To the Members of Titan Company Limited
The Directors are pleased to present the Thirty-Eighth Annual Report
and the Audited Financial Statements for the year ended 31st March 2022:
1. Financial Results
(Rs in crore)
|
Standalone |
|
Consolidated |
|
2021-2022 |
2020-2021 |
2021-2022 |
2020-2021 |
| Revenue from Operations |
27,210 |
20,602 |
28,799 |
21,644 |
| Other Income |
246 |
181 |
234 |
186 |
| Total Income |
27,456 |
20,783 |
29,033 |
21,830 |
| Expenditure |
23,931 |
18,901 |
25,458 |
19,920 |
| Profit before exceptional items, finance costs,
depreciation and taxes |
3,525 |
1,882 |
3,575 |
1,910 |
| Finance Costs |
195 |
181 |
218 |
203 |
| Depreciation/Amortisation |
347 |
331 |
399 |
375 |
| Profit before share of profit/(loss) of an associate and
joint venture and exceptional items and taxes |
2,983 |
1,370 |
2,958 |
1,332 |
| Share of profit/(loss) of an associate and |
- |
- |
- |
(5) |
| Jointly controlled entity |
|
|
|
|
| Profit before exceptional items and taxes |
2,983 |
1,370 |
2,958 |
1,327 |
| Exceptional items |
51 |
137 |
54 |
- |
| Profit before taxes |
2,932 |
1,233 |
2,904 |
1,327 |
| Income taxes |
|
|
|
|
| - Current |
779 |
351 |
786 |
360 |
| - Deferred |
(27) |
5 |
(80) |
(7) |
| Profit for the year |
2,180 |
877 |
2,198 |
974 |
| Attributable to |
|
|
|
|
| - Shareholders of the Company |
2,180 |
877 |
2,173 |
973 |
| - Non-controlling interests |
- |
- |
25 |
1 |
| Profit brought forward |
4,279 |
3,757 |
4,210 |
3,592 |
| Appropriations |
|
|
|
|
| Dividend on Equity Shares (excluding tax) |
(355) |
(355) |
(355) |
(355) |
| Closing Balance in Retained Earnings |
6,104 |
4,279 |
6,028 |
4,210 |
1 a) Standalone Numbers:
During the year under review, the Companys total revenue grew by
32% to ` 27,210 crore compared to ` 20,602 crore in the previous year.
Profit before tax and exceptional items grew by 118% to ` 2,983 crore
and the net profit grew by 149% to ` 2,180 crore.
The Watches & Wearables Division of the Company recorded revenue of
` 2,309 crore, a growth of 46%. The revenue from Jewellery Division grew by 35% touching `
23,268 crore (excluding sale of bullion of ` 1,045 crore). The revenue from EyeCare
Division grew by 38% to ` 517 crore.
New Businesses, viz. Indian Dress Wear Division and Fragrances &
Fashion Accessories Division recorded revenue of ` 154 crore, a growth of 57% over the
previous year. While the Indian Dress Wear Division grew by 43%, and the Fragrances &
Fashion Accessories Division also recorded a growth of 65%.
All the Divisions have done very well during the year amidst various
challenges.
The Management Discussion and Analysis report, which is attached,
dwells into the performance of each of the business divisions and the outlook for the
current year.
b) Consolidated Numbers
At the consolidated level, the revenue stood at
` 28,799 crore as against ` 21,644 crore in the previous year. The
details of the performance of the Companys subsidiaries are covered below in point
17 of this Report.
2. Companys Response to COVID- 19
The Company witnessed strong demand across its consumer businesses with
the major businesses achieving significant revenue uplift and ending the year on a strong
note. The underlying demand continued to be strong across all of its businesses with most
segments posting Y-o-Y growth over a very strong base from the fourth quarter of the
previous year. The network expansion and marketing campaigns have progressed very well
during the year under reporting.
However, during the first quarter of the year, the Companys focus
was back on keeping everyone safe and few stores were proactively closed in the highly
impacted towns. The initiative of customer outreach that brought in sales in the previous
year was also not undertaken considering that the humanitarian impact on consumers was
severe and widespread during the second wave of the pandemic.
The Company drove vaccination campaigns as the top priority and almost
all the store staff and employees got at least their first dose during June –
September 2021 period, which was an important step towards bringing back normalcy.
