Q4 2011 Earnings Call - Tata Motors Dt-27 May’11

MANAGEMENT DISCUSSION SECTION

Debasis Ray

Ladies and gentlemen, good evening. On behalf of Tata Motors, I welcome you to this interaction on the Company's Consolidated Financial Results for the Year 2010-2011. Shortly, our Chairman, Mr. Ratan N. Tata will join us. We already have with us our Vice Chairman, Mr. Ravi Kant; our Managing Director and Group Chief Executive Officer, Mr. Carl-Peter Forster; our Managing Director India Operations, Mr. Prakash M. Telang; our Chief Executive Officer of Jaguar Land Rover, Dr. Ralf Speth; and our Chief Financial Officer and President Tata Motors, Mr. C. Ramakrishnan. We begin the interaction with a presentation from Mr. Ramakrishnan following which Senior Management will take your questions. We will continue this interaction till about 7:15 p.m. Mr. Ramakrishnan, please.

Chandrasekaran Ramakrishnan

Thank you, Debasis. Good evening, ladies and gentlemen. Thank you for being here with us today for the interaction on the financial results of Tata Motors Group for March 2011.

[indiscernible] (1:20) level, Tata Motors Group sales crosses 1 million mark, at a little over 1 million vehicles, turnover crosses Rs.100,000 crore at Rs.123,000 crores representing an increase of about 33% over the turnover of the previous year. Profit before tax crosses Rs.10,000 crore mark, stands at Rs.10,437 crores which is a jump over the previous year of Rs.3,500 crores.

In the balance sheet, the earnings per share stood at Rs.155, compared to Rs.48 in the previous year. Net worth, the shareholder's funds increased by about Rs.11,000 crores during the year. Net automotive debt to equity stood at 0.68 as of 31st March, 2011.

The overall capital spending, Tata Motors, Jaguar Land Rover, combined at a global level, was about Rs.8,500 crores, comprising about - close to about £800 million in Jaguar Land Rover and about Rs.2,400 crores in Tata Motors.

Coming to Tata Motors standalone, turnover was Rs.48,000 crores, an increase of 35% over the previous year. EBITDA margin was close to about 10%, stood at 9.9%. Profit after tax was Rs.1,800 crores compared to Rs.2,200 crores in the previous year. You will recollect the previous year included profit on sale of investments like shares of Tata Steel and shares in our construction company, Telcon, which we partially divested. This together the other income last year in the PAT accounted for about Rs.800 crores.

Similarly, in Tata Motors' standalone balance sheet significant improvement in the overall leveraging. Net debt-to-equity ratio stood at 0.67. During the year, you will recall we had issued shares through QIP offering and we're also seeing significant conversion of our - many of our convertible bonds during the year and an aggregate of $326 million worth of bonds have been converted into shares during the year.

A short while ago, the Board declared a dividend of Rs.20 per share compared to Rs.15 in the previous year, which also means 20.50 on the A ordinary shares.

This entire presentation is available on the company website. So I'll not go through it in detail. There is a breakup in terms of sales of commercial vehicles posting a growth of about 23% over the previous year, witnessing a robust demand across different segments, significant new product introduction, which have been received well in the marketplace. Capacity expansion in Uttaranchal was in place towards the end of the year and we have further product offerings, which we'll talk about later.

In the commercial vehicle business, we took a cumulative price increase during the course of the year at different points of time aggregating 5.3%. Market share in commercial vehicles stood at 61.8% for the year.

Passenger vehicles, a growth of 23%, the number is at 319,000 sales for the year. Nano sales crossed 100,000 during the year. Indigo Manza is being received very well in the marketplace. Market share stood at 13% for the year and total price increase of a little over 4% - 4.5% for the year in passenger cars.

Export volumes, this from Tata Motors Standalone India, export volumes grew by about 70% to 58,000 numbers during the year. Strong exports to neighboring countries, Bangladesh, Sri Lanka, Bhutan, etcetera, with growth coming back in some of our other markets which had witnessed significant recession in the earlier years.

Jaguar Land Rover had significant improvement in its performance in the year, net revenue close to £10 billion, an increase of 51% over the previous year. EBITDA margin for the year was 16.3% compared to 6% in the previous year and profit after tax a little over £1 billion. EBITDA margins have been mainly the result of a richer and better product mix, successful introduction of newer products which have been received well by the market, the new XJ and other Land Rover models, a much market mix with significant growth in emerging markets, particularly China, and continued favorable exchange rates and of course a result of several continuing actions within the company in terms of cost control and improvement of efficiencies and operations.

