To the Members of Titan Company Limited
The Directors are pleased to present the Thirty Seventh Annual Report and the AuditedFinancial Statements for the year ended 31st March 2021:
1. Financial Results
| ||Standalone || ||Consolidated || |
| ||2020-21 ||2019-20 ||2020-21 ||2019-20 |
|Revenue from Operations ||20602 ||20010 ||21644 ||21052 |
|Other Income ||181 ||146 ||186 ||153 |
|Total Income ||20783 ||20156 ||21830 ||21205 |
|Expenditure ||18901 ||17592 ||19920 ||18585 |
|Profit before exceptional items finance costs depreciation and taxes ||1882 ||2564 ||1910 ||2620 |
|Finance Costs ||181 ||149 ||203 ||166 |
|Depreciation/Amortisation ||331 ||310 ||375 ||348 |
|Profit before share of profit/(loss) of an associate and joint venture and exceptional items and taxes ||1370 ||2105 ||1332 ||2106 |
|Share of profit/(loss) of an associate and Jointly controlled entity ||- ||- ||(5) ||(4) |
|Profit before exceptional items and taxes ||1370 ||2105 ||1327 ||2102 |
|Exceptional items ||137 ||- ||- ||- |
|Profit before taxes ||1233 ||2105 ||1327 ||2102 |
|Income taxes || || || || |
|- Current ||351 ||552 ||360 ||570 |
|- Deferred ||5 ||36 ||(7) ||39 |
|Profit for the year ||877 ||1517 ||974 ||1493 |
|Attributable to || || || || |
|- Shareholders of the Company ||877 ||1517 ||973 ||1501 |
|- Non-controlling interests ||- ||- ||1 ||(9) |
|Profit brought forward ||3757 ||2876 ||3592 ||2759 |
|Appropriations || || || || |
|Adjustment of transition to Ind AS 116 on opening retained earnings ||- ||(156) ||- ||(159) |
|Deferred tax on Ind AS 116 transition impact ||- ||55 ||- ||55 |
|Acquisition of non-controlling interest in subsidiary ||- ||- || ||(30) |
|Dividend on Equity Shares (excluding tax) ||(355) ||(444) ||(355) ||(444) |
|Tax on dividends ||- ||(91) ||- ||(91) |
|Closing Balance in Retained Earnings ||4279 ||3757 ||4210 ||3592 |
1 a) Standalone Numbers:
During the year under review the Company's total revenue grew by 3% to Rs.20602 crorecompared to Rs.20010 crore in the previous year.
Profit before tax declined by 41% to Rs.1233 crore and the net profit decreased by 42%to
The Watches and Wearables Division of the Company recorded revenue of Rs.1580 crore adecline of 40%. The revenue from Jewellery Division grew by 3% touching Rs.17274 crore(excluding sale of bullion of Rs.1357 crore). The revenue from Eyewear Division declinedby 31% to Rs.375 crore. New Businesses viz. Indian Dress Wear Division and Fragrances andAccessories Division recorded revenue of Rs.98 crore a decline of 43% over the previousyear. While the Indian Dress Wear Division declined by 30% the Fragrances and AccessoriesDivision recorded a decrease of 51%.
With the declaration of COVID-19 as a pandemic in mid-March 2020 the performance ofvarious Divisions were affected during the first half of the last financial year due tostore closures consequent upon declaration of national lockdown by the Government andsubsequent state-wise lockdowns. Watches & Wearables and Eyewear revenue declinedwhereas Jewellery Division grew marginally by 3% (excluding sale of bullion during theyear). There was a substantial increase in the procurement of gold through Gold on Leaseresulting in considerable increase in the cash balances and no borrowings at the end ofthe year. The Management Discussion and Analysis report which is attached dwells intothe performance of each of the business divisions and the outlook for the current year.
1 b) Consolidated Numbers
At the consolidated level the revenue stood at
Rs.21644 crore as against Rs.21052 crore in the previous year. The details of theperformance of the Company's subsidiaries are covered below in point 17 of this Report.
2. International Operations
The impact of the pandemic on this business was significant as secondary sales dried upleading to virtually zero primary sales to the Company's distributors in the first half ofthe year. As some normalcy returned in the second half of the year efforts were focusedon targeted expansion and maximizing returns from markets that performed better. Newproducts new distribution channels and a focus on e-commerce enabled a reasonablerecovery in the second half of the year.
The first international Tanishq store in Meena Bazaar Dubai was opened in October 2020in the midst of the pandemic but did exceedingly well. The store is loved by discerningcustomers for its differentiated merchandise and superlative customer experience. Furtherefforts will also be made to expand the brands' presence in the GCC region and around theworld. Considering this the Company plans to enter into North America for which groundwork has been initiated.
