TATA Motors JLR

Acquisition
PastTeam Decision
04 andonFuture
Submitted : 26 March 2017

Options
Mr. Gopikrishnan G
Mr. Jayaganapathy
Mr. Kishore Kumar
Ms. Padma Rangarajan
Mr. Prakash B Patel
Ms. Uma Maheshwari
Objectives & Road Map
Key Objectives
Tata Motors Analyse strategies behind TATAs acquisition
1
Assess the Current position of Tata JLR
2 Jaguar Land Rover
Recommendations TATA Motors to position JLR in the luxury
segment

3 Tata Jaguar Land Rover

Deal

5 Current Scenario

Road Ahead &

4 6 Recommendations

Post Acquisition Scenario

TATA Motors: An overview 1

TATA Motors previously called Tata Engineering and Locomotive Company (Telco)
One of the Worlds largest commercial vehicle manufacturer
Tata Motors was established in 1945
Listed on the New York Stock Exchange in 2004.
Indias 3rd largest passenger vehicle player.
It is the 5th largest medium and heavy commercial vehicle manufacturer in the world. listed in BSE, NSE & NYSE.
Has six R&D centers in India, South Korea, Spain and the UK, with over 1,400 engineers and scientists

1 1
1 2 3 4 5 6 7 8 9 0 1

1945 1984 1996 1998 2004 2005 2007 2007 2007 2008 2008
Founded 1st 1st SUV Indica Acquisition 1st Mini Truck Formed Formed Formed JV in Tata Nano - Acquired JLR
as part of Commercial (Safari) of Daewoo international JV Indian JV with Thailand with Peoples Car
Tata Group vehicle Motors Acquisition of Stake with Fiat Marcopolo of Thonburi
in Hispano, Spain Brazil

Timeline - Tata Motors

Vision and Mission Tata Motors 1

Mission
We innovate, with passion, mobility solutions to enhance quality of
life. Economies
of Scale
Vision
As a High Performance Organization, we are, by FY 2019 Supply Cost
Among the Top 3 in Global CV And Domestic PV
Achieving Sustainable Financial Performance
Delivering Exciting Innovations
Cost
Core Values People
- Value-driven: Integrity, Understanding, Excellence, Unity, Responsibility. Leadership

Business Strategy: Product design

Cost leadership strategy in Indian automobile industry

Process design
& collaboration
Corporate Strategy 1

Growth Strategy The TATA group has steadily globalized through big-ticket M&A deals
To consolidate position in the domestic Market and expand International
footprint through development of products by 2000 Tata Tea acquired Tetley (almost twice its size ) GBP 270 mn
- Leveraging in house capabilities 2006 Tata Communications acquired Tyco & Teleglobe $ 400 mn
- Acquisitions and strategic collaborations to gain complementary Tata Power acquired 30% in 2 assets of PT Bhumi in
2006 $ 1.1 bn
capabilities Indonesia
2007 Tata Steel acquired Corus (almost thrice its size ) $ 12.4 bn
PRODUCT LINE

A Calibrated strategy of Internationalization

Acquired bankrupt truck business of Daewoo in 2004 ($ 102mn)
Stake in Hispano Carrocera in 2005
M JV with Marcopolo for manufacture of buses in 2006
A MoU with FIAT (2005)
JV in India to produce cars and powertrains and sharing
R distribution network (2007)
K Ratan Tata is on the international Board of FIAT

E
T Daewoo CV A Strategic Fit
Enhance product portfolio through catering to increasing
s demand for heavy vehicles
Managing business in developed markets
Access to technology and complementary product range
Lead a change in the domestic market
Global Automobile Industry Porters Five Forces Analysis 1

Threat of New Entrants Power of Buyers

Customers varied choices & options
Capital extensive industry Threat of Substitutes
Long time for reputation on price and Safety
Public transport systems Switching cost is low
Video conferencing

Bargaining power of suppliers Competitive Rivalry

Switching cost is High Fierce competition
Long term collaboration creates US & European companies face
trust and stable environment firm competition from Asian
markets

Threat of
Threat of new substitutes Bargaining
entrant power
of buyers

Bargaining Competitive
power Rivalry
of suppliers
TATA MOTORS SWOT Analysis 1

Helpful
STRENGTHS WEAKNESSES

Strong Managerial Competencies

Experience in emerging markets

Internal
Strong monetary base to invest Weak Global foot print
Synergy due to TACO and TCS More focus on the low end market
New product development and brand
building experience
Technology driven Procurement

OPPORTUNITIES THREATS

Untapped potential in new automobile

External

Strong presence of competitors

segments Receding sales
Expanding to global markets

Harmful
Luxury Automobile Industry Porters Five Forces Analysis 2

Threat of New Entrants Threat of Substitutes Power of Buyers

- Revolutionary product ideas - Hyper-loop, - Demand for technology features
- Specialized manufacturing facilities - Travel convenience - High switching cost
- Capital extensive industry - Brand value
- Reaping period is long

Bargaining power of suppliers Competitive Rivalry

- Switching segments - All brands provide advanced
- Influence Price, Delivery, features
Distribution

Threat of Threat of Bargaining

new substitutes power
Bargaining entrant of buyers Competitive
power Rivalry
of suppliers
History of Jaguar / Land Rover 2

Timeline - Jaguar
Jaguar Founded as Swallow Sidecar Company by 1 2 3 4 5
Sir William Lyons
Name change from SS to Jaguar after World War II
1922 1960 1975 1984 1990
due to the unfavorable connotations Founded in Blackpool as Jaguar name Nationalized due to Floated as a Taken over by
Swallow Sidecar first appeared financial difficulties separate Ford
Land Rover developed in 1948. Land Rover is a company in the
stock market
4x4, sport utility and all-terrain vehicle
manufacturer, based in Solihull, West Midlands
Land Rover has had a succession of owners, Timeline - Land Rover
including British Leyland, British Aerospace and 2 3
1 4
BMW.
In 2000 BMW sold Land Rover to Ford Motor
Company 1948 1976 1994 2000
One million the Land Rover Group is taken Sold to Ford for $2.75
Ford Motor Company, decided to sell both Jaguar Land Rover is
designed by the Rover Rover leaves the
production line
over by BMW billion
Car co
and Land Rover together in 2007.
Problems with JLR under Ford 2