During the second quarter, the Company witnessed a strong recovery in
demand after the second wave across its consumer businesses with sales moving swiftly
above or close to pre-pandemic levels in most of the Divisions. Most stores were fully
operational, barring a few in select towns having localized restrictions, with overall
store operation days exceeding 90% for the quarter. Apart from its thrust on digital and
omnichannel, the Company also accelerated its retail network expansion during the second
quarter.
The Company finished the year on a satisfactory note despite the last
quarter of the year getting disrupted twice - first due to the partial lockdowns caused by
the Omicron wave in January and again during the month of March in which consumer
sentiments got affected adversely due to sharp increase and volatility in gold prices and
uncertainty due to a fragile geopolitical situation. The underlying demand continued to be
strong across all of its businesses with most segments posting growth over a very strong
base in the last quarter of the previous year.
3. Dividend
Considering the excellent performance of the Company during the last
financial year, the Board of Directors are pleased to recommend the payment of dividend on
equity shares at the rate of 750% (i.e. ` 7.50 per equity share of ` 1 each), subject to
approval by the shareholders, at the ensuing Annual General Meeting ("AGM") and
payment is subject to deduction of tax at source as may be applicable. This payment
represents a dividend payout ratio of 30.8%. The Dividend Distribution Policy, as amended
by the Board at its meeting held on 29th April 2021, is annexed as Annexure-III
to this Report.
4. Transfer to General Reserve
As permitted under the provisions of the Companies Act, 2013, the Board
does not propose to transfer any amount to general reserve and has decided to retain the
entire amount of profit for the Financial Year 2021-22 in the profit and loss account.
5. Finance
The year saw an excellent performance by all the businesses despite
challenges of partial lockdowns and uncertainty in a fragile geopolitical situation during
the year.
ICRA maintained the Companys long term rating of AAA with stable
outlook. The Company continues to optimise its efficiency in inventory management and cash
flow by selling excessive bullion as and when necessary.
6. Public Deposits
The Jewellery Division of the Company was successfully operating
customer acquisition schemes for jewellery purchases for many years. When the Companies
Act, 2013 (the "Act") became substantially effective on 1st April
2014, the Company had around seven lakh subscribers contributing to these schemes.
However, these schemes were exempt under the Companies Act, 1956 relating to acceptance of
public deposits, as such schemes were not covered in the definition of deposits. Under the
Act and the Rules made thereunder (‘Deposit Regulations) the scope of the term
"deposit" was enlarged and therefore a view was taken that the jewellery
purchase schemes offered by the Company to its customers would be treated as public
deposits. Thereupon, the Company discontinued fresh enrolment of subscribers and initiated
steps to close the erstwhile customer schemes, which were wound down in August 2014.
Under the Deposit Regulations as amended from time to time, a company
is permitted to accept deposits subject to applicable provisions, to the extent of 10% of
the aggregate of the paid-up share capital, securities premium account and free reserves
from its Members & 25% of the aggregate of the paid-up share capital, securities
premium account and free reserves from the Public after prior approval by way of special
resolutions passed by the Members in this regard. Requisite approval was obtained from the
Members of the Company and a new programme for customers to purchase jewellery (under the
Jewellery Purchase Plan) was launched in November 2014 in compliance with the Deposit
Regulations.
The details relating to deposits, covered under Chapter V of the Act
are as under: (a) accepted during the year: ` 2,701 crore (b) remained unpaid or unclaimed
as at the end of the year: ` 1,574 crore
(c) whether there has been any default in repayment of deposits or
payment of interest thereon during the year and if so, number of such cases and the total
amount involved- (i) at the beginning of the year : Nil (ii) maximum during the year : Nil
(iii) at the end of the year : Nil
There are no deposits that have been accepted by the Company that are
not in compliance with the requirements of Chapter V of the Act.
7. Material Changes and Commitments Affecting Financial Position
between the end of the Financial Year and Date of Report
There have been no material changes and commitments for the likely
impact affecting financial position between the end of the financial year and the date of
the Report.
8. Significant and Material Orders
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and Companys operations in
future.
9. Particulars of Loans, Guarantees and Investments
Details of loans, guarantees and investments covered under the
provisions of Section 186 of the Act are given in the notes to the financial statements.
During the year under review, the Company had invested ` 8 crore (CHF 1
million) as application money towards equity stake in Favre Leuba AG (FLAG). The Company
had also invested ` 1 crore (USD 0.15 million) as subscription to Equity Share capital and
` 160 crore (USD 20 million) as application money towards equity stake in TCL North
America Inc., a wholly owned subsidiary formed during the year.
