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 October 2020

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

Item 1:     2021FY Q2 Interim Financial Statements

SIGNATURE

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

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

Dated: October 28, 2020

Land Rover

Jaguar Land Rover Automotive plc Interim Report For the three and six month period ended 30 September 2020 Company registered number: 06477691

Contents

Key metrics/highlights for Q2 FY21 results	3
Market environment	3
Total automotive industry car volumes	3
Jaguar Land Rover Q2 FY21 sales volumes year-on-year performance	3
Q2 FY21 revenue and profits	4
Cash flow, liquidity and capital resources	5
Debt	5
Risks and mitigating factors	6
Acquisitions and disposals	6
Off-balance sheet financial arrangements	6
Post balance sheet items	6
Related party transactions	6
Personnel	6
Board of directors	6
Condensed consolidated financial statements
Income statement	7
Statement of comprehensive income and expense	8
Balance sheet	9
Statement of changes in equity	10
Cash flow statement	11
Notes	12

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

Note 3 on page 13 defines a series of alternative performance measures below.

Adjusted EBITDA margin	measured as adjusted EBITDA as a percentage of revenue.
Adjusted EBIT margin	measured as adjusted EBIT as a percentage of revenue.
PBT	Profit/(loss) before tax.
PAT	Profit/(loss) after tax.
Net debt/cash	defined by the Company as cash and cash equivalents plus short-term deposits and other investments less total balance sheet borrowings.
Q2 FY21	3 months ended 30 September 2020
Q2 FY20	3 months ended 30 September 2019
Q1 FY21	3 months ended 30 June 2020
Q1 FY20	3 months ended 30 June 2019
H1 FY21	6 months ended 30 September 2020
H1 FY20	6 months ended 30 September 2019
China JV	Chery Jaguar Land Rover Automotive Co., Ltd.

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

Jaguar Land Rover Automotive plc returned to profit and positive cash flow in the second quarter of Fiscal 2020/21 as sales continued to recover from the prior quarter also supported by ongoing Charge+ savings, however sales volumes, revenue and profitability were still down year-on-year as a result of the ongoing impact of Covid-19.

Key metrics for Q2 FY21 results, compared to Q1 FY21 and Q2 FY20, are as follows:

• Retail sales 113,569 vehicles, up 53.3% quarter-on-quarter but down 11.9% year-on-year (incl. China up 3.7%)

• Wholesales (excl. China JV) of 73,451 vehicles, up 50.2% QoQ but down 39.4% YoY

• Revenue of £4.4 billion, up 52.2% QoQ but down 28.5% YoY

• PBT of £65 million, compared to the loss before tax of £413 million in Q1 FY21 but lower than the PBT of £156 million in Q2 last year

• Profit after tax (PAT) of £117 million (incl. £52 million tax credit), compared to a loss after tax of £648 million (incl. £ 235m tax charge) in Q1 FY21 and PAT of £100 million (incl. £56 million tax charge) in Q2 FY20

• Adjusted EBITDA margin 11.1%, compared to 3.6% in Q1 FY21 and 13.4% in the same quarter a year ago

• Adjusted EBIT margin 0.3%, compared to (13.6)% in the prior quarter and 4.5% in the same quarter a year ago

• Free cash flow was positive £463 million (£2.0 billion better than Q1 FY21 and £506 million better than Q2 last year); after £531 million of investment spending and £528 million of working capital inflows as a result of the production restart and sales recovery from the prior quarter

• Liquidity at 30 September 2020 was £5.0 billion, including £3.05 billion of cash and short-term investments and £ 1.9 billion undrawn credit facility

Market environment

• Covid-19 continues to have a significant impact on global economic performance as governments across the globe continue to grapple with containing a second wave of the virus whilst balancing the need to support an economic recovery.

• Passenger car industry volumes recovered strongly in Q2 FY21 across all regions compared to the prior quarter as social distancing measures were lifted, but remain weaker year-on-year (except in China) as Covid-19 continues to impact industry sales volumes.

• Economic activity has continued to recover during the second quarter, however there remains considerable uncertainty about the extent, speed and regional differences of the recovery with many regions experiencing a second wave of the pandemic as infection rates continue to rise.

• In addition, geopolitical tensions continue, particularly relating to trade with recent increased volatility in financial markets. Further uncertainty and volatility could arise with the upcoming US presidential election on 3 November and the transition period for Brexit moving ever closer with little clarity yet on the future trading arrangements between the UK and the European Union.

Total automotive industry car volumes (units)

Region	Q2 FY21		Q1 FY21		Qtr on Qtr			Q2 FY20		Year on year
China		5,508,000		4,974,000		10.7	%		5,112,000		7.7	%
Europe (excl. UK)		2,876,028		1,877,892		53.2	%		3,096,735		(7.1	%)
UK		590,154		169,945		247.3	%		593,026		(0.5	%)
US		3,898,750		2,936,014		32.8	%		4,318,068		(9.7	%)

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

Jaguar Land Rover Q2 FY21 sales volumes performance

Total retail sales (including the China JV) were 113,569 units, up 53.3% quarter on quarter reflecting the continued recovery across all regions including the UK (up 231.6%), Europe (up 78.8%), Overseas (up 35.1%), North America (up 21.3%) and China (14.6%). However, retail sales in Q2 FY21 declined 11.9% year-on-year due to the ongoing impact of Covid-19 with sales down across all regions except China (up 3.7%). As expected, retail sales by model continued to recover in Q2 FY21 compared to the prior quarter but continued to be lower year-on-year. Sales of the New Land Rover Defender continued to ramp up retailing 9,813 vehicles in the second quarter.

Wholesales (excluding the China JV) totalled 73,451 units, up 50.2% quarter on quarter but down 39.4% year on year with sales declining in each region with the exception of China (up 25.8%). Wholesales of the new Land Rover Defender reached 12,125 vehicles in Q2 FY21.

3

Jaguar Land Rover’s Q2 FY21 retail sales (including the China JV) by key region and model is detailed in the following table:

	Q2 FY21		Q1 FY21		QoQ change (%)			Q2 FY20		YoY change (%)
UK		27,365		8,252		231.6	%		28,176		(2.9	%)
North America		25,262		20,833		21.3	%		29,992		(15.8	%)
Europe		20,613		11,527		78.8	%		25,713		(19.8	%)
China1		27,188		23,726		14.6	%		26,223		3.7	%
Overseas		13,141		9,729		35.1	%		18,849		(30.3	%)
Total JLR		113,569		74,067		53.3	%		128,953		(11.9	%)
F-PACE		7,924		4,700		68.6	%		11,447		(30.8	%)
I-PACE		3,214		2,481		29.5	%		3,666		(12.3	%)
E-PACE1		7,027		3,593		95.6	%		9,928		(29.2	%)
F-TYPE		1,399		927		50.9	%		1,760		(20.5	%)
XE1		4,944		4,562		8.4	%		6,889		(28.2	%)
XF1		2,562		1,946		31.7	%		2,746		(6.7	%)
XJ2		277		578		(52.1	%)		887		(68.8	%)
Jaguar1		27,347		18,787		45.6	%		37,323		(26.7	%)
Discovery Sport1		16,421		10,659		54.1	%		16,756		(2.0	%)
Discovery		6,147		4,440		38.4	%		7,880		(22.0	%)
Range Rover Evoque1		18,515		11,168		65.8	%		22,405		(17.4	%)
Range Rover Velar		11,016		7,161		53.8	%		13,695		(19.6	%)
Range Rover Sport		14,434		11,607		24.4	%		18,919		(23.7	%)
Range Rover		9,876		8,063		22.5	%		11,975		(17.5	%)
Defender		9,813		2,182		n/a			—		n/a
Land Rover1		86,222		55,280		56.0	%		91,630		(5.9	%)
Total JLR		113,569		74,067		53.3	%		128,953		(11.9	%)