3. COVID- 19
The COVID-19 pandemic has emerged as a global challenge creating disruption across theworld. The businesses and business models have transformed to create a new work order.
The revenue impact of the pandemic played out broadly along the anticipated lines withvarying levels of impact and a positive surprise in the Jewellery business.
The physical and emotional well-being of employees continues to be a top priority forthe Company with several initiatives taken to support employees and their families duringthe pandemic. The Company has extended counselling and self-help services providing mental& emotional support to employees. The Company has reimagined employee engagement byembracing virtual technologies. Initiatives were taken to reduce stress and the feeling ofisolation hosted inspirational leaders mental health experts and finance experts toboost the morale of employees.
After registering tepid business during the first half of the year due to COVID-19 theCompany witnessed strong business momentum as the COVID-19 impact on the consumersentiments seemed to fade during the second half of the year. After recording the bestrevenue in the third quarter which was a festive season the Company again recorded verystrong revenues in the last quarter across all businesses. The strong performance in thefinancial year had been the result of the agility in navigating through the crisis anduncertainty of ground situations along with innumerous grass root innovations to serveconsumer needs and leveraging digital channels to reach-out to them effectively. While theJewellery Division has emerged very strongly from the crisis and witnessed strong growthin the last two quarters the
Watches & Wearables and the Eyewear Divisions have also made very good progress onrecovery. The Company continued with its retail network expansion during the year acrossthe Watches & Wearables Jewellery and Eyewear businesses.
In line with the Company's philosophy to support its ecosystem during the year theCompany had granted loans to the extent of Rs.97 crore to its franchisees and vendors tosupport them during the pandemic crisis out of which an amount of Rs.3 crore isoutstanding as of 31st March 2021.
The Directors are pleased to recommend the payment of dividend on equity shares at therate of 400% (i.e.
Rs.4 per equity share of Rs.1 each) subject to approval by the shareholders at theensuing Annual General Meeting (AGM) and payment is subject to deduction of tax at sourceas may be applicable.
5. Transfer to General Reserve
As permitted under the provisions of the Companies Act 2013 the Board do not proposeto transfer any amount to general reserve and has decided to retain the entire amount ofprofit for Financial Year 2020-21 in the profit and loss account.
The year saw all the businesses being impacted by the COVID-19 pandemic with slow-downin operations and sales. The Company's War on Waste initiative to control the costs gavevery good results in reducing costs significantly. Further the Company's particular focuson conserving cash ensured that adequate liquidity was available despite the pandemic.Substantial increase in the procurement of gold through Gold on Lease resulted in hugecash generation for the year resulting in a very comfortable cash position at the end ofthe year. During the year under review ICRA upgraded the Company's long term rating fromAA+ to AAA with stable outlook. The Company had issued Commercial Papers (CP) totallingRs.1500 crore with three month tenure during the first and second quarters of the yearand redeemed the same on the respective due dates. There were no outstanding CPs as of 31stMarch 2021. During the year the Company had sold its excessive bullion thereby increasingthe efficiency in inventory management and cash flow situation.
7. Public Deposits
The Jewellery Division of the Company was successfully operating customer acquisitionschemes for jewellery purchases for many years. When the Companies Act 2013 (the"Act") became substantially effective from 1st April 2014 theCompany had around seven lakh subscribers contributing to these schemes. However theseschemes were exempt under the Companies Act 1956 relating to acceptance of publicdeposits as such schemes were not covered in the definition of deposits. Under the Act andthe Rules made there under (Deposit Regulations') the scope of the term"deposit" was enlarged and therefore a view was taken that the jewellerypurchase schemes offered by the Company to its customers would be treated as publicdeposits. Thereupon the Company discontinued fresh enrolment of subscribers and initiatedsteps 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 toaccept deposits subject to applicable provisions to the extent of 10% of the aggregate ofthe 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 andfree reserves from the Public after prior approval by way of special resolutions passed bythe Members in this regard. Requisite approval was obtained from the Members of theCompany and a new programme for customers to purchase jewellery (under the JewelleryPurchase 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: Rs.1909 crore
(b) remained unpaid or unclaimed as at the end of the year: Rs.1075 crore
(c) whether there has been any default in repayment of deposits or payment of interestthereon 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 ofthe year : Nil
There are no deposits that have been accepted by the Company that are not in compliancewith the requirements of Chapter V of the Act.
8. Material Changes and Commitments Affecting Financial Position Between end ofthe Financial Year and Date of Report
There have been no material changes and commitments for the likely impact affectingfinancial position between end of the financial year and the date of the report except forthe impact arising out of the continuance of the COVID-19 pandemic which has risenexponentially in the second wave till the date of signing of this Report.