10. Integrated Report
The Company has, over the last four years, taken steps to move towards
Integrated Reporting in line with its commitment to voluntarily disclose more information
to stakeholders on all aspects of the Companys business. Accordingly, the Company
had introduced key content elements of Integrated Reporting <IR> aligned to the
International Integrated Reporting Council Framework (IIRC) in the Annual Report of the
previous years and has disclosed more qualitative data in the Annual Report of this year.
Similar to earlier years, the relevant information has been provided in this years
Annual Report as well.
11. Adequacy of Internal Controls and Compliance with Laws
During the year, the Company has reviewed its Internal Financial
Control systems and has continually contributed to the establishment of a more robust and
effective internal financial control framework, prescribed under the ambit of Section
134(5) of the Act. The preparation and presentation of the financial statements is
pursuant to the control criteria defined considering the essential components of Internal
Control - as stated in the "Guidance Note on Audit of Internal Financial Controls
Over Financial Reporting" issued by the Institute of Chartered Accountants of India.
The control criteria ensure the orderly and efficient conduct of the
Companys business, including adherence to its policies, safeguarding of its assets,
prevention and detection of frauds and errors, accuracy and completeness of the accounting
records and the timely preparation of reliable financial information.
Based on the assessment carried out by the Management and the
evaluation of the results of the assessment, the Board of Directors are of the opinion
that the Company has an adequate Internal Financial Controls system that is operating
effectively as of 31st March 2022.
There were no instances of fraud which necessitated reporting of
material misstatements to the Companys operations.
There has been no communication from regulatory agencies concerning
non-compliance with or deficiencies in financial reporting practices.
12. Board Meetings
During the year under review, nine Board meetings were held, details of
which are provided in the Corporate Governance Report.
13. Audit Committee and other Board Committees
The details pertaining to the composition of the Audit Committee and
its role are included in the Corporate Governance Report, which is a part of this Annual
Report. In addition to the Committees mentioned in the Corporate Governance Report, the
Company has a Corporate Social Responsibility Committee, the details of which are covered
in Annexure-II to this Report.
14. Risk Management
Pursuant to the requirements of Regulation 21 and Part D of Schedule II
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI
LODR), the Company has constituted a Risk Management Committee (RMC), consisting of Board
members and senior executives of the Company.
The Company has in place a Risk Management framework to identify, and
evaluate business risks and challenges across the Company, both at the corporate level as
also separately for each business division. The Company has a robust process for managing
the top risks, overseen by the RMC. As part of this process, the Company has identified
the risks with the highest impact and then assigned a likely probability of occurrence.
Mitigation plans for each risk have also been put in place and are reviewed by the
Management every six months before presenting to the RMC. The RMC has set out a review
process to report to the Board on the progress of the initiatives for the major risks of
each of the businesses. The Company has also engaged a reputed firm to design an
enterprise level Business Continuity Plan including Disaster Recovery scenario,
considering the increasing size and complexity of the various businesses of the Company.
15. Related Party Transactions
There are no materially significant Related Party Transactions made by
the Company with Promoters, Directors or Key Managerial Personnel which may have a
potential conflict with the interests of the Company at large. All Related Party
Transactions are placed before the Audit Committee for approval of Independent Directors
of the Company and the Board for approval, if required. Prior omnibus approval of the
Audit Committee is obtained for transactions which are of a foreseen and repetitive in
nature. The transactions entered into pursuant to the omnibus approval so granted are
verified by the Internal Auditor and a statement giving details of all related party
transactions is placed before the Audit Committee and the Board of Directors for their
approval, if applicable, on a quarterly basis. The Company has developed an Internal Guide
on Related Party Transactions Manual and prescribed Standard Operating Procedures for the
purpose of identification and monitoring of such transactions. The Policy on Related Party
Transactions as approved by the Board is uploaded on the Companys website. None of
the Directors have any pecuniary relationships or transactions except to the extent of
sitting fees and commission paid to the Directors and to Mr. Bhaskar Bhat to whom the
Company pays monthly pension as approved by the Board of Directors consequent upon his
retirement as Managing Director of the Company in the month of September 2019. The details
of the transactions with related parties during the year under review are provided in the
accompanying financial statements. There were no transactions during the year under review
which would require to be reported in Form AOC-2.
