WABCO India Ltd Directors Report.


The directors have pleasure in presenting the 16th annual report and the audited financial statements for the financial year ended 31st March 2020.


Rs in lakhs

Details Year ended Year ended
31.03.2020 31.03.2019
Revenue from Operations 192,956.15 285,413.56
Other Income 6,388.05 7,247.53
Total Income 199,344.20 292,661.09
Profit before interest depreciation and tax 31,536.73 48,235.10
Finance costs 191.94
Depreciation 9,011.08 7,143.69
Profit before tax 22,333.71 41,091.41
Provision for taxation (including deferred tax and tax relating to earlier years) 6,452.34 12,874.48
Profit after tax 15,881.37 28,216.93
Other Comprehensive Income / (Loss) for the year net of tax (79.66) (197.96)
Total Comprehensive Income for the year Net of Tax 15,801.71 28,018.97


The Board of Directors of the Company at its meeting held on 19th March 2020, declared an interim dividend of Rs 10 per share (200%) for the year 2019-20, absorbing a sum of Rs 18.97 crores. The same was paid to all the shareholders who had registered their bank account details, on 30th March 2020. In respect of other shareholders dividned warrants were sent to them. The dividend distribution tax of Rs 3.90 crores on the said dividend was also paid by the Company. The Board does not recommend any further dividend for the year. The Company has not transferred any amount to the general reserves during the year.


During the year 2019-20, the Company achieved total income of Rs 1,993 crores as against Rs 2,927 crores in the previous year.

The profit before tax was Rs 223 crores as against Rs 411 crores in the previous year and the Profit after tax was Rs 159 crores as against Rs 282 crores in the previous year. There has been no change in the business of the Company during the financial year ended 31st March 2020.


On 28th March 2019, WABCO Holdings Inc., US the ultimate parent company of WABCO India Ltd., had announced to the New York stock exchange through a press release that it has entered into a definitive merger agreement with ZF Friedrichshafen AG ("ZF"), a privately held global leader in driveline and chassis technologies.

Under the agreement, ZF will acquire all outstanding shares of WABCO Holdings Inc., US for Rs 136.50 per share in an all-cash transaction for an equity value of over Rs 7 billion. The acquisition price represents a 13 percent premium to the closing stock price of Rs 120.75 on February 26, 2019, the date prior to media reports and WABCOs confirmation that ZF had approached the company. The transaction also represents a premium of approximately 18 percent and 23 percent to the undisturbed Volume Weighted Average Price (VWAP) for the 30 and 90 days ended February 26, 2019, respectively.

The transaction, once consummated, will bring together two global technology leaders with highly complementary and innovative technology offerings to address future serving OEMs and fleets in the automotive and commercial vehicle industry, combining WABCOs capabilities in commercial vehicle safety and efficiency, including technologies involved in vehicle dynamics control, active air suspension systems, and fleet management systems with ZFs leading position in driveline and chassis technologies for cars and commercial vehicles.

The said transaction, will result in the indirect acquisition by ZF of WABCO Asia Private Limited, an indirect subsidiary of WABCO Holdings LLP, US and holds 75% of the voting share capital of WABCO India Ltd. Accordingly, upon the completion of the said transaction, ZF will be entitled to, through WABCO Asia

(a) indirectly exercise 75% of the voting share capital

(b) indirectly exercise control over WABCO India Limited.

Hence, under Regulations 3(1), 4 and 5(1) of the SEBI (SAST) Regulations, a public announcement of an open offer for the acquisition of up to 4,741,900 fully paid-up equity shares of face value of Rs 5/-each of WABCO India Limited, representing 25% of the total voting equity capital of WABCO India Limited, comprising fully of public shareholders was given by ZF Friedrichshafen AG on 2nd April 2019 at Rs 6,318/- per share. This public announcement excluded the promoters / promoter group of WABCO India Limited.

In this regard, WABCO Holdings Inc. and ZF Friedrichshafen AG had on 16th May 2020 announced that all required regulatory approvals have now been received and WABCO and ZF expect to close the merger on May 29, 2020, subject to the satisfaction of all other closing conditions.


Capital expenditure of Rs 101.5 Crores was incurred during the year 2019-20 as against the plan of Rs 119.7 Crores and Capital Expenditure of Rs 104.8 Crores is planned for the year 2020-21.


On the recommendation of the Nomination & Remuneration Committee, Mr. Mahesh Chhabria has been appointed as an Independent Director by the Board with effect from 16th May 2020 for a term of 5 consecutive years subject to the approval of shareholders at the ensuing Annual General Meeting.

