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Directors Report of Bajaj Electricals Ltd.

Mar 31, 2016

Dear Members,

The Directors take pleasure in presenting the 77th Annual Report together with the audited financial statements for the financial year ended 31 March 2016. The Management Discussion and Analysis has also been incorporated into this report.

Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015

The Securities and Exchange Board of India (SEBI) vide its Notification No.SEBI/LAD-NRO/GN/2015-16/013 dated 02 September 2015 notified the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations"), applicable with effect from 01 December 2015. This Report therefore states compliance as per the requirement of the Companies Act, 2013 ("the Act"), SEBI LODR Regulations and other rules & regulations as applicable to the Company.

Financial Results

The highlights of the Standalone Financial Results are as under:

(Amount: Rs. in crore, except for EPS)

Particulars FY 2015-16 FY 2014-15

Revenue from Operations & Other Income 4,634.80 4,286.80

Gross Profit before Finance Cost and Depreciation 282.23 112.64

Less: Finance Cost 101.40 104.43

Less: Depreciation 27.24 29.03

Profit/(Loss) before Taxes 153.59 (20.82)

Less: Provision for Taxation 57.98 (6.87)

Profit/(Loss) after Tax 95.60 (13.95)

Add: Balance in Profit & Loss Account 1.50 8.69

Add : Transferred from General Reserve - 25.00

Balance available for appropriation 97.10 19.74

Appropriations

(i) Interim Equity Dividend 28.27 -

(ii) Final Equity Dividend - 15.11

(iii) Tax on Equity Dividend 5.75 3.08

(iv) Transferred to General Reserve 30.00 -

(v) Dividend paid on exercise of Stock Options along with Dividend Distribution Tax 0.01 0.05

Closing Balance 33.07 1.50

Earnings per share (Rs.) Basic 9.48 (1.39)

Earnings per share (Rs.) Diluted 9.46 (1.39)

The highlights of the Consolidated Financial Results are as under:

(Amount: Rs. in crore, except for EPS)

Particulars FY 2015-16 *FY 2014-15

Revenue from Operations & Other Income 4,634.80 -

Profit before Taxes 153.58 -

Profit/(Loss) from associates after Taxes (0.15) -

Profit for the year 95.45 -

Earnings per share (Rs.) Basic 9.46 -

Earnings per share (Rs.) Diluted 9.45 -

- This being the first year Consolidated Financial Statements are drawn up, the previous year''s comparative figures have not been presented.

Overview of Company''s Standalone Financial Performance

The overall performance of the Company for the year 2015-16 has been satisfactory with turnaround of EPC business.

- The gross turnover and other income achieved for the year ended 31 March 2016 was Rs. 4,634.80 crore, a growth of 8.12% over the previous year.

- PBDIT increased by 150.55% from Rs. 112.64 crore to Rs. 282.22 crore.

- Interest cost at Rs. 101.40 crore was lower by 2.90%.

- Net Profit was at Rs. 95.60 crore as against loss of Rs. 13.95 crore in the previous year.

- Basic Earnings Per Share (EPS) for the year was Rs. 9.48 Dividend

The Board, in its meeting held on 10 March 2016, declared an interim dividend for FY 2015-16 of Rs. 2.80 per share on 10,09,48,976 equity shares of Rs. 2 each as compared to final dividend of Rs. 1.50 per share for the previous year. The amount of dividend and the tax thereon aggregate to Rs. 34.02 crore (previous year Rs. 18.20 crore). Your Directors recommend that the interim dividend should be treated as the final dividend for FY 2015-16.

Transfer to Reserves

The Company proposes to transfer an amount of Rs. 30.00 crore to General Reserves. An amount of Rs. 33.07 crore is proposed to be retained in the statement of Profit and Loss.

Share Capital

The paid up Equity Share Capital of the Company as on 31 March 2016 was Rs. 20.19 crore. There was no public issue, rights issue, bonus issue, preferential issue, etc. made by the Company during the year. The Company has not issued shares with differential voting rights. The increase in number of shares is due to the issue of 1,86,550 equity shares of Rs. 2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS.

No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.

Financial Liquidity

The Company''s cash and cash equivalent as at 31 March 2016 was Rs. 4,657.94 lacs. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.

