you are here:

Tata Investment Corporation Ltd.

BSE: 501301 | NSE: TATAINVEST |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE672A01018 | SECTOR: Finance - Investments

BSE Live

Nov 26, 16:00
1442.50 -42.20 (-2.84%)
Volume
AVERAGE VOLUME
5-Day
5,365
10-Day
5,714
30-Day
14,630
5,153
  • Prev. Close

    1484.70

  • Open Price

    1469.10

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    0.00 (0)

NSE Live

Nov 26, 15:58
1447.65 -38.10 (-2.56%)
Volume
AVERAGE VOLUME
5-Day
31,548
10-Day
28,965
30-Day
124,004
32,095
  • Prev. Close

    1485.75

  • Open Price

    1476.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    1447.65 (8)

Annual Report

For Year :
2019 2018 2017 2016 2015 2014 2013 2012 2011

Director’s Report

TO

THE MEMBERS,

The Directors present their Eighty Second Annual Report with the Audited Financial Statements for the year ended 31st March, 2019.

1. FINANCIAL RESULTS (under Ind AS) :

Standalone

Consolidated

(Rs. in crores)

Previous Year (Rs. in crores)

(Rs. in crores)

Previous Year (Rs. in crores)

Dividend, Interest, Net gain on Fair Value changes & Others

181.74

160.87

177.05

157.71

Other Income

0.10

0.10

0.10

0.10

Total Income

181.84

160.97

177.15

157.81

Total Expenses

21.21

18.98

21.31

19.25

Share in Profit and Loss of Associates

-

-

(8.90)

8.38

Profit before tax

160.63

141.99

146.94

146.94

Less: Current tax and Deferred tax

12.98

15.35

13.12

15.82

Profit after tax

147.65

126.64

133.82

131.12

Less: Non Controlling Interest

-

-

(0.04)

(0.05)

Profit attributable to equity holder of the Company

147.65

126.64

133.78

131.07

Earnings Per Share Basic and Diluted (Rupees)

27.02

22.99

24.48

23.79

Opening balance of retained earnings

577.45

504.32

669.33

588.06

Profit for the year

147.65

126.64

133.78

131.07

Other Comprehensive Income (OCI)

(0.49)

(0.20)

(0.44)

1.89

Realised gains on equity shares carried at fair value through OCI

118.78

113.54

118.72

116.24

The Directors have made the following appropriations -Dividend (including tax on dividend)* (Refer Para 3)

132.85

119.35

132.85

119.35

Buy Back expenses

3.47

-

3.47

-

Transfer to Statutory Reserve

29.53

47.50

29.87

48.60

Closing balance of retained earnings

677.54

577.45

757.81

669.33

* Pertaining to dividend for the Financial Year 2017-18, paid in 2018-19

2. OPERATIONS :

The Standalone Operating Income of the Company is derived from a mix of dividend, interest income and other income. The profit from sale of long-term equity investments (post tax) for the year ended 31st March, 2019 is Rs. 118.78 crores as compared to Rs. 113.54 crores for the FY 2017-18 which have been carried at Fair Value through Other Comprehensive Income. The standalone profit before tax for the year under review is Rs. 160.63 crores as against Rs. 141.99 crores for the FY 2017-18, whereas the profit after tax for the year under review stands at Rs. 147.65 crores as against Rs. 126.64 crores for the FY 2017-2018. The Consolidated profit after tax for the year amounted to Rs. 133.82 crores as compared to Rs. 131.12 crores for the FY 2017-18.

The total number of companies held in the equity / bond portfolio of the Company stands at 91 as on 31st March, 2019, out of which 70 are Quoted and 21 are Unquoted companies.

3. DIVIDEND :

The Directors are pleased to recommend a dividend of Rs. 20 per share (200%) on the paid up capital of Rs. 50.59 crores aggregating Rs. 121.99 crores including dividend distribution tax. In FY 2017-18, the Company had paid dividend of Rs. 20 per share (200%) including a Special Dividend of Rs. 2 per share (20%) .

4. TRANSFER TO RESERVES :

The closing balance of the retained earnings of the Company for FY 2018-19, after all appropriation and adjustments was Rs. 677.54 crores.

