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Voltas Ltd.

BSE: 500575 | NSE: VOLTAS |

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Series: EQ | ISIN: INE226A01021 | SECTOR: Diversified

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Annual Report

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

Director’s Report


To The Members

The Directors present their Sixty-Fifth Annual Report and the Audited Statement of Accounts for the year ended 31st March, 2019.

1. Financial Results

Rs. in Crores







Total Income

Profit for the year after meeting all expenses but before interest,





depreciation and exceptional items










Depreciation and amortization





Profit before share of profit/(loss) of Joint Venture and Associates and exceptional items





Share of profit/(loss) of Joint Venture and Associates



Exceptional items (Net)





Profit before tax





Tax expenses





Profit after tax





Other Comprehensive Income (Net)





Total Comprehensive Income





2. Reserves

An amount of Rs. 20 crores was transferred to the General Reserve out of Profit available for appropriation.

3. dividend

The Company’s Dividend Policy which is uploaded on the Company’s website, is based on the need to balance the twin objectives of appropriately rewarding its shareholders with dividend and of conserving resources to meet its future needs. Based on Company’s performance, the Directors recommend dividend of Rs. 4 per equity share of Rs. 1 each (400%) for the year 2018-19 aggregating Rs. 132.35 crores (2017-18: 400%). The Dividend Distribution Tax is Rs. 27.21 crores, which would get reduced to the extent of dividend received by the Company from its subsidiary companies. The dividend pay-out is in accordance with the Company’s Dividend Policy.

4. Operations

During 2018, world growth was estimated at around 3%, lower than growth rate for the previous years. In recent months, geo-political events such as trade tensions, sanctions, etc. have further affected global growth. In India also, there was a slowdown in the economy across 2018-19 due to the declining growth of private consumption, a tepid increase in fixed investment, and muted exports. However, India continues to be the fastest growing major economy and is expected to largely maintain the trajectory.

During 2018-19, the Company reported consolidated total income of Rs. 7,310 crores, with income from operations of Rs. 7,085 crores and profit after tax of Rs. 514 crores.

There have been no material changes and commitments, that affect the financial position of the Company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

Unitary cooling products Business Group (UpBG)

The year 2018-19 was very challenging with the AC industry recording a de-growth of 3%. The segment performance was muted due to erratic summer conditions and a soft festive season. With higher inventory in the channel as well as with manufacturers, the pressure on prices and thus on margins continued to be high. Increasing input costs and depreciated rupee, added to the industry’s woes.

Despite a challenging and competitive environment, Voltas continued to be the undisputed Market Leader with sales of over 1.2 million units and increased its market share (across Multi-Brand outlets) to 23.7% from 22.1% in the same period last year. The Company is focussed on expanding its reach across cities by appointing Distributors, Dealers and opening Brand Shops. The brand shops house the latest consumer durable products including ACs, Air Coolers, Commercial Refrigeration Products from Voltas as well as White Goods such as Refrigerators, Washing Machines, Microwaves/Ovens and Dishwashers from Voltas Beko.

Voltas has also acquired land admeasuring 65 acres approx. near Tirupati for manufacture and assembly of air conditioners and other related cooling products. Continuing its thrust on Research and Development, Voltas aims to create technologically advanced products which are expected to start rolling out from the later half of 2020. The chosen location provides dual benefits of superior market access and cost effective connectivity via road and port. The proposed factory will cater primarily to the South and West markets. The Company plans to invest over Rs. 500 crores in phases, while simultaneously creating local employment opportunities in the region.

Air Coolers faced a more difficult year given their very seasonal nature. Nonetheless, based on a recent independent retail audit, Voltas is now the No. 2 player in the Air Cooler category having sold around 1.3 lakhs Fresh Air Coolers during 2018-19.

Despite headwinds of the current year, longer term industry prospects will be driven by the increasing consumer confidence, higher disposable incomes, lower penetration, better availability of power and many other positive factors. The Company’s thrust on introducing energy efficient products and expanding its enviable distribution network will enable the business to further improve its position.