16. Subsidiaries/Joint Venture/Associate Company
As on 31st March 2022, the Company had the following
subsidiaries/Associate/Joint Venture:
| Sl. No. |
Name of the Subsidiary/ Associate/Joint
Venture |
Relationship |
| 1 |
Favre Leuba AG, Switzerland (FLAG) |
Subsidiary |
| 2 |
Titan Watch Company Limited, Hong Kong |
Step-down Subsidiary |
| 3 |
Titan Engineering & Automation Limited (TEAL) |
Subsidiary |
| 4 |
CaratLane Trading Private Limited (CaratLane) |
Subsidiary |
| 5 |
Green Infra Wind Power Theni Limited |
Associate |
| 6 |
Titan Holdings International FZCO, Dubai |
Subsidiary |
| 7 |
Titan Global Retail LLC, Dubai |
Step-down Subsidiary |
| 8 |
Titan Commodity Trading Limited |
Subsidiary |
| 9 |
TCL North America Inc. (from 15th April 2021) |
Subsidiary |
| 10 |
TEAL USA Inc. (from 15th April 2021) |
Step-down Subsidiary |
| 11 |
StudioC Inc., USA |
Step-down Subsidiary |
During the Financial Year 2021-22, Favre Leuba AG had registered a
turnover of CHF 0.23 million i.e., ` 2 crore against the previous years figures of
CHF 1.04 million, i.e., ` 8 crore and loss of CHF 1.25 million, i.e., ` 28 crore (previous
year: CHF 7.34 million, i.e., ` 58 crore). During the Financial Year 2021-22, the Company
has invested CHF 1 million (` 8 crore) in Favre Leuba AG as share application money.
Titan Watch Company Limited is a subsidiary of Favre Leuba AG and hence
is a step-down subsidiary of the Company. It has a capital of HK $ 10,000 and no Profit
and Loss Account has been prepared.
During the Financial Year 2021-22, TEAL generated an income of ` 378
crore against the previous years figures of ` 354 crore, an increase of 7% and the
profit before tax was at ` 21 crore against the previous years figures of ` 40
crore.
CaratLane is engaged in the business of manufacturing and retailing of
jewellery products and has a significant online presence. During the last year,
CaratLanes performance was very good with strong double-digit growths recorded in
retail sales, with great emphasis on omnichannel selling. CaratLane added 21 stores in the
year to take the store count to 138. During the Financial Year 2021-22, CaratLane
registered a turnover of ` 1,256 crore (previous year: ` 716 crore) and recorded profit
before taxes of ` 39 crore as against the previous years figures of ` 2 crore.
Titan Holdings International FZCO (Titan Holdings) was formed as a Free
Zone Company with a view to carry out business activities and invest in the share capital
of any other companies/entities either as a joint venture partner or as its wholly-owned
subsidiary company for carrying out business activities. Titan Holdings incurred a loss of
AED 0.87 million (` 2 crore) against the previous years loss of AED 0.60 million (`
1 crore).
During the Financial Year 2021-22, Titan Global Retail LLC registered a
turnover of AED 55.14 million (` 112 crore) (previous year AED 19.20 million – ` 39
crore) and incurred a loss of AED 11.53 million (` 23 crore) against the previous
years loss of AED 2.47 million (` 5 crore).
During the Financial Year 2021-22, Titan Commodity Trading Limited
(TCTL) commenced operations of hedging of gold for Titan. TCTL registered an income of `
5.21 crore and a profit before tax of ` 0.95 crore.
TCL North America Inc., was incorporated during the year as a
wholly-owned subsidiary. However, the company has not started any operations as of 31st
March 2022.
TEAL USA Inc., was incorporated during the year as a wholly-owned
subsidiary of Titan Engineering & Automation Limited. However, the company has not
started any operations as of 31st March 2022.
The Company holds 26.79% stake in Green Infra Wind Power Theni Limited
which supplies energy to the Company.
None of these subsidiary companies declared a dividend for the
Financial Year 2021-22.
The annual accounts of these subsidiary companies/JV companies were
consolidated with the accounts of the Company for the Financial Year 2021-22.
The statement containing salient features of the financial statement of
subsidiaries/associate company/joint venture in Form AOC-1 forms part of the Annual
Report.
17. Conservation of Energy, Technology Absorption, Foreign Exchange
Earnings and Outgo
The particulars as prescribed under sub-section (3) (m) of Section 134
of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 are furnished in Annexure-I
to the Boards Report.