Some of the other highlights, I already mentioned some of them. The products: the new XJ and some of the other Land Rover models. Net debt in Jaguar Land Rover stood at £233 million at the end of the year, compared to about £600 million at the end of the previous year.

In terms of an overall split of Jaguar Land Rover volumes, U.K. accounted for about 24% of the global sales, North America about 22%, China about 11%, Europe, excluding Russia, 22%. China, if you recall, was a little below 10% in the previous year in terms of percentage to Jaguar Land Rover's global sales.

Our other Indian subsidiaries, Tata Motor Finance, profit after tax of Rs.127 crores compared to Rs.44 crores in the previous year. Total financing disbursals were at Rs.7,900 crores compared to Rs.6,600 crores in the previous year, an increase of about 18%. The book size of its financing portfolio stood at close to about Rs.10,000 crores. Tata Motor Finance accounted for a market share of about 21.4% in retail financing of Tata brand products. Net interest margin stood at 10.1%. Tata Motor Finance also issued perpetual bonds during the year for raising Tier 1 capital, aggregating Rs.150 crores.

Tata Technologies, our IT and engineering services subsidiary, significantly improved performance, 17% growth in turnover to Rs.1,200 crores; net profit of Rs.139 crores, compared to Rs.91 crores in the previous year; and a very good

regional mix, Europe accounting for 30%, North America 37%, and Asia-Pac including India about 33% in terms of its turnover split. Tata Technologies also completed a primary issuance of shares to a PE investor, aggregating $30 million which funds have been since received by the company.

Tata Daewoo, our commercial vehicles subsidiary in Korea, reported a net profit of about Rs.73 crores, a small dip over the previous year. If you recall, Tata Daewoo had to terminate the services of its wholesale distributor - sole distributor in the country, in Korea, and we've set up our own national sales company as a wholesale distributor in Korea, and the operations have been stabilized, and towards the end of the year the performance has significantly strengthened, and we hope to capture some of the lost market share in the current year.

Our Axles and Transmissions subsidiary in India reflect the performance of the underlying commercial vehicle business, with net profit growing by 47% and 72% respectively and stood at Rs.94 crores and Rs.90 crores.

Commercial vehicles, going forward the demand continues to be strong, but there are concerns building up in terms of higher interest rates which could impact the demand going forward. We need to be watchful. Cost pressures including commodity price increases, competitive intensity could increase, but we believe the company is well poised with a wide and compelling product portfolio and customer reach.

ACE family has been expanded in May 2011, earlier this month, few days ago, with the launch of Magic Iris and Ace Zip. We have further products in the pipeline, variants from the Prima range and other medium and heavy commercials and a new LCV range. Passenger cars will continue to exploit and grow the volumes in an attractive and relatively young product portfolio. We'll leverage further the power of the Nano car and the Nano platform and look at export potential. Further products in the pipeline, Nano variants, a Vista refresh, Manza Limited edition, New Safari and an Aria two-wheel drive. Once again, concerns on inflation, higher interest rates, and fuel prices could pose a challenge to demand and volume growth in the country.

Jaguar Land Rover, we hope to continue the volume growth and profitability in our operations. We'll focus of course on new product introductions and technology investments. Range Rover Evoque will be a major event later this year. We'll have further new Jaguar and Land Rover 2012 Model Year Products as well. Growth will be a special emphasis in China, Russia, India, and Brazil. Jaguar Land Rover earlier this month also completed a major fund-raising program and raised £1 billion equivalent through bonds, 7 and 10- year bonds. Part of the money £250 million has been used for repayment to Tata Motors of some other funding we had provided to Jaguar Land Rover. From a financing front, we will take further measures to strengthen the capital base in Jaguar Land Rover through debt restructuring and extending the maturity profile.

With this, I'll stop the presentation and along with other senior colleagues, Mr. Tata is here, we will take your questions.

Q&A

: Sir, hi. This is Kapil from Nomura. Hello. Sir, during the quarter we've seen some decline in JLR margins. Could you explain what was the reason for that and do you see the company maintaining margins around the current levels for full year as a whole next year?

: JLR margins - hello - JLR margins is a function of the volumes, model mix, regional mix, and exchange rates. There would be some changes in the quarterly performance but overall the margins have been quite robust and healthy. Going forward - we normally don't provide guidance on margins; we hope to maintain our profitable performance and hope to build further on it. There will, of course, always be concerns on costs.