¹  China JV retail volume in Q2 FY21 was 16,040 units, up 13.9% quarter-on-quarter and 10.3% year-on-year (7,056 units of Discovery Sport, 3,319 units of Evoque, 1,505 units of Jaguar XFL, 3,424 units of Jaguar XEL and 736 units of Jaguar E-PACE). 1China JV retail volume in Q1 FY21 was 14,083 units, (5,663 units of Discovery Sport, 3,008 units of Evoque, 1,399 units of Jaguar XFL, 3,473 units of Jaguar XEL and 540 units of Jaguar E-PACE). China JV retail volume in Q2 FY20 was 14,548 units (6,733 units of Discovery Sport, 2,156 units of Evoque, 1,254 units of Jaguar XFL, 3,785 units of Jaguar XEL and 620 units of Jaguar E-PACE)

²  No longer manufactured

Q2 FY21 revenue and profits

For the quarter ended 30 September 2020, revenue was £4.4 billion, 52.2% higher quarter on quarter but 28.5% lower year on year. Despite the challenging environment the Company returned to profit in the second quarter with PBT of £65 million (11.1% adjusted EBITDA, 0.3% adjusted EBIT), compared to the £413 million loss before tax (3.6% adjusted EBITDA, -13.6% adjusted EBIT) in Q1 FY21 and PBT of £156 million in Q2 FY20 (13.4% adjusted EBITDA, 4.5% adjusted EBIT), primarily reflecting the following factors:

Category	Qtr on Qtr £mils			Year on Year £mils
Volume and mix		331			(463	)
Variable marketing		147			73
Material, manufacturing and warranty costs		31			(62	)
Fixed costs (e.g. Marketing, D&A, furlough)		(70	)		253
FX impact & commodity hedges		39			108
Total PBT variance		478			(91	)

H1 FY21 revenue and profits

Revenue was £7.2 billion in H1 FY21 compared to £11.2 billion for the same period last year, generating a loss before tax of £348 million compared to a loss before tax of £239 million (after exceptional items) in H1 FY20. The Adjusted EBITDA margin in H1 FY21 was 8.1% compared to 9.5% in H1 FY20 and the loss before interest and tax (Adjusted EBIT) margin in H1 FY21 was (5.2)% compared to 0.3% in H1 FY20. The loss after tax in H1 FY21 was £531 million (including a £183 million tax charge) compared to a loss after tax of £302 million in H1 FY20 (including a £63 million tax charge).

4

Cash flow, liquidity and capital resources

In Q2 FY21 free cash flow was positive £463 million after £531 million of investment spending and £528 million of working capital inflows following the restart of production and the recovery in sales. The £463 million positive free cash flow in the second quarter was £2.0 billion better than in the prior quarter and £506 million better than in Q2 of last year. Of the £531 million total investment spending in Q2 FY21 £432 million was capitalised and £99 million of research and development costs were expensed through the income statement.

Total cash and cash equivalents, deposits and investments at 30 September 2020 stood at £3.05 billion (comprising £2.8 billion of cash and cash equivalents and £259 million of short-term deposits and other investments). The cash and financial deposits include an amount of £257 million held in subsidiaries of Jaguar Land Rover outside of the United Kingdom. The cash in some of these jurisdictions is subject to impediments to remitting cash to the UK other than through annual dividends. As at 30 September 2020, the Company also had an undrawn revolving credit facility totalling £1.9 billion, maturing in July 2022, which combined with total cash of £3.05 billion resulted in total available liquidity of £5.0 billion.

Debt

The following table shows details of the Company’s financing arrangements as at 30 September 2020:

(£ millions)	Facility amount		Amount outstanding			Undrawn amount		Issuer
£400m 5.000% Senior Notes due Feb 2022		400		400			—	Jaguar Land Rover Automotive plc
£400m 3.875% Senior Notes due Mar 2023		400		400			—	Jaguar Land Rover Automotive plc
£300m 2.750% Senior Notes due Jan 2021		300		300			—	Jaguar Land Rover Automotive plc
$500m 5.625% Senior Notes due Feb 2023		390		390			—	Jaguar Land Rover Automotive plc
$500m 4.500% Senior Notes due Oct 2027		390		390			—	Jaguar Land Rover Automotive plc
€650m 2.200% Senior Notes due Jan 2024		595		595			—	Jaguar Land Rover Automotive plc
€500m 5.875% Senior Notes due Nov 2024		458		458			—	Jaguar Land Rover Automotive plc
€500m 6.875% Senior Notes due Nov 2026		458		458			—	Jaguar Land Rover Automotive plc
€500m 4.500% Senior Notes due Jan 2026		458		458			—	Jaguar Land Rover Automotive plc
$200m Syndicated Loan due Oct 2022		156		156			—	Jaguar Land Rover Automotive plc
$800m Syndicated Loan due Jan 2025		624		624			—	Jaguar Land Rover Automotive plc
Fleet buyback facility due Dec 2020		110		110			—	Jaguar Land Rover Limited
UKEF loan due Oct 2024		510		510			—	Jaguar Land Rover Automotive plc
China RMB 5b revolving facility due Jun 20211		573		573			—	Various
Other2		38		38			—	Jaguar Land Rover Automotive plc
Revolving credit facility		1,935		—			1,935	Jaguar Land Rover Automotive plc
IFRS 16 lease obligations3		524		524			—	Various
Subtotal		8,319		6,384			1,935
Prepaid costs		—		(29	)		—
Fair value adjustments4		—		41			—
Total		8,319		6,396			1,935

¹  The China RMB 5 billion 3-year syndicated revolving loan facility is subject to an annual confirmatory review. This is fully drawn, equivalent to GBP 573m at 30^th September bookkeeping FX rates

²  Primarily an advance as part of a sale and leaseback transaction as well as parts factoring in China

³  Lease obligations are now accounted for as debt with the adoption of IFRS 16

⁴  Fair value adjustments relate to hedging arrangements for the $500m 2027 Notes and €500m 2026 Notes

5

Risks and mitigating factors

There are a number of potential risks which could have a material impact on the Group’s performance and could cause actual results to differ materially from expected and/or historical results, including those discussed on pages 19-22 of the Annual Report 2019-20 of the Group (available at https://www.jaguarlandrover.com/annual-report-2020) along with mitigating factors. The principal risks discussed in the Group’s Annual Report 2019-20 are competitive business efficiency, global economic and geopolitical environment (including COVID-19), brand positioning, distribution channels/retailer performance, IT systems and security, environmental regulations and compliance, supply chain disruptions, human capital, rapid technology change and unethical and prohibited business practices.

Acquisitions and disposals

There were no material acquisitions or disposals in Q2 FY21.

Off-balance sheet financial arrangements

At 30 September 2020, Jaguar Land Rover Limited (a subsidiary of the Company) had sold £81 million equivalent of receivables under a $700 million invoice discounting facility signed in March 2019.

Post balance sheet items

On 13 October 2020 the Company issued a $700 million bond maturing in October 2025, paying an annual coupon of

7.750%.

Related party transactions

Related party transactions for Q2 FY21 are disclosed in note 26 to the condensed consolidated financial statements disclosed on page 29 of this Interim Report. There have been no material changes to the related party transactions described in the latest Annual Report.

Personnel

At 30 September 2020, Jaguar Land Rover employed 36,433 people worldwide, including agency personnel, compared to 39,360 at 30 September 2019. Thierry Bolloré was appointed to the role of Chief Executive Officer of Jaguar Land Rover Automotive plc, effective 10 September 2020.

