WABCO India Ltd Management Discussions.

The Company is a leading supplier of technologies and services that improve safety, efficiency and connectivity of commercial vehicles in India. Powered by its vision for accident-free and greener transportation solutions, the Company excels in pioneering breakthrough innovations that bring industry-leading solutions to the commercial vehicle industry worldwide. The company positions itself at the forefront of technological innovation in its segment providing an advanced portfolio of solutions and technologies, Fleet Management solutions for Original Equipment Manufacturers (OEMs) and fleets in India and globally.

In todays dynamic and rapidly changing scenario, global mega-trends such as population growth, Internet of Things (IoT), higher customer expectations and a push towards sustainability, combined with increasingly demanding customer requirements for flexibility, speed and safety put further pressure on supply chains and fleet profitability. As the commercial vehicle industry moves towards increasingly autonomous, connected and electric (ACE) vehicles to meet these challenges, the company will focus and drive technological advancement that will continue to enable smarter operations across the ecosystem.

I. Industry Structure and Development:

i. GDP growth and Indian economic outlook:

India is currently facing short-term challenges, including the outbreak of COVID-19 which has compounded the slowdown. As per UN estimates, Indias GDP is likely to grow at 1.2% in 2021-22 due to the current COVID crisis which has added to the deceleration caused by the economic slowdown. India grew at 6.8 % in fiscal year 2018-19 and at 5% in 2019-20. There is a silver lining to every cloud and reports indicate a recovery starting in Q4 2020 and a favorable growth rate of 5.5 to 7 % in 2021. India and China are the only two economies in the world that are not projected to shrink in 2020 even though their growth rates have slowed down considerably.

Overall, apart from the continuing resilience of agriculture and allied activities, other sectors of the economy will be adversely impacted by the pandemic, depending upon its intensity, spread and duration. Relatively modest upsides are expected to emanate from monetary, fiscal and other policy measures and the early containment of COVID-19, if that occurs.

The Government of India has introduced support packages, (10 % of the GDP) including fiscal and monetary support as well as guarantee schemes. The Reserve Bank of India has also acted swiftly to reduce cost of capital and avoid the liquidity shortfall induced by the COVID -19 lockdown. It has cut policy rates, injected liquidity (about 4% of the GDP) and other long-term measures to encourage economic buoyancy. The Government has further announced several structural reforms to encourage investments, including partial deregulation of the agricultural sectors, lower entry restrictions in eight industrial sectors and revised the definitions of micro, small and medium size enterprises. The economy is expected to recover as the lock down is lifted. Pent up demand from postponed consumption and inventory restocking is expected to boost economic activity. The Government has announced several fiscal measures to incentivize capital formation attract foreign investment and create employment and the Reserve Bank of India (RBI) has also stepped in to provide adequate liquidity to counter a sudden stop in economic activity. The economic recovery is expected to be gradual and is likely to get back to pre-COVID levels by the second half of 2021 (Calendar Year). Inflation: Consumer price index (CPI) inflation for 2020-21 is projected to be at 3.2% Interest rates: The Monetary Policy Committee (MPC) has decided to fix the repo rates at 4.7%

ii. Indian Commercial Vehicle Industry:

Commercial vehicle sales are directly linked with economic activities in the country. The global automotive industry is witnessing one of the most challenging periods on the back of the ongoing COVID-19 pandemic and the slowdown. In FY20, the CV industry was hit with a number of growth-impacting factors such as revised axle load norms, the shift to BS VI emission norms, demand crunch due to a prolonged economic slowdown and the COVID-19 pandemic. The commercial vehicle space is expected to see 8% - 10% contractions over the next year, as the result of the pandemic and macro economic challenges. The demand headwinds are expected to continue over the near-term due to the weakening financial profile of fleet operators and significant price hikes because of transition to BS-VI emissions norms. According to reports available on the public domain, the sale of CVs were down by 88% in March 2020 compared to the corresponding period of the previous year. The cumuliative sales were down 28% in FY20 compared to FY19. Recovery in the CV segment, is expected to take a while; the partial revival ought to start in the next 1-2 quarters once the economy starts opening up.

Some of the trends that will drive the demand for commercial vehicles

• Globally, the urban logistics opprtunity is estimated at

Rs 6.12 tn by 2025

• E-commerce will be a key driver for retail sales and alsomost 20% of new sales will come through online channels

• Connectivy and digitalization will open up new opportunities and avenues for the industry

• New businees models such as freight aggregators will create a rise in demand for commercial vehicles With the implementation of GST, the proportion of small fleet owners is expected to decline and they are likely to associate themselves with larger fleet owners which will lead to the creation of mega-fleets. A well thought out vehicle scrappage policy with incentives is likely to spur demand for commercial vehicles in the short to medium term. Adoption of digital connectivity solutions will make fleets more efficient and cost-effective.