Please refer Note 37 of Notes to the standalone financial statements for furtherdetails in respect of impact of COVID-19 on the financial statements of the Company
9. Significant and Material Orders
There are no significant and material orders passed by the regulators or courts ortribunals impacting the going concern status and Company's operations in future.
10. Particulars of Loans Guarantees and Investments
Details of loans guarantees and investments covered under the provisions of Section186 of the Act are given in the notes to the financial statements.
During the year under review the Company had invested
Rs.28 crore (CHF 3.61 million) as application money towards equity stake in Favre LeubaAG (FLAG).
The Company had provided Corporate Guarantee of
Rs.66 crore to Titan Holdings International FZCO in two tranches and a CorporateGuarantee of Rs.7 crore to Titan Global Retail LLC during the year.
11. Integrated Report
The Company has over the last three years taken steps to move towards IntegratedReporting in line with its commitment to voluntarily disclose more information to thestakeholders on all aspects of the Company's business. Accordingly the Company hadintroduced key content elements of Integrated Reporting <IR> aligned to theInternational Integrated Reporting Council Framework (IIRC) in the Annual Report of theprevious year 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 year's AnnualReport as well.
12. Adequacy of Internal Controls and Compliance with Laws
The Company during the year has reviewed its Internal Financial Control systems andhas continually contributed to establishment of more robust and effective internalfinancial control framework prescribed under the ambit of Section 134(5) of the Act. Thepreparation and presentation of the financial statements is pursuant to the controlcriteria defined considering the essential components of Internal Control - as stated inthe "Guidance Note on Audit of Internal Financial Controls Over FinancialReporting" issued by the Institute of Chartered Accountants of India.
The control criteria ensures the orderly and efficient conduct of the Company'sbusiness including adherence to its policies safeguarding of its assets prevention anddetection of frauds and errors accuracy and completeness of the accounting records andthe timely preparation of reliable financial information.
Based on the assessment carried out by the Management and the evaluation of the resultsof the assessment the Board of Directors are of the opinion that the Company has adequateInternal Financial Controls system that is operating effectively as at 31stMarch 2021.
There were no instances of fraud which necessitates reporting of material misstatementto the Company's operations.
There has been no communication from regulatory agencies concerning non-compliance withor deficiencies in financial reporting practices.
13. Board Meetings
During the year under review seven Board meetings were held details of which areprovided in the Corporate Governance Report.
14. Audit Committee and other Board Committees
The details pertaining to the composition of the Audit Committee and its role isincluded in the Corporate Governance Report which is a part of this Annual Report. Inaddition to the Committees mentioned in the Corporate Governance Report the Company has aCorporate Social Responsibility Committee the details of which are covered in AnnexureII to this Report.
15. Risk Management
Pursuant to the requirement of Regulation 21 of the SEBI (Listing Obligations andDisclosure Requirements)
Regulations 2015 (the "SEBI LODR") the Company has constituted a RiskManagement Committee (RMC) consisting of Board members and senior executives of theCompany.
The Company has in place a Risk Management framework to identify evaluate businessrisks and challenges across the Company both at corporate level as also separately foreach business division.
The top tier of risks for the Company is captured by the operating management afterextensive deliberations on the nature of the risk being a gross or a net risk andthereafter in a prioritized manner presented to the Board for their inputs on riskmitigation/management efforts. Based on this framework a Risk Management policy has beenadopted.
The RMC engages in the Risk Management process and has set out a review process so asto report to the Board the progress on the initiatives for the major risks of each of thebusinesses that the Company is into.
The Company has a robust process for managing the top risks overseen by the RiskManagement Committee (RMC) of the Board. As part of this process the Company hasidentified the risks with the highest impact and then assigned them a likely probabilityof occurrence. Mitigation plans for each risk have also been put in place and are reviewedby the Management every six months before presenting to the RMC.
16. Related Party Transactions
There are no materially significant Related Party Transactions made by the Company withPromoters Directors Key Managerial Personnel which may have a potential conflict withthe interests of the Company at large. All Related Party Transactions are placed beforethe Audit Committee and the Board for approval if required. Prior omnibus approval of theAudit Committee is obtained for the transactions which are of a foreseen and repetitive innature. The transactions entered into pursuant to the omnibus approval so granted areverified by the Internal Auditor and a statement giving details of all related partytransactions is placed before the Audit Committee and the Board of Directors for theirapproval if applicable on a quarterly basis. The Company has developed an Internal Guideon Related Party Transactions Manual and prescribed Standard Operating Procedures for thepurpose of identification and monitoring of such transactions. The Policy on Related PartyTransactions as approved by the Board is uploaded on the Company's website. None of theDirectors have any pecuniary relationships or transactions except to the extent of sittingfees and commission paid to the Directors and to Mr. Bhaskar Bhat to whom the Company paysmonthly pension as approved by the Board of Directors consequent upon his retirement asManaging Director of the Company in the month of September 2019.