18. Corporate Social Responsibility (CSR)
In compliance with Section 135 of the Act, the Company has undertaken
CSR activities, projects and programs as provided in the CSR Policy of the Company and as
per the Annual Action Plan, and excluding activities undertaken in pursuance of its normal
course of business. In addition to the projects specified as CSR activities under Section
135 of the Act, the Company has also carried out several other sustainability/responsible
business initiatives and projects. The Company has spent the entire 2% of the net profits
earmarked for CSR projects during the year under review. A report on CSR pursuant to
Section 135 of the Act and Rules made thereunder is attached in Annexure-II.
19. Annual Return
The Annual Return as required under Section 92 and Section 134 the
Companies Act, 2013 read with Rule 12 of the Companies (Management and Administration)
Rules, 2014 is available on the Companys website at - https://www.titancompany.
in/sites/default/files/MGT-7.pdf.
20. Vigil Mechanism
The Company has a whistle blower mechanism wherein the employees can
approach the Management of the Company (Audit Committee in case where the concern involves
the Senior Management) and make protective disclosures to the Management about unethical
behaviour, actual or suspected fraud or violation of the Companys Code of Conduct
and Insider Trading Code. The Whistle Blower Policy requires every employee to promptly
report to the Management any actual or possible violation of the Code or an event an
employee becomes aware of, that could affect the business or reputation of the Company.
The disclosures reported are addressed in the manner and within the time frames prescribed
in the Policy. A mechanism is in place whereby any employee of the Company has access to
the Chairman of the Audit Committee to report any concern. No person has been denied
access to the Chairman to report any concerns. Further, the said policy has been
disseminated within the organisation and has also been posted on the Companys
website at https://www.titancompany.in/sites/default/files/
Whistle%20Blower%20Policy 1.pdf.
21. Secretarial Standards
The Directors state that the applicable Secretarial Standards i.e.,
SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to
Meetings of Board of Directors and General Meetings respectively, have been duly complied
with.
22. Disclosures as per the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013
In a continuous effort to sustain the respectful and safe work culture
at the Company, various means to prevent, prohibit and redress concerns are adopted by the
Company.
The Ethics Committee and the Committee on Prevention of Sexual
Harassment (POSH) work closely with the Board Ethics Committee and obtains inputs and
feedback for improvement from time to time.
Besides the core committee on POSH (having senior-level representation
from across the Company), 16 locational committees have been formed to ensure both spread
and coverage of the implementation of the requirements of the POSH Act, 2013.
The Policy acknowledges the virtual workplaces that are a norm and all
stakeholders are ensured a safe working environment in such remote conditions as well.
Titan has also included the collaborations by partnering with associated companies
(manpower agencies, consultants) in granting recourse to aggrieved persons by forming
joint Internal Complaints Committee to look into such matters. An elaboration of the
penalties that could be applicable as per the Disciplinary Procedure and Policies manual
and related processes has also been updated.
The Company shares best governance practices with its business
associates to influence and impact more work communities. In an effort to encourage
business associates to adopt the Policy for their own enterprises, masterclasses are
conducted highlighting the importance of compliance and the consequences of good
governance.
The virtual communication cascades by using innovative radio plays to
heighten awareness on this subject continues to be conducted regularly across the diverse
ecosystems of the Company (manufacturing, retail and offices, vendors and partners)
covering a total of 50 sessions involving 6,226 stakeholders across the board.
During the year under reporting, the Company received 7 complaints on
sexual harassment, all were disposed-off with appropriate action taken as on 31st
March 2022.
23. Details in Respect of Frauds Reported by Auditors Under Sub-Section
(12) of Section 143 other than those which are Reportable to the Central Government
The Statutory Auditors of the Company have not reported any fraud as
specified under the second proviso of Section 143(12) of the Act (including any statutory
modification(s) or re-enactment(s) for the time being in force).
24. Corporate Governance and Management Discussion and Analysis
As per SEBI LODR, Management Discussion and Analysis, Corporate
Governance Report and Practicing Company Secretarys Certificate regarding compliance
of conditions of Corporate Governance forms part of this Annual Report.
Pursuant to Regulation 34 of the SEBI LODR, the Management Discussion
and Analysis is presented in a separate section forming part of this Annual Report. As
required under the provisions of the SEBI LODR, the Audit Committee of the Company has
reviewed the Management Discussion and Analysis report of the Company for the year ended
31st March 2022.
25. Business Responsibility Report
As stipulated under the SEBI LODR, the Business Responsibility Report
(BRR) describing the initiatives undertaken by the Company from an environment, social and
governance perspective is attached and forms part of this Annual Report.