Mr. Narayan K Seshadri, ceased to be an Independent Director on the conclusion of his second term on 31st March 2020.

Mr. Sean Deason resigned from the Board with effect from 19th March 2020 due to his other commitments.

Ms. Lisa Brown retires by rotation at the ensuing annual general meeting of the Company. She has not offered herself for re-appointment.

The Board wishes to place on record its appreciation for the valuable guidance and services rendered by Mr. Narayan Seshadri and Mr. Sean Deason during their tenure as Directors.

The composition of the Board, taking into account the above changes, is in compliance with the Companies Act, 2013 ("the Act") and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing regulations") - three independent directors, three non-executive non-independent directors and an executive director as on date.

The independent directors continue to fulfill the criteria of independence as defined under Section 149(6) of the Act and Regulation 16(b) of Listing regulations and have furnished the requisite declarations in this regard and the Board confirms that they are independent of the management.


M/s. B S R & Co. LLP, Chartered Accountants, holding firm Registration No 101248W / W-100022 have been appointed as statutory auditors of the Company by the shareholders for a term of five consecutive years from the 15th Annual General Meeting upto the conclusion of the 20th Annual General Meeting as per the Section 139 of the Companies Act, 2013.

The Consolidated remuneration paid to Auditors / affiliated firms / entities for Audit and services rendered in other capacities is provided in the notes to the financial statements.

The Auditors report for the financial year 2019-20 does not contain any qualification, reservation or adverse remark ordisclaimer and the same is attached with the annual financial statements.


M/s. S Krishnamurthy & Co., Company Secretaries have carried out Secretarial Audit under the provisions of Section 204 of the Act, for the financial year 2019-20 and submitted their report, which is annexed to this report. The report does not contain any qualification, reservation or adverse remark or disclaimer.

The Board confirms compliance with the Secretarial Standards notified by the Institute of Company Secretaries of India, New Delhi.


Pursuant to Section 148 of the Act, the Board of Directors of the Company upon recommendation made by the audit committee has re-appointed M/s A. N Raman & Associates, Cost Accountants, as Cost Auditor of the Company for the financial year ending 31st March 2021 and has recommended his remuneration to the shareholders for their ratification at the ensuing Annual General Meeting.


Mr. P Kaniappan - Managing Director

Mr. R S Rajagopal Sastry - Chief Financial Officer

Mr. M C Gokul - Company Secretary


The Company has not provided any Loans or Guarantees to any person or other body corporate under Section 186 of the Act and the details of investments made are given in the notes to the Financial Statements.


During the year, the Board adopted a formal mechanism for evaluating its performance and as well as that of its Committees and directors, including the Chairman of the Board as per the requirements in this regard specified in the guidance note issued by the Securities Exchange Board of India (SEBI) and the provisions of the Companies Act, 2013. The exercise was carried out through a structured evaluation process covering various aspects of the functioning of the Board and Committees such as their composition, experience & competencies, performance of specific duties & obligations, governance issues etc. Separate exercise was carried out to evaluate the performance of each individual director including the Chairman who were evaluated on parameters such as attendance, contribution at the meetings, independent judgment and other relevant aspects as laid down under the Guidance note issued by SEBI in this regard. The Board was satisfied with the evaluation results, which reflected the overall engagement of the Board, Committees and the directors with the Company.


The Company has established a vigil mechanism through "WABCO Whistle Blower Policy" to enable employees and directors to report genuine concerns dealing with instances of fraud and mismanagement, if any. The mechanism provides for adequate safeguards against victimization of the whistle blower and also provides for direct access to the Chairman of the audit committee in appropriate or exceptional cases or chief ethics officer of the Company as the case may be to report any concerns or unethical activities.


The Company is one among the top 1000 listed companies as per the market cap as on 31st March 2020 and hence as per the Listing regulations, the Business Responsibility Report forms part of the annual report. In this regard, the Company has developed a Business Responsibility policy which is approved by the Board. As per this policy Mr. P Kaniappan, Managing Director is responsible for the implementation of the Business Responsibility initiatives. The initiatives of the Company in this regard for the year 2019-20 are provided in the Business responsibility report.


15.1 Conservation of energy, Research & Development Expenses and foreign exchange earnings and outgo

Information regarding conservation of energy, Research & Development expenses and foreign exchange earnings and outgo is given in Annexure 1 to this report, as per the requirements of Section 134(3)(m) of the Act, 2013. Towards the Companys continual commitment of utilizing renewable energy, the Company had commissioned a 400 KW roof top solar plant during the year 2018-19. This has resulted in increasing the overall renewable power share from zero to 5% of the total consumption during the year 2019-20.