Ford paid $2.5 billion for Jaguar, in 1989, and $3.3 billion for Land Rover,
in 1999.
Concentrated on Formulae1 and worked XF-type sports cars.
Failed to spot the diesel Powered cars that was sweeping Europe, losing
sales to rivals such as BMW and Mercedes-Benz as a result.
Under Ford, Jaguar lost $500 million in 2002 while trying to get the
aluminum process right
Ford almost drained away between $35 billion and $50 billion based on
the best estimates gained from the FORD's financial records
Reports said losses at in 2006, Ford to post losses of 10 billion - With
Jaguar loss stood at USD 715 million in 2006.
Jaguar was not able to provide any profit for Ford due to the
high manufacturing costs provided in the United Kingdom.
Land Rover's profit, was driven by the record sale of 2.26 lakh vehicles,
an 18% YoY growth in 2007.
Ford was combining both the brands since the products and
manufacturing of vehicles for Land Rover and Jaguar was so intertwined.
since the engineering, purchasing, and distribution of the two brands have
become interdependent as Ford has tried to find efficiencies running the
businesses.
In 2008 even at the end of it Ford had to pump a hefty $600 million back
into the Jaguar and Land Rover pension program.
 The Deal & Acquisition Process Timeline 3

Jun 2007- Announcement from Ford that it plans to sell

Land Rover and Jaguar.
Aug 2007 - Major bidders are identified

Likely buyers: Win Win

Tata Motors Tata Motors :

Mahindra & Mahindra Tata wanted to make a global impact by acquiring these two Iconic brands at a
Ceribrus capital Management lower rate.
Reduce dependency on Indian Market
TPG Capital Help in further penetration of the European market
Research and development facilities , Component sourcing, engineering and
Apollo Management design benefits
Indias Tata Motors and M&M arrive as top bidders ($
2.3b & $ 1.9b) Jaguar Land Rover :

Jan 2008 Ford announces Tata Motors as the
preferred bidders
Mar 2008 - Ford agreed to sell their Jaguar Land Rover
operations to Tata Motors.
Jun 2008 The acquisition is complete
Support from Staff, trade unions and the UK government.
Commitment from Tata to continue with JLRs production plans and new models
until the end of 2011.
Pre Acquisition Checklist for Tata Motors 3

Checklist
Acquired
Acquired firm
firm has
has assets
assets or
or resources
resources that
that are
are complementary
complementary to
to the
the Yes
acquiring
acquiring firm's
firm's core
core business?
business? Yes

Acquisition
Acquisition is
is friendly?
friendly? Yes
Yes
Due
Due diligence
diligence to
to select
select and
and evaluate
evaluate target
target firm's
firm's
health(Financial/HR/Cultural)?
health(Financial/HR/Cultural)? Yes
Yes

Acquiring
Acquiring firm
firm has
has financial
financial slack
slack (cash
(cash favorable
favorable debt
debt position)
position) Yes
Yes

Acquired
Acquired firm
firm maintains
maintains low
low to
to moderate
moderate debt
debt position
position Yes
Yes

Acquiring
Acquiring firm
firm has
has sustained
sustained and
and consistent
consistent emphasis
emphasis on
on R&D
R&D ,, Innovation
Innovation Yes
Yes

Acquiring
Acquiring firm
firm manages
manages change
change well
well and
and flexible/adaptable
flexible/adaptable Yes
Yes
Jaguar Land Rover Valuation Computation 3

Jaguar Land Rover Valuation Computation

Amount (USD
Assets Total (USD million)
million)
Receivables 758
Inventories 1530
Net properties 2,246
Goodwill and other net
2,010
intangibles
Pension assets 696
Other assets 297
Total Assets 7,537 7,537
Liabilities Amount Total
Payables 2,395
Pension liabilities 19
Warranty liabilities 645
Other liabilities 2022
Total liabilities 5,081 5,081
Net assets (Assets -
(7,537- 5,081) 2,456
liabilities)
@ 6 % Risk Premium adjustment on 2,456 Million USD - 2.3 USD
Billion finalized
Data was collected from Ford Motor's Annual Report 2007
Refinancing the Deal 3

Re-Financing Plans
Currently TML has raised a 15 month bridge loan of $3bn to
finance the acquisition
Board approval obtained to raise about $2,300mn - $2,400mn
through issue of equity/equity linked instruments to refinance
bridge loan 3 simultaneous but unlinked Rights Issues of about
$1,800mn of the following securities

Equity shares up to $550mn

A' Equity shares carrying differential voting rights up to Rs.20bn
($500mn)
5 year 0.5% Convertible Preference Shares (CCPs) up to Rs.30bn,
optionally convertible into 'A' Equity Shares after 3 years but before
5 years from the date of allotment (up to $750mn)

Price range to be determined in due course

Approx. USD 500/600mn to be raised through issue of securities in
the foreign markets

Above equity issues estimated to increase existing equity capital by

about 30%-35% in FY09; in the event of CCP conversions between
2011 and 2013, additional increase of about 12% estimated
Synergies of TATA JLR 4

Market Share & Vehicle Range Operations & Infrastructure

Domestic and Global Market share Service and distribution network
Reduce dependency on Indian Market Component sourcing, engineering and design benefits
Further penetration of the European market Infrastructure & advanced design facilities

Tata Group & Governance Infrastructure, Research & Development

Tata Steel - Steel supplier for all major Brands
TCS - Provides services like engineering design, manufacturing Infrastructure & advanced design facilities
solutions and sourcing services. Research and development facilities
TACO Tata Auto components.
INCAT - independent international provider of engineering and design
(E&D) services

Land Rover Jaguar Land Rover + Jaguar

2007 2008 2007 2008 2007 2008 Assumption: Considerable reduction in
Material cost Per Car 20,254 21,243 16,299 16,928 18,919 19,976 Labor and Material Cost
Labor Cost per Car 2,565 2,444 4,316 4,706 3,156 3,108 ( figures in GBP)
% of Sales
Material cost Per Car 84.50% 85.40% 112.80% 91.70% 91.70% 90.30%
Employees 9.60% 8.90% 24.30% 13.40% 13.40% 12.40%
Cross border Acquisition Rationale & Strategy 4

Rationale
Enter the luxury cars and premium
sports utility vehicles.
TATA brand limited to Indian market.
Global recognition
Strong product pipeline
Manufacturing expertise
design capabilities
extremely loyal global dealership
network. Strategy - Long
Term towards
Successful acquisition - Contribute
excellent Tata Motors financial results.
Continuing to support and invest in the
acquired entity
Short Term Only integrating those aspects of business
that make sense to integrate
Measures
JLR was spending cash during global financial
Managing cross-cultural issues
crisis and the deal seemed to be a mistake
Leading external consultants to the rescue
Focus on cost control, improve profitability and
liquidity
Reduction in number of employees, tighter
operational control
Invest cash in the loss-making JLR to keep its
product development initiatives running.
TATA JLR Post Acquisition SWOT Analysis
Helpful
STRENGTHS
JLR gives TAMO an in-house R&D and designing
capabilities
Better utilization of cash reserves available with TAMO
Reduce production cost of JLR by synergizing better with
other TATA companies like Corus, TCS, TACO, INCAT
JLRs strong brand image will ease acceptance of TAMO
in international markets
Diversification strengths due to other large businesses of
Tata Group
OPPORTUNITIES
Experienced, high quality, productive and low cost
work force in Asian markets
External
Gain control over UK and Europe markets by re-
enforcing the heritage of Jaguar and Land Rover
Keeping the existing management team of JLR make
turning around easier
4
WEAKNESSES
TATA MOTORS is perceived as an Indian brand. Will
take long time to establish as Global branding.
Internal
Continuous declining sales record of Jaguar
Not possessing localization skill outside India
markets
Jaguar and Land Rover requires lot of funds initially
which may strip down the company to cashless
levels.
THREATS
Strong presence of Competitors like BMW, Lexus,
Mercedes and Infinity
Volatile market driven by new, innovative products
Harmful
TATA JLR Post Acquisition - Value Chain Analysis 4

