Ingersoll-Rand (India) Ltd Management Discussions.

I. Industry Structure and Development: India has registered a steady pace of economic growth in Fiscal 2017-18 as it did in Fiscal 2016-17. Key reforms undertaken by the Government of India for raising economic growth and maintaining stability have made India one of the fastest growing major economies in the world.

Indias GDP for fiscal year 2017-18 was at 6.70%, slowing from 7.1% in the previous financial year. Macroeconomic developments this year have been characterized by swings. In the first half, Indias economy temporarily slowed down as the rest of the world accelerated. This can be attributed to a slew of reforms and policies; demonetization, teething difficulties with the new GST reform, high and rising real interest rates, the Twin Balance Sheet (TBS) challenge, and sharp falls in certain food prices that impacted agricultural incomes. However, the economy showed signs of revival in the second half of the year.

Following the impact of GST on Indias economy, there has been a fifty percent increase in the number of indirect taxpayers. There has also been a large increase in voluntary registrations, especially by small enterprises that buy from large enterprises wanting to avail themselves of input tax credits.

Reflecting the cumulative actions to improve business sentiments, India jumped 30 spots on the World Banks Ease of Doing Business rankings, while similar actions to liberalize the foreign direct investment (FDI) regime helped increase flows by 20 percent.

Your Companys products are primarily sold to industries in the automotive, metals, pharmaceutical and textile sectors and these sectors have shown moderate growth improving the revenue by 1.7% during the year under review.

II. Segment-wise operational performance: Air Solutions is the only segment in your Companys operations. The gross revenue of Air Solutions business in the year under review was Rs. 62,525 lakhs as against Rs. 66,397 lakhs in the previous financial year. Your Company continues to focus on local innovation and creating markets "In India; For India; By India".

The profit before tax is Rs. 13,165 lakhs in the year under review as against Rs. 11,439 lakhs in the previous financial year.

III. Outlook: The Economic Survey report 2017-18 has estimated the economic growth rate in the fiscal year 2019 between 7% and 7.5%, while saying that the rising crude oil price has become a major concern and is expected to grow by average 12% in the FY19. Your Company will continue to move on its path of sustained growth through differentiated product offerings and providing great service to its customers. The International Monetary Fund (IMF) has said that India could grow at 7.4% in the current year 2018-19, as against Chinas 6.8%, making it the fastest growing country among emerging economies. Notably, the International Monetary Fund has projected a 7.8% growth rate for India in 2019

IV. Threat and concerns: The primary threat continues to be leading competitors that are using price pressures as a tool to win the market share. Availability of spurious parts and components at cheap prices is also an added threat. Fluctuating foreign currency rates will have impact on imports. However, the superior product quality together with sustained performance and strong brand image is helping your Company in securing customer orders. Innovation based approach ensures that your Company stays ahead of competition.

V. Safety, Health and Environment: Environmental, Health and Safety (EHS) are areas of prime focus at Ingersoll Rand. Your Company is committed to pursue the goal of "zero injuries" and "incident free" operations, and ensure all employees are aligned with this objective. The management is dedicated to formulating policies and decisions that help conduct the Companys business in a sustainable manner with stringent procedures around safety systems and processes. Regular health check-up and hygiene studies are conducted every year for the employees. Your Company continues to monitor the hazardous and non-hazardous waste generation and disposal, improving its own environmental footprint by continually reducing greenhouse gas (GHG) emissions, consumption of water and by diverting waste from landfill disposal. Your Company has also achieved substantial savings by carrying out energy audits and implementing projects to save energy.

VI. Technology Innovation: Your Company has continued to invest in technology innovation to sustain its leadership position and be the pioneer of best-in-class solutions for its customers. This year, your company, introduced new models to its line of Next Generation R-Series oil-flooded rotary screw air compressors, which provide a more energy-efficient solution for customers with high capacity air requirements. The RS200 to RS250 models rotary screw air compressor reduce energy cost by approximately 10% for large manufacturing facilities. The ability for these compressors to deliver outstanding efficiency without compromising reliability meets the increasing demands of industries to increase productivity while reducing energy use. Our customers in India will be able to become more competitive in the global environment by boosting their productivity with a state of the art airend that delivers as much as 15% improved efficiency and 16% greater airflow capacity.

With this and more, we continue to push the edge of innovation to help our customers achieve real business results, including cost reductions and lower total cost of ownership. Ingersoll Rand holds very high standards for quality and performance and we continue to work diligently to ensure what we launch is true innovation and lives up to not only our high standards but the standards of our customers.

