial
instruments. (A) Financial assets and liabilities The details
of significant accounting policies, including the The following
table shows the carrying amounts and fair value criteria for
recognition, the basis of measurement and the basis of each
category of financial assets and liabilities as at 31 March on
which income and expenses are recognised, in respect of each 2022:
class of financial asset, financial liability and equity
instrument, Amortised cost and other (Ł millions) Total carrying
value Total fair value financial liabilities Other financial
assets—current 1,727 1,727 1,726 Other financial assets—non-current 5,288 5,288 5,189
Total financial assets 7,015 7,015 6,915 Other financial
liabilities—current 85 85 85 Short-term borrowings 1,180 1,180
1,179 Long-term borrowings 5,280 5,280 5,181 Total financial
liabilities 6,545 6,545 6,445 Annual Report 2021/22 J A G U A R L A
N D R O V E R A U T O M O T I V E P L C
147
FINANCIAL STATEMENTS The following table
shows the carrying amounts and fair value of each category of
financial assets and liabilities as at 31 March 2021: (Ł
millions) Amortised cost and other Total carrying value Total fair
value financial liabilities Other financial assets—current 1,074
1,074 1,074 Other financial assets—non-current 4,964 4,964 4,964
Total financial assets 6,038 6,038 6,038 Other financial
liabilities—current 82 82 82 Short-term borrowings 524 524 535
Long-term borrowings 4,959 4,959 5,122 Total financial liabilities
5,565 5,565 5,739 The following table shows the carrying amounts
and fair value of each category of financial assets and liabilities
as at 31 March 2020: (Ł millions) Amortised cost and other
Total carrying value Total fair value financial liabilities Other
financial assets—current 958 958 958 Other financial assets—non-current 4,770 4,770 4,770
Total financial assets 5,728 5,728 5,728 Other financial
liabilities—current 65 65 65 Short-term borrowings 424 424 408
Long-term borrowings 4,759 4,759 3,846 Total financial liabilities
5,248 5,248 4,319 Fair value hierarchy Fair values of cash and cash
equivalents and other financial Financial instruments held at fair
value are required to be assets and liabilities are assumed to
approximate to cost due to measured by reference to the following
levels: the short-term maturing of the instruments and as the
impact of discounting is not significant. • Quoted prices in an
active market (Level 1): This level of hierarchy includes financial
instruments that are measured by Management uses its best judgement
in estimating the reference to quoted prices (unadjusted) in active
markets for fair value of its financial instruments. However, there
are identical assets or liabilities; inherent limitations in any
estimation technique. Therefore, for substantially all financial
instruments, the fair value estimates • Valuation techniques with
observable inputs (Level 2): This level presented above are not
necessarily indicative of all the amounts of hierarchy includes
financial assets and liabilities measured that the Company could
have realised in a sales transaction using inputs other than quoted
prices included within Level 1 as of respective dates. The
estimated fair value amounts as that are observable for the asset
or liability, either directly (i.e. as of 31 March 2022, 2021
and 2020 have been measured as of prices) or indirectly (i.e.
derived from prices); and the respective dates. As such, the fair
values of these
financial instruments
subsequent to the respective reporting dates may • Valuation
techniques with significant unobservable inputs (Level be different
from the amounts reported at each year end. 3): This level of
hierarchy includes financial assets and liabilities measured using
inputs that are not based on observable market (B) Financial
risk
management data
(unobservable inputs). Fair values are determined in whole or in
part using a valuation model based on assumptions that The Company
is exposed to foreign currency exchange rate, are neither supported
by prices from observable current market interest rate, liquidity
and credit risks. The Company has a risk transactions in the same
instrument nor based on available management framework in place
that monitors all of these risks market
data. as
discussed below. This framework is approved by the JLR plc Board.
There has been no change in the valuation techniques adopted or any
transfers between fair value levels in either current or prior
periods as presented.