5. IMPLEMENTATION OF IND AS AND ITS IMPACT :

The Ministry of Corporate Affairs, in its press release dated 18th January, 2016, had issued a roadmap for implementation of Indian Accounting Standards (Ind AS) for Non-Banking Financial Companies (NBFCs). This roadmap required NBFCs to prepare Ind AS based financial statements for the accounting periods beginning from 1st April, 2018 onwards with comparatives for the periods beginning 1st April, 2017. Accordingly, the Company has prepared the accompanying financial statements as per Ind AS with the comparative financials for the FY 2017-18.

The implementation of Ind AS has resulted in significant changes to the way the Company has been preparing and presenting its financial statements from the erstwhile Indian GAAP. The areas that have significant accounting impact on the application of Ind AS based on the Ind AS mandatory exceptions and the optional exemptions elected by the Company, are summarised below:

- Investment in Equity Instruments and Fixed Income Securities are measured at Fair Value through Other Comprehensive Income (OCI). The realised gains/losses on sale of equity investments, other than fixed income securities, are reclassified to retained earnings from OCI which forms part of Other Equity in the Balance sheet.

- Investment in Mutual funds and Venture Capital funds are measured at Fair Value and change thereon are carried through the Statement of Profit and Loss.

- Interest income is recognised in the income statement using the effective interest method, whereby the coupon, fees net of transaction costs and all other premiums or discounts will be amortised over the life of the financial instrument.

- Gains realized on divestment of fixed income securities is recognised through Statement of Profit and Loss.

Therefore, following the transition to Ind AS, the operating income of the Company now mainly constitutes dividend, Interest income, gains or losses on sale of fixed income securities and change in fair value of investments classified through statement of profit and loss. Gains or losses on sale of equity investments, which hitherto had been disclosed in statement of profit and loss under erstwhile Indian GAAP, has been reclassified to retained earnings from the Other Comprehensive Income which has led to a significant reduction in the operating income of the Company.

6. VALUE CREATED :

Shareholders will recall that for the first time in the Annual Report of 31st March, 2015 the Company had shared the “Value Created” over a 15 year period. The table below analyses the performance of the Company’s portfolio rolling over the period to the 15 years prior to the closing of the current financial year 31st March 2019. “Value Created” is a measure which evaluates the wealth created net of the capital invested by the shareholders. “Value Created” is the Realisable Value of Investments as on 31st March to which is added Net Other Assets and Fixed assets while any contribution from shareholders is reduced (i.e. equity and share premium). The following table shows the Value Created over 15 year period and comparative returns to the Benchmark.

Year End Realisable Value (31st March) of I nvestments ( A )

Net Current Assets ( B )

Shareholder Funds (Equity Share Premium) ( C )

Value Created (A) (B)-(C)

BSE 200

(Rs. crs)

(Rs. crs)

(Rs. crs)

(Rs. crs)

2004 1,184.76

(13.82)

77.09

1,093.85

733.53

2019 9,340.91

9.96

355.12

8,995.75

4907.57

Nos of times (X)

8.22

6.69

CAGR

15.08%

13.59%

Shareholders will be pleased to note that the “Value Created” has recorded a compounded annual growth rate (CAGR) of 15.08% vis-a-vis the BSE 200 CAGR of 13.59% for the 15 year period 31st March, 2004 to 31st March, 2019. It is heartening that this performance has been achieved while the management has endeavoured to reduce risk of the portfolio with a prudent allocation to unlisted equity and fixed income securities.

The Company has consistently declared dividend which over the last 15 years has aggregated Rs. 1,370 crores. Incrementally during the current year, the Company has carried out a Buyback of Rs. 450 crores. Thus, if the value of dividend and capital distributed were to be added to Value Created, the multiplier and returns of the portfolio would stand enhanced.

7. BUY BACK OF SHARES :

The Board of Directors of the Company at its meeting held on 16th November, 2018, had approved buyback up to 4,500,000 equity shares of Rs. 10 each, on a proportionate basis, at a price of Rs. 1,000 per equity share payable in cash for an aggregate consideration not exceeding Rs. 450 crores by way of a Tender Offer route through Stock Exchange Mechanism. The value of the Buy Back equals 23.17% of the paid up equity share capital and free reserves and representing 8.17% of the paid-up capital of the Company. The shareholders will appreciate that the buyback was made at a substantial premium of 42% over market price on the date of announcement. The Company has successfully completed the Buy back and 4,500,000 shares were extinguished on 22nd February, 2019.