The details of the transactions with related parties during the year 2020-21 areprovided in the accompanying financial statements. There were no transactions during theyear which would require to be reported in Form AOC-2.
17. Subsidiaries/Joint Venture/Associate Company
As on 31st March 2021 the Company had the followingsubsidiaries/Associate/Joint Venture:
|Sl. No. Name of the Subsidiary/ Associate/ Joint Venture ||Relationship |
|1 Favre Leuba AG Switzerland ||Subsidiary |
|2 Titan Watch Company Limited Hong Kong ||Step-down Subsidiary |
|3 Titan Engineering & Automation Limited ||Subsidiary |
|4 CaratLane Trading Private Limited ||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 StudioC Inc. USA ||Step-down Subsidiary |
The Company held a 49% equity stake in Montblanc India Retail Private Limited(Montblanc India) a joint venture entered into with Montblanc Services B.V. theNetherlands for operation of retail boutiques in India for Montblanc products. As part ofthe Company's consolidation strategy to focus on its primary business and proprietarybrands the Company during the year took a strategic decision to divest its entireshareholding in Montblanc India to its Joint Venture partner and accordingly thedivestment was completed on 12th March 2021 at a consideration of Rs.43 croreby exercising Put Option under the joint venture agreement. Consequently the Company hasrecognised profit on sale of investment amounting to Rs.4 crore under the head "Otherincome" during the year ended 31st March 2021.
During the year 2020-21 Favre Leuba AG (FLAG) a wholly owned subsidiary inSwitzerland had registered a turnover of CHF 1.04 million i.e. Rs.8 crore against theprevious year's figures of CHF 0.89 million i.e.
Rs.6 crore and loss of CHF 7.34 million i.e. Rs.58 crore (2019-20: CHF 7.19 millioni.e. Rs.51 crore). During the year Financial Year 2020- 21 the Company had invested CHF3.61 million (Rs.28 crore) in FLAG as share application money. During the year theCompany had decided to significantly scale down the operations of FLAG due to the adverseimpact on its operations post the COVID-19 pandemic. Consequent to this the Companyperformed an impairment testing of its investments in FLAG and made an additionalprovision of Rs.137 crore towards impairment of investment in FLAG.
Titan Watch Company Limited is a subsidiary of Favre Leuba AG and hence is a step- downsubsidiary of the Company. It has a capital of HK $ 10000 and no Profit and Loss accounthas been prepared.
During the year Titan Engineering & Automation Limited (TEAL) generated income ofRs.354 crore against the previous year's figures of Rs.462 crore a decrease of 24% andthe profit before tax was at Rs.40 crore against the previous year's figures of
Rs.78 crore. The performance of TEAL was substantially hit due to the challenges facedby the Aerospace & Defence and Automation Divisions on account of COVID-19 pandemic.The TEAL Board has recommended a dividend of Rs.5 per share on the face value of Rs.10 pershare aggregating to Rs.24 crore (subject to applicable taxes) for Financial Year 2020-21.
CaratLane Trading Private Limited (CaratLane) is engaged in the business ofmanufacturing of jewellery products and has significant online and offline presence.During the last financial year CaratLane recorded double digit growth in retail saleswith great emphasis on omni-selling. CaratLane added 25 stores in the year to take thestore count to 117. During the year 2020-21 CaratLane registered a turnover of Rs.716crore (previous year: Rs.621 crore) and recorded a profit of Rs.2 crore for the first timeas against the previous year's loss of Rs.27 crore. Titan Holdings International FZCO(Titan Holdings) which was formed on 22nd October 2019 as a Free Zone Companywith a view to carry out business activities and invest in the share capital of any othercompanies/entities either as a joint venture partner or as its wholly owned subsidiarycompany for carrying out business activities. Titan Holdings incurred a loss of AED 0.60million ( Rs.1 crore) against previous year's loss of AED 0.31 million (Rs.0.59 crore).
During the year Titan Global Retail LLC started its operations through the storeopened in Dubai in October 2020 and registered a turnover of AED 19.20 million
`( 39 crore) and incurred a loss of AED 2.47 million ( Rs.5 crore) against previousyear's loss of AED 0.41 million (Rs.0.79 crore).
Titan Commodity Trading Limited (TCTL) was incorporated as a Wholly-Owned Subsidiaryduring the year with the objective of carrying on the business of trading in variouscommodities and products by acquiring or registering as a member of various commodityexchange/s and to acquire and build technology to facilitate trading dealing buying andselling of all types of direct commodities or commodity futures and other preciousmaterials. Subsequently TCTL is registered as a Trading Member on the Multi CommodityExchange of India Limited. As of 31st March 2021 the Company had not startedoperations.