Firm Structure Human Resources Technology Development Procurement

Multi- Location facilities. Vast pool of technically competent managers and Investment in R&D approx. 2% of annual E- Procurement Initiative
Strong leadership - under the support of Tata engineers company profit. Global sourcing team
Sons. Focus on development of technical capabilities - Knowledge portal for employees Localized supplier base at
Best in class prototype building facilities. Technical Training Centers, Alliance with technical Strategic partnership with MDI, Fiat for manufacturing locations
Technology - SAP Institutes. prototype building and testing facilities Technology driven procurement - SAP
Large product portfolio. Focus on development of managerial skills - MTC's, Benchmarking process Loyal suppliers
TMTC Technology day across all plants Tata Group resources Steel &
Career improvement schemes - FTSS international
Low inventory levels

Support Functions

Inbound Outbound Marketing

Operations Service
Logistics Logistics & Sales

SAP, VCM SAP, VCM - DMS

Inbound Logistics Operations Outbound Logistics Marketing and Sales Service

1. Easy availability of spare parts
1. Long term contract with service 1. Stockyards, all across the 1. Pan India presence and global
1. Capital Equipment 2. Efficient collection of data from
providers country footprint.
Manufacturing division field and communication to the
2. Personnel at regional offices for 2. Long term contracts with 2. Various teams for addressing
2. Apprentices Trainee Course respective plants.
transit of goods. transporters. the requirements of institutional
3. TPM Team (Total productive 3. Pan India presence, as well as
3. Transparency through IT DTL 3. High volume of business to customers
management) global presence.
(Daily Transport Logistics) transporters ensures competitive 3. Large network of dealers - use
4. Automated manufacturing 4. Large network of workshops -
4. Supplies for critical high value price of technology (CRM-DMS).
processes. Dealer workshops and TASS.
items. 4. Regional sales office and Vehicle 4.Structured approach to
5. Distributed Maintenance - 5. Training facilities - for dealer end
5. Efficient storage facilities - easy Dispatch Section linked through understanding the requirements of
technical capability and TASS personnel. .
storage and retrieval. SAP individual customers.
6. Capacity Utilization
5. Efficient security system for
prevention of any kind of pilferage.
TATA JLR Post Acquisition - BCG Matrix Analysis 4

RELATIVE MARKET SHARE

High Low

STARS QUESTION MARKS

Jaguar Land Rover Passenger Vehicles
RELATIVE MARKET GROWTH RATE

High

?
Municipal Purpose Vehicles Defence Purpose Vehicles

CASH COWS DOGS

LCV (Tata Ace) NANO
Trucks & Buses
Low
TATA JLR Post Acquisition - PESTEL 4

politic economic social technology environment legal

created more than Tatas Strategic Investment in R&D Legal acts that
Employment to locals The fluctuations in GDP 11,000 new jobs since its management Group & its section to produce eco- governs emission
In JLR Tata Motors growth directly affect the acquisition of JLR. allies friendly cars norms and safety
assured the legal purchasing power and standards in all
compliance. thus, the industry. The Tata Groups Tata Groups (parent Green Earth, Clean counties
philanthropic work with company) also owns Tata Earth campaigns.
The Group has strong The Indian economy has various NGOs in consultancy service which Several initiatives to Safety standards
presence in over 100 grown at 6 - 7 % per education scholarships, helps in upgrade of minimize waste. consideration is on
countries. annum. and charitable designs and technology different in each
organizations. Commitment to manage country
TATA JLR confident to The manufacturing Tata Motors own research and reduce Greenhouse
manage the BREXIT in sector has grown at 7-8 Trusts collaboration with and development group gas emissions. Tata Motors aims to
the long run. % per annum in the last various prestigious help in alternative energy set standards and
few years Institutes across the vehicles using solar, Land Rover UK supports norms are at par with
globe. electric, hybrid, etc., Red Cross societies in 15 international standards
countries.
TATA JLR Post Acquisition - VRIO Analysis 4

Resource / Capability Is Valuable Is Rare Costly to Imitate Is Organization Aligned Competitive Advantage

Financials
Equity Holders x Competitive Parity

Human
Leadership Sustainable Competitive advantage

Organizational
Supplier relation x Temporary competitive advantage
Dealer relation x Temporary competitive advantage
Union Workforce Sustainable Competitive Advantage
Environmental Strategy Sustainable Competitive advantage

Technology
Information Technology Sustainable Competitive Advantage
Logistics x Competitive Parity
TATA JLR Post Acquisition - VRIO Analysis 4

Resource / Capability Is Valuable Is Rare Costly to Imitate Is Organization Aligned Competitive Advantage

Intangible
Brand Name Sustainable Competitive Advantage
Corporate values Sustainable Competitive Advantage

Tangible/ Physical
Marketing/Advertising
Product R&D
Engineering
Manufacturing Plants
Product Reliability
Brand Portfolio
Domestic market Share
International market share
Large scale operations
Strategic Alliances
x Temporary Competitive Advantage
x Temporary Competitive Advantage
x Temporary Competitive Advantage
x Temporary Competitive Advantage
x Temporary Competitive Advantage
x Temporary Competitive Advantage
x x Competitive Parity
x x Competitive Parity
x x x Competitive Disadvantage
x Temporary Competitive Advantage

Customer Service x x Competitive Parity

TATA JLR Post Acquisition - Competitor Analysis 4

Brands Mercedes Benz BMW Audi Jaguar Land Rover

Parent Tata Motor / Jaguar Land
Daimler BMW Group Audi (Volkswagen Group) Tata Motors
Company Rover
Category Sedans, SUVs Luxury Sedan, SUV Super mini, SUV, Sedan, Sports Car Premium Luxury Cars SUVs, Luxury cars
Sector Automobiles Automobiles Automobiles Automobiles Automobiles
Born to perform; Unleash a
Ultimate Driving Jaguar; Don't dream it. Drive
Tagline/ Advancement through technology;
The best or nothing machine; Sheer Driving it; Jaguar-The art of Above and Beyond
Slogan Progress through technology
Pleasure performance; Grace. Space.
Pace.