The shareholders will be pleased to know that after the aforesaid distribution, the fair value of our portfolio stands at Rs. 9,341 crores as on 31st March, 2019.

8. MANAGEMENT DISCUSSION & ANALYSIS :

A summarised position of the company’s portfolio of investments is given below:-

As on 31.03.2019

As on 31.03.2018

( in crores)

( in crores)

QUOTED INVESTMENTS

Net Book value

1,784.40

1,975.13

Market value

8,511.32

8,761.41

UNQUOTED INVESTMENTS - (including Mutual Funds)

Net Book value

435.17

546.26

Estimated value (please see para below)

829.59

940.71

TOTAL BOOK VALUE

Net Book value of all investments

2,219.57

2,521.39

TOTAL MARKET VALUE

Total market value of quoted investments and estimated value of unquoted investments (subject to tax as applicable)

9,340.91

9,702.12

BANK DEPOSITS AND INTERCORPORATE DEPOSITS

10.00

10.00

TOTAL NUMBER OF COMPANIES (excluding Mutual Funds)

91

109

Total Equity per Share

After tax (Rs.)

1,546

1,485

The Directors confirm that all the investments have been made with the intent to hold for long term appreciation, to enhance the income from dividends and are not held for trade.

The Company continues to remain invested in leaders in sectors, which we believe have potential to remain value accretive over the long term. The Company continues to invest for the long term while availing opportunities to realize gains endeavouring to maintain its policy of consistent dividend distribution.

The Company invests in Tata and Non-Tata companies, both listed and unlisted, though investments in Tata companies constitute a larger portion and may be considered for a longer term and are strategic in nature.

The Company endeavours to evaluate opportunities considering the macro economic conditions both globally and domestically.

Global Equity Market Trends

The calendar year 2018 proved to be challenging for investors globally, particularly in the last three months of the year ending December 2018. Parallelly in India the calendar year 2018 was littered with a series of events which had left investors with a feeling of uncertainty and despondency.

The MSCI world Equity Index recorded a fall of 8.71% during the calendar year 2018 and the MSCI Emerging Markets Index recorded a fall of 14.57%. Global indices gained 6.1% in the first three quarters of 2018 but fell more than 12.0% in the fourth quarter of 2018.

Strangely, the last quarter of Financial Year 2018-19 the sentiment changed, and all markets moved northwards with the MSCI World Index appreciating 7.89% whereas the Emerging Markets Index rose only 9.67% considerable short of the fall in the previous year.

Year

MSCI World

MSCI Emerging Markets

% Return

% Return

2019 Q1

7.89

9.67

2018

(8.71)

(14.57)

2017

22.40

37.28

The Indian market too corrected almost 14% from its life time highs in August 2018 when the SENSEX reaching almost 39,000 down to 33,350 in December 2018. The investment community was considerably relieved with the rise in the markets post budget from February 2019 on the back of substantial FII flows leading to the Sensex breaching its life time high and closing above 39,000 on 31st March, 2019.

It should be noted that the rise in the markets has been narrow with only the very large cap companies recording positive returns. Only five companies attributed to 80% of the rise in the Sensex in the financial year 2018-19 with two companies contributing to only 50% of the rise.

The Indian macroeconomic and business scenario is perhaps not as buoyant and healthy as the markets are discounting. GDP growth has softened, companies are reporting tepid growth, NPAs are still rising, lower Auto and FMCG demand, all weigh upon sentiment and valuations and thus the lack of breadth in equity performance.

Another area of concern is the fall in household savings which have fallen to two decade low to 17.2% of GDP in FY18 vs. 25.2% of GDP in FY10. The main reason for the dwindling household savings is a sharp jump in household financial liabilities, which have nearly doubled from Rs. 3.9 trillion in FY16 to Rs. 7.4 trillion in FY18, may be due to surge in unsecured lending from Banks, Micro finance and NBFCs.