During 2019-20, the Company had incurred a capital expenditure of Rs 45 lakhs towards a total of 60 energy reduction projects implemented during the year in air conditioners, compressed air systems and other projects which yielded energy savings of 8.59 Lakh units and cost savings of Rs 68.75 Lakhs per annum. Further, these initiatives have also resulted in carbon footprint reduction of about 400 Ton in Co2 emissions per annum.

15.2 Corporate Social Responsibility

As required under Section 134(3)(o) of the Act, details about policy developed and implemented by the Company on Corporate Social Responsibility initiatives taken during the year ended 31st March 2020 are given in Annexure 2 to this report

15.3 Directors Responsibility Statement

Pursuant to Section 134(3)(c) of the Act, it is hereby confirmed that;

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures.

b. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March 2020 and of the profit of the Company for the year ended on that date;

c. That directors had 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;

d. The directors had prepared the annual accounts on a going concern basis;

e. The directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively; and

f. The directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.


16.1 Extract of the Annual Return

Details of extracts of the annual return as per Form MGT - 9 is enclosed in Annexure 3 to this report.

16.2 Number of Board Meetings

The Board of Directors met six times during the year 2019-20. The details of the Board meetings and the attendance of the Directors are provided in the Corporate Governance Report.

16.3 Committees of Board of Directors

Details of memberships and attendance of various committee meetings are given in Corporate Governance Report. The Board has accepted / considered all recommendations made by the Committees to the Board during the financial year

16.4 Related Party Transactions

All related party transactions that were entered into during the financial year were on an arms length basis and were in the ordinary course of business. There are no related party transactions made by the company with promoters, Directors, Key Managerial Personnel or other designed persons which may have a potential conflict with the interest of the company at large.

Certain related party transactions entered into during the year ended 31st March 2020 and transactions proposed to be entered into during the year ending 31st March 2021 between the Company and WABCO Europe BVBA, a fellow subsidiary of the company, are material in nature and require the approval of members by ordinary resolution as per the Listing regulation. An ordinary resolution seeking shareholders approval is included in the notice to shareholders.

The Company pays royalty to M/s WABCO Europe BVBA, a fellow subsidiary and related party at the rate of 4% per annum on the net sales (Total sales (less) inter-company sales (less) inter-company purchases) effective 1st January 2016 for the intellectual property, knowhow and processes supplied by WABCO Europe BVBA. M/s WABCO Europe BVBA charges Royalty to all its associated entities in linewith the global practices and transfer pricing norms. During the year ended 31st March 2020 royalty of Rs 44.22 crores was paid to M/s WABCO Europe BVBA which amounts to 1.5% of the total turnover for the financial year 2018-19.

All transactions with related parties are placed before the audit committee and prior approval of the audit committee is obtained. The Company has developed a Related Party Transactions Policy for the purpose of identification and monitoring of such transactions. Details of material Related Party Transactions entered by the company as required under Section 134(3)(h) of the Act and the Listing regulation are given in annexure 4 to this report.


17.1 The following policies approved by the Board of Directors of the Company were uploaded and are available in the Companys website at the web link: http://www.wabco-auto.com/en/investor_relations/wabco_india_investor_relations

• Corporate Social Responsibility Policy

• Related Party Transaction Policy

• Nomination and Remuneration Policy

• Whistle Blower Policy

• Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information

• Policy on Criteria for Determining Materiality of Events

• Dividend Policy

17.2 Policy on director appointment and remuneration

Companys policy on directors appointment and remuneration including criteria determining for qualification, positive attributes, independence of a director and other matters provided under Section 178(3) of the Act is provided in the Corporate Governance Report.


18.1 The ratio of the remuneration of each director to the median employees remuneration for the financial year and such other details as prescribed are as given below:

Name Ratio
Mr. P. Kaniappan, Managing Director 58.09:1
Mr. M. Lakshmi Narayan - Independent Director 2.29:1
Mr. Narayan Seshadri, Independent Director 2.11:1
Dr. Lakshmi Venu, Independent Director 1.95:1

Directors other than those mentioned above have not drawn any remuneration for the financial year 2019-20.