: Okay. And sir, also if you could comment on the volumes for different regions, what is the outlook or what is the ground feel that you are seeing in Europe, North America and China?

: Overall, we have a very strong demand for our vehicles based on a very, very strong product portfolio, the model year '10, but also the XJ which is first time available in the market. And, therefore, we see a strong demand, especially out of BRIC countries. I would just take one example, China where we sold 20,000 vehicles last year and where we are

going to sell around about 40,000 vehicles this year. So, you see, there's a very strong demand and we have a very interesting product portfolio for all these markets.

: So even in Europe and North America, do we continue to see strong demand?

: Yes. It's not only - we have more opportunities to grow. Growth is a more dimensional element for us, versus a geographical footprint, as I mentioned, but it's also an element of product portfolio and in that context we can grow vertically but also horizontally. And you know Evoque, as C.R. mentioned already, is coming in the market from September onwards, so we will see also growth out of the product portfolio.

: Excuse me. You'll get the opportunity, sir.

: Okay. I'll come back in the queue. : Yes, please sir.

: Sir, right here, behind you. Srinivas from Deutsche. Two questions sir, first on JLR, I mean you have always mentioned that this last year that the sharing of platforms will be something which JLR probably is a bit behind its key competitors. So where are we - or how do we see that over the next two, three years? Is Evoque a first example of that step? That would be my first question.

: For us as a group it's important to think about how can we maximize what we get out of our platforms. By the way that is the same - exactly the same challenge and issue on the Tata side as well as on the JLR side.

Sharing platforms normally makes sense if you have a small volume or certain niches you want to occupy where going in with your own platform doesn't make sense. Currently, we have so many opportunities to grow into significant segments that the question for us is how can we achieve this with a reasonable number of platforms before we go and share. We have experience in sharing and the - sometimes the problem in sharing platforms is you considerably expand the complexity because every platform you share has different technical standards, particularly if you go into electrical sharing. So one of the problems of JLR, which we are working through is that the current product portfolio is derived from different parents. The old Range Rover is from the - is a BMW heritage; we have a lot of Ford sort of joint activities. So we have to make sure that our - in future our activities, on both sides by the way, are streamlined. We minimize the number of platforms and yet achieve the maximum out of these platforms; that's really what we have to achieve. And you typically first look into your own opportunities before you go outside.

: And does Evoque kind of share any parts or modules with the existing product lineup of JLR?

: Overall, I guess we should forget about this word platform, because how else will you define it. But I see the spirit you talk about behind. I guess it's a question of how we can optimize an intelligent modular approach because in the premium segment, whenever you see - and look at our product portfolio we already have a very interesting volume base, and therefore I can - guess we can play. What the Evoque really show is that you will see the latest electronical (sic) [electronic] (18:42) architecture in the vehicle, which is also from a [ph] spirit but not quite (18:47) - not similar and not just a copy in the XJ, so the logic behind the full connectivity, the whole capability that's all now in the Evoque.

: Fair enough. So one more question just to maybe - Mr. Tata can comment on that. Daimler is or Mercedes- Daimler is now probably a very formidable competitor for you both in JLR and in India, the BharatBenz, which they have announced. Clearly, I see some product development and relative to your Indian capabilities, I would probably say they're ahead. So how do you - and that's been probably one of the, I would say bugbears for Tata Motors in India, product development of products have not come on time as even management has visualized. So do you think that changes over the next couple of years?

: First of all if size in the automotive industry would be the only thing that matters, I think the auto industry would look very different. And I think over the course of the last 10 years we have all learned that size is not everything and size is not the only thing that matters. It's about nimbleness, speed, getting products out in good quality fast. That's what we are working on, we have worked on, and we will be working on. And I think we clearly will improve the way

how we bring our products to market, but I think over the course of the last years we have made great progress already and we'll make further progress.

: Thank you. : Yes?

: Yes, sir. Sahil from ENAM. I have a question again on JLR. We have maintained that up to Q3 that the average CapEx and R&D would be about £1 billion or so, but in the latest presentation we've increased that to £1.5 billion or so. Can you just throw some light in terms of where the incremental number is going to be spent at?

: I can't comment specifically on the incremental spending between £1 billion to £1.5 billion. Yes, the capital spending is higher than what we had mentioned earlier. And again, giving a directional answer, it will be on the average about £1.5 billion going forward for the next few years. There have been further projects that we had separately talked about including investments of the China project or possible investments in some Indian manufacturing. C-X75, these are some of the newer additions that we had contemplated. And I have given you a more rounded number, which should be directional going forward.