Domestic projects Group (DpG)

With its strategic focus on procuring and executing Government backed projects, the Domestic Projects business continued its steady performance during 2018-19. The majority of orders came from the electrification sector and infrastructure space along with reasonable assurance of cash. The recent investment announcements in infrastructure (Metros, Airports), smart cities, cleaner water, healthcare and educational institutions is expected to increase opportunities. During the year, the Company has set up a manufacturing plant for higher tonnage cooling products such as VRF (Variable Refrigerant Flow) products and Chillers in Waghodia, Gujarat.

International Operations Business Group (iOBG)

During 2018-19, the Company has continued to selectively and cautiously pick and choose projects that are commercially viable, in a risk mitigated manner. It is gratifying to note that the Division was recognised with a number of external awards, including the District Cooling Company of the Year, the Facilities Management Company of the Year and MEP Contractor of the Year. As an adjunct to MEP, the business is also focussing on booking orders for Facility Management and Water Management solutions. Meanwhile, the Expo 2020 in UAE has given rise to certain project opportunities and the Company has also extended its reach to a new geography, having secured an order in Bahrain. It also appears that the hitherto deeper concerns on Qatar due to political issues are beginning to abate.

Engineering products and Services - Textile Machinery Division (TMD) and Mining and Construction Equipment Division (M&CE)

The Textile Machinery business faced pressure on margins due to the declining yarn prices and the withdrawal of certain specific spinning based State policies apart from the generic issues of credit disbursement affecting capital expenditure. Timely focus on the after-sales business helped compensate. In the Mining and Construction Equipment business, Mozambique operations contributed a significant share to the Division’s performance. Mining activity in India however remains tepid, as the re-auctioned mines are yet to commence operations. Meanwhile, the Government announcements on increasing spend on road infrastructure (Bharatmala project) augurs well over the medium term for the sale of Crushing and Screening equipment.

5. Finance

The year 2018-19 was challenging for the Company as the AC industry faced headwinds due to weak summer and soft festive season. Most of the Industry players, including Voltas were saddled with additional inventory, leading to higher working capital.

The year witnessed volatile interest rates impacting debt instruments, particularly during the first three quarters as a result of mark-to-market valuation. The Company is re-engineering its portfolio to reduce market driven volatility.

As part of its commitment, the Company has invested Rs. 118 crores during 2018-19 in the share capital of the Consumer Durable JV - Voltbek Home Appliances Private Limited. This alongside the accumulation of inventory and capex investments in the Waghodia facility, led to a reduction in the overall cash position. Notwithstanding, the liquidity position remains strong with overall cash of ‘1,868 crores as on 31st March, 2019.

6. Tata Business Excellence Model

Tata Business Excellence Model has been used as a successful initiative by the Tata Group to drive Business Excellence across companies. In order to assess the progress made by various companies, the Group conducts external assessments bringing together more than 300 Assessors and 30 Mentors from across 60 Tata companies.

During 2018-19, the Company participated in the formal assessment. It is a matter of pride that the Company was adjudged at a higher maturity level of ‘Emerging Industry Leader’ score band, a significant improvement over the last assessment.

Based on the Assessment, the Company has developed a comprehensive action plan to take its Business Excellence journey even more strongly forward in the years ahead. Voltas has also developed many Business Excellence champions to facilitate a seamless journey, nine of whom were also External assessors at the Tata Group level.

Innovation is one of the key determinants of long term value creation and is a continual quest at the Tata Group. Tata companies are supported in their efforts to achieve world-class standards in all aspects of operations through group level processes and systems that encourage innovation. During 2018-19, the Company successfully participated in Tata Innovista with company innovations being assessed by panel of Subject Matter Experts from within and outside the Tata Group.