During the year StudioC Inc. USA was incorporated as a 100% subsidiary of CaratLanewith the objective of retailng of jewellery in North America. However the Company has notstarted any operations as of 31st March 2021.
The Company holds 26.79% stake in Green Infra Wind Power Theni Limited which suppliesenergy to the Company.
None of these subsidiary companies declared a dividend for Financial Year 2020-21except TEAL. The annual accounts of these subsidiary companies/JV company wereconsolidated with the accounts of the Company for Financial Year 2020-21.
18. 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 readwith Rule 8 of the Companies (Accounts) Rules 2014 are furnished in Annexure-I tothe Board's Report.
19. Corporate Social Responsibility (CSR)
In compliance with Section 135 of the Act the Company has undertaken CSR activitiesprojects and programs as provided in the CSR policy of the Company and as identified underSchedule VII of the Act and excluding activities undertaken in pursuance of its normalcourse of business. In addition to the projects specified as CSR activities under Section135 of Act the Company has also carried out several other sustainability/responsiblebusiness initiatives and projects. The Company has spent the entire 2% of the net profitsearmarked for CSR projects during the Financial Year 2020-21. A report on CSR pursuant toSection 135 of the Act and Rules made thereunder is attached in Annexure-II.
In line with the amendments to the CSR Rules notified in January 2021 the Company hasamended its CSR policy and the same has been uploaded on the website of the Company alongwith the Action Plan for the CSR activities for Financial Year 2021-22.
20. Annual Return
The link to access the Annual Return is https://www.titancompany.in/sites/default/files/Annual%20 Return%20for%202021.pdf
21. Dividend Distribution Policy
The Dividend Distribution Policy as amended by the Board at its meeting held on 29thApril 2021 is annexed as Annexure-III to this Report.
22. Vigil Mechanism
The Company has a whistle blower mechanism wherein the employees can approach theManagement of the Company (Audit Committee in case where the concern involves the SeniorManagement) and make protective disclosures to the Management about unethical behaviouractual or suspected fraud or violation of the Company's Code of Conduct and InsiderTrading Code. The Whistle Blower Policy requires every employee to promptly report to theManagement any actual or possible violation of the Code or an event an employee becomesaware of that could affect the business or reputation of the Company. The disclosuresreported 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 ofthe Audit Committee to report any concern. No person has been denied access to theChairman to report any concern. Further the said policy has been disseminated within theorganisation and has also been posted on the Company's website athttps://www.titancompany.in/sites/default/ files/Whistle%20Blower%20Policy_1.pdf.
23. Secretarial Standards
The Directors state that the applicable Secretarial Standards i.e. SS-1 and SS-2issued by the Institute of Company Secretaries of India relating to Meetings of Board ofDirectors and General Meetings respectively have been duly complied with.
24. Disclosures as per the Sexual Harassment of Women at Workplace (PreventionProhibition and Redressal) Act 2013
The Company continues to work towards ensuring a safe and secure workplace to all itsemployees. The
Company has matured in its practices and the awareness amongst employees in realizingtheir rights and responsibilities. Regular internal feedback mechanisms have shownencouraging signs of trust and confidence in the organization by various stakeholders(employees partners and vendors).
The pandemic situation was an opportunity for the Internal Complaints Committee (ICC)members to adapt to the virtual reality quickly and increase the outreach. Allstakeholders across geographies viz. employees contract and agency hires vendors andassociates are part of the virtual communication cascades. The regional heads ormanufacturing/unit heads along with the leadership team also led the conversations withtheir respective teams on this subject. This has impacted positively with more and morestakeholders becoming familiar with the policy and gaining confidence to raise concernswith the locational committee members. About 81 such cascades covering over 3000stakeholders were held virtually. Other means of communication using short films quizzesand games were continued to be shared on digital platforms.
During the financial year Financial Year 2020-21 the Company received 4 complaints onsexual harassment 3 were disposed off with appropriate action taken and 1 complaint waspending as on 31st March 2021 which was disposed off as on the date of thisreport.
25. Details in Respect of Frauds Reported by Auditors Under Sub-Section (12) of Section143 other than those which are Reportable to the Central Government
The Statutory Auditors of the Company have not reported any fraud as specified underthe second proviso of Section 143(12) of the Act (including any statutory modification(s)or re-enactment(s) for the time being in force).
26. Corporate Governance and Management Discussion and Analysis
As per SEBI LODR Management Discussion and Analysis Corporate Governance Report andPracticing Company Secretary's Certificate regarding compliance of conditions of CorporateGovernance forms part of this Annual Report.