BMW is technologically
Mercedes is the global top-of- advanced and luxurious Wide range of luxurious and Premium luxury car with sport Rugged, authentic,
USP the-mind premium product portfolio comfortable cars delivering excellent features and high adventurous & freedom
automobile brand delivering ultimate driving engine performance performance loving
experience

STP
Affluent customers seeking luxury,
Luxury automobile segment Luxury segment cars for Ultra premium luxury
Segment comfort and excellent driving SUV segment
including sedans & SUVs affluent customers automobile segment
experience
Targeted towards rich Simple people with a liking
Target Business professional form Targeted towards professionals and Rich businessmen and Royal
professionals and for tough cars, Upper
Group the higher income group executives as well as rich families families
affluent families middle class

Positioned as eco-
friendly and
Audi is positioned as a company
technologically advanced Positioned as a premium
which continuously progresses by
Mercedes Benz is the best company which A car full of performance, British heritage icon with off-
Positioning using innovative technology and
premium car in the world inculcates innovation in grace and luxury road capability and on road
provides superior luxury and better
the products to provide style statement
driving experience
an exhilarating driving
experience
TATA JLR Post Acquisition - Competitor Analysis 4

Product Portfolio

1. Mercedes Benz C Class

1. BMW 3 Series 1. Audi A1 2. Audi A3 1. Jaguar XJ 1. Range Rover
2. E Class

3. Mercedes Benz GL Class

2. BMW 5 Series 3. Audi A4 4. Audi A5 2. Jaguar XF 2. Range Rover Sport

3. New Range Rover

4. Mercedes Benz M Class 3. BMW 7 Series 5. Audi A6 6. Audi A7 3. Jaguar F Pace
Velar

5. Mercedes Benz S Class

4. BMW X3 7. Audi A8 8. Audi Q3 4. Jaguar XE 4. Range Rover Evoque

6. Mercedes Benz SL Class 5. BMW X5 9. Audi Q5 10. Audi Q7 5. Jaguar F Type 5. All-New Discovery

7. Mercedes Benz SLK Class 6. BMW X6 11. Audi R8 12. Audi TT 6. Jaguar I - Pace Concept 6. Discovery Sport
ata Motors and JLR Current Financials 5

TATA PBDIT TATA NET PROFIT MARGIN

10 6.87 7.55 8.19
20 6.31 5.22 6.05 5.35 4.03
14.12 13.86 13.43 15.31 15.27 13.69 5 2.74
15 13.04 13.02
10.77 0
10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-5 -3.44
5 3.69
-10
0 -15
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CONSOLIDATED STANDANLONE
CONSOLIDATED STANDANLONE

TATA ROE TATA ROA

60 48.73 20
40.88
40 28.17 24.99 31.3 26.31 21.33 24.86 8.44 9.18 9.29
10 6.03 5.81 6.35 5.86 4.09
20 13.65 2.95
0 0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-20 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 -10 -3.37
-40
-20
-60 -48.23
CONSOLIDATED STANDANLONE
CONSOLIDATED STANDANLONE

TATA ROCE TATA DEBT / EQUITY

30 8 6.73
20.2 18.74
20 16.78 12.78 11.81 6
9.48 10.1 4.29
10 6.95
0.97 4
0 1.34 1.6 1.17 1.16 1.23
2 0.95 0.84 0.78
-10 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0
-20 -14.08 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
CONSOLIDATED STANDANLONE CONSOLIDATED STANDANLONE
Tata JLR Risks and Mitigation 5

Risk Driver Mitigation Plan

STRATEGIC RISKS
diversify the market by continuing to expand our international
GLOBAL ECONOMIC AND GEOPOLITICAL ENVIRONMENT
presence and maintain a balanced sales portfolio in situations like BREXIT
Monitor the opportunities that are available, and reposition as most preferred brand as the
BRAND POSITIONING Best in its premium segment by providing - Better Quality / Customer Satisfaction /
Efficiency / Environment Friendly
Increase the manufacturing base in various regions (POTENTIAL NEW MARKET)
GLOBAL EXPANSION
internationally to compliment the sales region.

OPERATIONAL RISKS
Issue technical update to the dealers ; Keep the customer informed. Follow stringent quality
PRODUCT LIABILITY AND RECALLS
standards to avoid recalls and minimize the warranty claims.

Customer-First Approach. Dealers and distributers to be monitored and managed to meet

SUPPLIERS & DISTRIBUTION CHANNELS
the customer expectations. Quality cannot be compromised from the suppliers.

LEGAL RISKS
Update frequently with the global quality standards and norms ; Look forward to adopt eco-
ENVIRONMENTAL REGULATIONS AND COMPLIANCE
friendly cars with less CO2 emission.

Continue to have a Dedicated team to manage the legal rights and Intellectual properties of
PATENT AND IP (INTELLECTUAL PROPERTY) PROTECTION
the Prestigious Brands and Patents.

TO Look forward for joint venture / for manufacturing and providing service support with
COMPETITIVE BUSINESS EFFICIENCY other car manufacturing companies to share the resources / improve efficiency / external
consultation to ensure the survival of the business world.
Tata JLR Projections - 2023 6

Sales Projection of JLR for FY23 Sales Projection for 2023

( based on Avg JLR Sales)
1,400,000
2,500,000 1,165,522
1,200,000
958,162
2,000,000 876,074 1,000,000
801,019 836,132
732,393 785,616
1,500,000 669,647 800,000 701,840
612,277
Sales in Units 563,591
Sales in Units 687,374 600,000 503,491
1,000,000 525,410 574,641 628,485
439,240480,397 400,000 329,391
500,000 222,024
173,037189,250206,983226,378247,589270,788
198,348
200,000
-
-
FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 Jaguar Land Rover Total JLR

Year Brands

Jaguar Land Rover Total JLR Pessimistic Neutral Optimistic

Legend:
Pessimistic Avg., 10 years All PC Sales @ 3.84%
Neutral - Avg., 14 years JLR Sales @ 5.81%
Optimistic - Avg., 5 years JLR Sales @ 13%
Tata JLR Growth Lifecycle 6

