To the Members of Titan Company Limited
The Directors are pleased to present the Fortieth Annual Report together with the Audited Financial Statements for the year ended 31st March 2024:
1. Financial Results
( in crore)
Standalone
Consolidated
a) Standalone Numbers:
The year saw strong performance by all the businesses driven by the aggressive expansion plans across all business segments.
During the year under review, the Company's total revenue grew by 23% to 47,114 crore compared to 38,270 crore in the previous year.
Profit before tax and exceptional items grew by 3% to 4,607 crore and the net profit grew by 6% to
3,543 crore.
The Watches & Wearables Division of the Company recorded a revenue of 3,904 crore, a growth of 18%. The revenue from Jewellery Division grew by 20% touching 38,352 crore (excluding sale of bullion of 3,940 crore). The revenue from EyeCare Division grew by 5% to 724 crore. New Businesses, viz., Indian Dress Wear Division and Fragrances & Fashion Accessories Division recorded a consolidated revenue of 378 crore, a growth of 28% over the previous year.
The Management Discussion and Analysis report, which is attached, showcases 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
51,084 crore as against 40,575 crore in the previous year. The details of the performance of the Company's subsidiaries are covered below in point 16 of this Report.
2. Dividend
The Board of Directors recommended a dividend on equity shares at the rate of 1100% (i.e., 11 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. The dividend on equity shares if approved by the Members, would involve a cash outflow of 976.56 crore resulting in a dividend pay-out of 28% of the standalone profits of the Company. The Dividend Distribution Policy, is annexed as Annexure-III to this Report and is also available at the
Company's website.
3. Transfer to General Reserve
As permitted under the provisions of the Companies Act, 2013, (the Act), 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 2023-24 appearing in the statement of profit and loss account.
4. Strategic Investments and Borrowings
During the year, the Company had acquired an additional stake of 27.91% from the founder shareholders of CaratLane Trading Private Limited (CaratLane) and from other shareholders resulting in an increase in the Company's holding in CaratLane to 99.99% at a total investment of 4,682 crore. The initial investment in CaratLane was made in the year 2016 and over the past 8 years, in partnership with Tanishq, CaratLane has grown by leaps and bounds. CaratLane has expanded consumer purchase preferences offering beautiful fashionable jewellery for the contemporary woman of today's era. The increase in stake and making it a Wholly-Owned Subsidiary in the foreseeable future, would enhance the Company's offerings in the jewellery segment which offers other brands such as Tanishq, Mia by Tanishq and Zoya.
During the year under reporting, the Company had, by way of private placement, issued and allotted 2,50,000 (Two lakh fifty thousand) Rated, Unsecured, Listed, Redeemable, Non-Convertible Debentures (NCDs) at a face value of 1,00,000 (Rupees One lakh only) each, aggregating up to 2,500 crore (Rupees Two thousand five hundred crore only) in two tranches of 1,250 crore (Rupees One thousand two hundred and fifty crore only) each. The NCDs were rated AAA (Stable) by CRISIL. The NCDs were listed on the Debt Segment of the National Stock Exchange of India Limited (NSE). The proceeds from the issue of NCDs have been utilised as per the objects stated in the offer document and there have been no deviations or variations in the use of proceeds of the NCD issuance from the objects stated in the offer document.
Further, during the year, the Company availed long-term bank borrowings of 779 crore and the same is outstanding as on 31st March 2024. Both the NCDs and long-term borrowings were availed at very competitive rates and the same has been used to increase the stake in CaratLane.
The Company continued to avail short-term working capital facilities from various bankers for its business operations and the facilities are being used mainly for gold procurement for the jewellery business and other related activities of the Company.
The Company continues to optimise its efficiency in inventory management and cash flow by selling excessive bullion as and when necessary.
5. 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 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 and 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: 4,286 crore (b) remained unpaid or unclaimed as at the end of the year: 2,468 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.
6. 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.
7. 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 Company's operations in future.
8. Proceedings under Insolvency and Bankruptcy Code, 2016
During the year under review, there were no proceedings that were filed by the Company or against the Company, which are pending under the Insolvency and Bankruptcy Code, 2016, as amended, before National Company Law Tribunal or other Courts.
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. The corporate guarantees issued by the Company are on behalf of the subsidiaries of the Company to enable them to avail financial assistance from their bankers.
10. Integrated Report
The Company has, over the last six years, taken steps to move towards Integrated Reporting <IR> in line with its commitment to voluntarily disclose more information to stakeholders on all aspects of the Company's business. Accordingly, the Company had introduced key content elements of Integrated Reporting aligned to the International Integrated Reporting Council Framework 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 year's 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 Company's 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 2024.