Pursuant to Regulation 34 of the SEBI LODR the Management Discussion and Analysis ispresented in a separate section forming part of this Annual Report. As required under theprovisions of the SEBI LODR the Audit Committee of the Company has reviewed theManagement Discussion and Analysis report of the Company for the year ended 31stMarch 2021.
27. Business Responsibility Report
As per SEBI LODR a Business Responsibility Report is attached and forms part of thisAnnual Report.
28. Directors and Key Managerial Personnel
Ms. Hema Ravichandar and Ms. Ireena Vittal were Independent Directors during part ofthe Financial Year 2020-21. Ms. Hema Ravichandar Independent Director retired from theBoard with effect from 1st August 2020 upon completion of her second term as anIndependent Director. Ms. Ireena Vittal resigned from the Board with effect from 1stOctober 2020 due to her increased preoccupation with her other professional commitments.The Board placed on record its appreciation for the valuable contribution and wise counselrendered by Ms. Hema Ravichandar and Ms. Ireena Vittal during their tenure as a member ofthe Board.
Mr. Ashwani Puri Mr. B Santhanam Mr. Pradyumna Vyas and Dr. Mohanasankar Sivaprakasamwere the Independent Directors during the entire financial year 2020-21. Ms. SindhuGangadharan and Mr. Sandeep Singhal were appointed as Independent Directors during theyear. Ms. Sindhu Gangadharan was appointed as an Additional Director and IndependentDirector on the Board of the Company with effect from 8th June 2020 andsubsequently approved by the shareholders at the thirty sixth Annual General Meeting heldon 11th August 2020 as an Independent Director for a period of five years from8th June 2020. Mr. Sandeep Singhal on the basis of the recommendation of theBoard Nomination and Remuneration Committee was appointed as an Additional Director andIndependent Director on the Board of the Company on 11th November 2020 for aperiod of five years subject to the approval of the shareholders in the ensuing AnnualGeneral Meeting.
All the Independent Directors have given declarations that they continue to meet thecriteria of independence as laid down under Section 149(6) of the Act and Regulation16(1)(b) of the SEBI LODR and that they are not debarred from holding the office ofdirector by virtue of any SEBI order or any other such authority. All the IndependentDirectors have confirmed that they are in compliance with Rules 6(1) and 6(2) of theCompanies (Appointment and Qualification of Directors) Rules 2014 with respect toregistration with the data bank of Independent Directors maintained by the IndianInstitute of Corporate Affairs.
The Board had based on the recommendations of the Board Nomination and RemunerationCommittee and pursuant to the performance evaluation of Mr. Ashwani Puri as a Member ofthe Board and considering that the continued association of Mr. Ashwani Puri would bebeneficial to the Company proposed to re-appoint Mr. Ashwani Puri as an IndependentDirector of the Company not liable to retire by rotation for a second term effective 3rdAugust 2021 up to 5th May 2026.
In accordance with the provisions of the Act and in terms of the Memorandum andArticles of Association of the Company Mr. V. Arun Roy retires by rotation at the ensuingAnnual General Meeting and has offered himself for re-appointment.
Subsequent to the end of financial year under review Tamilnadu Industrial DevelopmentCorporation Limited (TIDCO) had withdrawn the nomination of Ms. Kakarla Usha IAS as itsnominee director and nominated Mr. Pankaj Kumar Bansal IAS in her place. Accordingly on16th June 2021 the Board has appointed Mr. Pankaj Kumar Bansal IAS as anAdditional Director who will hold office as Director up to this AGM and a resolution isplaced in the ensuing AGM for his appointment as a director of the Company.
The Board placed on record its appreciation for the valuable contribution and wisecounsel rendered by Ms. Usha Kakarla during her tenure as a member of the Board. Membersattention is drawn to Item No. 4 of the Notice for the re-appointment of Mr. V. Arun Royas a Director of the Company liable to retire by rotation Item No.5 of the Notice forthe reappointment of Mr. Ashwani Puri as an Independent Director of the Company for thesecond term Item No.6 of the Notice for the appointment of Mr. Sandeep Singhal as anIndependent Director of the Company for a period of five years from 11thNovember 2020 and Item No. 7 for appointment of Mr. Pankaj Kumar Bansal IAS as aDirector liable to retire by rotation. None of the Directors are related to each otherwithin the meaning of the term "Relative" as per Section 2(77) of the Act.
29. Details of Key Managerial Personnel who were Appointed or have Resigned during theyear
None of the Key Managerial Personnel were appointed or resigned during the year.Pursuant to the provisions of Section 203 of the Act Mr. C K Venkataraman-ManagingDirector Mr. S. Subramaniam - Chief Financial Officer and Mr. Dinesh Shetty General Counsel & Company Secretary continue to be the Key Managerial Personnel of theCompany.