The Government of Indias FAME-II scheme has led to an increase in the adoption of electric buses in the country. The Government can make significant budget allocation to the Ministry of Urban Development to support State Transport

Undertakings in procuring Buses with other fuels like CNG, Diesel, Biofuel etc. This would also lead to reviving demand for commercial vehicles.

With more structural reforms underway in a stable economic environment with digital technology, the market is expected to regain the growth path. The market forecast points to an increase in the sale of light and intermediate commercial vehicles, with demand for high-tonnage trucks rising in FY 2022. The production cycle will increase in the coming years owing to export markets seeking budget trucks that are compliant to global emission standrds and quality norms. Some of the key technologies that will drive future trends include alternate fuel systems, Electric vehicles and EV retrofits, Higher horse power engines with electronic diesel-controlled system, Auxiliary braking system like electromagnetic retarders, hydraulic retarders and intarder in automatic transmission, Speed monitoring and control systems, Vehicle payload monitoring systems, eSIM-enabled vehicles, GPRS and GPS-related technologies, Vehicle alarm system to detect irregular driving patterns, Engines complying with BS VI emission norms, Infotainment systems, IT-enabled navigation, vehicle tracking, vehicle productivity analysis, Advance transmissions with electronic integrations such as automated manual transmission and other new technologies, Electronic braking system (EBS), Electronic stability program and control (ESP), Collision avoidance warning system, Lane departure warning systems, Air suspensions for buses and trucks, HVAC systems for cabins of buses / trucks.

II. Opportunities & Threats

With the shift from BS IV to BS VI in 2020, the auto industry has taken a significant step in the right direction by harmonizing and coming on par with emission norms of the European and American markets. The BS-VI regime normalizes the playing field for OEMs and the auto component industry alike to participate in the global market through exports, given that the vehicles and the technology in them would be at par with the global standards.

Stricter safety norms provides the company a unique opportunity to work even more closely with OEMs to further penetrate the Indian market and introduce new technologies for the benefit of the end customers. During the year, the company introduced new products for OEMs, fleets and aftermarket thus creating an increase in vehicle content, better technology penetration and foraying into new domains for commercial vehicle technology.

During the course of the year, the company worked with OEMs as a technology partner to introduce technolgies compliant with BS VI norms like hill start aid (HSA), Automatic Traction Control (ATC), Air Disc Brakes (ADB), Electronic Stability Control (ESC), Automated Manual Transmission (AMT), Fleet Management Solutions (FMS), Tire Pressure Monitoring System (TPMS), Advanced Air Processing Units among other technologies.

As a complete system supplier, the company uniquely connects truck, trailer, cargo, drivers, business partners and fleet operators real time so as to empower the fleets to significantly enhance safety and operational efficiency. The company is today working with several OEMs in the country to reduce the Total Cost of Ownership (TCO) by recommending the right value enhancers and by providing improved uptime for the fleets through its Fleet Management Solutions. The shift to better emission norms and upgrade of vehicle platforms has created numerous digitalization opportunities in the entire fleet ecosystem with a huge potential to mobilize the vehicle intelligence to provide deep meaningful insights on the vehicle performance to the end user/ fleet owner. Post GST and increased axle load norms; the fleets are looking at amplified vehicle utilization and optimizing their total cost of ownership. To better support the OEMs when the regulation for increased axle load was effected, the company introduced larger sized compressors, improved braking and stability solutions to help them create differentiated products for their customers.

The Company also introduced numerous products through the aftermarket to enhance the safety and efficiency of fleets including Air Suspension with ECAS technology, Tandem Master cylinder and Clutch master cylinders. The company also increased its market share for Diesel Exhaust Fluid (DEF). The Company looks forward to the following strategic opportunities in the coming years.

• Partner with Trailer customers for implementing 100% TABS, penetrating and expansion of Intelligent Trailer Program products and air disc brakes for trailers

• Technical / Homologation support for advanced technology products

• Leverage / expand its manufacturing footprint to ensure increase customer centricity

• Penetration road map for newer technologies like Electronic Stability Control (ESC), Advanced Driver Assistance Systems (ADAS), Reverse Parking Assistance System (RPAS), Driver behaviour monitoring system (DBMS)

• Introduction of new product protfolio - Doors with door control system, air suspension systems, air disc brakes among others Anticipating evolutionary changes in the traditional aftermarket business models, the Company is striving to introduce new business and revenue models through e-commerce. The company is also looking at ramping up its sales, service and distribution network to effectively cater to fleets and customers across the country. Leveraging the wave of digitalization, the company is also exploring the use of digital models and other initiatives to be ahead of the curve. The authorized service center network is expanding and currently the company has around 280 service centers with pan India presence to cater to the customer requirements. These initiatives have resulted in improved service practices, availability of genuine parts and generate additional revenue for the company. Given the opportunities available in the commercial vehicle segment we expect the activity levels of the competitors to also be on the rise.