Credit Rating

The below table depicts Company''s credit ratings profile in a nutshell:

Instrument Rating Agency Rating Outlook

Non-Convertible [ICRA] A Debenture (NCD) ICRA Limited (pronounced ICRA A) Positive

Commercial Paper ICRA Limited [ICRA] A1 (CP) (pronounced ICRA A one) -

Line of Credit ICRA Limited Short Term Rating - [ICRA] A1 (LOC) (pronounced ICRA A one) positive

Long Term Rating - [ICRA] A (pronounced ICRA A) Deposits

The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder.

Particulars of Loans, Guarantees and Investments

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements annexed to the Report.

One third of 1,00,00,000 - 9% Non-Convertible Cumulative Redeemable Preference Shares of Rs. 10 each of Starlite Lighting Limited, are due for redemption in FY 2016-17 and hence they have been shown under the head ''Current Investments''.

Non-Convertible Debentures

During FY 2013-14, the Company had issued 1000 Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) of Rs. 10,00,000/- each, aggregating to Rs. 100.00 crore, on private placement basis, in two series, Series - 1 of 400 NCDs & Series - 2 of 600 NCDs, which are listed on National Stock Exchange of India Limited (NSE) under ISIN ''INE193E07014'' and ''INE193E07022'', respectively. Out of the said NCDs, Series - 1 NCDs were redeemed on 28 April 2016, the due date of their redemption.

Axis Trustee Services Limited is the Debenture Trustee for the Debentureholders, whose details are provided in the Corporate Governance section of the Annual Report. Further, pursuant to Regulation 53 of the SEBI LODR Regulations, disclosures in compliance with the Accounting Standard on "Related Party Disclosures" are given in the notes to the financial statements annexed to this Report.

Employees Stock Option Scheme

The Company implemented the Employees Stock Option Scheme ("Scheme") in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (''the SEBI SBEB Regulations'') as a measure to reward and motivate employees as also to attract and retain the talent. Details of the shares issued under the Scheme, as also the disclosures in compliance with Regulation 14 of the SEBI SBEB Regulations, are set out herewith in the Annexure ''A'' to this Report. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

During the year under review, 6,17,500 Stock Options were granted to the eligible employees at the market price prevailing on National Stock Exchange of India Ltd. (NSE) as on the date of their grant. The issuance of equity shares pursuant to exercise of Stock Options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI SBEB Regulations and the resolutions passed by the shareholders. The certificate would be placed at the Annual General Meeting for the inspection by the Members.

Scheme of Arrangement for demerger of Manufacturing Business of Hind Lamps Limited into the Company

During the year under review, the Board of Directors of the Company ("Company"/"Transferee Company") has approved the proposal for demerger of manufacturing business of Hind Lamps Limited ("HLL"/"Transferor Company") into the Company, pursuant to a Scheme of Arrangement ("Scheme").

The Transferor Company is an unlisted company incorporated on 30 April 1951 having its registered office & manufacturing unit located at Shikohabad, Dist. Firozabad, Uttar Pradesh and HID Lamps manufacturing unit located at Parwanoo, Himachal Pradesh. The Transferor Company is engaged in the business of manufacturing of glass bulbs, HID bulbs and aluminium caps and has been declared as a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 ("SICA") by the Board for Industrial and Financial Reconstruction ("BIFR").

Shri Shekhar Bajaj, Chairman & Managing Director and Shri Anant Bajaj, Joint Managing Director of the Company are also the Directors in HLL.

Rationale and Object of the Scheme:

HLL, amongst others, has been Company''s vendor for last several years and supplying products under Company''s brand. The Company, being a leading player in the business of lighting & consumer durables business for over 75 years, has management expertise and quality system & controls, whereas HLL has a manufacturing capabilities and required infrastructure.

The Board of Directors of the Company is of the view that the proposed Scheme would inter-alia have the following benefits:

i. The transfer and vesting of the manufacturing business of HLL into the Company will enable both the companies to achieve and fulfill their objectives more efficiently and economically and the same is also in the interest of all the stakeholders.

ii. The Company''s existing management expertise and quality system & controls will facilitate revival of the manufacturing business of HLL upon its consolidation into the Company.