Foreign currency exchange rate risk The
fluctuation in foreign currency exchange rates may have a The
Company’s operations are subject to risks arising from potential
impact on the balance sheet, statement of changes fluctuations in
exchange rates. The risks primarily relate to in equity and cash
flow statement where any transaction fluctuations in US Dollar
and Euro against Sterling as the references more than one currency
or where assets or liabilities Company has US Dollar and Euro
assets and liabilities and a GBP are denominated in a currency
other than the functional currency functional currency. of the
Company. The following table sets forth
information relating to foreign As at 31 March 2022, 2021 and
2020, there are no designated currency exposure as at 31 March
2022: cash flow hedges. (Ł millions) US Dollar Euro Financial
assets 2,980 2,282 Financial liabilities (2,974) (2,282) Net
exposure asset 6—A 10 per cent appreciation/depreciation of
the US Dollar or Euro The following table sets forth
information relating to foreign would result in an
increase/decrease in the Company’s net profit currency exposure as
at 31 March 2021: before tax and net assets by approximately
Ł1 million and Łnil respectively. (Ł millions) US Dollar
Euro Financial assets 2,480 1,861 Financial liabilities (2,477)
(1,861) Net exposure asset 3—A 10 per cent
appreciation/depreciation of the US Dollar or The following
table sets forth information relating to foreign Euro would result
in an increase/decrease in the Company’s net currency exposure as
at 31 March 2020: profit before tax and net assets by
approximately Łnil and Łnil respectively. (Ł millions)
US Dollar Euro Financial assets 2,033 2,180 Financial
liabilities (2,033) (2,180) Net exposure asset — A 10 per cent
appreciation/depreciation of the US Dollar or profit before
tax and net assets by approximately Łnil and Łnil Euro would result
in an increase/decrease in the Company’s net respectively. Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 149
FINANCIAL STATEMENTS Interest rate risk
assumes that the change occurs at the balance sheet date and has
been calculated based on risk exposures outstanding Interest rate
risk is the risk that changes in market interest as at that date.
The year-end balances are
not necessarily rates will lead to changes in interest income and
expense for the representative of the average debt outstanding
during the year. Company. Liquidity rate risk The Company is
presently funded with long-term fixed interest rate borrowings and
long-term variable-rate borrowings. The Liquidity risk is the risk
that the Company will not be able to Company is also subject to
variable interest rates on certain meet its financial obligations
as they fall due. other debt obligations. The Company’s policy on
liquidity risk is to ensure that sufficient As at 31 March
2022, net financial assets of Ł465 million (2021: borrowing
facilities are available to fund ongoing operations
Ł436 million, 2020: Ł595 million) were subject to a variable
without the need to carry significant net debt over the medium
interest rate. An increase/decrease of 100 basis points in interest
term. The quantum of committed borrowing facilities available rates
at the balance sheet date would result in an impact of Ł5 to the
Company is reviewed regularly and is designed to exceed million
(2021: Ł4 million, 2020: Ł6 million). forecast peak gross debt
levels. The risk estimates provided assume a parallel shift of 100
basis The following are the undiscounted contractual maturities of
points interest rate across all yield curves. This calculation also
financial liabilities, including estimated interest payments: As at
31 March 2022 (Ł millions) Carrying Contractual 1 year 1 to
<2 2 to <5 5 years amount cash flows or less years years and
over Financial liabilities Long-term borrowings and accrued
interest 5,347 6,447 246 1,045 3,356 1,800 Short-term borrowings
and accrued interest 1,188 1,228 1,228 — -Other financial
liabilities 9 28 22 6 — Total contractual maturities 6,545 7,703
1,496 1,051 3,356 1,800 As at 31 March 2021 (Ł millions)
Carrying Contractual 1 year 1 to <2 2 to <5 5 years amount
cash flows or less years years and over Financial liabilities
Long-term borrowings and accrued interest 4,959 6,054 221 1,263
3,193 1,377 Short-term borrowings and accrued interest 524 557 557
— -Other financial liabilities 82 28 22 6 — Total contractual
maturities 5,565 6,639 800 1,269 3,193 1,377 As at 31 March
2020 (Ł millions) Carrying Contractual 1 year 1 to <2 2 to <5
5 years amount cash flows or less years years and over Financial
liabilities Long-term borrowings and accrued interest 4,759 5,811
215 737 3,424 1,435 Short-term borrowings and accrued interest 424
434 434 — -Other financial liabilities 65 34 19 11 4—Total
contractual maturities 5,248 6,279 668 748 3,428 1,435 Credit risk
Financial assets Financial instruments that are subject to
concentrations of credit None of the Company’s cash equivalents or
other financial assets, risk consist of loans to subsidiaries. are
past due or impaired. Regarding other financial assets that are
neither past due nor impaired, there were no indications as
Exposure to credit risk at 31 March 2022 (2021, 2020: no
indications) that defaults in payment obligations will occur.
However, as required under IFRS The carrying amount of financial
assets represents the maximum 9, the Company has assessed other
financial assets for expected credit exposure. credit
losses.