III. Risks and Concerns

The company is experiencing the impact of lockdowns induced by the spread of COVID 19 to pandemic levels.

The nationwide lockdown which started from 17th March 2020 is continuing. This has resulted in nil to very minimal commercial vehicle production and hence has an impact on the revenue of the Company. Review of the business plan based on the scenarios were put in place and is being closely monitored by the Board and the Leadership team with timely and relevant information. The company has been gradually opening up its factories and operations within the limits approved by the appropriate Governments. An average capacity of about 40% has been enabled at various factories of the Company when compared to operating levels of February 2020. The company is monitoring the state of relaxations at various locations and also the evolution of demand. The company is suitably equipped to scale up capacities and production to match the demand as it evolves.

The Company adopted the work from home policy during the entire duration of the lockdown wherever feasible. All necessary arrangements were made for employees to work from home. The company was largely successful in ensuring that essential activities were not interrupted.

The Company has its operational locations in areas which are classified as "Red areas". The company is strictly adhering to the protocols defined by the Government while operating in these locations. Well established and well-rehearsed safety, social distancing and sanitizing norms are ensured. These measures include

• Standard SOP for restart of operations based on government guidelines

• Thermal Screening, self-declarations & hand sanitizing of all employees and visitors

• Regular update of the health of all the employees and their families

• Disinfection of all frequent touch points twice a day in all sites/offices, non-touch hand sanitizers are placed

• Social distancing in production line as well as in office areas with gloves and masks being made mandatory in all production lines

• Touch free modification made in rest rooms and water coolers

• Awareness sessions with Dos and Donts to all employees before back to work

• Video for COVID safety practices developed and communicated to all employees

• Work from home recommended for non-production employees

• Only 50% occupancy is permitted in canteen at a time; food is served by canteen staff so to ensure minimal touch

• Regular engagements with customers & vendors to assess their preparedness.

The Company expects that the return to normalcy in the segment in which the company operates will commence as the lockdowns and restrictions are relaxed and economic activity begins. The company is closely monitoring all the factors which may impact the demand for commercial vehicles, the components needed for servicing the commercial vehicles and also the global economy which will impacts its OEM, After Market and export sales respectively. Given the uncertainty in evolution of various factors, the company is fairly confident that over the next 2 or 3 quarters, economy and the industry will witness gradual increase in activity levels. As the finished good inventories of commercial vehicles are estimated to be low currently, the outlook for volumes is positive.

Factors like continued restrictions even after lifting of lock down, social distancing norms, ability of supply chain to revive, getting back the required workforce and the time to train them may impact the road to recovery. This may result in low levels of manufacturing activity in the short term. The cost of operations is likely to be impacted due to the need for re-designing factories to address social distancing norms.

The Company has cash reserves to meet its obligations and does not foresee a need to borrow or raise capital. The company has a strong credit management process and investment vetting processes. The assets of the Company need not be impaired due to the slow down caused by COVID 19. The Company has met all its financial obligations and would continue to do so.The company is receiving all major dues from its customers albeit with some delays. The company has been accepting payments through arrangements with the banks the customers have made on a selective basis. The Company does not consider any incremental material recoverability risk. It is expected that the situation would improve going forward along with the relaxation in restrictions. The company has taken all steps to conserve cash during the lockdown, as revenues were hit. The company also has imposed strict cost control measures to reduce and avoid discretionary spend. However, cash and profitability are expected to be impacted due to extreme drop in activity levels.

The company has however ensured that all committed and due payments for statutory purposes, to vendors and to employees were made on time. The company took special care to engage with its employees and help them be motivated and productive during the lock down while monitoring and caring for their health and safety. All possible advice and help was made available to the employees. The company had conducted special programs to address the vendors and guide them to be safe and sustain themselves during the lockdown.

The Company did a thorough study of its inventory and no major obsolescence is estimated but for a slowing of liquidation of some items.

The Company has robust ERP system in place and all its locations are well networked. Even during the lockdown with a combination of critical staffs working from locations and all others working from home, all reporting systems worked seamlessly without any disruption and ensuring adequate controls.

Apart from the above, the cyclical nature of the Indian commercial vehicle industry presents its own risk to the business. The operating expenses are likely to rise with the expected increase in prices of key raw materials.