Growth

Declin
Matur
e
e

2008 2016 Timeline

Tata JLR Brand Positioning 6

HIGH PRICE

HIGH QUALITY
LOW QUALITY

LOW PRICE 29
Recommendations
Connected Cars
Adopt new technologies for
Fully digitized car Wi-fi access vehicle
Infotainment systems and apps
Vehicle-to-vehicle communications
Real time location services
Routing based on traffic conditions
Networked web links to facilitate cars
diagnostics and repairs.
Safe Car and Environmental Factors
Efficient engine high performance
Hybrid/Electric/Solar cars - Green
environment
Potential platform for green operation
strategy - might help being a potential
mover.
Long distance sensors- Alert of potential
hazards to the driver
6
Intelligent Cars
Self-braking
Self-parking
automatic cruise control
automatic accident-avoidance features
computer operated power steering
Driverless cars
Other items to consider:
Pricing needs to be skimmed to be positioned at a
higher end of new luxury statement. - this will help
in better profit margin.
Loyalty and Community programs for the
customers.
Clients could have access to many luxury shops.
VIP access to showrooms for new car test for
existing customers.
Tata JLR Current Valuation 6

JLR Automotive PLC (GBP Million) 2011-12 2012-13 2013-14 2014-15 2015-16
Capital 1,500.60 1,500.60 1,500.60 1,500.60 1,500.60
Reserves and Surplus 1,423.60 2,038.20 4,363.00 4,539.00 6,113.00
Borrowings 1,974.10 2,166.80 2,010.00 2,550.00 2,500.00
Turnover~ 13,511.70 15,783.70 19,386.00 21,866.00 22,208.00
Profit/ (Loss) Before Taxes 1,479.00 1,674.00 2,501.00 2,614.00 1,557.00
Profit/ (Loss) After Taxes 1,460.00 1,214.00 1,879.00 2,038.00 1,312.00
PAT to Sales 10.81% 7.69% 9.69% 9.32% 5.91%
EBITDA Margin 15.00% 15.22% 17.50% 18.90% 14.90%*^
Notes :
*^ Adjusted for one time reserves and charges of 166m for the recall in the U.S. of potentially faulty passenger airbags supplied by Takata,
doubtful debts and previously capitalised investments.

Brand Value Calculation based on EBITA 5 Yrs Average Option 1 Option 2 Option 3
EBITA Margins (@ 16.3% Avg Margin) in GBP Million 3,620 3,620 3,620
EBITA Multiple 3.50 4.50 5.00
Value In GBP Million 12,670 16,290 18,100
Liability (as per 2015-16 Borrowings) 2,500 2,500 2,500
Value (Less : Borrowings) 10,170 13,790 15,600
Value in US Million Dollors (1 GBP - 1.25 USD) 12,712 17,237 19,499
Value in Billion USD 12.71 17.24 19.50
JLR Investment by Tata Motors Limited (Less Gratuity) 2.40 2.40 2.40
Interest @ 10%, 15%, 18% for 3 Billion $ - 8 Yrs 2.40 3.60 4.32
Brand Value - Assumed 7.91 11.24 12.78
Multiple on Investment 3.30 4.68 5.32
Notes - Assuming on 5 Years Average EBITA Margins less Borrowings - (Depreciation , Gratuity not considered)

The Cacultaion is on simple multiples 3.5,4.5,5 times on EBITA with Option 1,2,3, and also with deduction on Interest at 10%,
15%,18%
 Bibliography 6

http://www.tatamotors.com/about-us/company-profile/
http://www.tatamotors.com/investors/financials/67-ar-html/pdf/Milestones.pdf
http://www.tatamotors.com/investors/financials/71-ar-html/mission-vision.html
http://www.dnb.co.in/fesconftool/uploads/presentations
www.siamindia.com/statistics
http://www.npr.org/2012/03/12/148298794/how-fords-ceo-helped-restore-the-american-icon
http://www.mycustomer.com/marketing/strategy/brand-destruction-how-ford-failed-jaguar
https://www.bloomberg.com/news/articles/2007-06-19/
jaguar-land-rover-synergy-for-cerberus-businessweek-business-news-stock-market-and-financial-advices
www.jaguarlandrover.com
https://www.pressreader.com/india/economic-times/20070719/281539401552889
www.tatamotors.com/investors/pdf/2008/Jaguar-Land-Rover-Acquisition-Part-1.pdf
www.tata.com/article/inside/Jaguar-Land-Rover-has-been-the-big-positive
www.jaguarlandrover.com/media/23076/jlr_company_information.pdf
www.tata.com/article/inside/Jaguar-Land-Rover-has-been-the-big-positive
http://www.tatamotors.com/aresult/annual-results-financial-year-2015-16-2/
http://www.tatamotors.com/about-us/leadership/
http://www.jaguarlandrover.com/people-listing
http://www.prnewswire.com/ne ws-releases/record-global-auto-sales-expected-in-2017-scotiabank-611188055.html
Thank
You
Appendix
Global Automobile Industry - Outlook
Strong sales supported by stronger global economic
growth is predicted
A slow and steady gains are expected over 2017 with
purchases increasing to an eighth consecutive annual
record.
Increase in replacement demand in the U.S.
Transformed sales upturn in most emerging markets with
China being an exception, the remaining of the emerging
markets will gain sales in 2017.
Canada and Mexico, purchases are expected to edge
lower in 2017 a reverse trend from previous years
Eastern Europe is likely to lead the sales gains among
emerging markets, though purchases will edge higher
in Asia as well, despite lower volumes in China.
In South America the declines have come to an end in
Brazil and Peru is now a stable market due to opening-up
of its Mining sector.
A very well distributed growth expected in every region
for the first time in five years.
Global Automobile Industry Luxury Cars Outlook

Daimlers Mercedes-Benz raced to first place in the U.S.

and global luxury-auto sales race last year.
In 2016 Luxury cars market ups the ante by posting an
8% plus over the previous year.
Europe leading the growth offsetting the US market
Ruble devaluation also boosted sales in Russia
The sales of Mercedes-Benz cars powered past the two
million mark for the first time in 2016
Mercedes outsold BMW brand globally, resultant of the
heavy recent investment, a revamped lineup and
shakeup of its China business.
Volkswagens Audi unit remained third
Thriving demand in China helped all three German
manufacturers to new sales records.
2017 will be crucial as the vehicle selling cycle begins to
slow and manufacturers are forced to move more on
margins than on volumes
TATA JLR Post Acquisition - 7s Mckinsey framework 4

Strategy Structure
Focus Differentiation Strategy ( JLR) Mixed Organizational Structure
Luxury Vehicles (JLR) Decentralization-Autonomous
Acquisition Philosophy Management by Objectives
Target Bottom of the Pyramid Market New Corporate Culture
Brand Positioning
Combination of Ansoffs Product
Development and Diversification Strategy
Offset A for B
Corporate Social Responsibility
Styles
Management participation
Effective Leadership
Systems .
Economies of Scale (Tata)
Continuous Improvement
Assets, Operations and Systems
platforms
Staffs
Mutual Trust, Communication
Respect for People
Skills Continuous Improvement
Technical Skills
Innovation
. Shared Values
Core Values
Pride
Corporate Culture
.
Tata Motors Current scenario
Leadership Team
TATA MOTORS Guenter Butschek
N Chandrasekaran
CEO, MD
Chairman

Dr. Timothy Mayank

Ravindra Satish C Ramakrishnan Gajendra
Leverton Pareek
Pishody Borwanker President, Group Chandel
President & President
ED (CV) ED (Quality) CFO CHRO
Head (PVBU)

JLR Guenter
DR. Ralf Speth
Butschek
CEO,CEOMD

Keith
Andy Goss Kenneth
Benjamin Ian Callum John Edwards
Sales Op Gregor
Legal Director MD Operations
Director CFO
Director
Whats in the Deal ?