7. IT Initiatives

‘Business Ready’ was the focus of Voltas IT this year, ensuring secure, seamless and timely adoption of technology across platforms. SAP ECC, Payroll and HCM were rolled out for Voltbek as per the planned schedule along with Siebel CRM. Additionally, all the Modules of SAP were deployed for the new Waghodia factory as also Costing and Profitability (COPA) modules at Weathermaker Limited in UAE. Two major capabilities were simultaneously added - the E Way Bill system and E Merge (a solution for financial consolidation for JVs and subsidiaries), apart from a number of additional solutions to facilitate operational efficiency across different businesses. Ensuring appropriate focus in the IT Infrastructure and Security space, many Data Centre Servers and Network equipment were upgraded.

Digitization is an important part of forward strategy and the Company firmed up plans across Mobility, Analytics and RPA (Robotic Process Automation). For example, in Analytics, MIS Dashboard was developed on the Power BI platform and in RPA, the Service Registration process was automated through a Bot.

8. Safety and Health

Safety is a priority and of prime importance at Voltas. While a Board Committee comprising 3 Directors reviews Safety performance, a Steering Committee comprising the Corporate Management Group periodically reviews the implementation of various initiatives.

In order to ensure consistency and resilience of Safety controls, 89 major projects were audited, with a weighted score on the Tata Group Safety Standards compliances. This was in addition to the regular Safety inspections and audit of sites, Customer care premises, offices and warehouses. Training was an area of focus - Awareness training was stepped up to cover approx. 2,27,000 personnel, an increase of 13% over last year. At the same time, 100% Induction training is ensured for all personnel at project sites.

Internal Auditors certification program (ISO 14001 and ISO 45001) covered 135 personnel across business units together with Behaviour Based Safety and First Aid (CPR certification) programs. Unfortunately, during 2018-19, there were two fatal incidents at project sites. A serious note has been taken along with appropriate internal action and measures to prevent recurrence.

The Company has improved the communication channels to capture S-H-E related observations through creation of a ‘WhatsApp’ group of Safety practitioners. The improved communication mechanisms have helped increase workmen engagement in Safety meetings and trainings at project sites, apart from an increase in the reporting of Safety observations, Lost Time Injury (LTI) incidents and Near Misses from the project sites.

The Company has received appreciation letters and awards in recognition of enhancing the Safety standards. Clients like Reliance Industries, have recognised Voltas for achieving 5 million safe man hours without LTI at DAICEC project in BKC, Mumbai. Bihar Urban Infrastructure Development Corporation Limited also appreciated Voltas for achieving 2.5 million safe man hours without LTI.

9. Sustainable Development

The Company through its CSR initiatives, strives to engage with the segment at the bottom of the pyramid and build capabilities in youth and women to ensure sustainable livelihood. It also focusses on education, health, water and disaster relief for communities through its other CSR verticals. The CSR interventions are strategic long-term projects with end-to-end intervention based on community participation and ownership. The need-based projects bring in all the crucial stakeholders together through better community participation, for sustainable development outcomes.

(a) Sustainable Livelihood

Sustainable livelihood, the flagship program of Voltas, has 37 partnership Skill Training Centres across India. The Skill Training Centres create pools of trained Room AC (RAC) and Central AC technicians and ensures end-to-end intervention including identification of deserving candidates, theoretical training, practical, periodic assessments, On-the-Job training, certification, placement, and post placement support. Over 80% youth engaged through Voltas’ sustainable livelihood program, are now gainfully employed.

Besides training freshers for RAC and HVAC, the Company recognized the need to upgrade the skills of the existing technicians in the space and get them certified through a program called Recognition of Prior Learning (RPL). The Company trained 1180 existing technicians under RAC and HVAC RPL, across 16 locations in the country. The Company also offered non-technical courses like Business Correspondent and Business Facilitator (BCBF), Retail, and Sewing and Tailoring to over 249 students across centres.