STEEL

As a raw material and intermediate product, production and consumption of steel are widely regarded as indicators of economic progress. Today, the steel industry directly contributes slightly more than 2% to the GDP of the country. Iindirect contribution is much larger, owing to the dependence of other sectors.

India is currently the worlds second largest producer of crude steel, with 110.92 MT produced in 2018-19 (up from 103.13 MT in 2017-18). The country has strengthened its domestic steel industry considerably over the last decade. It became a net exporter in FY 2016-17, with exports of total finished steel reaching 8.24 MT vis--vis imports of 7.22 MT in the same year. The growth pace of Indias steel demand is likely to slow because of weak auto and manufacturing demand even as Indias demand growth remains the strongest in Asia. However, the country will continue to remain the worlds second-largest steel producer behind China, after having overtaken Japan in 2018. According to India Ratings and Research (Ind-Ra), the steel industrys net leverage and interest coverage are likely to deteriorate in FY20 due to compressed EBITDA margins, drop in realisations due to demand slowdown and increase in raw material prices in FY20 year-on-year. The demand for steel in India is likely to be driven by the "House for all by 2022" mission to build 19.5 million homes over the next two years and Rs 140 billion spending on railways, roads and metros.

The Indian automotive industry is the fourth largest in the world. It contributes to around 9% of total steel demand in India. India is the largest manufacturer of two-wheelers, threewheelers and tractors, the fourth largest producer of passenger vehicles, and the seventh largest in commercial vehicles in the world. Two-wheelers occupy a dominant position with an 81% market share and overall passenger vehicles compose 13% of the market. Indias automobile sector is domestic market oriented, with domestic sales accounting for over 80% of sales. After rapid growth in the last few years, the sector is currently undergoing a slowdown. All the sub-segments have witnessed de-growth in 2019.

The profitability of the steel makers, measured by EBITDA per tonne, is expected to further decline by 5% in 2020 following a sharp decline of around 25% in 2019 because of soft demand according to Moodys Investors Service, which has negative outlook for the Asian steel sector for 2020. The National Steel Policy, 2017 envisages 300 million tonnes of production capacity by 2030-31. The per capita consumption of steel has increased from 57.6 kgs to 74.1 kgs during the last five years. The industry is witnessing consolidation of players, which has led to investment by entities from other sectors. The ongoing consolidation also presents an opportunity to global players to enter the Indian market. Government has introduced the steel scrap policy aiming to reduce import. After slower than expected growth in 2019, mainly due to the recession in the developed economies, a further decline is being witnessed in global steel demand in the second quarter of 2020.

The automotive industry, which in recent years was already going through a slump with negative growth around the world due to saturation of demand, regulation changes and transformation toward EVs, is expected to be among the hardest hit by COVID-19. The pandemic will not change the long-term trends within the automotive sector with increased environmental regulation and the consumers move towards plug-in hybrids and full Electric Vehicles.

ALUMINIUM

Aluminium is the second most used metal in the world after steel with an annual consumption of approximately 88 million tonnes (including scrap). It is also the fastest growing metal which has grown nearly 20 times in the last sixty years (compared to 6 to 7 times for other metals). India, too, is catching up with this global trend. Aluminium Industry is the second most important metallurgical industry in India. Aluminium demand in the first quarter had grown by about 7%, and in the second quarter degrew by 6%. India has nearly 10% of the worlds bauxite reserves and a growing aluminium sector that leverages this. Demand for aluminium is estimated to grow at 6 - 8% per annum in view of the low per capita consumption in India. Indias aluminium consumption is expected to double to over 7 million tonnes in five years.

In India, almost half the demand for aluminium is from the power sector, unlike other countries where it is the auto sector that drives the demand.In India, the auto sector consumes about 15 per cent of the aluminium produced in the country. Also, demand for the metal is expected to pick up as the scenario improves for user industries, like power, infrastructure and transportation. The metal has replaced steel and iron in the construction of many critical auto parts. Aluminium prices were below Rs 2,000 per tonne for the major part of the year and since mid-July have been below Rs 1,800 per tonne despite available stocks nearly falling to their lowest in a decade. Although raw materials prices are significantly lower than they were a year ago, they continue to make up a large percentage of the LME aluminium price. Since the auto industry is the largest consumer of aluminium, its slowdown across the globe has been a dampener. In 2019, while production was 63.69 million tonnes, demand was 60 million tonnes. Aluminium scrap imports come into India in bulk quantities. So, if the global excesses find a way to India this year again, with no custom barriers, the prices may move in tandem with the global market.

Risk Management:

The Company has laid down procedures for risk assessment and mitigation actions. The Board has constituted a Risk Management Committee to review the aspects of risk management periodically, to ensure that executive management reviews and controls risk through means of a properly defined framework. Risks identified and mitigation measures are periodically checked by the internal audit team and are communicated to the Board of Directors.

