Tata Motors : JLR 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

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
1 0	O u r s t r a t e g y
1 4	R e f o c u s
1 6	O u r b u s i n e s s m o d e l
1 8	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
2 0	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
2 6	O p e r a t i n g e n v i r o n m e n t
2 8	G l o b a l r e t a i l s a l e s
3 0	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
3 6	O u r a p p r o a c h t o r i s k
4 0	I n t r o d u c t i o n t o g o v e r n a n c e
4 4	L e a d e r s h i p
4 8	E f f e c t i v e n e s s
5 0	A c c o u n t a b i l i t y
5 2	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
5 2	A p p r o a c h t o Ta x

D I R E C T O R S ' R E P O R T

5 4D 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

5 8	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
6 8	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
6 8	C o n s o l i d a t e d s t a t e m e n t o f
	c o m p r e h e n s i v e i n c o m e a n d e x p e n s e
6 9	C o n s o l i d a t e d b a l a n c e s h e e t
7 0	C o n s o l i d a t e d s t a t e m e n t o f
	c h a n g e s i n e q u i t y
7 1	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
7 2	N o t e s ( f o r m i n g p a r t o f t h e c o n s o l i d a t e d
	f i n a n c i a l s t a t e m e n t s )
1 4 0	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.

R E TA I L S A L E S 1

376,381 UNITS

FY2021/22: 376,381

FY2020/21: 439,588

FY2019/20: 508,659

F R E E C A S H F L O W 1

£(1.2)bn

FY2021/22: £(1.2)bn

FY2020/21: £0.2bn

FY2019/20: £(0.8)bn

R E V E N U E 3

£18.3bn

FY2021/22: £18.3bn

FY2020/21: £19.7bn

FY2019/20: £23.0bn

N E T D E B T 4

£3.2bn

FY2021/22: £3.2bn

FY2020/21: £1.9bn

FY2019/20: £2.2bn

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 1 2

£(0.4)bn

FY2021/22: £(0.4)bn

FY2020/21: £0.7bn

FY2019/20: £(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 £43 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

CHAIRMAN'S

STATEMENT

"Jaguar Land Rover is in a strong position with a striking portfolio of attractive premium luxury products, a healthy bank of customer orders, low break-evens and the right strategy to support its unique and renowned British brands in a rapidly changing legislative and commercial landscape."

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 the Reimagine journey to embrace an electric future and transform into a digitally savvy modern luxury business delivering strong financial results.

During the year, we saw the successful global launch of the award- winning New Range Rover, while customer deliveries of Defender continued across 94 markets, with 107,208 units sold by the end of FY2021/22.

The global shortage of semiconductors had a disproportionately adverse impact on Jaguar Land Rover's production and sales compared to our competitors. Even though we took various steps

to address the issue, the situation continues to remain challenging. This is a key issue facing Jaguar Land Rover and we are working assiduously to address the same during FY2021/22. This should aid a gradual recovery in performance through the coming year.

The company delivered a resilient performance during the year despite a fall in revenues by reducing their breakeven levels to 320,000 units. While production and sales remained significantly constrained, the business continued to see strong demand for its products, with global retail orders at record levels thanks to strong demand for Defender and New Range Rover.

Revenue fell 7 per cent to £18.3 billion, whilst the company's EBIT 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 £1.2 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.

Looking beyond these near-term challenges outlined above, Jaguar Land Rover is in a strong position with a striking portfolio of

attractive premium luxury products, a healthy bank of customer orders, low break-evens and the right strategy to support its unique and renowned British brands in a rapidly changing legislative and commercial landscape. Additionally, Jaguar Land Rover is an important player in the automotive vertical of the Tata Group where we are driving collaboration, knowledge sharing and synergies across our group companies.

I am confident that in the coming years we will be able to realise the full potential of Jaguar Land Rover as it executes its strategy to seize the mega trends described above. I would like to thank all our colleagues and partners for their passion and commitment, as we accelerate, together, towards a successful and peaceful future.

NATARAJAN CHANDRASEKARAN

CHAIRMAN

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

7

CHIEF EXECUTIVE OFFICER'S STATEMENT

"As we transform our business, at pace and amid intense external pressures, I am deeply proud of the resilience, energy and unity of our people."

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.

We are monitoring the Ukraine/Russia conflict very closely. We have witnessed a rapidly developing humanitarian crisis in Ukraine 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 individual families and supporting the ongoing work of the International Federation of Red Cross and Red Crescent Societies.

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 customer orders for the New Range Rover. Alongside sustained, significant demand for the Land Rover Defender, this made a record order book during the year, and of course we expect demand to remain very strong.

And as we work relentlessly on Jaguar's renaissance as an all- electric modern luxury brand from 2025, I can assure you that we are absolutely on track.

Throughout 2021, we increased our capability as an agile, fully data- driven, digital business with the creation of InDigital, a key pillar of our Refocus transformation programme. Our 250 specialists focusing on analytics, data science, data engineering and automation have already supported initiatives that have delivered a return of over £300 million value to our business this fiscal year.

Refocus also drives our quality transformation to realise benchmark levels of customer satisfaction. We have seen positive impacts across all our key quality metrics, reflected in improving positions for our brands and products in key customer surveys.

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 services and digitalisation, creating new opportunities in connectivity and clean mobility, establishing control points on the new value chain and driving our strategy towards technology leadership.

Lennard Hoornik joined as Chief Commercial Officer, to head all our brand and product marketing and go-to-market strategy.

Thomas Müller, our new Executive Director of Product Engineering, brings invaluable insight in agile principles, advanced driver assistance systems and autonomous driving.

Reimagine also sees us collaborating with leaders in their fields. I was delighted to announce a partnership with NVIDIA - the world leader in artificial intelligence, computing, connected car services, and automated and autonomous driving systems. Together, we can accelerate our in-vehicle software strategy, delivering modern luxury experiences and enabling a true leapfrog in automotive technology.

As we transform our business, at pace and amid intense external pressures, I am deeply proud of the resilience, energy and unity of our people.

Thanks to their commitment, as well as to our growing ecosystem both within and beyond the Tata Group, we have the ingredients to reimagine Jaguar Land Rover and realise its unique potential.

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

9