30. Directors' Responsibility Statement
Based on the framework of Internal Financial Controls and compliance systemsestablished and maintained by the Company the work performed by the internal statutoryand secretarial auditors and external consultants including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls are adequate and operatingeffectively.
Accordingly pursuant to the requirements of Section 134 (5) of the Act the Directorshereby confirm that: i. in the preparation of the annual accounts the applicableaccounting standards have been followed and there are no material departures; ii. theyhave selected such accounting policies and applied them consistently and made judgmentsand estimates that are reasonable and prudent so as to give a true and fair view of thestate of affairs of the Company at the end of the financial year and of the profit of theCompany for that period; iii. they have taken proper and sufficient care for themaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting fraud andother 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 thatsuch internal financial controls are adequate and are operating effectively; and vi. theyhave devised proper systems to ensure compliance with the provisions of all applicablelaws and that such systems were adequate and operating effectively.
31. Board Evaluation
The performance evaluation of the Board its Committees and individual Directors wasconducted by the Board Nomination and Remuneration Committee (BNRC) and the Board. Thiswas based on questionnaire responses and feedback with each Director. Based on thequestionnaire the performance of every Director was evaluated by the BNRC andpresentation was made to the Board and an action plan was drawn accordingly. Some of thekey criteria for performance evaluation as laid down by the BNRC were as follows:
Performance evaluation of directors:
Contribution at Board/Committee meetings and Guidance/ support to Management outsideBoard/ Committee Meetings.
Performance evaluation of Board and Committees:
Board structure and composition Degree of fulfilment of key responsibilitiesEstablishment and delineation of responsibilities to Committees Effectiveness of BoardProcesses Information and Functioning Board Culture and Dynamics Quality ofrelationship between the Board and Management Efficacy of communication with ExternalStakeholders and Committees strengths and areas of improvement.
32. Independent Directors
A separate meeting of the Independent Directors ("Annual ID Meeting") wasconvened which reviewed the performance of the Board (as a whole) the non-independentdirectors and the Chairman. Post the Annual ID Meeting the collective feedback of each ofthe Independent Directors was discussed by the Chairperson of the BNRC with the Boardcovering performance of the Board as a whole performance of the non-independent directorsand performance of the Chairman of the Board.
33. Remuneration Policy
The Board has on the recommendation of the BNRC framed a policy for selection andappointment of Directors Senior Management and their remuneration. The link to access theRemuneration Policy is https://www.titancompany.in/sites/default/files/ R E M U N E R AT IO N % 2 0 P O L I C Y % 2 0 F O R % 2 0 DIRECTORS.pdf
34. Policy on Directors' Appointment and Remuneration and other Details
In accordance with the Joint Venture Agreement between the promoters three Directorseach may be nominated by Tata Sons Private Limited and Tamilnadu Industrial DevelopmentCorporation Limited.
The guidelines for selection of Independent Directors are as set out below: The BNRCoversees the Company's nomination process for Independent Directors and in that connectionto identify screen and review individuals qualified to serve as an Independent Directoron the Board. The BNRC further has in place a process for selection and the attributesthat would be desirable in a candidate and as and when a candidate is shortlisted theBNRC will make a formal recommendation to the Board.
35. Other Disclosures
The information required under Section 197 of the Act read with Rule 5(1) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 are givenbelow:
i) The ratio of the remuneration of each director to the median remuneration of theemployees of the Company and the percentage increase in remuneration of each DirectorManaging Director Chief Financial Officer and Company Secretary in the financial year:
|Sl. No. A] Name of the director Director's remuneration ||Ratio (times) _ ||% change1 |
|1 Mr. N Muruganandam ||3.02 ||-34.00 |
|2 Mr. Arun Roy ||3.49 ||-28.18 |
|3 Ms. Kakarla Usha ||2.73 ||NA1 |
|4 Mr. N. N. Tata2 ||NA ||NA |
|5 Mr. Bhaskar Bhat ||3.54 ||NA1 |
|6 Ms. Hema Ravichandar3 ||2.17 ||NA1 |
|7 Ms. Ireena Vittal4 ||3.28 ||NA1 |
|8 Mr. Ashwani Puri ||5.25 ||-30.68 |
|9 Mr. B Santhanam ||4.79 ||-20.90 |
|10 Mr. Pradyumna Vyas ||3.05 ||-16.59 |
|11 Dr. Mohanasankar Sivaprakasam ||4.26 ||NA1 |
|12 Ms. Sindhu Gangadharan5 ||2.66 ||NA1 |
|13 Mr. Sandeep Singhal6 ||1.21 ||NA1 |
|14 Mr. C K Venkataraman ||99.92 ||NA1 |
|B] Key Managerial Personnel || || |
|15 Mr. S Subramaniam ||- ||1.94 |
|16 Mr. Dinesh Shetty ||- ||-2.56 |
Note : Aligning with the performance of the Company for Financial Year 2020-21 theBoard approved payment of Commission to the non-executive Directors at 60% of thecommission as eligible as per the criteria adopted by the Board.