These financial assets are loan receivables
from subsidiaries and risk, the Company has assessed these based on
a 12-month the Company
notes that there is no history of default on such expected credit
loss. The impairment of the loan receivables due arrangements. As
there has been no significant increase in credit to the
requirements under IFRS 9 are set out below: As at 31 March
2022 2022 2022 Net 2021 2021 2021 Net 2020 2020 2020 Net (£
millions) Gross Impairment carrying Gross Impairment carrying Gross
Impairment carrying value value value Receivables from
subsidiaries—current 1,734 (7) 1,727 1,077 (3) 1,074 960 (2) 958
Receivables from subsidiaries—non-current 5,314 (26)
5,288 4,992 (28) 4,964 4,792 (22) 4,770 Total 7,048 (33) 7,015
6,069 (31) 6,038 5,752 (24) 5,728 Movement in allowances for
expected credit losses of financial assets Year ended 31 March
(£ millions) 2022 2021 2020 At beginning of year 31 24 -Charged
during year 2 7 24 At end of year 33 31 24 53 Reconciliation of
movements of liabilities to cash flows arising from financing
activities (£ millions) Short-term borrowings Long-term borrowings
Balance at 1 April 2019 767 3,594 Proceeds from issue of
financing—1,486 Repayment from issue of financing (826)
-Reclassification of long term debt 477 (477) Foreign exchange 6
155 Arrangement fees paid (1) (8) Fee amortisation 2 8
Reclassification of long term debt fees (1) 1 Balance at
31 March 2020 424 4,759 Proceeds from issue of financing—1,034
Repayment from issue of financing (425) -Reclassification of long
term debt 525 (525) Foreign exchange—(309) Arrangement fees
paid—(11) Fee amortisation—11 Balance at 31 March 2021 524
4,959 Proceeds from issue of financing—1,417 Repayment from issue
of financing (557) (1) Reclassification of long term debt 1,200
(1,200) Foreign exchange 13 105 Arrangement fees paid—(13) Fee
amortisation—13 Balance at 31 March 2022 1,180 5,280 Annual
Report 2021/22 J A G U A R L A N D R O V E R A U T O M O T I V E P
L C 151
FINANCIAL STATEMENTS 54 Related party
transactions Tata Sons Private Limited is a company with
significant influence of Tata Motors Limited. The Company routinely
enters into over the Company’s ultimate parent company Tata Motors
transactions with these related parties in the ordinary course of
Limited. The Company’s related parties therefore include Tata
business. Sons Private Limited, subsidiaries and joint ventures of
Tata Sons Private Limited and subsidiaries, associates and joint
ventures The following table summarises related party balances: (Ł
millions) With subsidiaries With immediate parent 31 March
2022 Loans to subsidiaries of the Company 7,015 -Loans from
subsidiaries of the Company 43 31 March 2021 Loans to
subsidiaries of the Company 6,038 -Loans from subsidiaries of the
Company 34 31 March 2020 Loans to subsidiaries of the Company
5,728 -Loans from subsidiaries of the Company 36 Compensation of
key management personnel Year ended 31 March (Ł millions) 2022
2021 2020 Short-term benefits 5 6 4 Post-employment benefits—1
-Other long-term employee benefits—1 1 Total compensation of key
management personnel 5 8 5 Apart from the directors, the Company
did not have any 31 March 2022, 2021 and 2020. All directors’
costs are fully employees and had no employee costs in the years
ended recharged to Jaguar Land Rover
Limited.
55 Auditor’s remuneration Copies of the TML
Holdings Pte. Ltd. (Singapore) consolidated financial statements
can be obtained from the Company Amounts receivable by the
Company’s auditor and its associates Secretary, TML Holdings Pte.
Ltd. 9 Battery Road #15-01
MYP in respect of services to the Company and its associates, other
Centre, Singapore 049910. than the audit of the Company’s financial
statements, have not been disclosed as the information is required
instead to be Copies of the Tata Motors Limited, India consolidated
financial disclosed on a consolidated basis in the consolidated
financial statements can be obtained from the Company Secretary,
statements. Tata Motors Limited, Bombay House, 24, Homi Mody
Street, Mumbai-400001, India. 56 Ultimate parent company and parent
company of the larger group 57 Subsequent events The immediate
parent undertaking is TML Holdings Pte. Ltd. There have been no
material subsequent events between the (Singapore), which is the
parent for the smallest group to balance sheet date and the date of
signing this report. consolidate these financial statements. The
ultimate parent undertaking and controlling party is Tata Motors
Limited, India, which is the parent of the largest group to
consolidate these financial statements. Annual Report 2021/22 J A G
U A R L A N D R O V E R A U T O M O T I V E P L C
153
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