There were no instances of fraud which necessitated reporting of material misstatements to the Company's 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 had, during the year, renamed the Corporate Social Responsibility Committee as Corporate Social Responsibility &
Sustainability 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 a well-designed enterprise level Business Continuity Plan including Disaster Recovery scenario for the various businesses and functions of the Company to minimise disruptions and potential impact on its employees, customers and business during any unforeseen adverse events or circumstances.
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 Policy on Related Party Transactions as approved by the Board is uploaded on the Company's website and can be accessed at https://www.titancompany.in/sites/default/ files/2023-08/Related%20Party%20Transactions%20 Policy%20-%2014.03.22.pdf. 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. During the year under review, all Related Party Transactions that were entered into were in the Ordinary Course of Business and at Arms' Length Basis. All transactions entered into with related parties were approved by the Audit Committee in line with regulatory requirements. None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for the Financial Year 2023-24 and hence does not form part of this report.
16. Subsidiaries and Associate
As on 31st March 2024, the Company has the following subsidiaries/Associate:
During the year under review and as reported in the previous year regarding the liquidation proceedings of TCL Watches Switzerland, AG (SWAG), SWAG was liquidated effective 21st March 2024 and ceased to be a subsidiary of the Company. Consequently, the Company had provided for impairment in the value of investments to the tune of 282 crore in SWAG and the same is covered in Note 7 of the standalone financial statement.
Titan Watch Company Limited is a subsidiary of Titan Holdings 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 for the Financial Year 2023-24.
TEAL is in the business of Manufacturing Services and Automation Solutions. During the Financial Year 2023-
24, TEAL generated an income of 756 crore against the previous year's figures of 510 crore, an increase of 48% and the profit before tax was at 86 crore against the previous year's figures of 26 crore.
CaratLane is engaged in the business of manufacturing and retailing of jewellery products and has a significant online presence. During the year under review, CaratLane's performance had recorded a strong double-digit growth in retail sales, with great emphasis on omni-channel selling. CaratLane added 50 stores in the year to take the store count to 272. During the Financial Year 2023-24, CaratLane registered a turnover of
3,081 crore (previous year 2,169 crore) and recorded profit before taxes of 114 crore as against the previous year's figures of 119 crore.
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 9.3 million ( 21 crore) against the previous year's loss of AED 2 million ( 4 crore).
TGRL carries out business activities in UAE and GCC regions pertaining to retail trade in the industry in which the Company operates. During the Financial Year 2023-24, TGRL registered a turnover of AED 324.20 million ( 731 crore) (previous year AED 157.70 million - 345 crore) and incurred a loss of AED 28.9 million ( 65 crore) against the previous year's loss of AED 26.59 million ( 58 crore).
Titan International QFZ LLC., carries out jewellery business activities in Qatar and started operations during the Financial Year 2023-24. The Company registered a turnover of QAR 16.3 million ( 37.1 crore) and incurred a loss of QAR 1.8 million ( 4 crore).
TCTL is a trading cum clearing member of Multi Commodity Exchange of India Limited and Multi Commodity Exchange Clearing Corporation Limited. TCTL is in the business of trading in all types of direct and derived commodities, commodity futures, currencies, and other securities. During the Financial Year 2023-24, TCTL registered an income of 8.17 crore (previous year 7.23 crore) and a profit before tax of
5.44 crore (previous year 2.76 crore).
TCL NA is in the business of jewellery retailing in the USA and had registered a turnover of USD 41.5 million ( 343 crore) (previous year USD 7.10 million ( 57 crore) and a loss of USD 3.9 million ( 32 crore) (previous year USD 2.51 million ( 20 crore).
TEAL USA Inc. is a Wholly-Owned Subsidiary of TEAL. The Company has not started any operations as of 31st March 2024.
The Company holds 26.79% stake in Green Infra Wind Power Theni Limited which supplies energy to the operations of the Company.
None of these subsidiary companies declared a dividend for the Financial Year 2023-24.
There has been no material change in the nature of the business of these subsidiaries.
The annual accounts of these Subsidiary/Associate Companies were consolidated with the accounts of the Company for the Financial Year 2023-24. Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of the financial statement of subsidiaries and associate company in Form AOC-1 forms part of the Annual Report. Pursuant to the provisions of Section 136 of the Act, the Financial Statements along with other relevant documents, in respect of subsidiaries, are available on the website of the Company at https://www.titancompany.in/investors/ subsidiaries.