26. Directors and Key Managerial Personnel
Mr. Ashwani Puri, Mr. B Santhanam, Mr. Pradyumna Vyas, Dr.
Mohanasankar Sivaprakasam Ms. Sindhu Gangadharan and Mr. Sandeep Singhal were the
Independent Directors during the entire Financial Year 2021-22.
All the Independent Directors have given declarations that they
continue to meet the criteria of independence as laid down under Section 149(6) of the Act
and Regulation 16(1)(b) of the SEBI LODR and that they are not debarred from holding the
office of director by virtue of any SEBI order or any other such authority. All the
Independent Directors have confirmed that they are in compliance with Rules 6(1) and 6(2)
of the Companies (Appointment and Qualification of Directors) Rules,
2014, with respect to registration with the data bank of Independent
Directors maintained by the Indian Institute of Corporate Affairs.
In accordance with the provisions of the Act and in terms of the
Memorandum and Articles of Association of the Company, Mr. N N Tata retires by rotation at
the ensuing Annual General Meeting and has offered himself for re-appointment.
During the course of the year under review, Tamilnadu Industrial
Development Corporation Limited (TIDCO) had withdrawn the nominations of Mr. Arun Roy and
Mr. N Muruganandam as its nominee directors and had nominated Ms. Jayashree Muralidharan
and Mr. S Krishnan in their place.
The Board placed on record its appreciation for the valuable
contribution and wise counsel rendered by Mr. N Muruganandam and Mr. Arun Roy during their
tenure as members of the Board.
Members attention is drawn to Item No. 4 of the Notice for the
re-appointment of Mr. N N Tata as a Director of the Company, liable to retire by rotation,
Item No. 6 of the Notice for the appointment of Mr. S Krishnan as a Director of the
Company, liable to retire by rotation, and Item No.7 of the Notice for the appointment of
Ms. Jayashree Muralidharan as a Director of the Company, liable to retire by rotation.
None of the Directors are related to each other within the meaning of
the term "Relative" as per Section 2(77) of the Act.
27. Details of Key Managerial Personnel who were appointed or have
resigned during the year
Pursuant to the provisions of Section 203 of the Act, Mr. C K
Venkataraman – Managing Director, Mr. Ashok Sonthalia – Chief Financial Officer
and Mr. Dinesh Shetty – General Counsel & Company Secretary are the Key
Managerial Personnel of the Company. Mr. S Subramaniam retired from the services of the
Company at the close of business hours on 30th June 2021 and Mr. Ashok
Sonthalia took over as the Chief Financial Officer effective 1st July 2021.
28. Directors Responsibility Statement
Based on the framework of Internal Financial Controls and compliance
systems established and maintained by the Company, the work performed by the internal,
statutory and secretarial auditors and external consultants, 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 Companys internal financial controls are
adequate and operating effectively.
Accordingly, pursuant to the requirements of Section 134 (5) of the
Act, the Directors hereby confirm that: i. in the preparation of the annual accounts, the
applicable accounting standards have been followed and 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; 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.
29. Board Evaluation
The performance evaluation of the Board, its Committees and individual
Directors was conducted by the Board Nomination and Remuneration Committee (BNRC) and the
Board. This was based on questionnaire responses and feedback from each Director. Based on
the questionnaire, the performance of every Director was evaluated by the BNRC and
presentation was made to the Board and an action plan was drawn accordingly.
The overall recommendations based on the evaluation were discussed by
the Board and individual feedback from Directors was taken on record. The discussion
quality was robust, well intended and led to clear direction and decision. Based on the
outcome of the evaluation, assessment and feedback of the Directors, the Board and the
Management have agreed on various action points that would be implemented as per the
agreed timelines. It was noted that the Board Committees function professionally and
smoothly, and besides the Board Committees terms of reference as mandated by law,
important issues are brought up and discussed in the respective Board Committees. Progress
on recommendations from last year and the current years recommendations were
discussed. Apart from the other key matters, the aspects of succession planning and
committee composition were also discussed.
30. Independent Directors
A separate meeting of the Independent Directors ("Annual ID
Meeting") was convened, which reviewed the performance of the Board (as a whole), the
Non-Independent Directors and the Chairman. On an overall basis, the Independent Directors
were highly satisfied with the functioning of the Board and its various Committees and the
high level of commitment and engagement. Apart from this, the Independent Directors also
appreciated the commitment and contributions of the Chairman and Vice Chairman of the
Board in dealing with the Board matters as well as key strategic matters. Post the Annual
ID Meeting, the collective feedback of each of the Independent Directors was discussed by
the Chairperson of the BNRC with the Board covering the performance of the Board as a
whole, the performance of the non-independent directors and the performance of the
Chairman of the Board. The Board also suggested certain areas which require more focused
attention from the Management of the Company in the current financial year.