Board of directors

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

Name	Position	Year appointed as Director
Natarajan Chandrasekaran	Chairman and Director		2017
Thierry Bolloré	Chief Executive Officer and Director		2020
Prof Sir Ralf D Speth	Vice Chairman and Director		2020
Andrew M. Robb	Director		2009
Nasser Mukhtar Munjee	Director		2012
Mr P B Balaji	Director		2017
Hanne Sorensen	Director		2018

6

Condensed Consolidated Income Statement

			Three months ended						Six months ended
£ millions	Note		30 September 2020			30 September 2019			30 September 2020			30 September 2019
Revenue		5		4,352			6,086			7,211			11,160
Material and other cost of sales				(2,695	)		(3,720	)		(4,528	)		(7,001	)
Employee costs*		4		(492	)		(631	)		(927	)		(1,287	)
Other expenses		8		(931	)		(1,343	)		(1,618	)		(2,661	)
Exceptional items		4		—			(10	)		—			(22	)
Engineering costs capitalised		6		210			353			378			692
Other income				41			15			81			41
Depreciation and amortisation				(469	)		(504	)		(960	)		(967	)
Foreign exchange gain/(loss) and fair value adjustments				100			(10	)		116			(51	)
Finance income		7		3			11			7			25
Finance expense (net)		7		(55	)		(50	)		(109	)		(99	)
Share of profit/(loss) of equity accounted investments				1			(41	)		1			(69	)
Profit/(loss) before tax				65			156			(348	)		(239	)
Income tax credit/(expense)		13		52			(56	)		(183	)		(63	)
Profit/(loss) for the period				117			100			(531	)		(302	)
Attributable to:
Owners of the Company				117			100			(531	)		(303	)
Non-controlling interests				—			—			—			1

^*  ‘Employee costs’ excludes the exceptional item explained in note 4.

The notes on pages 12 to 29 are an integral part of these condensed consolidated financial statements.

7

Condensed Consolidated Statement of Comprehensive Income and Expense

	Three months ended						Six months ended
£ millions	30 September 2020			30 September 2019 restated*			30 September 2020			30 September 2019 restated*
Profit/(loss) for the period		117			100			(531	)		(302	)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of net defined benefit obligation		(10	)		(156	)		(947	)		(200	)
Income tax related to items that will not be reclassified		2			28			180			35
		(8	)		(128	)		(767	)		(165	)
Items that may be reclassified subsequently to profit or loss:
Gain/(loss) on cash flow hedges (net)		361			(70	)		325			9
Currency translation differences		(2	)		(8	)		15			19
Income tax related to items that may be reclassified		(69	)		10			(62	)		(8	)
		290			(68	)		278			20
Other comprehensive income/(expense) net of tax		282			(196	)		(489	)		(145	)
Total comprehensive income/(expense) attributable to shareholder		399			(96	)		(1,020	)		(447	)
Attributable to:
Owners of the Company		399			(96	)		(1,020	)		(448	)
Non-controlling interests		—			—			—			1

^*  see note 1 for details of the restatement

The notes on pages 12 to 29 are an integral part of these condensed consolidated financial statements.

8

Condensed Consolidated Balance Sheet

As at (£ millions)	Note		30 September 2020		31 March 2020		30 September 2019
Non-current assets
Investments				389		399		460
Other financial assets		10		294		257		205
Property, plant and equipment		14		6,795		6,814		6,573
Intangible assets		14		6,219		6,278		5,970
Right-of-use assets				543		568		606
Pension asset		22		—		408		—
Other non-current assets		12		54		23		73
Deferred tax assets				455		523		567
Total non-current assets				14,749		15,270		14,454
Current assets
Cash and cash equivalents				2,790		2,271		1,971
Short-term deposits and other investments				259		1,393		874
Trade receivables				692		833		1,053
Other financial assets		10		328		383		286
Inventories		11		3,030		3,468		3,728
Other current assets		12		463		477		579
Current tax assets				29		9		11
Total current assets				7,591		8,834		8,502
Total assets				22,340		24,104		22,956
Current liabilities
Accounts payable				5,465		6,499		6,572
Short-term borrowings		18		1,131		526		812
Other financial liabilities		15		784		1,073		1,176
Provisions		16		915		944		950
Other current liabilities		17		749		716		630
Current tax liabilities				102		100		86
Total current liabilities				9,146		9,858		10,226
Non-current liabilities
Long-term borrowings		18		4,741		4,817		3,759
Other financial liabilities		15		546		778		777
Provisions		16		1,220		1,355		1,263
Retirement benefit obligation		22		585		28		826
Other non-current liabilities		17		477		533		535
Deferred tax liabilities				90		179		106
Total non-current liabilities				7,659		7,690		7,266
Total liabilities				16,805		17,548		17,492
Equity attributable to shareholders
Ordinary shares				1,501		1,501		1,501
Capital redemption reserve				167		167		167
Other reserves		20		3,859		4,880		3,789
Equity attributable to shareholders				5,527		6,548		5,457
Non-controlling interests				8		8		7
Total equity				5,535		6,556		5,464
Total liabilities and equity				22,340		24,104		22,956

The notes on pages 12 to 29 are an integral part of these condensed consolidated financial statements.

These condensed consolidated interim financial statements were approved by the JLR plc Board and authorised for issue on 23 October 2020.

Company registered number: 06477691

9

Condensed Consolidated Statement of Changes in Equity

(£ millions)	Ordinary shares		Capital redemption reserve		Other reserves			Equity attributable to shareholder			Non- controlling interests		Total equity
Balance at 1 April 2020		1,501		167		4,880			6,548			8		6,556
Loss for the period		—		—		(531	)		(531	)		—		(531	)
Other comprehensive expense for the period		—		—		(489	)		(489	)		—		(489	)
Total comprehensive expense		—		—		(1,020	)		(1,020	)		—		(1,020	)
Amounts removed from hedge reserve and recognised in inventory		—		—		(1	)		(1	)		—		(1	)
Balance at 30 September 2020		1,501		167		3,859			5,527			8		5,535
(£ millions)	Ordinary shares		Capital redemption reserve		Other reserves			Equity attributable to shareholders			Non- controlling interests		Total equity
Balance at 1 April 2019		1,501		167		4,305			5,973			6		5,979
Adjustment on initial application of IFRS 16 (net of tax)		—		—		(22	)		(22	)		—		(22	)
Adjusted balance at 1 April 2019		1,501		167		4,283			5,951			6		5,957
(Loss)/profit for the period		—		—		(303	)		(303	)		1		(302	)
Other comprehensive expense for the period		—		—		(145	)		(145	)		—		(145	)
Total comprehensive (expense)/income		—		—		(448	)		(448	)		1		(447	)
Amounts removed from hedge reserve and recognised in inventory		—		—		(56	)		(56	)		—		(56	)
Income tax related to amounts removed from hedge reserve and recognised in inventory		—		—		10			10			—		10
Balance at 30 September 2019		1,501		167		3,789			5,457			7		5,464

The notes on pages 12 to 29 are an integral part of these condensed consolidated financial statements.