On a brighter note, it was heartening to see that GST collection has finally moved up and crossed Rs. 1.1 lac crores for the month of April 2019. The biggest fear for the economists was that GST will fuel inflation and for the assessees that an online system will never succeed. Both these fears have been negated with the business community relieved of dealing with myriad departments of the 17 to 18 different state and centre related taxes which were subsumed in GST and economists pleased with the retail price inflation touching a low of 1.97 % in January 2019 falling from as high as about 5% in FY 17 - 18 when GST was introduced.

Another development which deserves attention is the growth in deposits in ‘Jan-Dhan’ accounts, a version of nofrill accounts and the basic savings accounts launched in August 2014, intended as a first step in increasing financial inclusion across India’s population, have inched close to the Rs. 1 lakh crore. As on 3rd May, 2019, deposits in Jan-Dhan accounts stood at Rs. 98,874.5 crore, spread across 35.54 crore beneficiaries. Deposits in such accounts have risen by 22 percent over the previous year. Average account balance in the Jan-Dhan accounts stood at Rs. 2,782 in April, 2019 compared to Rs. 838.8 at the end of the scheme’s first phase in January 2015. This is a incredible success story and is now being closely studied and implemented by many other countries.

Expectedly, the aforesaid reforms have laid the foundation for buoyant equity markets in the future. GST is leading to formalization of the economy which is helping organized retail, Jan-Dhan accounts has strengthened the liability side of PSU Banks and will lead to plethora of opportunities to market products for Banks, Insolvency and Bankruptcy Code has brought a discipline into the workings of companies resulting in reduction of excess debt in balance sheets.

A trend which is now catching favor globally is Industry consolidation. This is happening in India too. There is a visible consolidation in a few industries namely, airlines, telecom and real estate developers leading to disruption and breakdown of many weaker players. This has unfortunately led to rising unemployment, higher NPAs for Banks and NBFCs, and large write offs in the income statements of creditors as seen in the Jet Airways scenario. The emergence of strong leaders in industries which are consolidating brings forth investment opportunities. In financial markets it is commonly referred to as “Value Migration”.

In the last year your company has rationalized its portfolio and remains invested in leaders increasing its holdings based on review and analysis of the potential of growth. The shareholders will observe that your company has a portfolio well represented by leaders in private banks, housing finance companies, consumer facing companies, infrastructure and engineering, automobiles and pharmaceuticals. We remain invested in high quality companies which will record competitive revenue and earnings growth. In the year to come your company will continue to identify opportunities in select sectors which the management believes have potential to grow your wealth.

To summarize, the path to rejuvenation of the Indian economy to higher growth as experienced in the years 2007 to 2010 remains a quandrum. However, there are silver linings in the clouds of low growth primarily higher capacity utilization but how far this will sustain over the year only time will tell. Data released by the Reserve Bank of India says that capacity utilization at 75.2 per cent in the quarter ended March 2018 the highest in last two years. Economists, however, caution that corporate capacities are still far away from the 83.2 per cent recorded in March 2011.

Valuations remain rich which may lead to lower appreciation than what the market has rewarded shareholders in the last few years. We will continue to look for opportunities both in the listed and unlisted space.

9. FIXED DEPOSITS :

The Company has not accepted any deposits from the public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :

The provisions of Section 186 of the Companies Act, 2013 (“Act”) pertaining to investment, guarantee and lending activities is not applicable to the company since the Company is an NBFC whose principal business is acquisitions of securities. During the year under review, the Company has not provided any guarantee.

11. CONSOLIDATED FINANCIAL STATEMENTS :

The Consolidated Financial Statements of the Company form part of the Annual Report.

The annual accounts of the subsidiary company and related detailed information are available on the website of the Company and are kept at the Registered Office of the Company and its subsidiary company and will be available to investors seeking information at any time during the business hours.

The consolidated financial results reflect the operations of Simto Investment Company Ltd. (Subsidiary), and the following Associate Companies namely Tata Asset Management Ltd., Tata Trustee Company Ltd. and Amalgamated Plantations Private Ltd.