31. Remuneration Policy
The Board has, on the recommendation of the BNRC, framed a policy for
selection and appointment of Directors, Senior Management and their remuneration. The
Remuneration Policy forms part of the Corporate Governance Report.
The remuneration to the Non-Executive and Senior Management Employees
consists of various components as explained here.
Non – Executive Directors
The Non-Executive Directors shall be entitled to receive remuneration
by way of sitting fees, reimbursement of expenses, for participation in the
Board/Committee meetings and Commission.
Senior Management Employees The remuneration is divided into two
components viz; fixed component of salaries, perquisites and retirement benefits and
variable component of performance based incentive.
32. Policy on Directors Appointment and Remuneration and other
Details
In accordance with the Joint Venture Agreement between the Promoters,
three Directors each may be nominated by Tata Sons Private Limited and Tamilnadu
Industrial Development Corporation Limited.
The guidelines for selection of Independent Directors are as set out
below:
The Board Nomination and Remuneration Committee oversees the
Companys nomination process for Independent Directors and in that connection
identifies, screens and reviews individuals qualified to serve as an Independent Director
on the Board. The BNRC further has in place a process for selection and the attributes
that would be desirable in a candidate and as and when a candidate is shortlisted, the
BNRC will make a formal recommendation to the Board.
33. Other Disclosures
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:
i) The ratio of the remuneration of each Director to the median
remuneration of the employees of the Company and the percentage increase in remuneration
of each Director, Managing Director, Chief Financial Officer and Company Secretary in the
financial year:
| Sl. No. A] |
Name of the director Directors
remuneration |
Ratio (times) |
% change |
| 1 |
Chairman1 |
5.90 |
NA |
| 2 |
Mr. Arun Roy1 |
2.40 |
NA |
| 3 |
Ms. Kakarla Usha1 |
0.84 |
NA |
| 4 |
Ms. Jayashree Muralidharan1 |
5.67 |
NA |
| 5 |
Mr. Pankaj Kumar Bansal1 |
6.08 |
NA |
| 6 |
Mr. N N Tata2 |
2.78 |
NA |
| 7 |
Mr. Bhaskar Bhat |
8.44 |
152.16 |
| 8 |
Mr. Ashwani Puri |
12.25 |
154.31 |
| 9 |
Mr. B Santhanam |
10.57 |
137.62 |
| 10 |
Mr. Pradyumna Vyas |
7.54 |
166.50 |
| 11 |
Dr. Mohanasankar Sivaprakasam |
9.76 |
146.88 |
| 12 |
Ms. Sindhu Gangadharan1 |
7.94 |
NA |
| 13 |
Mr. Sandeep Singhal1 |
9.00 |
NA |
| 14 |
Mr. C K Venkataraman |
125.16 |
48.55 |
| B] |
Key Managerial Personnel |
|
|
| 15 |
Mr. S Subramaniam3 |
- |
- |
| 16 |
Mr. Ashok Sonthalia3 |
- |
- |
| 16 |
Mr. Dinesh Shetty |
- |
15% |
1 The % change in remuneration is not comparable as the said
directors held the position for a part of the year either in 2020-21 or in 2021-22.
2 In line with the internal guidelines, no payment is made
towards commission to Mr. N N Tata, Non–Executive Director of the Company during the
period for which he was in full-time employment with other Tata Group companies i.e., till
November 2021.
3Employed for part of the year and hence not applicable.
The remuneration includes the Commission for the year under reporting
and payable in Financial Year 2022-23 post the ensuing Annual General Meeting.
ii) The percentage increase in the median remuneration of employees in
the financial year: 7%
iii) The number of permanent employees on the rolls of Company: 7,263
iv) Average percentile increase already made in the salaries of
employees other than the managerial personnelinthelastfinancialyearanditscomparison with
the percentile increase in the managerial remuneration and justification thereof and point
out if there are any exceptional circumstances for increase in the managerial
remuneration:
The average percentage increase for the Financial Year 2021-22 was 7%
across all levels. Increase in the managerial remuneration is based on market trends and
performance criteria as determined by the Board of Directors and on the recommendation of
the BNRC.
v) Affirmation that the remuneration is as per the Remuneration Policy
of the Company: The Companys Remuneration Policy is based on the principle of
internal equity, competence and experience of the employee and industry standards. Through
its compensation programme, the Company endeavours to attract, retain, develop and
motivate high performance and engaged workforce. The Company follows a compensation mix of
fixed pay, benefits and performance based variable pay. Individual performance pay is
determined by business performance and the performance of the individuals is measured
through the annual appraisal process. The Company affirms that remuneration is as per the
Remuneration Policy of the Company.