10

Condensed Consolidated Cash Flow Statement

			Three months ended						Six months ended
£ millions	Note		30 September 2020			30 September 2019			30 September 2020			30 September 2019
Cash flows from operating activities
Cash generated from/(used in) operations		25		1,045			776			5			726
Income tax paid				(73	)		(27	)		(97	)		(62	)
Net cash generated from/(used in) operating activities				972			749			(92	)		664
Cash flows from investing activities
Purchases of other investments				—			(3	)		—			(5	)
Proceeds from sale of other investments				—			—			22			—
Investment in other restricted deposits				(19	)		(15	)		(21	)		(18	)
Redemption of other restricted deposits				12			4			24			14
Movements in other restricted deposits				(7	)		(11	)		3			(4	)
Investment in short-term deposits and other investments				(361	)		(678	)		(1,546	)		(1,287	)
Redemption of short-term deposits and other investments				385			664			2,674			1,468
Movements in short-term deposits and other investments				24			(14	)		1,128			181
Purchases of property, plant and equipment				(229	)		(347	)		(451	)		(648	)
Proceeds from sale of property, plant and equipment				—			—			1			—
Net cash outflow relating to intangible asset expenditure				(203	)		(377	)		(422	)		(786	)
Finance income received				2			11			10			26
Net cash (used in)/generated from investing activities				(413	)		(741	)		291			(1,236	)
Cash flows from financing activities
Finance expenses and fees paid				(79	)		(79	)		(153	)		(115	)
Proceeds from issuance of short-term borrowings				36			—			854			—
Repayment of short-term borrowings				(82	)		—			(252	)		(114	)
Repayment of long-term borrowings				(31	)		—			(62	)		—
Payments of lease obligations				(19	)		(21	)		(40	)		(33	)
Net cash (used in)/generated from financing activities				(175	)		(100	)		347			(262	)
Net increase/(decrease) in cash and cash equivalents				384			(92	)		546			(834	)
Cash and cash equivalents at beginning of period				2,460			2,045			2,271			2,747
Effect of foreign exchange on cash and cash equivalents				(54	)		18			(27	)		58
Cash and cash equivalents at end of period				2,790			1,971			2,790			1,971

The notes on pages 12 to 29 are an integral part of these condensed consolidated financial statements.

11

Notes (forming part of the condensed consolidated interim financial statements)

1 Accounting policies

Basis of preparation

The financial information in these interim financial statements is unaudited and does not constitute statutory accounts as defined in Section 435 of the Companies Act 2006. The condensed consolidated interim financial statements of Jaguar Land Rover Automotive plc have been prepared in accordance with International Accounting Standard 34, ‘Interim Financial Reporting’ under International Financial Reporting Standards (‘IFRS’) as adopted by the European Union (‘EU’). The balance sheet and accompanying notes as at 30 September 2019 have been disclosed solely for the information of the users.

The condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments held at fair value as highlighted in note 19.

The condensed consolidated interim financial statements should be read in conjunction with the annual consolidated financial statements for the year ended 31 March 2020, which were prepared in accordance with IFRS as adopted by the EU.

The condensed consolidated interim financial statements have been prepared on the going concern basis as set out within the directors’ report of the Group’s Annual Report for the year ended 31 March 2020.

The accounting policies applied are consistent with those of the annual consolidated financial statements for the year ended 31 March 2020.

The Group has been presenting gains and losses on effective cash flow hedges of inventory in the statement of other comprehensive income and expense as “not to be reclassified to income statement”. With wider industry practice emerging, clearer guidance now being available and with the present economic situation due to COVID-19, the Group has changed the presentation of these effective cash flow hedges of inventory to “may be reclassified to income statement”, from year ended 31 March 2021 and accordingly reclassified the comparative amounts for the prior periods. The change in presentation is within the statement of other comprehensive income and expense and does not affect net income.

Estimates and judgements

The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the Group’s accounting policies and the key sources of estimate uncertainty were the same as those applied to the consolidated financial statements for the year ended 31 March 2020.

Going concern

The Condensed Interim Financial Statements have been prepared on a going concern basis as the Directors consider that adequate resources exist for the Group to continue operating for the foreseeable future.

There is significant liquidity and financing headroom at 30 September 2020 and throughout the going concern forecast period. As at 30 September 2020 total available liquidity stood at £5 billion: this does not include the 7.75% 5 year bond for $700 million that priced 7 October 2020. As compared to the management estimates at 31 March 2020, the Group’s business performance is better for the six months ended 30 September 2020, increasing the amount of headroom at 30 September 2020. Total wholesale volumes are higher than forecast at 31 March 2020, with a particularly strong recovery in China in the six months ended 30 September 2020. The EBIT margin for the six months ended 30 September 2020 was better than that forecast for the FY20 assessment.

The going concern assessment has been made utilising the models and assumptions from the assessment performed for the preparation of the FY20 financial statements, with the period to March 2021 being updated for actual observed performance and trends, while the six months period to September 2021 has been kept consistent with the FY 20 assessment and the forecast extended to March 2022 using the same basis of preparation. Details of the scenarios and assumptions used in the FY20 assessment are set out in Note 2 to the annual financial statements.

The Group has modelled two scenarios in its assessment of going concern; a base case and a severe but plausible downside scenario.

The base case takes into account the estimated impact of the COVID-19 global pandemic as well as other end market and operational factors throughout the going concern period and has been monitored against the actual results and cash generation in the period since 1 October 2020.

The impact of COVID-19 remains uncertain; however, the directors have considered latest external market commentaries and industry forecasts in arriving at a severe but plausible downside scenario.

12

Notes (forming part of the condensed consolidated interim financial statements)

1 Accounting policies (continued)

This downside scenario assumes a 10% reduction in sales across the going concern period as well as other risk sensitivities and mitigations considered in the ‘Severe scenario’ FY20 assessment. This additional decline in cash flows over and above the base case has an impact on available UK liquidity (which excludes cash in subsidiaries outside of the UK, adjusted for intra-month volatility and excludes new funding) of about 25% over the going concern period when compared to the base scenario.

In the downside scenario there is sufficient liquidity in the forecast for the Group to operate and discharge its liabilities as they fall due, taking into account only cash generated from operations and the funding facilities existing on the date of authorisation of these interim financial statements, including the presently undrawn revolving credit facility.

Consequently, the directors are confident that the Group will have sufficient funds to continue to meet its liabilities as they fall due for at least 12 months from the date of approval of the financial statements and therefore have prepared the interim financial statements on a going concern basis.

2 Government grants

Employee costs for the three and six month periods ended 30 September 2020 are net of government grants received in relation to employees placed on furlough under the Coronavirus Job Retention Scheme of £54 million and £177 million respectively (three and six months ended 30 September 2019: £nil).

3 Alternative Performance Measures

In reporting financial information, the Group presents alternative performance measures (‘APMs’) which 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 by the Group are defined below.

Alternative Performance Measure	Definition
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.
Loss before tax and exceptional items	Loss before tax excluding 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.
Operating cash flow before investment	Free cash flow before financing excluding total product and other investment.
Working capital	Changes in assets and liabilities as presented in note 25. 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, deposits and investments	Defined as cash and cash equivalents, short-term deposits and other investments, marketable securities 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.
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 dealers. The Group recognises revenue on wholesales.

13

Notes (forming part of the condensed consolidated interim financial statements)

3 Alternative Performance Measures (continued)

The Group uses adjusted EBITDA as an APM to review and measure the underlying profitability of the Group on an ongoing basis for comparability as it recognises that increased capital expenditure year-on-year will lead to a corresponding increase in depreciation and amortisation expense recognised within the consolidated income statement.

The Group uses adjusted EBIT as an APM to review and measure the underlying profitability of the Group on an ongoing basis as this excludes volatility on unrealised foreign exchange transactions. Due to the significant level of debt and currency derivatives, unrealised foreign exchange distorts the financial performance of the Group from one period to another.

During the three month period ended 30 September 2020, the definition of ‘Free cash flow’ was amended to exclude non-automotive investments and net investments in equity and debt investments held at fair value, which are deemed more financial investment in nature. The definition was also amended to exclude foreign exchange gains/losses on short-term deposits and cash and cash equivalents, therefore ensuring more consistent treatment since revaluation of other current assets and liabilities is already excluded. The Group considers these changes should provide greater clarity of Free Cash Flow more closely aligned to JLR’s competitors hence providing improved comparability for users of the APM. Free cash flow for the three and six month periods ended 30 September 2019 prior to the change was £(64) million and £(783) million respectively.