The Company has adopted a Policy for determining material Subsidiaries in terms of Regulation 16(1)(c) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). The Policy, as approved by the Board, is uploaded on the Company’s website at https://tatainvestment.com.

Subsidiary Company

The Company has a subsidiary Simto Investment Company Ltd. (“Simto”) which is registered as a Non-Banking Financial Company with the Reserve Bank of India. In terms of Regulation 16(1)(c) of the Listing Regulations, Simto is not a material unlisted subsidiary. Simto is engaged in investment activities which allocates capital in the markets to participate in activities other than making investments for the long term which has been the primary activity of the Company for many decades.

Simto has an Issued Capital of Rs. 1.53 crores with a net worth of Rs. 53.63 crores as on 31st March, 2019.

Associate Companies

a. Tata Asset Management Ltd.

The Company holds 32.09% of the equity share capital of Tata Asset Management Ltd. whose principal activity is to act as an investment manager to Tata Mutual fund and the company is registered with Securities and Exchange Board of India (“SEBI”) under the SEBI (Mutual Fund) Regulations 1996. The consolidated turnover of the company during the year was Rs. 209.69 crores and Profit after tax for the year was Rs. 23.80 crores. The company has a net worth of Rs. 256.77 crores as on 31st March 2019.

b. Tata Trustee Company Ltd.

The Company holds 50% of the equity share capital of Tata Trustee Company Ltd. which is acting as the Trustees to Tata Mutual Fund. During the year under review, the turnover of the company was Rs. 6.38 crores and Profit after tax for the year was Rs. 3.37 crores. The company has a net worth of Rs. 16.46 crores as on 31st March, 2019.

c. Amalgamated Plantations Private Ltd.

The Company holds 24.61% of the equity share capital of Amalgamated Plantations Private Ltd (“APPL”) which is engaged in the business of cultivation and manufacturing of tea and other allied agricultural products and packaging services. The turnover of APPL during the year was Rs. 680.08 crores and registered a loss of Rs. 68.04 crores during the financial year 2018-19.

A statement containing the salient features of the financial statements of the subsidiary company and associate companies is annexed to the Financial Statements in Form AOC-1 “Annexure A”

12. DIRECTORS’ RESPONSIBILITY STATEMENT :

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory and secretarial auditors including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company’s internal financial controls were adequate and effective during the financial year 2018-19.

Accordingly, pursuant to Section 134(3)(c) and 134(5) of the Act, the Board of Directors, to the best of their knowledge and ability, confirm that: -

i) in the preparation of the annual accounts, the applicable accounting standards have been followed and that there are no material departures;

ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively;

vi) They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

13. RISK MANAGEMENT :

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Regulation 17(9) of the Listing Regulations. It establishes various levels of risks with its varying levels of probability, the likely impact on the business and its mitigation measures.

The Internal Auditor evaluates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Asset Liability Risk Management and IT Strategy and Steering Committee oversees the Risk Management and reports to the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status from time to time.

14. INTERNAL CONTROL SYSTEMS :

The Company maintains appropriate systems of internal controls, including monitoring procedures, to ensure that all assets and investments are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances and are meant to ensure that all transactions are authorized, recorded and reported correctly.

The Internal Auditors reviews the efficiency and effectiveness of these systems and procedures. Added objectives include evaluating the reliability of financial and operational information and ensuring compliances with applicable laws and regulations. The Internal Auditors submit their Report periodically which is placed before and reviewed by the Audit Committee.

15. VIGIL MECHANISM / WHISTLE BLOWER POLICY :

The Company has adopted a Whistle Blower Policy to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company’s Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. During the year under review, the Company amended the Whistle Blower Policy to provide a clause wherein all employees of the Company are eligible to report any instance of leak of Unpublished Price Sensitive Information. The Policy, as approved by the Board, is uploaded on the Company’s website at the web link: https://tatainvestment.com/images/Whistle_Blower_Policy.pdf.

16. RELATED PARTY TRANSACTIONS :

All Related Party Transactions that were entered into during the FY 2018-19 were on an arm’s length basis, in the ordinary course of business and were in compliance with Section 188 of the Act and the Listing Regulations. There were no materially significant Related Party Transactions made by the Company with Promoters, Directors, Key Managerial Personnel which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained for the transactions which are repetitive in nature. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature, value and terms and conditions of the transactions, if any.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company’s website at the web link: https://www.tatainvestment.com/images/RelatedParty_Policy.pdf. During the year under review, the Company amended the said Policy in line with the amendments to the Listing Regulations.