3. DIVIDEND

Your Company on November 8, 2017 declared an interim dividend at the rate of Rs. 3/- per share, absorbing Rs. 947.04 lakhs. Your Company also on May 10, 2018, has declared a special dividend of Rs. 202/- per share, as second interim dividend for the financial year under review, out of profits for the current year and accumulated surplus from profits of earlier years.

Your Directors at its meeting held on May 10, 2018 have, subject to the approval of the members at the ensuring Annual General Meeting, recommended payment of final dividend for the year under review at the rate of Rs. 3/- per share.

The total dividend payout for the year is Rs. 208/- per share absorbing Rs. 65,661.44 lakhs (previous year Rs. 1,894.08 lakhs). Dividend distribution tax payable by the Company would be Rs. 13,687.80 lakhs (previous year Rs. 385.60 lakhs).

As per Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the dividend distribution policy of the Company has been disclosed in the Corporate Governance Report and on the website of the Company.

4. TRANSFER TO RESERVES

Pursuant to the provisions of the Act, your Directors have decided to retain the full profits for the year under review in Retained Earnings.

5. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which has occurred, affecting the financial position of the Company between the end of the financial year of the Company i.e. March 31, 2018 and the date on which this report has been signed.

6. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS IMPACTING THE GOING CONCERN STATUS

There are no significant and material order(s) passed by any of the Regulators or Courts or Tribunals which could impact the going concern status of the Company and its future operations.

7. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Companys management is responsible for establishing and maintaining an adequate system of internal controls over financial reporting. Accordingly, the Board of Directors has laid down internal financial controls to be followed by the Company and such policies and procedures to be adopted by the Company for ensuring efficient and orderly conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the accuracy and completeness of the accounting records and the timely preparation of financial information. The internal controls are commensurate with the size, scale and complexity of your Companys operations and facilitate prevention and timely detection of any irregularities, errors and frauds. The internal controls are continuously assessed and improved/modified to meet changes in business conditions, statutory and accounting requirements.

As a subsidiary of a corporation that is publicly listed on the New York Stock Exchange, your Company complies with the requirements of the Sarbanes Oxley Act of 2002. The Company through its own Corporate Internal Audit Department carries out periodic audits to independently assess the design and operating effectiveness of the internal control system to provide a credible assurance to the Board of Directors and the Audit Committee regarding the adequacy and operating effectiveness of the internal control system. The observations arising out of audit are periodically reviewed by the Audit Committee and compliance ensured.

8. DETAILS OF JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES

Ingersoll-Rand Company, USA is the holding Company and Ingersoll-Rand plc, Ireland, is the ultimate holding company of your Company. Your Company does not have any associate, subsidiary or joint venture either in India or anywhere else in the world.

9. DEPOSITS

During the year under review, your Company has not accepted any fixed deposits from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. There are no unclaimed deposits as on March 31, 2018.

10. STATUTORY AUDITORS

M/s. B S R & Co. LLP. Chartered Accountants (Firm Registration No. 101248W/ W-100022) were appointed as the Statutory Auditors of the Company to hold office for a period of five (5) years commencing from the 95th Annual General Meeting held on August 3, 2017, subject to ratification by the members at every Annual General Meeting. However, pursuant to the notification of certain sections of the Companies (Amendment) Act, 2017, with effect from May 7, 2018 the requirement of ratification of the Statutory Auditors by members is no longer required. Taking into consideration this recent amendment, the annual ratification will not be required from this year onwards.

11. COST AUDITORS

As per Section 148 of the Act read with Companies (Cost Records and Audits) Rules, 2014, as amended, and on the recommendation of the Audit Committee, the Board of Directors has appointed M/s. Ashish Bhavsar & Associates, Cost Accountants, as Cost Auditors for conducting the audit of the cost records maintained by the Company for the year ending March 31, 2019. The Company has received their written consent that the appointment is in accordance with the applicable provisions of the Act and rules framed thereunder. As required under the Act, the remuneration payable to cost auditors is required to be placed before the Members in a General Meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s. Ashish Bhavsar & Associates, Cost Accountants is included in the Notice convening the Annual General Meeting.