Whats in the deal?

100% stake in Jaguar & land TAMO has acquired the business & initially they will be operated independently of the partner.
Rover Business

3 Plants in UK These are well invested plants

2 advanced design & 4-5000 engineers engaged in testing ,prototype design & powertrain
engineering center Engineering , development & integration

26 National sales company Both existing national sales companies of jaguar/land rover & also those that are carved out of
current Ford operation

Intellectual property rights This covers all key technologies to be transferred to JLR & perpetual royalty free license on
technologies shared with Ford

Capital Allowance A minimum guaranteed amount of $1.1 bn which will help managing in Tax going forward

Support from Ford Motor Ford Motor Credit will continue to support the sales of JLR for around next 12 months
Credit

Pension Contributed by Ford Ford will contribute $ 600 Mn of the Pension Fund
FORD SWOT Analysis
Helpful

STRENGTHS WEAKNESSES
Great brand Equity with strong heritage and legacy Financial condition is pretty bad with falling sales
Innovations in Technology and Procedures like virtual and revenues
assembly line, single supplier model, etc. No dividend payout during 2007 & 2008

l
Interna
Truly global company with excellent knowledge and Inability to establish sustainable markets in high
analytics of global markets end car models
Excellent network of suppliers and supply chain Not able to tap opportunities in small and medium
management segments
Proud owners of some of the best car models of the No diversification only Automotive
world manufacturing and supply business

OPPORTUNITIES THREATS

Develop new customer friendly Western Economies facing severe

technologies like low emission cars, economic down turn due to the current
Externa

hybrid cars, etc. Sub-Prime crisis

Develop new markets in developing Japanese competitors are very aggressive
countries more aggressively. in the western markets
Collaboration with Asia manufacturers Stringent Emission norms in Europe, UK
l

and localize manufacturing and the US

Fords strategy of single supplier at global
level conflicting with their supply chain
excellence objective in Asian countries.
Harmful
JLR Financial Performance at the time of
Acquisition
JLR Financial Performance - 2005 till 2007

16,000
14,942
14,500
12,969
13,00012,462
12,258
11,500
11,292
10,00010,955
8,500
US $ Millions
7,000
5,500
4,000 2,684
2,341 2,100
2,500 2,250
1,000
1,507 1,677 619
-500
2005
-1,932 2006 2007
-2,000

Year

Revenue Cost Of Sales

Gross Profit Expenses
EBIT (Incl. Special Items*)
 Global PV Segment - Trend Analysis
Global PV Segment - Increase in Sales YOY Global PV Segment - Increase in Sales YOY
50.00% 50.00%
40.00% 40.00%
37.10% 37.24% 37.10% 37.24%
30.00% 30.00%
20.00% 18.36% 20.00% 18.36%
16.44% 16.44%
10.00% 10.00%
7.33% 7.33%
Sales % 0.00% 0.00% 4.75% Sales % 0.00% 0.00% 4.75%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
-10.00% -10.00%
-20.00% -20.00%
-30.00% -0.29 -30.00% -0.29
-40.00% -38.16% -40.00% -38.16%
-43.99% -43.99%
-50.00% -50.00%
YEAR YEAR

INCREASE IN SALES YOY TML INCREASE IN SALES YOY INCREASE IN SALES YOY TML INCREASE IN SALES YOY
JLR INCREASE IN SALES YOY TATA JLR INCREASE IN SALES YOY JLR INCREASE IN SALES YOY TATA JLR INCREASE IN SALES YOY
 Pre-Acquisition - Tata Post-Acquisition - Tata JLR
Ratio 2006 - 2007 - 2008 - 2009 -
Mean Mean
2007 2008 2009 2010
Current Ratio 1.36 0.97 1.17 0.89 0.66 0.78

Liquid Ratio 1.41 0.72 1.21 0.58 0.49 0.54

Debt equity ratio 0.58 0.80 0.69 1.08 1.11 1.10

Total Asset to Debt ratio 2.20 2.40 2.30 2.01 1.99 2.00

Proprietary ratio 0.48 0.52 1.65 0.46 0.45 0.46

Dividend Payout ratio 0.35 0.33 0.34 0.35 0.44 0.40

Net Profit ratio 6.90 6.90 6.90 3.80 5.90 4.85

ta Motors and JLR Current Financials contd. 5
ata Motors and JLR Current Financials 5
ta Motors and JLR Financials Ratio Analysis
Key Financial Ratios of Tata Motors In Crs
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11
Consolidate Consolidate Consolidate Consolidate Consolidate
Profitability Ratios Standalone Standalone Standalone Standalone Standalone
d d d d d
PBDIT Margin (%) 13.04 13.31 13.02 12.7 3.69 9.98 10.77 14.44 14.12 10.8
PBIT Margin (%) 10.89 11.11 10.81 10.43 0.19 6.57 6.53 11.52 10.31 7.91
PBT Margin (%) 9.62 9.65 8.71 8.95 -2.49 3.95 4.21 7.99 8.54 4.66
Net Profit Margin (%) 6.87 7.17 6.31 7.05 -3.44 3.96 2.74 6.33 7.55 3.84
Return on Networth/Equity (%) 28.17 27.95 24.99 25.96 -48.23 8.21 31.3 15.15 48.73 9.06
Return on Capital Employed (%) 16.78 19.18 12.78 15.49 -14.08 4.96 9.48 7.75 20.2 5.14
Return on Assets (%) 8.44 9.96 6.03 7.75 -3.37 2.64 2.95 4.38 9.18 3.34
Total Debt/Equity (X) 0.95 0.59 1.34 0.8 6.73 1.06 4.29 1.12 1.6 0.73
Asset Turnover Ratio (%) 124.85 138.87 98.64 110.01 96.6 66.81 105.27 69.22 120.9 86.89
Liquidity Ratios
Current Ratio (X) 1.27 1.1 1.02 0.80 0.56 0.54 0.71 0.52 0.76 0.58
Quick Ratio (X) 1.03 0.83 0.84 0.61 0.38 0.42 0.52 0.39 0.51 0.37
Source : Dion Global Solutions Limited