(b) Community Development

To enhance the quality of human capital, the Company’s educational interventions focusses on five crucial aspects such as Quality Education; Teacher’s Training and Capacity Building; English Proficiency through digital medium; Inculcating Reading habits in primary school children; and Career Guidance and Counselling for Youth. Over 10,100 children were directly impacted by the quality education intervention. The educational projects which aim at sustainable outcomes, emphasises on stakeholder participation. Under Teachers Training, in partnership with Muktangan, Voltas reached out to over 284 teachers from government-run schools.

The community project in Dadra is an integrated rural development project with focus on water, health and sanitation. The project is also an affirmative action initiative for tribal communities living in and around the Company’s Dadra plant. Voltas has successfully constructed 200 toilets with active participation from villagers and the Gram Panchayat. Under the water for irrigation project, the Company has formed water user groups, conducted agricultural training, and built 10 Bore-wells and 10 Poly-Ponds with farmers’ participation.

(c) Issues of National Importance

There are three sub-themes under this vertical, namely Disaster Management, Affirmative Action (for inclusion of socio-economically weaker sections in the development process) and Sanitation.

As part of Disaster Management, an intervention was initiated to address water scarcity in the perennially drought prone area of Marathwada in Maharashtra. The initiative which aimed at Participatory Ground Water Management, undertook area treatment plan in five villages of Osmanabad and Latur districts. Voltas also built capacities of over 250 farmers from the two districts to understand hydro-geological state of the villages, measures for sustainable and safe drinking water, and appropriate agricultural activities and practices.

Under Affirmative Action, the Company continues to extend nutritional and educational support to Kathkari children from a school near Panvel. Additionally, Voltas also introduced two more initiatives: Stitching and Tailoring skill training program for tribal women and Nursing course. The Company created an Income-generation and Empowerment Centre called Sabala which helps the trained tribal women with linkages to generate tailoring business on a sustainable basis. Out of the CSR Budget of 2018-19, over 24% was spent towards Affirmative Action.

In 2018-19, the exclusive skill training program in Electrical and Plumbing for Scheduled Caste / Scheduled Tribe youth in Raigad, Thane and Palghar District were further strengthened with better outreach strategies. Value additions in the program included industry experts coming on board for guidance and better placement opportunities. At present, 254 youth have been trained, 184 youth are placed with appropriate organizations, and 56 youth who are currently undergoing training, will be up for placement in 2019-20.

10. Corporate Social Responsibility (CSR)

Disclosure as per Rule 9 of Companies (Corporate Social Responsibility Policy) Rules, 2014 in prescribed form is enclosed as Annexure I to the Directors’ Report.

During the financial year 2018-19, the Company has spent Rs. 10.15 crores towards various CSR activities, in line with the requirements of Section 135 of the Companies Act, 2013. Details of composition of CSR Committee and Meetings held during 2018-19 are disclosed in the Corporate Governance Report.

11. Subsidiary/Joint Ventures/Associate Companies

The Company has 9 subsidiaries, 5 joint ventures and 2 associate companies.

As per the requirement of Section 129(3) of the Act, a statement containing salient features of the financial statements of subsidiaries, joint venture and associate companies in prescribed Form No. AOC-1 is attached to the financial statements of the Company. Further, pursuant to Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of subsidiaries are available on the website of the Company -

The Policy for determining material subsidiaries of the Company has also been provided on the Company’s website at pdf/38085.pdf

Performance of key operating subsidiary and joint venture companies in India are given below:

- Universal Comfort Products Limited (UCPL), a wholly owned subsidiary of the Company, engaged in the business of manufacturing air conditioners, reported turnover of Rs. 925 crores and net profit of Rs. 48 crores for the year ended 31st March, 2019. UCPL has recommended dividend of 175% (Rs. 48.37 crores), same as last year.

- Rohini Industrial Electricals Limited (RIEL), a wholly owned subsidiary of the Company, is engaged in the business of undertaking rural electrification projects. RIEL has turned around with a significantly higher turnover of Rs. 543 crores and net profit of Rs. 43 crores in 2018-19 as compared to Rs. 173 crores and Rs. 0.15 crore respectively, in the previous year. RIEL had good order book position of over Rs. 800 crores per year ended 31st March, 2019.