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 Board's Report.
18. Corporate Social Responsibility
In compliance with Section 135 of the Act the Company has undertaken Corporate Social Responsibility (CSR) activities, projects and programmes as provided in the CSR Policy of the Company and as per the Annual Action Plan, 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 and the Impact Assessment has been carried out for all the projects wherever applicable. 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 Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014 is available on the Company's website at https://www. titancompany.in/sites/default/files/2024-06/Annual%20 return%202024_0.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 Company's Tata Code of Conduct and Code of Conduct to Regulate, Monitor and Report Trading by Insiders and Code of Fair Disclosures. The Whistle Blower Policy requires every employee to promptly report to the Management any actual or possible violation of these Codes 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 Company's 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
The Company remains unwavering in its commitment to nurturing a secure and safe work environment for all its constituents. It employs a diverse array of measures to proactively prevent, address, and redress concerns. Close collaboration among the Ethics Committee, the Committee on Prevention of Sexual Harassment (POSH), and the Board Ethics Committee ensures ongoing enhancement through comprehensive feedback mechanisms.
In addition to the core POSH committee, which boasts senior representatives from various echelons of the organisation, 16 locational committees ensure thorough coverage of the POSH Act, 2013. The core committee has been further fortified with seasoned members representing key manufacturing locations.
The Company's POSH Policy is meticulously crafted to uphold gender neutrality, recognising the expansive landscape of the modern workplace and ensuring a protective shield for all stakeholders. Collaboration with recruiting agencies and consultants facilitates the establishment of joint Internal Complaints Committees, offering avenues for recourse to aggrieved parties. Transparent guidelines on penalties and consequences, as delineated in the Disciplinary Procedure and Policies manual, have been revisited and updated.
The Company actively disseminates governance best practices to its business associates, advocating for the adoption of similar policies. Through specialised masterclasses, the paramount importance of compliance and robust governance is underscored.
Communication strategies, including large-scale interactions and the art of storytelling, are harnessed to disseminate awareness, with theatrical presentations serving as an immersive educational platform. Various engagement activities such as quiz, short film competitions were organised to all stakeholders, along with that several classroom and on-line sessions have been conducted to create awareness on Prevention of Sexual Harassment at Workplace.
As of 31st March 2024, there were 7 instances of sexual harassment complaints lodged throughout the year and all cases were investigated and dealt with in line with the POSH Policy of the Company and were disposed-off appropriately.
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 Secretary's 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 2024.
25. Business Responsibility and Sustainability Report
As per the SEBI LODR, SEBI has mandated top 1,000 listed entities in India by market capitalisation to prepare the Business Responsibility and Sustainability Report (BRSR) and further the top 150 listed entities basis market capitalisation are also required to undertake reasonable assurance of the BRSR Core. The BRSR Core is a subset of the BRSR consisting of a set of Key Performance Indicators (KPIs)/metrics under nine Environment, Social and Governance attributes.
Accordingly, the BRSR and Assurance Statement on BRSR Core forms integral part of this Integrated Annual Report and is also available on the Company's Website at www.titancompany.in.
26. Directors and Key Managerial Personnel
As of 31st March 2024, the Company has 12 Directors with an optimum combination of Executive and Non-Executive Directors with 2 women Directors.
Mr. Ashwani Puri, Mr. B Santhanam, Dr. Mohanasankar Sivaprakasam, Ms. Sindhu Gangadharan and Mr. Sandeep Singhal were the Independent Directors during the entire Financial Year 2023-24.
During the year under reporting, Tamilnadu Industrial Development Corporation Limited (TIDCO) had withdrawn the nomination of Mr. S Krishnan and Ms. Jayashree Muralidharan and had nominated Mr. Arun Roy and Mr. Sandeep Nanduri as their nominee directors and the Board accordingly, appointed them as Directors with effect from 17th October 2023 and 2nd November 2023 respectively, followed by approval of the Members of the Company through a Postal Ballot.
Mr. Anil Chaudhry was appointed on the Board as an Additional Director designated as Non-Executive Independent Director on the Board of the Company for a period of 5 years with effect from 20th March 2024, subject to approval of the Shareholders.
Mr. Pradyumna Vyas ceased to be a Director of the Company effective 25th March 2024 on account of completion of his term as an Independent Director of the Company.
The Board placed on record its appreciation for the valuable contribution and guidance rendered by Mr. S Krishnan, Ms. Jayashree Muralidharan and Mr. Pradyumna Vyas during their tenure as members of the Board.