34. Information as per Rule 5(2) of the Chapter XIII, of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014
The statement containing particulars of employees as required under
Section 197(12) of the Act read with Rule 5(2) and 5(3) of the Rules forms part of this
Report. Further, the Report and the Accounts are being sent to the Members excluding the
aforesaid statement. In terms of Section 136 of the Act, the said statement will be open
for inspection upon request by the Members. Any Member interested in obtaining such
particulars may write to the Company Secretary.
35. Auditors a) Statutory Auditors
B S R & Co. LLP, Chartered Accountants (ICAI Registration No.
101248W/W-100022) were appointed as the Statutory Auditors of the Company to hold office
from the conclusion of the 33rd Annual General Meeting till the conclusion of
the ensuing 38th Annual General Meeting.
After evaluating all proposals and considering various factors such as
independence, industry experience, technical skills, geographical presence, audit team,
audit quality reports, etc., BSR has been recommended for the reappointment as statutory
auditors of the Company for a term of five years, from the conclusion of the ensuing
Annual General Meeting, till the Annual General Meeting to be held in the calendar year
2027, at such remuneration mutually agreed and approved by the Board.
The Company has received confirmation from the Auditors to the effect
that their appointment, if made, will be in accordance with the limits specified under the
Companies Act, 2013 and that the firm satisfies the criteria specified in Section 141 of
the Act read with Rule 4 of Companies (Audit & Auditors) Rules 2014.
b) Secretarial Audit
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has
appointed V. Sreedharan & Associates, Practicing Company Secretary to undertake the
Secretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewith
as Annexure-IV.
c) Cost Audit
The Company is not required to maintain cost records as per sub-section
(1) of Section 148 of the Act.
36. General Disclosure
During the year, there were no transactions requiring disclosure or
reporting in respect of matters relating to:
(a) issue of equity shares with differential rights as to dividend,
voting or otherwise;
(b) issue of shares (including sweat equity shares) to employees of the
Company under any scheme;
(c) raising of funds through preferential allotment or qualified
institutions placement;
(d) significant or material order passed by the Regulators or Courts or
Tribunals which impact the going concern status and Companys operations in future;
(e) pendency of any proceeding under the Insolvency and Bankruptcy
Code, 2016; and
(f) instance of one-time settlement with any bank or financial
institution.
37. Auditors Report and Secretarial Auditors Report
The Auditors Report on the financial statements of the Company
for the financial year ended 31st March 2022 is unmodified, i.e., it does not
contain any qualification, reservation, or adverse remark. The Auditors Report is
enclosed with the financial statements forming part of the Annual Report.
There are no disqualifications, reservations, adverse remarks, or
disclaimers in the secretarial auditors report.
38. Disclosures of Transactions of the Listed Entity with any Person or
Entity belonging to the Promoter/Promoter Group which hold(s) 10% or more Shareholding in
the Listed Entity, in the format prescribed in the relevant Accounting Standards for
Annual Results
Related Party Transactions with Promoter/Promoter Group holding 10% or
more shares
Tamilnadu Industrial Development Corporation Limited and Tata Sons
Private Limited holds 10% or more shares in the Company. The details of transactions with
promoter/promoter group holding 10% or more shares have been disclosed in the financial
statements which is part of the Annual Report.
The details of the transactions with related parties during Financial
Year 2021-22 are provided in the accompanying financial statements. There were no
transactions during the year which would require to be reported in Form AOC-2.
Acknowledgements
Your Directors wish to place on record their appreciation for the
commitment extended by the employees of the Company and its subsidiaries during the year,
especially during the second and third wave of COVID-19 related disruptions. Further, the
Directors also wish to place on record the support which the Company has received from its
promoters, shareholders, bankers, business associates, vendors and customers of the
Company.
|
On behalf of the Board of Directors, |
| S Krishnan |
C K Venkataraman |
| Chairman |
Managing Director |
3rd May 2022
Bengaluru