Key Financial Ratios of Tata Motors In Crs

Mar-12 Mar-13 Mar-14 Mar-15 Mar-16
Consolidate Consolidate Consolidate Consolidate Consolidate
Profitability Ratios Standalone Standalone Standalone Standalone Standalone
d d d d d
PBDIT Margin (%) 13.86 8.74 13.43 8.48 15.31 8.52 15.27 1.77 13.69 10.49
PBIT Margin (%) 10.47 5.79 9.42 4.42 10.56 2.48 10.17 -5.39 7.52 4.7
PBT Margin (%) 8.16 2.46 7.22 0.39 8.1 -2.99 8.25 -10.95 5.07 0.35
Net Profit Margin (%) 8.19 2.28 5.22 0.67 6.05 0.97 5.35 -13.05 4.03 0.55
Return on Networth/Equity (%) 40.88 6.33 26.31 1.57 21.33 1.74 24.86 -31.93 13.65 1.04
Return on Capital Employed (%) 18.74 3.84 11.81 0.97 10.96 1.08 10.1 -16.02 6.95 0.67
Return on Assets (%) 9.29 2.27 5.81 0.57 6.35 0.67 5.86 -9.48 4.09 0.44
Total Debt/Equity (X) 1.17 0.56 1.16 0.75 0.84 0.76 1.23 1.35 0.78 0.63
Asset Turnover Ratio (%) 113.94 99.6 111.05 85.78 105.83 68.94 110.11 72.67 102.32 80.81
Liquidity Ratios
Current Ratio (X) 0.88 0.62 0.86 0.48 1.04 0.36 1.01 0.42 1.04 0.6
Quick Ratio (X) 0.63 0.41 0.61 0.27 0.74 0.15 0.72 0.19 0.74 0.33
ta Motors and JLR Financials Ratio Analysis
Financial Statistics History

Capital Account 2006-07 2007-08 2008-09^^^ 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16

Capital

Tata Motors Consolidated (Rs. Lakhs) 38,541.00 38,554.00 51,405.00 57,060.00 63,771.00 63,475.00 63,807.00 64,378.00 64,378.00 67,918.00

Tata Motors Standalone (Rs. Lakhs) 38,541.00 38,554.00 51,405.00 57,060.00 63,771.00 63,475.00 63,807.00 64,378.00 64,378.00 67,918.00

JLR Automotive PLC (GBP Million) - - 283.60 644.60 1,500.60 1,500.60 1,500.60 1,500.60 1,500.60 1,500.60

Reserves and Surplus

Tata Motors Consolidated (Rs. Lakhs) 7,33,626.00 8,31,198.00 5,42,659.00 7,63,588.00 18,53,376.00 32,06,375.00 36,99,923.00 64,95,967.00 55,61,814.00 80,10,349.00

Tata Motors Standalone (Rs. Lakhs) 6,48,434.00 7,45,396.00 11,71,610.00 14,39,487.00 19,37,559.00 18,99,126.00 18,49,677.00 18,53,287.00 14,21,881.00 21,68,890.00

JLR Automotive PLC (GBP Million) - - -1,210.40 -1,107.40 -25.20 1,423.60 2,038.20 4,363.00 4,539.00 6,113.00

Borrowings

Tata Motors Consolidated (Rs. Lakhs) 7,30,190.00 11,58,487.00 34,97,385.00 35,19,236.00 32,81,055.00 47,14,896.00 53,71,571.00 60,64,228.00 73,61,039.00 70,46,849.00

Tata Motors Standalone (Rs. Lakhs) 4,00,914.00 6,28,052.00 13,16,556.00 16,59,454.00 15,91,543.00 15,88,057.00 16,79,895.00 15,05,280.00 21,13,441.00 15,88,725.00

JLR Automotive PLC (GBP Million) - - 2,722.60 3,030.40 1,381.50 1,974.10 2,166.80 2,010.00 2,550.00 2,500.00

Revenue Account

Turnover ~

Tata Motors Consolidated (Rs. Lakhs) 37,07,579.00 40,60,827.00 74,89,227.00 97,36,054.00 1,26,84,370.00 1,71,33,935.00 1,94,51,406.00 2,37,45,502.00 2,67,24,399.0 2,81,07,844.0
0 0
Tata Motors Standalone (Rs. Lakhs) 32,06,467.00 33,57,711.00 29,49,418.00 40,21,755.00 51,60,692.00 59,79,502.00 51,40,793.00 41,59,103.00 41,40,575.00 48,77,959.00

JLR Automotive PLC (GBP Million) - - 4,949.50 6,527.20 9,870.70 13,511.70 15,783.70 19,386.00 21,866.00 22,208.00

Profit/ (Loss) Before Taxes

Tata Motors Consolidated (Rs. Lakhs) 3,08,800.00 3,08,629.00 -2,12,925.00 3,52,264.00 10,43,717.00 13,53,387.00 13,64,733.00 18,86,897.00 21,70,256.00 13,98,087.00

Tata Motors Standalone (Rs. Lakhs) 2,57,318.00 2,57,647.00 1,01,376.00 2,82,954.00 2,19,652.00 1,34,103.00 17,493.00 -1,02,580.00 15,039.00
(3,97,472.00)
JLR Automotive PLC (GBP Million) - - -375.70 51.40 1,114.90 1,479.00 1,674.00 2,501.00 2,614.00 1,557.00

Profit/ (Loss) After Taxes

Tata Motors Consolidated (Rs. Lakhs) 2,16,999.00 2,16,770.00 -2,50,525.00 2,57,106.00 9,27,362.00 13,51,650.00 9,89,261.00 13,99,102.00 13,98,629.00 11,02,375.00

Tata Motors Standalone (Rs. Lakhs) 1,91,346.00 2,02,892.00 1,00,126.00 2,24,008.00 1,81,182.00 1,24,223.00 30,181.00 33,452.00 23,423.00
(4,73,895.00)
JLR Automotive PLC (GBP Million) - - -402.40 23.50 1,035.90 1,460.00 1,214.00 1,879.00 2,038.00 1,312.00

Dividend including tax

Tata Motors Consolidated (Rs. Lakhs) 68,822.00 67,674.00 36,458.00 1,00,185.00 1,48,130.00 1,48,862.00 75,614.00 69,008.00 (3,319.00) 11,052.00

Tata Motors Standalone (Rs. Lakhs) 67,639.00 65,968.00 34,570.00 99,194.00 1,46,703.00 1,46,372.00 72,423.00 66,627.00 (9,340.00) 7,300.00

JLR Automotive PLC (GBP Million) - - - - - - 150.00 150.00 150.00 150.00

ta Motors and JLR Financials Ratio Analysis
Financial Statistics History
2008-
RATIO 2006-07 2007-08 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
09^^^
PAT to Sales
Tata Motors Consolidated 5.90% 5.30% -3.30% 2.60% 7.30% 7.90% 5.10% 5.90% 5.20% 3.90%
Tata Motors Standalone 6.00% 6.00% 3.40% 5.60% 3.50% 2.50% 0.60% 0.80% - 0.50%
JLR Automotive PLC - - -8.13% 0.36% 10.49% 10.81% 7.69% 9.69% 9.32% 5.91%
EBITDA Margin
Tata Motors Consolidated 3.10% 9.30% 14.60% 14.30% 14.10% 16.10% 16.00% 14.60%
Tata Motors Standalone 6.84% 11.74% 10.20% 8.10% 4.77% -1.41% -2.20% 6.50%
JLR Automotive PLC -1.70% 5.35% 15.21% 15.00% 15.22% 17.50% 18.90% 14.9%*^
Earnings Per Share (Basic)* (Rs.)