During the three month period ended 30 September 2020, the definitions of adjusted EBIT and adjusted EBITDA were amended to exclude foreign exchange gains and losses on revaluation of other assets and liabilities, including short-term deposits and cash and cash equivalents. The Group considers the amended APM to better measure the underlying operational profitability of the Group, and is consistent with the treatment of the revaluation of other balance sheet items such as that of debt and unrealised hedges. It also recognises that the Group may use cash and/or derivatives to hedge debt and/or working capital balance sheet exposures and therefore it is logical to present gains or losses on revaluation of all such items consistently, excluded from EBITDA. This is also consistent with the Group’s definition of Free Cash Flow. Adjusted EBIT for the three and six month periods ended 30 September 2019 prior to the change was £295 million and £17 million respectively. Adjusted EBITDA for the three and six month periods ended 30 September 2019 prior to the change was £840 million and £1,053 million respectively.

Free cash flow is considered by the Group to be a key measure in assessing and understanding the total operating performance of the Group and to identify underlying trends.

Total product and other investment is considered by the Group to be a key measure in assessing cash invested in the development of future new models and infrastructure supporting the growth of the Group.

Operating cash flow before investment is used as a measure of the operating performance and cash available to the Group before the direct cash impact of investment decisions.

Working capital is considered by the Group to be a key measure in assessing short-term assets and liabilities that are expected to be converted into cash within the next 12-month period.

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.

Reconciliations between these alternative performance measures and statutory reported measures are shown on the next pages.

14

Notes (forming part of the condensed consolidated interim financial statements)

3 Alternative Performance Measures (continued)

Adjusted EBIT and Adjusted EBITDA

			Three months ended						Six months ended
(£ millions)	Note		30 September 2020			30 September 2019 restated			30 September 2020			30 September 2019 restated
Adjusted EBITDA				481			818			583			1,065
Depreciation and amortisation				(469	)		(504	)		(960	)		(967	)
Share of profit/(loss) of equity accounted investments				1			(41	)		1			(69	)
Adjusted EBIT				13			273			(376	)		29
Foreign exchange (loss)/gain on derivatives				(5	)		(10	)		3			1
Unrealised gain/(loss) on commodities				49			(18	)		65			(44	)
Foreign exchange and fair value adjustments on loans				79			(39	)		43			(108	)
Foreign exchange (loss)/gain on economic hedges of loans				(4	)		(7	)		28			13
Foreign exchange (loss)/gain on balance sheet, cash and deposits revaluation				(15	)		22			(16	)		(12	)
Finance income		7		3			11			7			25
Finance expense (net)		7		(55	)		(50	)		(109	)		(99	)
Fair value (loss)/gain on equity investments				—			(16	)		7			(22	)
Profit/(loss) before tax and exceptional items				65			166			(348	)		(217	)
Exceptional items				—			(10	)		—			(22	)
Profit/(loss) before tax				65			156			(348	)		(239	)

Free cash flow

	Three months ended						Six months ended
(£ millions)	30 September 2020			30 September 2019			30 September 2020			30 September 2019
Net cashed generated from/(used in) operating activities		972			749			(92	)		664
Purchases of property, plant and equipment		(229	)		(347	)		(451	)		(648	)
Net cash outflow relating to intangible asset expenditure		(203	)		(377	)		(422	)		(786	)
Proceeds from sale of property, plant and equipment		—			—			1			—
Finance expenses and fees paid		(79	)		(79	)		(153	)		(115	)
Finance income received		2			11			10			26
Free cash flow		463			(43	)		(1,107	)		(859	)

15

Notes (forming part of the condensed consolidated interim financial statements)

3 Alternative Performance Measures (continued)

Total product and other investment

			Three months ended				Six months ended
(£ millions)	Note		30 September 2020		30 September 2019		30 September 2020		30 September 2019
Purchase of property, plant and equipment				229		347		451		648
Net cash outflow relating to intangible asset expenditure				203		377		422		786
Engineering costs expensed		6		99		114		206		197
Purchases of other investments				—		3		—		5
Total product and other investment				531		841		1,079		1,636

In accordance with the definition of total product and other investment set out on page 13, “Engineering costs expensed” for the three and six month periods ended 30 September 2020 include £18 million and £40 million respectively of employee costs in relation to employees placed on furlough under the Coronavirus Job Retention Scheme. “Engineering costs expensed” excludes the impacts of grants received.

Total cash and cash equivalents, deposits and investments

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Cash and cash equivalents		2,790		2,271		1,971
Short-term deposits and other investments		259		1,393		874
Total cash and cash equivalents, deposits and investments		3,049		3,664		2,845

Available liquidity

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Cash and cash equivalents		2,790		2,271		1,971
Short-term deposits and other investments		259		1,393		874
Committed undrawn credit facilities		1,935		1,935		1,935
Available liquidity		4,984		5,599		4,780

Retails and wholesales

	Three months ended				Six months ended
Units	30 September 2020		30 September 2019		30 September 2020		30 September 2019
Retail sales		113,569		128,953		187,636		257,568
Wholesales*		73,451		121,124		122,363		225,314

*Wholesale volumes exclude sales from Chery Jaguar Land Rover – Q2 FY21: 17,916, Q2 FY20: 13,365, H1 FY21: 34,429, H1 FY20: 27,725 units

4 Exceptional items

There was no exceptional item recognised in the six months ended 30 September 2020.

The exceptional item recognised in the three and six months ended 30 September 2019 comprised additional restructuring costs of £10 million and £22 million respectively relating to the Group restructuring programme that was announced and commenced during the year ended 31 March 2019.

The table on the next page sets out the impact on the consolidated income statement if this item was not disclosed separately as an exceptional item.

16

Notes (forming part of the condensed consolidated interim financial statements)

4 Exceptional items (continued)

	Three months ended				Six months ended
£ millions	30 September 2020		30 September 2019		30 September 2020		30 September 2019
Employee costs as reported excluding exceptional items		492		631		927		1,287
Impact of:
Restructuring costs		—		10		—		22
Including exceptional items		492		641		927		1,309

5 Disaggregation of revenue

	Three months ended						Six months ended
£ millions	30 September 2020			30 September 2019			30 September 2020			30 September 2019
Revenue recognised for sales of vehicles, parts and accessories		4,094			6,022			6,825			10,990
Revenue recognised for services transferred		88			75			162			149
Revenue - other		225			198			319			392
Total revenue excluding realised revenue hedges		4,407			6,295			7,306			11,531
Realised revenue hedges		(55	)		(209	)		(95	)		(371	)
Total revenue		4,352			6,086			7,211			11,160

6 Engineering costs capitalised

	Three months ended						Six months ended
£ millions	30 September 2020			30 September 2019			30 September 2020			30 September 2019
Total engineering costs incurred		309			467			584			889
Engineering costs expensed		(99	)		(114	)		(206	)		(197	)
Engineering costs capitalised		210			353			378			692
Interest capitalised in engineering costs capitalised		25			26			52			49
Research and development grants capitalised		(9	)		(17	)		(16	)		(20	)
Total internally developed intangible additions		226			362			414			721

7 Finance income and expense

	Three months ended						Six months ended
£ millions	30 September 2020			30 September 2019			30 September 2020			30 September 2019
Finance income		3			11			7			25
Total finance income		3			11			7			25
Total interest expense on financial liabilities measured at amortised cost		(81	)		(70	)		(161	)		(138	)
Interest income on derivatives designated as a fair value hedge of financial liabilities		2			1			3			2
Unwind of discount on provisions		(4	)		(8	)		(8	)		(15	)
Interest capitalised		28			27			57			52
Total finance expense (net)		(55	)		(50	)		(109	)		(99	)

The capitalisation rate used to calculate borrowing costs eligible for capitalisation during the six month period ended 30 September 2020 was 4.2% (six month period ended 30 September 2019: 4.0%).