There are no transactions to be reported in form AOC-2 and hence it does not form part of the Report.

The details of the transactions with Related Parties are provided in the accompanying financial statements.

17. CORPORATE SOCIAL RESPONSIBILITY (CSR) :

In terms of Section 135, Schedule VII and applicable Rules of the Act, Board of Directors has constituted a CSR Committee under the Chairmanship of Mr. F. N. Subedar. Mr. Z. Dubash and Mr. A. N. Dalal are the other members of the Committee.

The CSR committee of the Board has framed a CSR policy and uploaded it on the website of the company https://www. tatainvestment.com/images/CSR_Policy.pdf.

The Annual Report on CSR activities is annexed herewith as “Annexure B”.

18. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE :

The Company has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act 2013 and the Rules thereunder. The Policy aims to provide protection to employees at the work place and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure. The Company has also constituted an Internal Complaints Committee, known as the Prevention of Sexual Harassment (“POSH”) Committee, to inquire into complaints of sexual harassment and recommend appropriate action.

The Company has not received any complaint of sexual harassment during the FY 2018-19.

19. DIVIDEND DISTRIBUTION POLICY :

In term of Regulations 43A of SEBI Listing Regulations, the Board of Directors of the Company has adopted a Dividend Distribution Policy, which is annexed herewith as”Annexure C”. The Policy is also available on the website of the Company at the link: https://tatainvestment.com/investor_information.asp.

20. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS :

There are no significant material orders passed by the Regulators / Courts which would impact the going concern status of the Company and its future operations.

21. BOARD AND COMMITTEE MEETINGS :

During the year under review, five Board Meetings were held. The details of the composition of the Board and its Committees and of the Meetings held and attendance of the Directors at such Meetings, are provided in the Corporate Governance Report. The Board has constituted an Audit Committee under the Chairmanship of Mr. H. N. Sinor, the other members of the Committee being Mr. P. P. Shah and Mr. F. N. Subedar. There have not been any instances during the year when recommendations of the Audit Committee were not accepted by the Board.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL AS ON 31ST MARCH 2019 :

Pursuant to the provisions of Section 152 of the Act and the Company’s Articles of Association, Mr. Noel N. Tata, Director, retires by rotation and, being eligible, offers himself for re-appointment.

Mr. A. B. K. Dubash retired as a Director from the Board of Directors with effect from 22nd September, 2018 and the Board of Directors place on record its sincere appreciation of his valuable support and guidance to the Board during his tenure.

Mr. Zubin Dubash was appointed as an independent director at the Annual General Meeting (AGM) held on 5th August, 2014 for a period of five years. Based on the recommendation of the Nomination and Remuneration Committee, his reappointment for a second term upto 16th March, 2020 is proposed at the ensuing AGM for the approval of the Members by way of special resolution.

Pursuant to the provisions of Section 149 of the Act, Regulations 16(1)(b) and 25(8) of the Listing Regulations, the independent directors have submitted declarations that each of them meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) and 25(8) of the SEBI Listing Regulations. There has been no change in the circumstances affecting their status as independent directors of the Company.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board/Committee of the Company. Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31st March, 2019 are: Mr. A. N. Dalal, Executive Director and Mr. Manoj Kumar C V, Chief Financial Officer and Company Secretary.

Brief particulars and expertise of directors seeking reappointment together with their other directorships and committee membership have been given in the annexure to the notice of the Annual General Meeting in accordance with the requirements of the Listing Regulations and Secretarial Standards.

23. ANNUAL EVALUATION OF BOARD PERFORMANCE AND PERFORMANCE OF ITS COMMITTEES AND OF INDIVIDUAL DIRECTORS :

Pursuant to the provisions of the Act and Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors individually as well as the evaluation of the working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for the Performance Evaluation process for the Board, its Committees and individual Directors, including the Chairman of the Company.