Ordinary Share
Tata Motors Consolidated 56.43 56.24 -56.88 48.64 155.25 42.58** 31.02 43.51 43.44 32.61
Tata Motors Standalone 49.76 52.64 22.70 42.37 30.28 3.90** 0.93 1.03 -14.72 0.68
Earnings Per Share (Basic)* (`Rs.) 'A'

Ordinary Share
Tata Motors Consolidated - - -56.88 49.14 155.75 42.68** 31.12 43.61 43.54 32.71
Tata Motors Standalone - - 23.20 42.87 30.78 4.00** 1.03 1.13 -14.72 0.78
Dividend Per Share*(#) Ordinary Share
Tata Motors Consolidated 15.00 15.00 6.00 15.00 20.00 4.00** 2.00 2.00 - 0.20
Tata Motors Standalone 15.00 15.00 6.00 15.00 20.00 4.00** 2.00 2.00 - 0.20
Dividend Per Share*(#) 'A' Ordinary

Share
Tata Motors Consolidated - - 6.50 15.50 20.50 4.10** 2.10 2.10 - 0.30
Tata Motors Standalone - - 6.50 15.50 20.50 4.10** 2.10 2.10 - 0.30
Net Worth Per Share* (`)
Tata Motors Consolidated 200@ 225@ 114++ 144^ 302^^ 103.00 118@ 204@ 175@ 238@
Tata Motors Standalone 178@ 203@ 238++ 262^ 315^^ 62.00 60@ 60@ 46@ 66@
Net Debt Equity
Tata Motors Consolidated (Net
4.55 2.42 0.68 0.25 0.24 0.07 0.19 (0.01)
Automotive Debt Equity)
Tata Motors Standalone 0.98 0.96 0.67 0.72 0.83 0.77 1.36 0.61
JLR Automotive PLC NA~~ NA~~ 0.24 (0.16)*~ (0.19)*~ (0.25)*~ (0.29)*~ (0.28)*~
Jaguar and Land Rover Pre-Acquisition
Jaguar Cars Ltd & Land Rover
JCL & LR JCL & LR JCL & LR JCL & LR JCL & LR
Amounts in GBP Millions (in 2008 Average (1 GBP = 1.90 US Dollar) Profit & Loss account
JCL & LR JCL & LR JCL & LR JCL & LR JCL & LR Dec-09 Dec-08 Dec-07 Dec-06 Dec-05

Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Sales 4,783.40 6,662.00 6,609.60 6,217.50 6,064.70
Fixed Assets

Tangible Assets 1,611.30 1,617.20 1,415.00 1,479.20 1,616.30 Cost of Sales (4,779.70) (6,697.20) (5,954.00) (5,933.80) (5,973.80)
Intangible Assets 1,561.00 1,180.90 312.00 322.00 347.90

Investments 257.10 132.80 1.50 24.50 24.50 Gross Loss 3.70 (35.20) 655.60 283.70 90.90
3,429.40 2,930.90 1,728.50 1,825.70 1,988.70
Distribution Costs (145.40) (199.10) (249.70) (293.30) (269.20)
Current Assets

Stock 543.80 415.90 373.30 262.40 295.30

Depreciation and Amortisation - - - - -

Debtors 3,008.60 762.60 2,153.40 1,877.80 1,187.40 Administrative Expenses (160.40) (143.20) (114.30) (185.70) (182.80)
Other Current Assets - - - - -
Operating Profit / (Loss) (302.10) (377.50) 291.60 (195.30) (361.10)
Cash at Bank & in Hand 334.00 83.60 3.60 7.10 16.60
Dividends Received 0.50 0.30 8.00 11.40 49.00
3,886.40 1,262.10 2,530.30 2,147.30 1,499.30

Creditors: Less than 1 year (5,566.90) (1,719.20) (2,786.50) (1,617.30) (1,234.40) Gain on Disposals TM, Investments & FA (13.30) (7.50) 370.50 52.20 28.80

Net Current (Liabilities) / Assets (1,680.50) (457.10) (256.20) 530.00 264.90 Interest Payable (49.00) (56.00) (95.80) (96.50) (171.60)
Total Assets less Current Liabilities 1,748.90 2,473.80 1,472.30 2,355.70 2,253.60
Other Income 30.30 91.10 86.20 68.90 30.20
Creditors: More than 1 year (401.20) (661.20) (6.00) (1,265.90) (1,223.00)

Provisions for Liablities and charges (418.30) (503.70) (479.40) (598.20) (475.90)
Profit / (Loss) Before Tax (333.60) (349.60) 660.50 (159.30) (424.70)

Net (Liabilities) / Assets excluding pension liability 929.40 1,308.90 986.90 491.60 554.70 Tax on Loss on Ordinary Activities (44.50) (323.80) (79.00) 120.20 189.40
Pension Liability (46.00) 53.90 261.00 (200.20) (433.60)
Profit / (Loss) for the Year (378.10) (673.40) 581.50 (39.10) (235.30)
Net Liabilities including pension liability 883.40 1,362.80 1,247.90 291.40 121.10

Capital and Reserves Other Non Operating Income Effecting P&L (136.50) (643.40) 316.70 272.10 114.10

Calledup Share Capital 2,842.20 2,842.20 2,469.20 2,369.20 2,369.20

Actuarial Gains, Deferred Tax & Prior period
Share Premium Account 1,156.10 1,156.10 491.40 491.40 491.40 Adjustments etc.,

Revaluation Reserve 22.50 22.50 22.50 36.60 36.60 Movement of Deferred Tax 35.20 126.50 (43.70) (22.20) (29.40)
Other Reserves 303.50 303.50 119.10 117.10 102.50

Profit and Loss Account (3,440.90) (2,961.50) (1,854.30) (2,722.90) (2,878.60) Total Profit / (Loss) Recognised for the Year (479.40) (1,190.30) 854.50 210.80 (150.60)
Total Shareholder's funds 883.40 1,362.80 1,247.90 291.40 121.10