18.2 The percentage increase in remuneration of each Director, Managing Director, Chief Financial Officer, Company Secretary, in the financial year:

Mr. M. Lakshminarayan, Chairman 3.61%
Mr. Narayan K Seshadri, Director (3.80%)
Dr. Lakshmi Venu, Director (2.67%)
Mr. P. Kaniappan, Managing Director 23.09%
Mr. R.S Rajagopal Sastry, Chief Financial Officer 10.70%
Mr. M.C Gokul, Company Secretary 33.08%

18.3 The percentage increase in the median remuneration of employees in the financial year: 3.17%

18.4 The number of permanent employees on the rolls of company as on 31st March 2020: 1839

18.5 Average percentage increase already made in the salaries of employees other than the managerial personnel in the last financial year: 10.6%

Percentage increase in the managerial remuneration in the last financial year was 20.67%. There are no exceptional circumstances for increase in the managerial remuneration. With respect to the Managerial Personnel, variable component is paid in the form of incentive, as per the remuneration policy of the Company and based on the financial and non-financial parameters based on their individual performance and the performance of the Company.

18.6 The key parameters for any variable component of remuneration availed by the directors: Independent directors have been paid sitting fees for attending meetings of the Board and Committees and also paid a profit related commission, but not exceeding 1% of the net profit of the Company for the financial year. No sitting fee and commission is paid to non-executive and non-independent Directors of the Company. However, with respect to Mr. P. Kaniappan, Managing Director, variable component is paid in the form of incentive, as per the Remuneration Policy of the Company and based on the financial and non-financial parameters.

18.7 The remuneration of directors and employees are as per the remuneration policy of the Company.

18.8 Particulars of Employees

The statement of particulars of employees as per Section 197 of the Companies Act, 2013, read with Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014, for the year ended 31st March 2020, is given in Annexure 5 and forms part of this Report.


The Company has complied with the provisions of the Listing Regulations concerning corporate governance and a report to this effect is attached, as required by Under Schedule V of the Listing Regulation. The certificate issued by the auditors of the Company regarding compliance with the corporate governance requirements is also annexed to this report. The Managing Director, (CEO) and the Chief Financial Officer (CFO) of the Company have certified to the board on financial statements and other matters in accordance with Regulation 17(8) of the Listing Regulations pertaining to CEO / CFO certification for the financial year ended 31st March 2020. Further, applicable Secretarial Standards have been complied with.

The management discussion and analysis report, as required by the Listing Regulation and various disclosures required under the Act is also attached and forms part of this report.


The Company has a structured familiarization program for independent Directors of the Company which also extends to other Non-Executive Directors to ensure that Directors are familiarized with their function, role, rights, responsibilities and the nature of the company Business viz., automotive component industry and WABCO global business model, etc.

The Board of Directors has complete access to the information within the Company. Presentations are regularly made to the Board of Directors and all Committees of the Board on various matters, where Directors get an opportunity to interact with Senior Management. Presentations, inter alia, cover the Companys strategy, business model, operations, markets, organization structure, product offerings, finance, risk management framework, quarterly and annual results, human resources, technology, quality and such other areas as may arise from time to time.

The Company also issues appointment letters to the Independent Directors which also incorporates their role, duties and responsibilities. Further, regulatory updates on regulatory changes are also periodically placed before the Board. The details of familiarisation programme have been hosted in the web site of the Company under the weblink http://wabco-auto.com/investor-relations/wabco-india-investorrelations


• The Company has not accepted any deposits from the public within the meaning of Sections 76 of the Companies Act, 2013 for the year ended 31st March 2020.

• The Company has considered the possible effects that may result from the COVID-19 pandemic on the carrying value of property, plant and equipment, inventories, revenue & receivables and other assets. In developing the assumptions relating to the possible future uncertainties in the global economic conditions because of this pandemic, the Company, as at the date of approval of these financial statements has used internal and external sources of information and concluded that no adjustments are required to the financial results. The Company will continue to monitor the developing scenario or any material changes.

• There are no significant and material orders passed by regulators or courts or tribunals, which would impact the going concern status of the Company and its future operations.

• The Company does not have any subsidiary, associate or joint venture. There was no Company which has become or ceased to be Companys subsidiary, Joint venture or associate Company during the financial year 2019-20.

• The Company has not raised any funds during the year.


The directors thank the vehicle manufacturers, distributors, vendors and bankers for their continued support and assistance. The directors gratefully acknowledge the support rendered by WABCO Europe BVBA. The directors wish to place on record their appreciation of the excellent work done by employees of the Company at all levels during the year. The directors specially thank the shareholders for the confidence reposed by them in the Company.

For and on behalf of the board
22nd May 2020 Chairman