IV. Internal control system and their adequacy

The Company has proper and adequate systems of internal control including internal financial controls for financial reporting to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition thereof and ensure accurating reporting. All transactions are authorized, recorded and reported correctly. The internal controls are checked by internal auditors. Observations made by them, management actions and time frames are reviewed.

V. Operations review A. Manufacturing

During 2019-20, in response to volatile market scenario and slumped economic conditions, integrated supply chain rolled out various cost optimization programs to flex cost throughout the entire supply chain. The Companys manufacturing facilities built on its strong fundamentals of Total Quality Management (TQM), Total Productive Maintenance (TPM) and Lean Manufacturing has rolled out major productivity and quality improvements engaging all the employees within the organization.

Given the reduced activity levels, supply chain was focussed on aggressive localization programs, improving cost competitiveness, quality and responsiveness. During the year, the Company had focused to improve capacity of new gen products to secure additional export volumes and to improve the local market penetration. It had also transferred few manufacturing lines closer to customer promoting the plants to be self-reliant.

Company had carried out line upgradation program across its facilities in India to meet the product/process requirements of BS-VI with optimal investment leveraging its lean and frugal engineering capabilities.

During the year, the company had also revisited its distribution strategy. Packaging costs were challenged through alternate materials and value analysis of packaging design enabling transportation of more parts per cubic space. Company had also performed reverse auction, rationalizing service providers and revisiting its delivery operations consolidating long haul shipments. This had helped 50% reduction of vehicle trips and reducing CO2 emissions by 0.35 metric tons per day. The company had also reduced the storage space in the external warehouses.

"WIN 2.0" was a transformation initiative intended towards changing the mindset of employees at all levels, all functions and across locations to achieve global standards of performance. This initiative which was widely imbibed in employees continues to yield visible results in all areas of operations. Employees won several awards in external competitions organized by Confederation of Indian Industry (CII); National Institution of Quality Assurance and Indian Association of Quality and Reliability (NIQR); Automotive Component Manufacturers Association of India (ACMA) demonstrating their passion and innovation in various areas of excellence in manufacturing. Notably, a QCC team from Mahindra World City plant had won the first prize in state level QCC competition organized by CII. Teams from Ambattur plant secured First Prize in CII Regional Poka Yoke competition & "Platinum" award in National Convention on Innovative QC Teams competition.

B. Quality

The quality systems in the company aim at achieving total customer delight through its focus on improving product quality confirming to world class standards. This is achieved through inculcation of quality mindset and transformation among employees. The Company is at 15 PPM for the year 2019-20. Customers continue to expect the industry benchmark of Zero PPM and Zero Irritants. The Company strives for zero defect performance and mindset of zero tolerance towards deviations.

Six sigma tools are used for analysis and projects are rolled out for each customer to meet their requirements and to standardize all critical production lines. Deploying "VDA6.3" and "VDA6.5" process and product requirements, product safety standards and IATF 16949 helped the company to eliminate the defects significantly. Project quality along with product engineering quality achieved 100% customer PPAP "First Time Right" for All BS VI Products and ensure 100% Green launch. Significant efforts were put in to improve product quality which ensured that there was no recall of products or service campaign during the year and significantly reduce warranty claims. Total Quality Management is a way of life at the Company. As part of this, 100% participation in total employee involvement has been successful for the past two decades. Employees across all the plants were involved and have completed 265 quality control circle projects, 174 supervisory improvement team projects and cross functional team projects by applying statistical tools, including Six Sigma (DMAIC and DMADV) and Quick Response Six Sigma (QR6S) methodology during the year. Over 1,15,869 suggestions have been implemented by all employees throughout all the plants, including trainees. Employee suggestion scheme is in force at all plants and employees implement suggestions under productivity, quality, cost, delivery, safety and morale categories. In order to foster employee engagement across all plants, interplant quality circle and six sigma competitions were conducted and best teams were recognized.

Quality control circle, cross functional teams of employees participated in external competitions conducted by industry bodies, Automotive Component Manufacturers Association (ACMA), Confederation of Indian Industry (CII), National Institution for Quality and Reliability (NIQR), Indian Machine Tool Manufacturers Association (IMTMA), Quality Circle Forum of India (QCFI), Indian National Suggestions Schemes Association (INSSAN) and have won various prizes demonstrating their passion and innovation in various areas of excellence in quality & manufacturing which are given below. Notably, a QCC team from Jamshedpur plant had won the gold award in an international QCC competition conducted by Japan Productivity Association in Tokyo. The team qualified for the international QCC competition by winning the regional and national level QCC competitions.