- As earlier reported, Voltas and Ardutch B.V. (a subsidiary of Argelik A.S. and part of the Kog Group - Turkey’s largest industrial and services group) have established a joint venture company in India in the name of Voltbek Home Appliances Private Limited (Voltbek) for white goods under the brand name Voltas.Beko. Voltbek launched its range of frost free refrigerators, washing machines, microwave ovens and dishwashers on 13th September, 2018. The product launch was backed by an extensive advertising campaign which showcased the unique Store Fresh technology of its refrigerators and the Stain Removing function of its washing machines. Voltbek is setting up its manufacturing plant at Sanand, Gujarat which is expected to commence production in the second half of 2019, with Direct Cool Refrigerators specifically designed for the Indian market. In order to provide financial assistance, funds have been infused in the share capital of Voltbek in equal proportion by the JV partners. The paid-up capital of Voltbek as on 31st March, 2019 was Rs. 402 crores approx. During 2018-19, the Company invested Rs. 118 crores in the share capital of Voltbek and the Company’s total investment upto 31st March, 2019 was Rs. 197 crores approx.

There have been no material changes in the nature of the business of the subsidiaries, including associates and joint ventures during the financial year 2018-19.

12. Number of Board Meetings

During 2018-19, nine Board Meetings were held on 18th April, 2018; 17th May, 2018; 10th August, 2018; 20th August, 2018; 27th September, 2018; 6th November, 2018; 10th January, 2019; 14th February, 2019 and 27th March, 2019.

13. policy on Directors’ appointment and remuneration including criteria for determining qualifications, positive attributes, independence of a Director

Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board has adopted the Remuneration Policy for Directors, KMPs and other Employees. NRC has formulated the criteria for determining qualifications, positive attributes and independence of an Independent Director and also the criteria for Performance evaluation of individual Directors, the Board as a whole and the Committees.

14. Evaluation of performance of Board, its Committees and of Directors

Pursuant to the provisions of the Act and Regulation 17 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations), the Board has carried out an evaluation of its own performance, Committees and performance of individual Directors.

The performance of the Board as a whole, Committees and individual directors was evaluated by seeking inputs from all Directors based on certain parameters as per the Guidance Note on Board Evaluation issued by SEBI on 5th January, 2017, such as: Board structure and composition; Meetings of the Board in terms of frequency, agenda, discussions and dissent, if any, recording of Minutes and dissemination of information; Functions of the Board including governance and compliance, evaluation of risks, stakeholder value and responsibility, Board and Management including evaluation of performance of the management. The Directors also made a self-assessment of certain parameters - Attendance, Contribution at Meetings and guidance/support extended to the Management. The feedback received from the Directors was discussed and reviewed by the Independent Directors at their annual separate Meeting held on 27th March, 2019 and also shared with the NRC/Board. At the separate annual Meeting of Independent Directors, performance of Non-independent directors, including Chairman, Board as a whole and various Committees was discussed. The Independent Directors in the said Meeting also evaluated the quality, quantity and timeliness of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform their duties and expressed their satisfaction in respect thereof. The performance of the individual Directors, performance and role of the Board/Committees was also discussed at the Board Meeting held on 9th May, 2019. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

15. Statutory Auditors

At the 63rd Annual General Meeting (AGM) held on 28th August, 2017, the Members had approved the appointment of S R B C & CO LLP (SRBC) as Statutory Auditors as well as Branch Auditors of the Company, to examine and audit the accounts of the Company for five consecutive financial years between 2017-18 and 2021-22. Ratification of appointment of Statutory Auditors at every AGM is no more a legal requirement. The Auditors’ Report for the financial year 2018-19 does not contain any qualification, reservation or adverse remarks.