At the meeting of the Board held on 3rd May 2024, the Board, based on the recommendation of the Board Nomination and Remuneration Committee (BNRC), approved the re-appointment of Dr. Mohanasankar Sivaprakasam as Independent Director for a second consecutive term of five years effective 3rd July 2024, subject to the approval of the Shareholders.
The Board, at its meeting held on 3rd May 2024, had approved a Postal Ballot notice to obtain the Shareholders approval for the appointment of Mr. Anil Chaudhry and re-appointment of Dr. Mohanasankar Sivaprakasam as Independent Directors, both for a period of five years.
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 reappointment. 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.
The Members of the Company at its 36th Annual General Meeting held on 11th August 2020, had approved the appointment of Mr. C K Venkataraman as the Managing Director of the Company for a period of 5 years commencing from 1st October 2019 to 30th September 2024. Based on the recommendation of the BNRC and pursuant to the performance evaluation of Mr. C K Venkataraman as Managing Director and considering his background, experience and contribution to the Company over the last 5 years, the Board, at its meeting held on 3rd May 2024, approved his re-appointment as Managing Director of the Company, for a further period commencing from 1st October 2024 up to 31st December 2025 (the date on which he is scheduled to superannuate from the services of the Company), subject to the approval of the Shareholders in the ensuing Annual General Meeting of the Company.
Members attention is drawn to Item No. 5 of the Notice for the re-appointment of Mr. C K Venkataraman as Managing Director of the Company.
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
None of the Key Managerial Personnel (KMP) were appointed or 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 and Company Secretary are the KMPs of the Company.
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 control 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 are adequate and operating effectively during the Financial Year 2023-24.
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 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 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 Company is led by a diverse, experienced and competent Board. The performance evaluation of the Board, Committees of the Board and the individual members of the Board (including the Chairman) for Financial Year 2023-24, was carried out internally pursuant to the framework laid down by the BNRC. This was based on a structured questionnaire which cover various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Member's strengths and contribution, execution and performance of specific duties, obligations and governance and feedback from each Director.
The Chairman of the BNRC leads the performance evaluation exercise. The outcome of the performance evaluation of Committees of the Board and the Board is presented to the Board of Directors of the Company and key outcomes, actionable areas are discussed and acted upon. For more information on the Board Evaluation Process and outcome, please refer the "Board Evaluation Criteria" section of the Corporate Governance Report.
The Independent Directors at their separate meeting review the performance of Non-Independent Directors and the Board as a whole, Chairman of the Company after taking into account the views of Executive Director and Non-Executive Directors, the quality, quantity and timeliness of flow of information between the Company management and the Board that is necessary for the Board to effectively and reasonably perform their duties.
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. The Independent Directors inter-alia discuss the issues arising out of Committee meetings and Board discussion including the quality, quantity and timely flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. Post the Annual ID Meeting, the collective feedback of each of the Independent Directors was discussed by the Chairman 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.
31. Remuneration Policy
Based on the recommendation of BNRC, the Board has formulated a comprehensive Remuneration Policy for its Directors, KMPs and Senior Management of the Company. The philosophy behind this policy is to create a cultureofleadershipandtrust.Thispolicyisinaccordance with Section 178 of the Act and Regulation 19 of SEBI LODR and is available on the Company's website at www.titancompany.in.
Under this policy, the Managing Director, Executive Director, KMPs and other Senior Management personnel are compensated with a fixed salary that includes basic pay, allowances, perquisites, and other benefits. They may also receive annual incentive remuneration, performance-linked payment, or performance based stock units, based on specific performance criteria and other appropriate parameters determined by the BNRC and the Board. The performance-linked payment is dependent on the outcome of the performance appraisal process and the Company's overall performance. The Company's Remuneration Policy takes into account various factors, including the Company's performance throughout the year, achievement of budgeted targets, growth and diversification, remuneration in other companies of comparable size and complexity, etc.
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 BNRC oversees the Company's 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 – 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: 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:
$The % change in remuneration is not comparable as the said Directors held the position for a part of the year either in Financial Year 2022-23 or in Financial Year 2023-24.
The remuneration for the Directors includes the Commission for the year under reporting and payable in Financial Year 2024-25 post the ensuing Annual General Meeting.