1. Ambattur team won platinum award in Regional ABK AOTS - DOSOKAI SIT Competition

2. Uttarakhand team won 1st prize in ACMA Northern Zonal Level QCC Competition

3. Rainbow QCC team of Jamshedpur plant won Gold award in QCFI, Bhilai QCC

4. Rudra QCC team of Jamshedpur plant won gold award in International QCC Convention at Tokyo

5. Ambattur team won the first Prize in ACMA Low Cost Automation competition

C. Cost management

The Company continues its focus on upgrading the robustness of cost control mechanisms and capabilities in all activities, especially procurement, operational expenses and manufacturing. The Company realizes that better cost management is the key differentiating factor in this competitive environment, the prime strategies are value creation through design improvement, localisation of inputs and products and conversion cost productivity.

Cross functional teams are formed with members from various functions like product engineering, manufacturing & sourcing to focus on identified cost reduction projects. The Company continues to find best cost supplier across continents leveraging the global platform in an endeavor to become best cost supplier to our customers. Key focus area is process improvement through technical collaboration with leading suppliers to continuously keep the costs at optimal levels.

D. Information Technology

The Company continues its digital transformation drive across 3 major pillars - enterprise transformation, digital transformation and IT/Cyber security in alignment with global IT guidelines.

Data & Advanced Analytics, Industry 4.0, Robotic Process Automation, Mobility based solutions, chatbots are key areas of focus in the digital transformation to enable cost optimization, productivity and addressing customer needs. Multiple Industry 4.0 pilots have been successfully implemented in the shop floor in the areas of Machine Health, Energy Management, Production Management, Quality process control etc. Plans are put in place to assess & implement Digital Twin & Process mining solutions for the Order to Cash and Procure to Pay process. Business teams are enabled with tools like Tableau & Cognos to perform their own analysis and findings from their data As part of Enterprise transformation, multiple SAP projects are delivered to enhance the SAP usage maturity and standardisation and Salesforce implemented to assist the sales team to streamline and manage the leads and opportunities. IT/Cyber security governance and compliance is a key focus area. IT/Cyber security measures defined by the group IT/cyber security team are strictly adhered to. Awareness campaigns have been carried out for all employees for protection against ransomware, phishing and data security. The IT department & the BigData Analytics Center are assessed and certified to ISO/IEC 27001:2013 standard for Information Security Management. Periodic vulnerability assessments are being conducted for all the portal applications hosted by the Company.

VI. Human Resource Development

The year 2019-20 has seen notable HR initiatives wherein the main focus was talent attraction and retaining key talents. The year commenced with successful implementation of "Workday" a HCM tool replacing PeopleSoft. Workday is more users friendly and has business process flow chain to capture every detail and its virtual user interface was quickly adapted. The Human Resource organization restructured through internal role change and provided opportunity within the function to leverage team synergy.

WABCO India on-boarded its first Campus to Corporate (C2C) batch of 45 fresh engineering graduates during July 2019 from top ranked premium institutes from the country viz., NITs, BITS, Anna university etc. The initiative kick started in 2018 by creating a new brand called C2C aimed at adding new and young talent pipeline to the existing talent pool to take up leadership positions in near future.

VoW - Voice of WABCO India an employee engagement survey theme was conceptualized and launched as a region wide survey covering employees of all locations Dec 2019. The survey was conducted by an external agency and overall score accounted for the survey is 79% which is a benchmark for similar industries.

Leadership talent addition was also a key focus wherein the year witnessed addition of leadership talents in Sales AM, Quality Assurance function, Site Leadership roles and FMS business. During the year the company has inducted 333 new talents focused mainly for Product Engineering. The current average recruitment lead time of the lateral talent is around 45 days. The Company successfully blends mid-career recruitments with internally grown talent through a robust globally managed talent management process. Rewards and recognition system is in place to retain and provide fast track growth for high potential employees. Internal talent mobility rate which is at 50% is one of the key engagement drivers ensuring employees to move and grow within WABCO group across functions, businesses, and countries. The Companys voluntary turnover rate is at 7.6%, while similar industry attrition rates are at an average of 10%.

"Ignition" a revamped Induction program to orient new joiners continues to be one of the focus areas during the year. A kit containing branded merchandise has been introduced for new joiners containing policy manuals, code of conduct etc., which has helped provide a wow feel to the new joiners. Familiarization of the Code of conduct program is also a part of the induction program so that they can better understand the importance of complying with the code and policies of the company.

WIN continuously nurtures its culture through the PACEmakers program and has conducted workshops frequently during the year to different functions. The PACEmakers guide personnel to nurture specific behaviors that are critical to help power continued success; behaviors that encourage unleashing passion, use diverse talents to the greatest effect and work together in a rich environment of creativity and collaboration. These behaviors include 1) Be Authentic,

2) Foster Engagement, 3) Leverage Difference, 4) Cultivate Collaboration & 5) Be Accountable.