17

Notes (forming part of the condensed consolidated interim financial statements)

8 Other expenses

	Three months ended				Six months ended
£ millions	30 September 2020		30 September 2019		30 September 2020		30 September 2019
Stores, spare parts and tools		21		15		41		55
Freight cost		117		151		187		287
Works, operations and other costs		466		691		855		1,291
Power and fuel		15		19		27		42
Write-down of intangible assets		41		—		41		—
Product warranty		184		270		317		602
Publicity		87		197		150		384
Total other expenses		931		1,343		1,618		2,661

9 Allowances for trade and other receivables

	Six months ended
£ millions	30 September 2020			30 September 2019
At beginning of period		11			12
Charged during the period		5			1
Receivables written off as uncollectable		(7	)		—
Unused amounts reversed		(1	)		—
At end of period		8			13

10 Other financial assets

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Non-current
Restricted cash		6		7		103
Derivative financial instruments		194		142		7
Warranty reimbursement and other receivables		88		102		89
Other		6		6		6
Total non-current other financial assets		294		257		205
Current
Restricted cash		10		12		107
Derivative financial instruments		167		241		13
Warranty reimbursement and other receivables		79		87		104
Accrued income		22		14		31
Other		50		29		31
Total current other financial assets		328		383		286

18

Notes (forming part of the condensed consolidated interim financial statements)

11 Inventories

As at (£ millions)	30 September 2020		31 March 2020			30 September 2019
Raw materials and consumables		117		104			143
Work-in-progress		465		388			392
Finished goods		2,447		2,977			3,208
Inventory basis adjustment		1		(1	)		(15	)
Total inventories		3,030		3,468			3,728

12 Other assets

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Non-current
Prepaid expenses		11		8		7
Research and development credit		31		—		48
Other		12		15		18
Total non-current other assets		54		23		73
Current
Recoverable VAT		235		228		263
Prepaid expenses		122		139		197
Research and development credit		86		85		113
Other		20		25		6
Total current other assets		463		477		579

13 Taxation

Recognised in the income statement

Income tax for the six month periods ended 30 September 2020 and 30 September 2019 is charged at the estimated effective tax rate expected to apply for the applicable financial year ends and adjusted for relevant deferred tax amounts where applicable.

14 Capital expenditure

Capital expenditure in the six month period was £404 million (six month period to 30 September 2019: £570 million) on property, plant and equipment and £441 million (six month period to 30 September 2019: £794 million) was capitalised as intangible assets (excluding research and development expenditure credits). There were no material disposals or changes in the use of assets.

15 Other financial liabilities

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Current
Lease obligations		66		73		76
Interest accrued		65		65		52
Derivative financial instruments		251		453		545
Liability for vehicles sold under a repurchase arrangement		402		479		500
Other		—		3		3
Total current other financial liabilities		784		1,073		1,176
Non-current
Lease obligations		458		468		498
Derivative financial instruments		88		310		279
Total non-current other financial liabilities		546		778		777

19

Notes (forming part of the condensed consolidated interim financial statements)

16 Provisions

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Current
Product warranty		685		731		747
Legal and product liability		191		124		127
Provisions for residual risk		15		61		9
Provision for environmental liability		3		6		10
Other employee benefits obligations		13		7		36
Restructuring		8		15		21
Total current provisions		915		944		950
Non-current
Product warranty		1,062		1,155		1,116
Legal and product liability		65		54		55
Provision for residual risk		66		114		64
Provision for environmental liability		18		17		16
Other employee benefits obligations		9		15		12
Total non-current provisions		1,220		1,355		1,263

£ millions	Product warranty			Legal and product liability			Residual risk			Environmental liability			Other employee benefits obligations			Restructuring			Total
Balance at 1 April 2020		1,886			178			175			23			22			15			2,299
Provisions made during the period		295			99			(4	)		—			2			5			397
Provisions used during the period		(442	)		(19	)		(44	)		(2	)		—			(12	)		(519	)
Unused amounts reversed in the period		—			(2	)		(40	)		—			(2	)		—			(44	)
Impact of unwind of discounting		8			—			—			—			—			—			8
Foreign currency translation		—			—			(6	)		—			—			—			(6	)
Balance at 30 September 2020		1,747			256			81			21			22			8			2,135

Product warranty provision

The Group offers warranty cover in respect of manufacturing defects, which become apparent one to five years after purchase, dependent on the market in which the purchase occurred and the vehicle purchased. The Group offers warranties of up to eight years on batteries in electric vehicles. The estimated liability for product warranty is recognised when products are sold or when new warranty programmes are initiated. These estimates are established using historical information on the nature, frequency and average cost of warranty claims and management estimates regarding possible future warranty claims, customer goodwill and recall complaints. The discount on the warranty provision is calculated using a risk-free discount rate as the risks specific to the liability, such as inflation, are included in the base calculation. The timing of outflows will vary as and when a warranty claim will arise, being typically up to eight years.

Legal and product liability provision

A legal and product liability provision is maintained in respect of compliance with regulations and known litigations that impact the Group. The provision primarily relates to motor accident claims, consumer complaints, retailer terminations, employment cases, personal injury claims and compliance with emission and battery disposal regulations. The timing of outflows will vary as and when claims are received and settled, which is not known with certainty.

20

Notes (forming part of the condensed consolidated interim financial statements)

16 Provisions (continued)

Residual risk provision

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

Environmental liability provision

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

Other employee benefits obligations

This provision relates to the LTIP scheme for certain employees and other amounts payable to employees.

Restructuring provision

This provision relates to amounts payable to employees under Group restructuring programmes.

17 Other liabilities

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Current
Liabilities for advances received		53		50		50
Ongoing service obligations		324		324		315
VAT		218		169		145
Other taxes payable		130		148		102
Other		24		25		18
Total current other liabilities		749		716		630
Non-current
Ongoing service obligations		457		522		522
Other		20		11		13
Total non-current other liabilities		477		533		535

18 Interest bearing loans and borrowings

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Short-term borrowings
Bank loans		596		—		—
Current portion of long-term EURO MTF listed debt		300		299		812
Current portion of long-term loans		235		225		—
Other secured		—		2		—
Short-term borrowings		1,131		526		812
Long-term borrowings
EURO MTF listed debt		3,578		3,562		2,958
Bank loans		1,149		1,241		801
Other unsecured		14		14		—
Long-term borrowings		4,741		4,817		3,759
Lease obligations		524		541		574
Total debt		6,396		5,884		5,145

Undrawn facilities

As at 30 September 2020, the Group has a fully undrawn revolving credit facility of £1,935 million (31 March 2020: £1,935 million, 30 September 2019: £1,935 million). This facility is available in full until 2022.

21

Notes (forming part of the condensed consolidated interim financial statements)

19 Financial instruments

The condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain financial instruments held at fair value. These financial instruments are classified as either level 2 fair value measurements, as defined by IFRS 13, being those derived from inputs other than quoted prices which are observable, or level 3 fair value measurements, being those derived from significant unobservable inputs. There have been no changes in the valuation techniques used or transfers between fair value levels from those set out in note 35 to the annual consolidated financial statements for the year ended 31 March 2020.

The tables below show the carrying amounts and fair value of each category of financial assets and liabilities, other than those with carrying amounts that are reasonable approximations of fair values.