16. Cost Auditors

The Company has maintained the accounts and cost records as specified by Central Government under Section 148(1) of the Companies Act, 2013. The Board had appointed M/s. Sagar and Associates, Cost Accountants as the Cost Auditors for the financial year 2018-19. M/s. Sagar and Associates, Cost Accountants, have been re-appointed as Cost Auditors of the Company for the financial year 2019-20 and approval of the Members is being sought for ratification of their remuneration at the ensuing AGM.

17. Secretarial Auditor

M/s. N. L. Bhatia and Associates, the Practicing Company Secretaries were appointed as Secretarial Auditor to undertake Secretarial Audit of the Company for the year 2018-19. Their Secretarial Audit Report, in prescribed Form No. MR-3, is annexed to the Directors Report as Annexure IV, and does not contain any qualification, reservation or adverse remarks. M/s. N. L. Bhatia and Associates have been re-appointed as the Secretarial Auditor for the financial year 2019-20.

18. Audit Committee

The Audit Committee presently comprise Mr. Nani Javeri (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari, all Independent Directors, in line with the requirements of Section 177 of the Act. Mr. Arun Kumar Adhikari was appointed member of Audit Committee with effect from 6th November, 2018. Mr. R. N. Mukhija ceased to be member of Audit Committee upon his retirement on 4th February, 2019. The Board has accepted the recommendations made by the Audit Committee from time to time. Details of Audit Committee Meetings held during the year 2018-19 have been disclosed in the Corporate Governance Report.

19. Internal Financial Controls

The Internal Financial Controls (IFCs) and its adequacy and operating effectiveness is included in the Management Discussion and Analysis. The Auditors Report also includes their reporting on IFCs over Financial Reporting.

20. Risk Management

Pursuant to Section 134(3)(n) of the Act and Regulation 21 of Listing Regulations, Risk Management Committee is in place comprising Mr. Nani Javeri (Chairman), Mr. Debendranath Sarangi and Mr. Arun Kumar Adhikari. Mr. Arun Kumar Adhikari was appointed member of Risk Management Committee with effect from 6th November, 2018. Mr. R. N. Mukhija ceased to be member of the Committee upon his retirement on 4th February, 2019. The Company has formulated a Risk Management Policy to establish an effective and integrated framework for the risk management process. During 2018-19, two meetings were held on 9th August, 2018 and 13th February, 2019 where, the top 10 risks identified for the Company and various mitigation measures in respect thereof were reviewed and discussed.

21. particulars of Employees

The information required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given below:

(a) The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the financial year:


Ratio to median remuneration

Mr. Noel N. Tata


Mr. Nani Javeri


Mr. R. N. Mukhija (upto 4.2.2019)


Mr. Vinayak Deshpande


Mr. Debendranath Sarangi


Mr. Bahram N. Vakil


Ms. Anjali Bansal


Mr. Hemant Bhargava


Mr. Arun Kumar Adhikari


Executive Directors

Mr. Pradeep Bakshi, Managing Director & CEO


Mr. Anil George,

Deputy Managing Director


* Since the remuneration of Mr. R. N. Mukhija is only for part of the year, the ratio of his remuneration to median remuneration is not comparable and hence not stated.

Note: Ratio of Remuneration of Directors is computed based on Sitting fees and Commission paid during 2018-19.

(b) The percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Directors, Chief Executive Officer, Chief Financial Officer and Company Secretary