For evaluating the Board as a whole, views were sought from the Directors on various aspects of the Board’s functioning such as degree of fulfilment of key responsibilities, Board Structure and composition, establishment, delineation of responsibilities to various committees, effectiveness of Board processes, information and functioning, Board culture and dynamics, quality of relationship between the Board and the management.

Similarly, views from the Directors were also sought on performance of individual Directors covering various aspects such as attendance and contribution at the Board/Committee Meetings and guidance/support to the management outside Board/Committee Meetings. In addition, the chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and promoting effective relationships and open communication, communicating effectively with all stakeholders and motivating and providing guidance to the Executive Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition, effectiveness of meetings, Committee dynamics and quality of relationship of the Committee with the Board and the Management.

The performance evaluation of the Independent Directors was carried out by the entire Board. The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of individual Directors.

The Chairman of the Board provided feedback to the Directors, as appropriate. Significant highlights, learning with respect to the evaluation, were discussed at the Board Meeting.

24. REMUNERATION POLICY :

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The Remuneration Policy is stated in the Corporate Governance Report.

25. AUDITORS : STATUTORY AUDITORS :

M/s Kalyaniwalla & Mistry LLP, Chartered Accountants (Firm Reg. No. 104607W/W-100166), were appointed as Statutory Auditors of the Company from the conclusion of the Eightieth Annual General Meeting held on 21st August, 2017 till the conclusion of the Eighty-fifth Annual General Meeting to be held in the year 2022.

As per the provisions of Section 139 of the Act, they have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Audit Report of M/s Kalyaniwalla & Mistry LLP on the Financial Statements of the Company for the Financial Year 2018-19 is a part of the Annual Report.

SECRETARIAL AUDITORS :

Pursuant to provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Parikh & Associates, Company Secretaries, to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit Report is annexed herewith as “Annexure D”

The Auditors’ Report and the Secretarial Audit Report for the financial year ended 31st March, 2019 do not contain any qualification, reservation, adverse remark or disclaimer.

26. REPORTING FRAUD :

During the year under review, the Statutory Auditor and Secretarial Auditor have not reported any instances of frauds committed in the Company by its Officers or Employees, to the Audit Committee under Section 143(12) of the Act details of which needs to be mentioned in this Report.

27. SECRETARIAL STANDARDS OF ICSI :

The Company is in compliance with relevant provisions of the Secretarial Standards issued by The Institute of Company Secretaries of India.

28. CORPORATE GOVERNANCE :

The Annual Report contains a separate Section on the Company’s corporate governance practices, together with a certificate from the Company’s Auditors confirming compliance, as per SEBI Listing Regulations.

29. BUSINESS RESPONSIBILITY REPORTING :

A separate Section on Business Responsibility forms part of this Annual Report as required under Regulation 34(2)(f) of SEBI Listing Regulations is annexed herewith as “ Annexure E”

30. EXTRACT OF ANNUAL RETURN :

As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the extract of the annual return for FY 2019 is given in “Annexure F” in the prescribed Form No. MGT-9, which is a part of this report.

Further, the extract to the Annual Return of the Company can also be accessed on the Company’s website at http:// www.tatainvestment.com

31. CONSERVATION OF ENERGY, ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

Being an investment company and not involved in any industrial or manufacturing activities, the Company’s activities involve very low energy consumption and has no particulars to report regarding conservation of energy and technology absorption. However, efforts are made to further reduce energy consumption.

During the year under review, the Company’s expenditure in foreign exchange is Rs. 3.34 lacs and the Company did not have any foreign exchange earnings during the year.

32. PARTICULARS OF EMPLOYEES AND REMUNERATION :

The information required under Section 197(12) of the Act read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as “Annexure G”.

The information required under Section 197(12) of the Act read with Rules 5(2) and (3) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in the Annexure forming part of the Report. In terms of the first proviso to Section 136 of the Act, the Report and Accounts are being sent to the Shareholders excluding the aforesaid Annexure. Any Shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

A report on Corporate Governance, in accordance with Schedule V of SEBI Listing Regulations is set out separately for the information of the shareholders.

On behalf of the Board of Directors,

NOEL N. TATA

Mumbai, 10th May, 2019 Chairman

Director’s Report