WIN also hosted the ACE I, Ready to Lead and Ready 4 impact program in India which is a global level driven program form the Talent development team. Three of our leaders attended the coveted ACE II program at Spain in September.

The Employee relations were peaceful and productive across all sites of WIN. Long term wage settlements were signed with the unions for the WINC and WINJ plants. Management provided adequate opportunity for collective bargaining with the union members and maintained cordial relation across the Plant which supported business continuity with zero man hours lost.

WABCO India continues to follow its previous programs "Talk 2Me", Employee contact program for blue collar workforce have helped to build strong bottom up communication. "Womens Forum" helped to address priorities of women population. POSH refresher training sessions have been conducted to the leadership team to ensure the importance of prevention of sexual harassment at workplace and cascade down the level to the members of the respective functions. New joiners get together program for C2C batch was separately conducted which was addressed by the Managing Director to emphasize the role of these fresh engineers in building WIN as employer brand of choice and the available opportunities to take up the leadership role within WABCO. Development of Entry level Agile Leaders (DEAL) is another tailor-made technical program was rolled out for developing leaders from entry level.

As of 31st March 2020, the Company had 1839 employees on its rolls.

VII. Environment & Safety

The January to March quarter was taken as safety months and used to enhance safety systems and create safety awareness among the employees. During the year, based on the theme "Target 3 Zeros" i.e Zero Hazard, Zero Fatigue & Zero Discharge more than 100 Kaizens were implemented at the shop floor. These were followed up with competitions across plat locations. All plants and test track have completed the recertification audit of ISO 14001 & OHSAS 18001 during the year. The plants at Ambattur, Mahindra World City, Lucknow and Jamshedpur have been certified for ISO 50001 standards for implementing energy management systems and achieving continuous improvement in energy performance.

The Company has taken many initiatives on improving ergonomics in the shop floor. Medium fatigue stations were identified, and the ergonomics was improved with achievement of low risk job stations of 98%, thereby improving productivity and operator morale. As part of horizontal deployment, Jamshedpur and Pant Nagar plants initiated the Ergo Stretch program for shop floor employees which helps operators refresh themselves and reduce fatigue. As part of environmental protection, the installed sewage treatment plant treats and reuses water which is used for gardening thereby reducing the water consumption by 15%.

During the year Ambattur plant won "4 star" award for the best SHE practices from the Confederation of Indian Industries and "Best Safety kaizen" award from ACMA southern region for implementing safety kaizen in Ambattur plant.

Mobilizing Vehicle Intelligence was launched to concisely and powerfully communicate the shared mission, industry expertise and the focus of global teams passion to all WABCO stakeholders. It frames what we believe will sustain WABCOs differentiation in the rapidly converging and digitalizing commercial vehicle industry. A future where transportation ecosystems become operated by fully-autonomous, connected and electric commercial vehicles is still quite a number of years away. Yet, the Company seeks to sustain its strong reputation as an innovator and pioneer of critical vehicle control systems, new energy technologies and digital solutions as the industry migrates towards this goal. The company believes that "Mobilizing Vehicle Intelligence" represents a powerful declaration of the essential role WABCO will play in delivering key vehicle control technologies and operating functions necessary to achieve this vision.

Autonomous Connected & Electric (ACE) are the three key domains of innovation focus for the company to drive growth. These innovations will help to advance vehicle autonomy, enhance road safety, empower the fleets and pave the way for greener transportation. To further the advent into the ACE domain, the Company is undertaking several key strategic initiatives:

• To launch advanced technologies for electric vehicles

• To drive the vision of connected vehicles in India by steadily increasing offerings in the fleet management solutions portfolio.

• To further autonomous driving in India partnering with leading OEMs of Both CV and OH industry.

VIII. Community development and social responsibility

As a responsible corporate citizen, the company engages in social responsibility and community development activities. This year the activities were conducted through internal engagement of employees and resources, primarily focused on activities which would help the needy sections of the society as specified in Schedule VII of the Companies Act, 2013 and the Companys CSR policy with specific focus towards areas surrounding the companys plant locations.

The Company is also in the process of identifying suitable projects and scaling up the existing projects and hence could not spend 2% of the average net profits of the last three years. The Company has established a trust in the name of WABCO Foundation for carrying out CSR programs, which identifies appropriate CSR projects in line with the Companys CSR policy and implements them. The CSR Activities of the Company for the FY 2019-20 are mentioned in the Annexure - 2 to the directors report. The company has identified four primary areas to focus its CSR activities.