	30 September 2020				31 March 2020				30 September 2019
As at (£ millions)	Carrying value		Fair value		Carrying value		Fair value		Carrying value		Fair value
Cash and cash equivalents		2,790		2,790		2,271		2,271		1,971		1,971
Short-term deposits and other investments		259		259		1,393		1,393		874		874
Trade receivables		692		692		833		833		1,053		1,053
Non-equity accounted investments		23		23		37		37		52		52
Other financial assets — current		328		328		383		383		286		286
Other financial assets — non-current		294		294		257		257		205		205
Total financial assets		4,386		4,386		5,174		5,174		4,441		4,441
Accounts payable		5,465		5,465		6,499		6,499		6,572		6,572
Short-term borrowings		1,131		1,129		526		512		812		810
Long-term borrowings		4,741		4,359		4,817		3,859		3,759		3,411
Other financial liabilities — current		784		784		1,073		1,073		1,176		1,176
Other financial liabilities — non-current		546		514		778		778		777		777
Total financial liabilities		12,667		12,251		13,693		12,721		13,096		12,746

20 Reserves

The movement in reserves is as follows:

(£ millions)	Translation reserve			Hedging reserve			Cost of hedging reserve			Retained earnings			Total other reserves
Balance at 1 April 2020		(316	)		(286	)		(33	)		5,515			4,880
Loss for the period		—			—			—			(531	)		(531	)
Remeasurement of defined benefit obligation		—			—			—			(947	)		(947	)
Gain on effective cash flow hedges		—			211			21			—			232
Income tax related to items recognised in other comprehensive income		—			(40	)		(4	)		180			136
Cash flow hedges reclassified to profit and loss		—			94			(1	)		—			93
Income tax related to items reclassified to profit or loss		—			(18	)		—			—			(18	)
Amounts removed from hedge reserve and recognised in inventory		—			(6	)		5			—			(1	)
Income tax related to amounts removed from hedge reserve and recognised in inventory		—			1			(1	)		—			—
Currency translation differences		15			—			—			—			15
Balance at 30 September 2020		(301	)		(44	)		(13	)		4,217			3,859

22

Notes (forming part of the condensed consolidated interim financial statements)

20 Reserves (continued)

(£ millions)	Translation reserve			Hedging reserve			Cost of hedging reserve			Retained earnings			Total other reserves
Balance at 1 April 2019		(337	)		(506	)		(33	)		5,181			4,305
Adjustment on initial application of IFRS 16 (net of tax)		—			—			—			(22	)		(22	)
Adjusted balance at 1 April 2019		(337	)		(506	)		(33	)		5,159			4,283
Loss for the period		—			—			—			(303	)		(303	)
Remeasurement of defined benefit obligation		—			—			—			(200	)		(200	)
(Loss)/gain on effective cash flow hedges		—			(368	)		6			—			(362	)
Income tax related to items recognised in other comprehensive income		—			63			(1	)		35			97
Cash flow hedges reclassified to profit and loss		—			373			(2	)		—			371
Income tax related to items reclassified to profit or loss		—			(70	)		—			—			(70	)
Amounts removed from hedge reserve and recognised in inventory		—			(64	)		8			—			(56	)
Income tax related to amounts removed from hedge reserve and recognised in inventory		—			12			(2	)		—			10
Currency translation differences		19			—			—			—			19
Balance at 30 September 2019		(318	)		(560	)		(24	)		4,691			3,789

21 Dividends

During the three and six month periods ended 30 September 2020 and 30 September 2019, no ordinary share dividends were proposed or paid.

23

Notes (forming part of the condensed consolidated interim financial statements)

22 Employee benefits

The Group has pension arrangements providing employees with defined benefits related to pay and service as set out in the rules of each scheme. The following table sets out the disclosure pertaining to employee benefits of the JLR Automotive Group plc which operate defined benefit pension schemes.

	Six months ended
£ millions	30 September 2020			30 September 2019
Defined benefit obligation at beginning of period		7,788			8,648
Current service cost		62			68
Past service cost		—			4
Interest expense		88			102
Actuarial gains/(losses) arising from:
Changes in financial assumptions		1,475			1,052
Exchange differences on foreign schemes		1			1
Member contributions		—			1
Benefits paid		(225	)		(285	)
Defined benefit obligation at end of period		9,189			9,591
Change in present value of scheme assets
Fair value of schemes’ assets at beginning of period		8,168			7,981
Interest income		93			95
Remeasurement gain on the return of plan assets, excluding amounts included in interest income		528			852
Administrative expenses		(2	)		(8	)
Exchange differences on foreign schemes		1			1
Employer contributions		41			128
Member contributions		—			1
Benefits paid		(225	)		(285	)
Fair value of schemes’ assets at end of period		8,604			8,765

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

	Six months ended
	30 September 2020			30 September 2019
Discount rate		1.7	%		1.8	%
Expected rate of increase in benefit revaluation of covered employees		2.1	%		2.5	%
RPI inflation rate		3.0	%		3.1	%

Amounts recognised in the condensed consolidated balance sheet consist of:

As at (£ millions)	30 September 2020			31 March 2020			30 September 2019
Present value of defined benefit obligations		(9,189	)		(7,788	)		(9,591	)
Fair value of schemes’ assets		8,604			8,168			8,765
Net (liability)/asset		(585	)		380			(826	)
Non-current assets		—			408			—
Non-current liabilities		(585	)		(28	)		(826	)

24

Notes (forming part of the condensed consolidated interim financial statements)

22 Employee benefits (continued)

For the valuations at 30 September 2020 and 31 March 2020, the mortality assumptions used are the SAPS base table, in particular S2PxA tables and the Light table for members of the Jaguar Executive Pension Plan.

For the Jaguar Pension Plan, scaling factors of 111 per cent to 117 per cent have been used for male members and scaling factors of 101 per cent to 112 per cent have been used for female members.

For the Land Rover Pension Scheme, scaling factors of 107 per cent to 111 per cent have been used for male members and scaling factors of 101 per cent to 109 per cent have been used for female members.

For the Jaguar Executive Pension Plan, an average scaling factor of 94 per cent has been used for male members and a scaling factor of 84 per cent has been used for female members.

There is an allowance for future improvements in line with the CMI (2019) projections and an allowance for long-term improvements of 1.25 per cent per annum and a smoothing parameter of 7.5.

For the valuations at 30 September 2019, the mortality assumptions used are the SAPS base table, in particular S2PxA tables and the Light table for members of the Jaguar Executive Pension Plan. Scaling factors of 112 per cent to 118 per cent for males and 101 per cent to 112 per cent for females have been used for the Jaguar Pension Plan, 107 per cent to 112 per cent for males and 101 per cent to 109 per cent for females for the Land Rover Pension Scheme, and 94 per cent for males and 84 per cent for females for the Jaguar Executive Pension Plan. There is an allowance for future improvements in line with the CMI (2018) projections and an allowance for long-term improvements of 1.25 per cent per annum.

A past service cost of £4 million was recognised in the six month period ended 30 September 2019 as part of the Group restructuring program that commenced in the year ended 31 March 2019.

23 Commitments and contingencies

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

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

Litigation and product related matters

The Group is involved in legal proceedings, both as plaintiff and as defendant. There are claims and potential claims of £30 million (31 March 2020: £40 million; 30 September 2019: £18 million) against the Group which management has not recognised, as settlement is not considered probable. These claims and potential claims pertain to motor accident claims, consumer complaints, employment and dealership arrangements, replacement of parts of vehicles and/or compensation for deficiency in the services by the Group or its dealers.

The Group has provided for the estimated cost of repair following the passenger safety airbag issue in the United States, China, Canada, Korea, Taiwan, Australia and Japan. The Group recognises that there is a potential risk of further recalls in the future; however, the Group is unable at this point in time to reliably estimate the amount and timing of any potential future costs associated with this warranty issue.

Other taxes and duties

Contingencies and commitments include tax contingent liabilities of £64 million (31 March 2020: £44 million, 30 September 2019: £49 million). These mainly relate to tax audits and tax litigation claims.

25

Notes (forming part of the condensed consolidated interim financial statements)

23 Commitments and contingencies (continued)

Commitments

The Group has entered into various contracts with vendors and contractors for the acquisition of plant and equipment and various civil contracts of capital nature aggregating to £1,385 million (31 March 2020: £1,217 million, 30 September 2019: £1,225 million) and £7 million (31 March 2020: £14 million, 30 September 2019: £20 million) relating to the acquisition of intangible assets.

Commitments and contingencies also includes other contingent liabilities of £362 million (31 March 2020: £376 million, 30 September 2019: £376 million) relating to contractual claims and commitments. The timing of any outflow will vary as and when claims are received and settled, which is not known with certainty.

The remaining financial commitments, in particular the purchase commitments and guarantees, are of a magnitude typical for the industry.