% increase in remuneration in the financial year

Mr. Noel N. Tata


Mr. Pradeep Bakshi


Mr. Anil George


Mr. Nani Javeri


Mr. R. N. Mukhija


Mr. Vinayak Deshpande


Mr. Debendranath Sarangi


Mr. Bahram N. Vakil


Ms. Anjali Bansal


Mr. Hemant Bhargava


Mr. Arun Kumar Adhikari


Mr. Abhijit Gajendragadkar (CFO) - KMP


Mr. V. P. Malhotra (Company Secretary) - KMP


* Since the remuneration of Mr. R. N. Mukhija is for part of the year 2018-19, the percentage increase in his remuneration is not comparable and hence not stated. Similarly, remuneration of Mr. Pradeep Bakshi, Mr. Anil George, Mr. Hemant Bhargava, Mr. Arun Adhikari and Mr. Abhijit Gajendragadkar is not comparable as it was for part of the year in 2017-18. In line with internal Group guidelines, no commission was paid for 2017-18 to Mr. Noel N. Tata and Mr. Vinayak Deshpande as they are in full time employment with another Tata company. Their remuneration is therefore not comparable with the previous year and hence, not stated.

(c) percentage increase in the median remuneration of employees in the financial year: 1.31%

(d) Number of permanent employees on the rolls of Company: 2,898.

(e) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstance for increase Sin managerial remuneration:

Average increase in remuneration is 12.94% for Employees other than Managerial Personnel. The remuneration of Managerial Personnel (Managing Director and Deputy Managing Director) is not comparable as they were for part of the year in 2017-18.

(f) Affirmation that the remuneration is as per the Remuneration policy of the Company:

The Company affirms that the remuneration paid is as per the Remuneration policy of the Company.

(g) A statement containing names of top ten employees in terms of remuneration drawn and the particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in a separate Annexure forming part of this Report. Further, the Report and the Accounts are being sent to the members excluding the aforesaid Annexure. In terms of Section 136 of the Act, the said Annexure is open for inspection at the Registered Office of the Company. Any Member interested in obtaining a copy of the same may write to the Company Secretary. None of the employees listed in the said Annexure are related to any Director of the Company.

22. Employee Stock Option

The Company has not issued any Employee Stock Options.

23. Conservation of energy, technology absorption, foreign exchange earnings and outgo

Information pursuant to Section 134(3)(m) of the Act, relating to conservation of energy, technology absorption, foreign exchange earnings and outgo is given as Annexure II to this Report.

24. Directors and Key Managerial personnel

In accordance with the provisions of the Act and the Company’s Articles of Association, Mr. Noel N. Tata and Mr. Hemant Bhargava retire by rotation and being eligible, offer themselves for re-appointment.

Mr. R. N. Mukhija retired as the Independent Director of the Company upon expiry of his term on 4th February, 2019. The Directors place on record their sincere appreciation of the valuable guidance and support given by Mr. R. N. Mukhija during his tenure as Independent Director of the Company.

The Members had at the 60th AGM held on 1st September, 2014 appointed Mr. Nani Javeri, Mr. Debendranath Sarangi and Mr. Bahram N. Vakil as Independent Directors for a term of 5 years up to 31st August, 2019, respectively. At the 61st AGM, Ms. Anjali Bansal was appointed as Independent Director for a term of 5 years, upto 8th March, 2020. In line with the Governance Guidelines formulated for Tata companies, which has been adopted by the Company, Mr. Nani Javeri holds office upto 31st August, 2019.

Mr. Zubin S. Dubash is proposed to be appointed as an Independent Director for a term of 5 years with effect from 9th August, 2019 and the approval of the shareholders is being sought at the ensuing AGM. Attention of the Members is drawn to Resolution No. 6 of the AGM Notice and its related Explanatory Statement.

Taking into consideration the skills, knowledge, valuable contribution and performance evaluation, and based on the recommendation of NRC, it is proposed to continue to avail the services of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal for second term of5 years. Notices under Section 160 of the Act have been received from a member proposing reappointment of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal as Independent Directors. The Special Resolutions seeking approval of the members for reappointment of Mr. Debendranath Sarangi, Mr. Bahram N. Vakil and Ms. Anjali Bansal as Independent Directors, including their brief profile form part of the Notice of the 65th AGM of the Company. Attention of the Members is drawn to Resolution Nos. 7 to 9 of the AGM Notice and its related Explanatory Statements.