1 The % change in remuneration is not comparable as the said directors held theposition for a part of the year either in 2019-20 or in 2020-21.
2 In line with the internal guidelines no payment is made towards commission toMr. N N Tata Non-Executive Director of the Company as he is in full-time employment withanother Tata Group Company
3 Ms. Hema Ravichandar ceased to hold office as an Independent Director of theCompany with effect from 1st August 2020 upon completion of her second term asapproved by the shareholders at the 35th Annual General Meeting of the Company.
4 Ms. Ireena Vittal resigned from the Company with effect from 1stOctober 2020.
5 Ms. Sindhu Gangadharan was appointed as an Independent Director on the Boardeffective 8th June 2020.
6 Mr. Sandeep Singhal was appointed as an Additional Independent Director on theBoard effective 11th November 2020. ii) The percentage increase in themedian remuneration of employees in the financial year: No increment was provided for theFinancial Year 2020-21 as the sales and profits in Financial Year 2020-21 were projectedto be significantly lower than the Financial Year 2019-20 levels due to the COVID-19pandemic.
iii) The number of permanent employees on the rolls of company: 7235 iv) Averagepercentile increase already made in the salaries of employees other than the managerialpersonnel in the last financial year and its comparison with the percentile increase inthe managerial remuneration and justification thereof and point out if there are anyexceptional circumstances for increase in the managerial remuneration: No increase wasgiven during the previous year thereby there is no comparison with the managerialremuneration.
v) Affirmation that the remuneration is as per the Remuneration Policy of the Company:The Company's Remuneration Policy is based on the principle of internal equity competenceand experience of the employee and industry standards. Through its compensation programmethe Company endeavours to attract retain develop and motivate a high performance andengaged workforce. The Company follows a compensation mix of fixed pay benefits andperformance based variable pay. Individual performance pay is determined by businessperformance and the performance of the individuals measured through the annual appraisalprocess. The Company affirms that remuneration is as per the Remuneration Policy of theCompany.
36. Information as per Rule 5(2) of the Chapter XIII of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014
The statement containing particulars of employees as required under Section 197(12) ofthe Act read with Rule 5(2) and 5(3) of the Rules forms part of this Report. Further theReport 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 uponrequest by the Members. Any Member interested in obtaining such particulars may write tothe Company Secretary.
37. Auditors a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Act read with applicable Rules framedthereunder M/s. BSR & Co. LLP have been appointed as Auditors for a term of fiveyears subject to ratification by the shareholders from the conclusion of the 33rdAnnual General Meeting till the conclusion of the 38th Annual General Meeting.
The Ministry of Corporate Affairs vide Notification dated 7th May 2018notified several Sections of the Companies (Amendment) Act 2017. In view of the saidnotification the requirement of ratification of appointment of auditors under Section139 of the Companies Act 2013 at each AGM is no longer required. Hence the resolutionto this item is not being included in the Notice to the AGM.
b) Secretarial Audit
Pursuant to the provisions of Section 204 of the Companies Act 2013 and the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 the Company hasappointed V. Sreedharan & Associates Practicing Company Secretary to undertake theSecretarial Audit of the Company. The Report of the Secretarial Audit is annexed herewithas Annexure-IV.
c) Cost Audit
The Company is not required to maintain cost records as per sub-section (1) of Section148 of the Act.
38. Auditor's Report and Secretarial Auditor's Report
There are no disqualifications reservations adverse remarks or disclaimers in theauditor's report and secretarial auditor's report.
39. Disclosures of Transactions of the Listed Entity with any Person or Entitybelonging to the Promoter/Promoter Group which hold(s) 10% or more Shareholding in theListed Entity in the format prescribed in the relevant Accounting Standards for AnnualResults
Related Party Transactions with Promoter/ Promoter Group holding 10% or more shares
Tamilnadu Industrial Development Corporation Limited and Tata Sons Private Limited hold10% or more shares in the Company. The details of transactions with promoter/ promotergroup holding 10% or more shares have been disclosed in the financial statements which ispart of the Annual Report.
Your Directors wish to place on record their appreciation of the support which theCompany has received from its promoters shareholders lenders business associatesvendors customers media and the employees of the Company.
|On behalf of the Board of Directors |
|N Muruganandam ||C K Venkataraman |
|Chairman ||Managing Director |
|Chennai ||Bengaluru |
28th June 2021