12. SHARE CAPITAL

The Company has only one class of share viz. equity share with a face value of Rs. 10 each. During the year under review, there is no change in the issued and subscribed capital of your Company. The outstanding capital as on March 31, 2018 is Rs. 3,156.80 lakhs comprising 31,568,000 equity shares of Rs. 10/- each. Share capital audit as per the directives of the Securities and Exchange Board of India is being conducted on a quarterly basis by Parikh & Associates, Company Secretaries and the Audit Reports are placed on the table of the Board Meeting and duly forwarded to the stock exchanges where the equity shares of your Company are listed.

13. EXTRACT OF THE ANNUAL RETURN

The Extract of Annual Return as on March 31, 2018 as per Section 92(3) of the Act and Rule 12(1) of the Companies (Management and Administration) Rules, 2014 is set out in Annexure A forming part of this report.

14. NUMBER OF MEETINGS OF THE BOARD

Five meetings of the Board of Directors were held during the year under review. The meeting details are provided in the Corporate Governance Report that forms part of this Annual Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed in the Act.

15. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO The information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed as per the provisions of Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is set out in Annexure B forming part of this report.

16. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company has a long and proud history of supporting good activities of philanthropic organizations. Each year, your Company contributes time and financial support to the communities and beneficiaries in and around its areas of operation. This year, your Company has continued its CSR initiatives to focus on providing education, healthcare & sanitation, livelihood and furthering sustainability. These activities are in accordance with Schedule VII of the Act. The Board of Directors and CSR Committee review and monitor from time to time all the CSR activities being undertaken by the Company.

The details of CSR activities carried out by your Company during the year under review are set out in Annexure C forming part of this report.

The Board has adopted a policy on Corporate Social Responsibility which has been uploaded on website of the Company www.ingersollrand.co.in

17. INDEPENDENT DIRECTORS

The Board has an optimum combination of Independent and Non-Independent Directors. In line with the requirements of the SEBI Listing Regulations, more than half of the Board comprise of Independent Directors. Mr. Hemraj C. Asher, Mr. Darius C. Shroff and Mr. Sekhar Natarajan are independent directors of the Company. The independent directors have given a declaration confirming that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 25 of SEBI Listing Regulations.

18. AUDIT COMMITTEE

Mr. Sekhar Natarajan, Mr. Amar Kaul and Mr. Darius C. Shroff continue as members of the Committee. The powers and role of Audit Committee are included in the corporate governance report section of the annual report. All the recommendations made by the Audit Committee was accepted by the Board of Directors.

19. DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of Section 152 (6) of the Act and the Article 131 of the Articles of Association of the Company, Ms. Jayantika Dave retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers herself for re-appointment.

The brief resume and other relevant details of Director seeking appointment/re-appointment is given in the annexure to the Notice of the Annual General Meeting.

Mr. G. Madhusudhan Rao, Vice – President (Finance) retired during the year under review and Mr. Vikas Goel was appointed as Chief Financial Officer, in lieu thereof, effective November 8, 2017. Mr. Vikas Goel is a qualified Chartered Accountant and Cost Accountant with over 23 years professional experience in senior management positions with different corporate entities.

As on date, Mr. Amar Kaul, Chairman and Managing Director, Mr. Vikas Goel, Chief Financial Officer and Mr. P. R. Shubhakar, General Manager – Corp. Finance & Company Secretary are the Key Managerial Personnel of the Company.

20. PARTICULARS OF EMPLOYEES

The information on employees particulars as required pursuant to Section 197 (12) of the Act read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended from time to time are furnished in Annexure D forming part of this report.

21. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your Company has an effective Vigil Mechanism system which is embedded in its Code of Conduct. The Code of Conduct of your Company serves as a guide for daily business interactions, reflecting your Companys standard for appropriate behavior and living corporate values. The Code of Conduct is applicable to all employees of the Company.

The suppliers and vendors of the Company are also required to adhere to Code of Conduct as it is a prerequisite for conducting business with your Company.

The Companys Whistle Blower Policy is the mechanism for directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Companys code of conduct, violations of legal or regulatory requirements, incorrect or misrepresentation in any financial statements and reports etc. The mechanism provides for adequate safeguards against victimization of those who avail the mechanism and also provides for direct access to the Chairman of Audit Committee in exceptional cases.

The Whistle Blower Policy has been uploaded on the website of the Company www.ingersollrand.co.in

22. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Nomination and Remuneration Committee of the Company has formulated a policy relating to the remuneration of the directors, key managerial personnel and other employees of the Company. The Companys policy on directors appointment and remuneration including the criteria for determining qualifications, positive attributes, independence of a director and other details are set out in the policy which has been uploaded on the website of the Company www. ingersollrand.co.in.

23. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act and SEBI Listing Regulations, read with the Guidance Note on Board Evaluation, the Board has carried out the annual performance evaluation of the Board as a whole, the Directors individually as well as the working of the Board and its Committees.

The performance of the Board was evaluated by the Board after seeking inputs from all the Directors on the basis of criteria such as board composition and structure, effectiveness of board processes, information and functioning etc. The Board and the Nomination and Remuneration Committee reviewed the performance of individual directors on the basis of criteria such as contribution of individual director to the board and committee meetings like preparedness on matters to be discussed, constructive contribution and inputs in meetings etc. Further, in a separate meeting of independent directors, performance of non-independent directors, the Board as a whole and its Chairman was evaluated as stipulated under the SEBI Listing Regulations.

24. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year under review, your Company has not given any loans or provided any guarantees or made any investments within the meaning of Section 186 of the Act.

25. CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All Related Party Transactions (RPTs) that were entered into during the year were on an arms length basis and were in the ordinary course of business. All RPTs are placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all RPTs is placed before the Audit Committee and the Board of Directors for their approval on a quarterly basis.

There are no materially significant related party transactions entered into by the Company with its promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

As per Regulation 23(2) of SEBI Listing Regulations, material RPTs shall require prior approval of the Members. A transaction with a related party shall be considered material if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds ten percent of the annual turnover as per last audited financial statements of the Company. In pursuance of the same, the shareholders of the Company have approved and authorised the Board of Directors and Audit Committee to enter into transactions, in excess of 10% of the Companys annual turnover, with Ingersoll Rand Company, USA and Ingersoll Rand International

Limited, Ireland up to December 31, 2020.

Transactions with related parties, as per the requirements of Ind AS 24 are disclosed in the notes to financial statements.

The Board of Directors has adopted a policy on Related Party Transactions which has been uploaded on website of the Company www.ingersollrand.co.in

26. SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, your Board of Directors appointed Mr. Natesh K, Practicing Company Secretary, Bangalore, to conduct the Secretarial Audit of the Company for the year ended March 31, 2018. The Secretarial Audit Report issued by Mr. Natesh K is given in Annexure E forming part of this report.

There is no qualification, reservation or adverse remark or disclaimer made by the company secretary in practice for the year under review.

27. CORPORATE GOVERNANCE CERTIFICATE

The Company is committed to adhere to highest standards of Corporate Governance in all areas of its functioning. As required under Regulation 34 read with Schedule V of SEBI Listing Regulations, a report on Corporate Governance together with a certificate from Mr. Natesh K, Practicing Company Secretary confirming compliance with the requirements of Corporate Governance is set out in Annexure F forming part of this report.

28. RISK MANAGEMENT POLICY

Your Company has constituted a Risk Management Committee which comprises Mr. Amar Kaul – Chairman, Mr. Darius C. Shroff, Director, Ms. Jayantika Dave, Director.

The Committee has formulated a risk management policy for identifying the elements of risk, which in the opinion of the Board of Directors, threatens the existence of the Company. The said policy sets out the objectives and elements of risk management within the organization and helps to promote risk awareness amongst employees along with facilitating integration of risk management within the corporate culture.

The formulation and monitoring of the Risk Management Policy at the corporate levels illustrates the executive managements commitment to implement and continuously develop risk management within the Company.

29. PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. An Internal Compliance Committee has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review, no complaint relating to sexual harassment has been received.

30. DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations provided to them, your Directors, pursuant to sub-section (5) of Section 134 of the Act, state:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

(b) that appropriate accounting policies have been selected and applied consistently and have 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 as March 31, 2018 and of the profit and loss of the Company for the year ended March 31, 2018;

(c) that proper and sufficient care has been taken 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;

(d) that the annual accounts have been prepared on a going concern basis;

(e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

31. ACKNOWLEDGEMENTS

Your Directors take this opportunity to express their gratitude to the various stakeholders – customers, shareholders, banks, dealers, vendors and other business partners for the continued cooperation and support extended by them during the year under review. Your Directors would also like to acknowledge the exceptional contribution and commitment from all the employees of the Company during the year under review.

For and on behalf of the Board of Directors
Amar Kaul
Mumbai, May 10, 2018 Chairman & Managing Director