Mr. Pradeep Bakshi (Managing Director & CEO), Mr. Anil George (Deputy Managing Director), Mr. Abhijit Gajendragadkar (Chief Financial Officer) and Mr. V. P. Malhotra (Company Secretary) are the Key Managerial Personnel (KMPs) of the Company, in line with the requirements of Section 203 of the Act.

25. Declaration by Independent Directors

Pursuant to Section 149(7) of the Act, the Company has received declarations from all Independent Directors confirming that they meet the criteria of independence as specified in Section 149(6) of the Act, as amended, read with Rules framed thereunder and Regulation 16(1 )(b) of Listing Regulations. In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation which exists or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence and that they are independent of the Management.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

26. Corporate Governance

Pursuant to Schedule V of Listing Regulations, Management Discussion and Analysis, Corporate Governance Report and Auditors’ Certificate regarding compliance of conditions of Corporate Governance forms part of the Annual Report. A declaration signed by the Managing Director in regard to compliance with the Code of Conduct by the Board Members and Senior Management personnel also forms part of the Annual Report.

27. Details of establishment of vigil mechanism for Directors and employees

The Company had adopted a Whistle Blower Policy (“the Policy”) as required under Section 177(9) of the Act and Listing Regulations. The Policy has been formulated with a view to provide a mechanism for Directors and employees of the Company to approach the Ethics Counsellor/Chairman of the Audit Committee of the Company in case of any concern. During 2018-19, no complaints were received under the Whistle Blower Policy. The Whistle Blower Policy can be accessed on the Company’s website at the link: pdf/21782.pdf

28. particulars of loans, guarantees or investments under Section 186 of the Act during 2018-19

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statements (Please Refer to Notes 7, 8, 17 and 41 of the standalone financial statements).

29. particulars of contracts or arrangements with related parties

During the year under review, the Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Act.

Accordingly, particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Act along with the justification for entering into such contracts or arrangements in Form AOC-2 does not form part of the Report, as the same is not applicable.

30. Secretarial Standards

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

31. SEBI (prohibition of Insider Trading) Regulations, 2015

SEBI has by its notification dated 31st December, 2018 amended the Prohibition of Insider Trading Regulations, whereby listed companies have been advised to formulate certain additional Policies and Procedures. These amendments have become effective from 1st April, 2019. Accordingly, the Company has adopted a revised Code of Conduct for Prevention of Insider Trading and Code of Corporate Disclosure Practices and formulated the Policy for determination of legitimate purpose and Policy for inquiry in case of leak of Unpublished Price Sensitive Information (UPSI). The terms of reference (Charters) of Board Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and Shareholders’ Relationship Committee have been suitably revised to comply with the requirements of SEBI Prohibition of Insider Trading and Listing Regulations, 2015.

32. Directors’ Responsibility Statement

Based on the framework and testing of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost 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(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, in the selection of the accounting policies, consulted the Statutory Auditors and have applied their recommendations consistently and made judgements 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 financial year and of the profit of the Company for that period;

(iii) they have taken proper and sufficient care to the best of their knowledge and ability, 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 were operating effectively; and

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

33. Extract of the Annual Return

The extract of Annual Return in prescribed Form No. MGT-9 is enclosed as Annexure III to Directors’ Report and is also placed on the website of the Company

34. Disclosure as per the Sexual Harassment of Women at Workplace (prevention, prohibition and Redressal) Act, 2013

The Company has zero tolerance for sexual harassment at workplace and has adopted a ‘Respect for Gender’ Policy on prevention, prohibition and redressal of sexual harassment in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. Pursuant to this Act, the Company has complied with the provisions relating to the constitution of Internal Complaints Committee. The Company had not received any written complaints on sexual harassment during the financial year 2018-19.

35. General

The Notes forming part of the Accounts are self-explanatory or to the extent necessary, have been dealt with in the preceding paragraphs of the Report.

On behalf of the Board of Directors

Noel N. Tata


Mumbai, 9th May, 2019

Director’s Report