Promoting road safety across India: The Government of India is taking consistent efforts to reduce accidents through safety education, safety engineering, creating safe environment and enforcement. In an effort to support this initiative the WABCO foundation has been conducting safety awareness training programs for commercial vehicle drivers, and vehicle maintenance technicians combined with health checkups. The Company has expanded its programs to other states in the Western and Eastern regions of India. Over 8000 drivers & mechanics from Tamilnadu, Kerala and Andhra Pradesh, Telangana, Maharashtra and Orissa have been trained on road safety by creating awareness on vehicle safety & safe driving practices, advanced braking systems, etc. These projects were carried out in association with the Regional Transport Offices and State Transport Undertakings.

The safety awareness camps are complemented with medical and eye check-up camps for the participants. Considering the tremendous acceptance, response and impact of such programs the foundation plans to extend this pan India. This has resulted in transforming the lives of drivers and mechanics which will, in turn, translate into safer roads. As part of this important road safety objective, the Company is continuing its partnership with Praxair India, one of the worlds largest Industrial Gas companies and State Transport authorities, to provide advanced driver training for drivers of hazardous cargo carriers, fuel carriers, etc. These programs are conducted by subject experts from the industry along with practical sessions for drivers. Over 500 drivers have been trained since inception in various modules through classroom and practical sessions including safe driving practices, - rollover stability, the advantage of using ABS & EBS and other safety technologies. These programs have been well received and have helped the attendees to maintain zero accident levels. The drivers receive a certification on successful completion of this course.

Response to the COVID-19 crisis: In view of the spread of Corona virus in India and Its declaration as a pandemic by the WHO, the company also stepped up and facilitated immediate action to support the medical, healthcare and frontline workers in the battle against COVID. The company through its kitchens across all plant locations cooked and supplied over 31,000 food packages and drinking water to the local administration. The foundation also helped to set up a complete 50 bed COVID care ward at the ESI Hospital, Ayanavaram with the entire necessary infrastructure like beds, critical care equipment etc. The company also pro-actively reached out to serve the community (Government) hospitals in the vicinity of manufacturing plants with PPE equipment, Pulse Oximeters, gloves, masks, sanitizers among other aid.

Employability & skill enhancement through partnerships with educational Institutions : The Company being a pioneer in technologies and services that improve safety, efficiency, and connectivity for commercial vehicles is uniquely poised to share its best practices, knowledge on safety & efficiency with budding professionals thus enhancing their employability, skills and also contributing to road safety. This has been done in partnership with universities / colleges in Tamilnadu where Centers of Excellence for skill development have been set up.

Environment sustainability: Nurturing environment through tree plantations, rainwater harvesting, etc., in and around our plant locations were carried out wherein more than 1000 tree saplings across locations were planted and are being maintained.

Community services: Various community services were undertaken like personal hygiene awareness & health checks for drivers, upgrading road safety infrastructure in and around the plant locations etc.

IX. Financial statement

Particulars Year ended 31st March 2020 Year ended 31st March 2019
Rs in lakhs % Rs in lakhs %
Revenue from contractrs with customers 1,92,956.15 96.80 2,85,413.56 97.52
Other Operating Income 6,388.05 3.20 7,247.53 2.48
Total Income 1,99,344.20 100.00 2,92,661.09 100.00
Raw Materials Consumed 1,12,635.52 56.50 1,83,454.22 62.68
Changes in investories of Finished goods & WIP 2,231.99 1.12 (1,237.27) (0.42)
Staff cost 26,569.41 13.33 25,364.41 8.67
Stores & tools consumed 4,015.69 2.01 5,953.97 2.03
Power & fuel 1,766.11 0.86 2,183.63 0.75
Repirs & maintenance to machinery 810.81 0.41 1,402.91 0.48
Other expenses 19,777.94 9.92 27,304.12 9.33
Finance costs 191.94 0.10
Depreciation 9,011.08 4.52 7,143.69 2.44
Total Expenditure 1,77,010.49 88.80 2,51,569.68 85.96
Profit Before Tax 22,333.71 11.20 41,091.41 14.04
Provision for taxation 6,452.34 3.24 12,874.48 4.40
Profit After Tax 15,881.37 7.97 28,216.93 9.64
Other Comprehensive Income / (Loss) for the year net of tax (79.66) (0.04) (197.96) (0.07)
Total Comprehensive Income / (Loss) for the year net of tax 15,801.71 7.93 28,018.97 9.57

X. Cautionary statement

Statements in the management discussion and analysis report describing the Companys objectives, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand / supply and price conditions in the domestic and overseas markets in which the Company operates, changes in the Government regulations, tax laws and other statutes and incidental factors.