: But, we expect this to start from this year itself? : Sorry?

: We expect to spend this kind of money from FY'12 itself? : That's right.

: All right. And one more question, sir. We have mentioned earlier that as part of the turnaround in JLR, we've managed to get a lot of cost savings, just wanted to get a sense of where we are today in terms of some of those savings especially sourcing from low-cost countries, et cetera, and what's the way forward there?

: Already, since quite a while ago, a very, very intensive transformation program was set up and even in better times, you try to turn every cent three times in order to inject it in additional products, in growth in the PT factory so to speak. So we are trying to do simultaneously the restructuring and the sustainable growth in order to get the leading edge results. And I guess we are on good track as you can see out of the figures.

: All right sir, thank you.

: Yes, sir, please. Sir, please ask your question.

: Okay. Sir, this is Hitesh from Kotak. Basically, I wanted to ask, we are hearing that incentives in JLR have started to increase in key markets like U.S. So can you comment about that?

And secondly, then on the - is there any volume targets that management has for Evoque going forward? I mean how the product mix would look like?

: Incentive overall, I don't know what you - how really you defined incentive and you think - overall, incentive, I don't see anything in contrary saying incentive for the Evoque is decreasing.

: The next question please? Yes. It's coming from the rear. Please - yes, sir.

: Okay. This is Chirag from Emkay. First, on the quarterly if I can ask, on the standalone side the margins have actually dropped sequentially. Is there any specific cost item which is kind of a lumpy impact or a one-off kind of impact?

: No, there are no one-time or lumpy items. Throughout the year we have been cautioning on cost pressures particularly on account of commodity price increases. While we have been making price increase on our products and we have also been focusing on cost reduction, we always cautioned about some timing mismatch between the cost increase and the recovery that has been a contributing factor creating pressure on the

margins.

: Okay. So is it right to assume that most of the commodity pressures and cost pressure are there in this quarter or there is some spillover effect?

: I would never say it is right to assume cost pressures are over. : Okay. Okay. And

: It will continue to be a challenge

: Okay. And on - if I look at the subsidiaries apart from JLR, there is also a drop in performance, so is there again anything specific over there which is there

: No, there are no : - for this particular quarter, fourth quarter?

: No, there are no specific write-offs or onetime items, but overall if you look at the year, there has been a slight decline in performance in Tata Daewoo due to some specific circumstances they went through on the distribution side. Tata Technologies has significantly improved its performance over the previous year; Tata Motor Finance has more than tripled its performance profit-wise. HVAL/HVTL have performed exceedingly well. So I would say overall, the other subsidiaries, the performance has been quite good this year.

But in specific answer to your question, no specific write-offs or one-time items.

: Okay. And last question on this quarterly is what would be the product development expenditure for JLR, [ph] indeed (25:50) through P&L that you must have routed, because EBITDA number that has been stable?

: Overall for the year the total capital expenditure, including product development spend in JLR was about £775 million, close to about £800 million. I don't have the separate - your question was on Q4, I presume?

: Yeah, Q4 annual that has been routed through P&L.

: Yeah, I don't have the specific Q4 number here, but I'll share it with you later.

: Okay.

: The annual spend was about £775 million.

: Okay. And if I can take one question, between Jaguar and Land Rover, how do you think the profitability of these two business lines - or these two product streams would move ahead? I presume Land Rover is a much more profitable product. Can Jaguar close the gap between the two or the structure of the product is such that the profitability cannot really change significantly?

: Look it's our old strategy to leverage the opportunities these two brands give us together. And with this you should expect us - that it makes less sense to separate the profitability of the one or the other brand. They share increasing certain dealer outlets for example, the sales organization, in future probably production sites, engines, transmissions, technologies and so on and so forth. So it makes less and less sense to really separate the profitability and by the way we've never given separate profitability of the brands.

: Because it's [indiscernible] (27:16) : Sir, we'll rotate the opportunity please. : [ph] Oh, sure. (27:20)

: Sir, you had a question there, right? [indiscernible] (27:22). Yes, sir.

: Yeah, I am Sanjay Parekh from ICICI Prudential Mutual Fund. Congratulations on a great set of numbers. Sir, I just wanted to understand the CapEx of JLR. Earlier we were estimating £700 million to £800 million [indiscernible] (27:31). So when you plan for your CapEx for the next five years, what sort of threshold returns do you envisage when you decide this? I mean certainly the character of the business needs capital, that's for sure, and what sort of benefits you would get in terms of maybe cost reductions or market expansion, if you can guide us that would be helpful.