Inventory of £138 million (31 March 2020: £127 million, 30 September 2019: £nil) and trade receivables with a carrying amount of £25 million (30 March 2020: £nil, 30 September 2019: £nil) and property, plant and equipment with a carrying amount of £nil (31 March 2020: £nil, 30 September 2019: £nil) and other financial assets with a carrying amount of £8 million (31 March 2020: £nil, 30 September 2019: £nil) are pledged as collateral/security against the borrowings and commitments.

Stipulated within the joint venture agreement for Chery Jaguar Land Rover Automotive Co. Ltd, and subsequently amended by a change to the Articles of Association of Chery Jaguar Land Rover Automotive Co. Ltd. is a commitment for the Group to contribute a total of CNY 5,000 million of capital. Of this amount, CNY 3,475 million has been contributed as at 30 September 2020. The outstanding commitment of CNY 1,525 million translates to £175 million at the 30 September 2020 exchange rate.

At 30 September 2019, the outstanding commitment was CNY 2,125 million (£241 million at the 30 September 2019 exchange rate) restated to reflect an additional CNY 1,500 million that was committed during the year ended 31 March 2017.

The Group’s share of capital commitments of its joint venture at 30 September 2020 is £51 million (31 March 2020: £69 million, 30 September 2019: £106 million) and contingent liabilities of its joint venture 31 March 2020 is £nil (31 March 2020: £nil, 30 September 2019: £nil).

24 Capital Management

The Group’s objectives when managing capital are to ensure the going concern operation of all subsidiary companies within the Group and to maintain an efficient capital structure to support ongoing and future operations of the Group and to meet shareholder expectations.

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

The capital structure and funding requirements are regularly monitored by the JLR plc Board to ensure sufficient liquidity is maintained by the Group. All debt issuance and capital distributions are approved by the JLR plc Board.

The following table summarises the capital of the Group:

As at (£ millions)	30 September 2020		31 March 2020		30 September 2019
Short-term debt		1,197		599		888
Long-term debt		5,199		5,285		4,257
Total debt*		6,396		5,884		5,145
Equity attributable to shareholders		5,527		6,548		5,457
Total capital		11,923		12,432		10,602

* Total debt includes lease obligations of £524 million (31 March 2020: £541 million, 30 September 2019: £574 million).

26

Notes (forming part of the condensed consolidated interim financial statements)

25 Notes to the consolidated cash flow statement

Reconciliation of profit/(loss) for the period to cash used in operations

	Three months ended						Six months ended
£ millions	30 September 2020			30 September 2019			30 September 2020			30 September 2019
Cash flows from operating activities Profit/(loss) for the period		117			100			(531	)		(302	)
Adjustments for:
Depreciation and amortisation		469			504			960			967
Write-down of intangible assets		41			—			41			—
(Profit)/loss on disposal of assets		(2	)		22			(3	)		22
Foreign exchange and fair value (gain)/loss on loans		(79	)		39			(43	)		108
Income tax (credit)/expense		(52	)		56			183			63
Finance expense (net)		55			50			109			99
Finance income		(3	)		(11	)		(7	)		(25	)
Foreign exchange loss/(gain) on economic hedges of loans		4			7			(28	)		(13	)
Foreign exchange loss/(gain) on derivatives		5			10			(3	)		(1	)
Foreign exchange (gain)/loss on balance sheet revaluation		(44	)		(29	)		(17	)		96
Foreign exchange loss/(gain) on short-term deposits		5			25			6			(27	)
Foreign exchange gain/(loss) on cash and cash equivalents		54			(18	)		27			(57	)
Unrealised (gain)/loss on commodities		(49	)		18			(65	)		44
(Gain)/loss on matured revenue hedges		—			—			(6	)		33
Share of (profit)/loss of equity accounted investments		(1	)		41			(1	)		69
Fair value loss/(gain) on equity investments		—			16			(7	)		22
Exceptional items		—			10			—			22
Other non-cash adjustments		(3	)		—			(2	)		(1	)
Cash flows from operating activities before changes in assets and liabilities		517			840			613			1,119
Trade receivables		(91	)		(233	)		145			293
Other financial assets		28			53			40			14
Other current assets		34			41			10			(16	)
Inventories		(402	)		37			439			(125	)
Other non-current assets		(9	)		(33	)		390			(65	)
Accounts payable		1,233			61			(981	)		(528	)
Other current liabilities		(91	)		22			31			(23	)
Other financial liabilities		(39	)		(1	)		(81	)		25
Other non-current liabilities and retirement benefit obligation		(33	)		(12	)		(446	)		(29	)
Provisions		(102	)		1			(155	)		61
Cash generated from/(used in) operations		1,045			776			5			726

27

Notes (forming part of the condensed consolidated interim financial statements)

25 Notes to the consolidated cash flow statement (continued)

Reconciliation of movements of liabilities to cash flows arising from financing activities

(£ millions)	Short-term borrowings			Long-term borrowings			Lease obligations			Total
Balance at 1 April 2019		881			3,599			31			4,511
Adjustment on initial application of IFRS 16		—			—			499			499
Issue of new leases		—			—			69			69
Repayment of financing		(114	)		—			(56	)		(170	)
Interest accrued		—			—			23			23
Foreign exchange		45			77			8			130
Fee amortisation		—			3			—			3
Long-term borrowings revaluation in hedge reserve		—			45			—			45
Fair value adjustment on loans		—			35			—			35
Balance at 30 September 2019		812			3,759			574			5,145
Balance at 1 April 2020		526			4,817			541			5,884
Proceeds from issue of financing		854			—			—			854
Issue of new leases		—			—			23			23
Repayment of financing		(314	)		—			(61	)		(375	)
Interest accrued		—			—			21			21
Reclassification of long-term debt		62			(62	)		—			—
Foreign exchange		3			(15	)		—			(12	)
Fee amortisation		—			5			—			5
Fair value adjustment on loans		—			(4	)		—			(4	)
Balance at 30 September 2020		1,131			4,741			524			6,396

28

Notes (forming part of the condensed consolidated interim financial statements)

26 Related party transactions

Tata Sons Limited is a company with significant influence over the Group’s ultimate parent company Tata Motors Limited. The Group’s related parties therefore include Tata Sons Limited, subsidiaries and joint ventures of Tata Sons Limited and subsidiaries, joint ventures and associates of Tata Motors Limited. The Group routinely enters into transactions with its related parties in the ordinary course of business, including transactions for the sale and purchase of products with its joint ventures and associates.

All transactions with related parties are conducted under normal terms of business and all amounts outstanding are unsecured and will be settled in cash. Transactions and balances with the Group’s own subsidiaries are eliminated on consolidation.

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

Six months ended 30 September 2020 (£ millions)	With joint ventures of the Group		With associates of the Group		With Tata Sons Limited and its subsidiaries and joint ventures		With immediate or ultimate parent and its subsidiaries, joint ventures and associates
Sale of products		179		—		1		4
Purchase of goods		—		—		—		33
Services received		—		1		58		30
Services rendered		50		—		—		—
Trade and other receivables		53		—		—		8
Accounts payable		—		—		10		47

Six months ended 30 September 2019 (£ millions)	With joint ventures of the Group		With associates of the Group		With Tata Sons Limited and its subsidiaries and joint ventures		With immediate or ultimate parent and its subsidiaries, joint ventures and associates
Sale of products		128		—		1		25
Purchase of goods		—		—		—		35
Services received		—		1		72		42
Services rendered		63		—		—		—
Trade and other receivables		100		—		1		20
Accounts payable		—		—		7		37

Compensation of key management personnel

Six months ended 30 September (£ millions)	2020		2019
Key management personnel remuneration		8		9

27 Subsequent events

In October 2020 the company issued a $700 million bond maturing in 2025 and paying an annual coupon of 7.75%.

29