^The remuneration of Mr. C K Venkataraman does not include the PSUs granted to him during the Performance Period. ii) The percentage increase in the median remuneration of employees in the Financial Year: 9% iii) The number of permanent employees on the rolls of Company: 8,680 iv) 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 circumstances for increase in the managerial remuneration:
The average percentage increase for the Financial Year 2023-24 was 9% 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 Company's 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, Performance based Stock Units, 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. Performance Stock Units
The Company has adopted and implemented Titan Company Limited Performance Based Stock Unit Scheme 2023 (Scheme 2023) for granting Performance Stock Units (PSUs) to the eligible employees of the Company and its Subsidiaries.
The Scheme 2023 was introduced with an objective to achieve sustained growth and to create Shareholder value by aligning the interests of the employees with long term interest of the Company. The Shareholders of the Company through a Postal Ballot on 21st March 2023, vide special resolution had approved the Scheme 2023 for grant of 10,00,000 PSUs to the Eligible Employees of the Company and its Subsidiaries under the Scheme 2023 and the BNRC administers the Scheme 2023. During the year under review, the Company had granted 7,29,800 PSUs to the eligible employees of the Company and its Subsidiaries under the Scheme 2023 and no employee was granted PSUs equal to or exceeding 1% of the issued share capital of the Company. The Scheme has been implemented through a Trust mechanism by way of secondary acquisition of equity shares by the Trust for transferring the same to the eligible employees on exercising and vesting of PSUs.
The actual number of the PSUs that would vest under the Scheme 2023 shall be subject to meeting performance parameters (which inter alia, includes time and/or performance-based conditions for vesting) on completion of the performance period prescribed by the BNRC for the eligible employees.
This Scheme is in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SBEB & SE Regulations). There has been no material variation in the terms of the PSUs granted under the Scheme.
The certificate from the Secretarial Auditor on the implementation of the Scheme 2023 in accordance with the SBEB & SE Regulations (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force), has been uploaded on the website of the Company at www.titancompany.in. The details of the Scheme 2023, including terms of reference, and the requirement specified under Regulation 14 of the SBEB & SE Regulations are available on the Company's website, at h t t p s: // w w w.t i t a n c o m p a ny. i n / s i t e s /d e fa u l t / files/2024-06/Disclosures%20pursuant%20to%20 SEBI%20%28SBEB%29%20Regulations%202021.pdf.
35. 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.
36. Auditors a) Statutory Auditors
Pursuant to the provisions of Section 139 of the Act read with applicable Rules framed thereunder, M/s. B S R & Co., LLP have been appointed as Auditors for a term of five years from the conclusion of the 38th Annual General Meeting till the conclusion of the 43rd Annual General Meeting.
The Ministry of Corporate Affairs vide Notification dated 7th May 2018 notified several Sections of the Companies (Amendment) Act, 2017. In view of the said notification, the requirement of ratification of appointment of auditors, under Section 139 of the Act at each AGM is no longer required. Hence, the resolution to this item is not being included in the Notice to the AGM.
b) Secretarial Auditors
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 M/s. 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 Auditor
The Company is not required to maintain cost records as per sub-section (1) of Section 148 of the Act.
37. Disclosure of certain types of agreements
The Investment Agreement dated 8th February 1984 (Investment Agreement) and the Supplementary Agreement dated 10th April 2007 (Supplementary Agreement) subsist on the date of this Report where the Company is not a party. Tamilnadu Industrial Development Corporation Limited and Tata Sons Limited (now known as Tata Sons Private Limited) (who replaced Questar Investments Limited, as was mentioned in the Investment Agreement) are parties to the Investment Agreement and the Supplementary Agreement (Agreements). The purpose of entering into these Agreements was for manufacture and sale of watches and watch components.
The details of the said Agreements are provided in the website of the Company as under: https://www. titancompany.in/sites/default /files/2023-09/173-Disclosure%20under%20Regulation%2030A%20 of%20the%20Securities%20and%20Exchange%20 Board%20of%20India%2014th%20August%202023. pdf.
38. 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) instance of one-time settlement with any bank or financial institution.
39. Auditor's Report and Secretarial Auditor's Report
The Auditors' Report on the financial statements of the Company for the Financial Year ended 31st March 2024 is unmodified, i.e., it does not contain any qualification, reservation, adverse remark or disclaimers. The Auditor's 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 Auditor's Report.
40. 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 2023-24 are provided in the accompanying financial statements. There were no transactions during the year which would require to be reported in Form AOC-2.
41. Industrial Relations
During the year under review, industrial relations remained harmonious at all oure stablishments and offices.
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. Further, the Directors also wish to place on record the support which the Company has received from its promoters, shareholders, debenture holders, bankers, business associates, vendors, government(s) and customers of the Company.