: I think there are two questions mixed in that one. Your first question was relating to the overall capital expenditure spend in JLR and product investments and what type of threshold returns we would expect, did I understand correctly?

: Yes, sir.

: Okay. You have seen the profitability performance of Jaguar Land Rover. With the new product spend we definitely would hope to maintain the current levels of its profitability and hopefully enhance it even further. And in a business like this as volumes improve you would also expect significant scale advantages and operating leverage to benefit us. I'm sorry, I think, I missed your second question.

: Yeah. So in terms of - if you can - if it's £1.5 billion say per annum and let's say it is going on for four, five years, then

: Yeah.

: So, if you are taking £1.5 billion per annum and it goes for four, five years, if you can get some sort of benefits that we'll get from this $7.5 billion over next five - £7.5 billion of next five years in terms of new markets. Get some idea of what sort of benefits we'll get and that will help.

: Overall, we can say, as I mentioned earlier, we can grow two-fold, first from the geographical footprint and there we have a lot of opportunity, I mentioned China already. But there is also Russia, South America coming up, where we have to increase our network and we can do even better.

In addition, whenever you look to the landscape of our product portfolio, you can see immediately at the very first glance that there are a lot of opportunities to grow and this is the investment for further growth of [indiscernible] (29:58) products. So overall, 40 major product actions within the next five years, that's a huge commitment, that's a most ambitious product program for both Jaguar and Land Rover in the history of both brands.

: Say your question.

: Thanks. This is Sonal Gupta from UBS. Sir just wanted to understand one on JLR - Jaguar Land Rover, in terms of you mentioned about setting up new engine capacity. So what are your plans in terms of - are you looking at - I mean continuing a collaboration with Ford or do you want to be independent in terms of that? And doesn't that - given the sort of scale you have on the JLR side, doesn't that increase maybe your capital intensity because then you'll have to pursue on the engine side as well on all the technologies. So just two first question was on that.

: Well, firstly, we have a very good relationship with Ford. It's a solid relationship and we will continue for many years to come. You know, we - this relationship will definitely not end before late in this decade and then we can still decide whether we extend or not.

On the other hand, we also have to decide, as we grow, are we able to deliver an engine program with a critical - at a critical scale and which would give us benefits in terms of fuel economy, performance and let's not forget as Jaguar Land Rover, we have to stay at the forefront of powertrain technology. Also combining these engines with hybrid for example, we have to prepare to do that. So the requirements on us is - on our product in particular are extremely high and we have to see where do we get it from.

Secondly, we have to look into what is long term the best commercial solution and once you achieve a certain critical scale, we think and we believe and we have looked very intensively in it, we can deliver an engine program successfully. It will help us commercially significantly and it will probably long term give us a better returns and better product and better fuel economy, and let's not forget the future in this segment will be 80% full cylinders, hybridized full cylinders most probably if you think 10, 15 years ahead.

So I think you would expect from us that we look into, shall we do such an engine program ourselves or not, but if we do it how can we leverage the fact that Jaguar Land Rover is now within the Tata Group and how can we leverage sort of what Tata can offer to Jaguar Land Rover, that's the second question, which we think these opportunities are significant, so I don't want to come to a conclusion, I'm just saying this is a current ongoing thought process, probably we'll come to an end in not too distant future, but it could create a tremendously interesting opportunity for Jaguar Land Rover and for the Tata Group combined.

: And just a follow-up on the JLR side, so I mean given the amount of investment you're making right now on the product development side, so do we see you sort of significantly going for a significant growth strategy because you've mentioned that we want to be a nimble [ph] footed (33:30), it doesn't really matter in terms of the number of volumes, but do we see that four or five years or six years down the line you are looking for volumes to double or even more than that in terms of your strategy?

: With Mr. Tata and Mr. Kant here, the two gentlemen have invested in a tremendous opportunity and I think three years down the road we can already see how these opportunities unfolding in terms of growth and profitability. You would expect us not to stay put and not to continue to grow. All we're saying we are not driven by volume and we are not announcing volume growth as the primary, we want to grow profitably.

We believe we have tremendous opportunities for growth and we will go after the opportunities and that's why we invest. We invest as the business is generating more cash we invest and we're able to invest more to go after these opportunities. Ultimately, it is exploiting the opportunities these brands offer globally. I think that's our job and that's what we're going to do.

: Thank you. Just a final question on the domestic side, given that on the passenger vehicle side we've seen clearly, I mean Nano has done well, but the other brands have really been under pressure, especially in the last couple of months. So any comments on how you are shaping - reshaping your strategy on the passenger vehicle side and what is the goal for the company now?

: Look - if you look into the various opportunities, let's - first of all, you see that we are building the Nano. Our constraint on Nano continues to be how quickly can we ramp up a capable sales network and a capable sales force and a well-trained sales force. That's our biggest constraint right now. It's not production, it's not demand. Its how quickly can we build this sales force, that's on Nano and we'll continue to build that.

You know that the feedback on the product is excellent, our customers are very happy with the product and so we will continue to grow. If you look at the other products, that is clearly a segment which is under very, very heavy competition, but you will see, for example, that with our recent initiatives in terms of fuel economy which is coming exactly at the right point in time, the 25 kilometers per liter, that has been very well received.

So what we will do is we will continue to focus to segment Indica, Indigo, Vista and Manza in the respective segments and to do both wherever important to grow volume and margin and where the product have good margins to go for volume. Particularly on Indigo and Indica, we are clearly going for more volume and you will see that in the near future.

The third area, are the UVs where we also believe we have significant opportunities. We are currently recruiting 100 focused UV dealerships because we have seen that with our breadth of our product portfolio in India, we are coming to the limit of what a dealer can really sort of deliver in a focused manner, it's almost too broader product portfolio in too many different segments. So we are currently recruiting 100 specialized UV dealerships in order to boost our UV volume and you will see that unfolding over the month to come.

And by the way, I should also mention that expanding the field force and the dealer network, I should mention the Nano dealer network. We're also massively increasing the dealer network for the Nano, particularly in rural areas and we are looking at a smaller, a smaller format for a profitable Nano dealership in the rural markets, and we're currently already recruiting the first such small specific Nano dealer outlets for the rural markets. So these are the activities and with this we will continue to see our volume growing.

: Sir, this is [indiscernible] (38:02). Nano is not just very, very dear to Mr. Ratan Tata, but it is a people's car as perceived down the globe when it was launched. I think as you mentioned that production is not a constraint, I personally believe it's time for the launching of Nano in various markets around the globe, because the world is looking at a product of a little genie like Nano across the globe in view of so many certain economic tightness and conditions prevailing. Would like to have your comment on the export initiatives around the globe of the Nano?

: You will see the first announcement very shortly

: Yes.

: - our first export in markets which we open up for Nano. As we're looking into Nano opportunities in many markets you also have to locally assemble the Nano. And this you tend to have to combine with other products, which is normally takes a bit longer and needs a bit more thorough diligence before we can start this. So we're looking into other markets and the opportunities there, most of which then sort of contain some sort of assembling or manufacturing operations, which always takes a bit longer, you need a local partner thus you can't just decide an export, you have to build that business. We are working on such projects and as soon as we are concluded with the local partners, we'll announce that.

: And can we look at the Nano sales for the next financial year to touch the full capacity of 3 lakh cars?

: Look, we do tell - we typically don't make volume forecast, because volume forecast hinges on what does the market do and how does the market develop. For us, it's important we will continue fast ramp up of the sales volumes. I can't tell you exactly when we'll reach the capacity.

: Thanks and all the best.

: This is - hello, this is [indiscernible] (40:03). You have raised about £1 billion in JLR additional debt, which you have mentioned that you will retire older debt and substitute it with this £1 billion that you have raised. What is this debt that you're hoping to retire? That's my question number one.

And two, if I look at your partnerships in the automobile world, you are partnered with Fiat in India; you are partnered with Ford by virtue of JLR. You've also partnered Fuji in engine development. You've partnered Volvo; Volvo is now with a Chinese company. How do you look at all these partnerships together fructifying your goals ahead or are you really looking at any partner to be - partner with any partners?

: I think some of the information, I think, is not completely correct. We have not partnered with Volvo, for example. By the very nature of our past sort of call it family relationship, we are sharing some components and some call it elements of the Freelander platform with some vehicles on the Volvo side. That's not a partnership yet.

We have a good partnership with Ford and we'll see how we can develop that. Further partnerships, I - we are looking into it, nothing to report out right now. But as you see partnerships typically are develop in very specific areas, for certain specific projects, for certain specific markets, or for certain specific components and powertrains. And those are the areas you typically look into it and the most important partnership we have is the one with Ford with engines, which will continue as I've stated before.

: As I remember there was also a question on the repayment of debt in JLR, totally about £1 billion have been raised, out of this about £250 million has been repaid to Tata Motors out of the funding that we have provided during the crisis period.

: That was preference capital, right?