Salient features of the Scheme:

a. The entire manufacturing business of HLL together with all its assets and liabilities will be transferred to the Company on a going concern basis.

b. The Scheme shall be deemed to be effective from the Appointed Date i.e. 31 March 2014, but shall be operative from the Effective Date.

c. Pursuant to the Scheme, the shareholders of HLL will be issued 5,29,740 fully paid-up equity shares of the Company of the face value of Rs. 2 each, except to the Company itself, in consideration for the demerger in compliance with the provisions of Section 2(19AA) of the Income Tax Act, 1961.

d. The equity shares to be so issued to the shareholders of HLL have been determined based on the Share Entitlement Ratio of 109 equity shares of the Company of the face value of Rs. 2 each for 1000 equity shares of HLL of the face value of Rs. 25 each, as recommended by S.R. Batliboi & Co. LLP, Chartered Accountants, Mumbai and the same will be issued on the record date.

e. Fairness opinion has been given by SPA Capital Advisors Limited.

f. The Audit Committee and the Board of Directors of the Company have approved the Scheme, Valuation Report and the Fairness Opinion.

g. Upon the Scheme becoming effective, the shareholding of the Promoters in the Company would increase to 63.80% from the existing shareholding of 63.61%.

h. HLL will retain the remaining business which includes all the undertakings, businesses, activities (including trading activities and support services to other undertakings), employees and operations other than that of the manufacturing business.

i. The Scheme would be effective upon receipt of all requisite approvals including from the Shareholders, Creditors, BIFR or such other appropriate authorities and filling the certified copies of the order of BIFR with the Registrar of Companies.

j. Subject to the regulatory approvals, the proposed transaction is expected to be completed in a period of about 12 months.

Operations

Engineering & Projects Business

- Transmission Line Towers (TLT)

TLT BU has performed well in FY 2015-16 in terms of margins, though the top line has not grown as expected in comparison with the previous year. The increase in the services related revenue by about 70% has resulted in excellent collection of dues against sales. The new orders intake for the year was Rs. 400 crore.

During the year under reporting, due to release of fewer transmission line orders by the central power utility companies and availability of huge idle capacities with the manufacturers, many of the manufacturers compromised with the margins while picking up the fresh orders. However, your Company was selective in picking up the orders to ensure coverage of the fixed costs and protection of margins.

Major achievements of TLT BU for FY 2015-16 are:

i. Completed and commissioned 2 sub-stations of 132 kV along with connected transmission lines and bays at Mungoli and Gohad for MPPTCL;

ii. Bagged order for 220 kV sub-station along with connected transmission line and bay at Mittemari in Karnataka from KPTCL;

iii. Successfully completed and commissioned 187 KM long 765 kV D/C Kudgi Kolhapur Transmission line for PGCIL;

iv. Successfully completed and commissioned re- conductoring of Neyveli TS-I to TS-II expansion 400 kV link with HTLS conductor along with LILO of 2nd circuit of Neyveli-Trichy 400 kV D/C line at Nagapatnam Pooling Station;

v. Bagged 2 packages of 765 kV D/C Warora Parli transmission line from PGCIL; and

vi. Completed Pile Foundations at 15 tower locations for 132 kV transmission lines of BSPTCL with design, engineering and construction in record time of 6 months.

In consideration of increase in the share of investment of private utilities in transmission sector, new EPC business models are expected to be evolved in future. EPC players who will be able to provide one stop solution for the transmission sector, with sustained quality and completion of job in the given timelines will have competitive edge. Keeping this in mind, your Company is focusing on developing capabilities in other related business areas like usage of monopoles for transmission lines, construction of EHV sub-stations and laying of underground EHV cables, besides conventional transmission lines business. Further, to improve margins, the Company has decided to set its foot prints in overseas EPC transmission sector.

- Power Distribution (PD) Business Unit

The performance of PD Business Unit for FY 2015-16 was satisfactory, as it achieved a turnover of Rs. 917 crore with a growth of 35% over the previous year. Considering the unexecuted order book of Rs. 2,474 crore in hand at the beginning of the financial year, the Business unit was conservative in acquiring fresh orders and acquired orders worth Rs. 120 crore, including the prestigious orders of Feeder Separation Project by Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited (MPPKVVCL) at Rewa District and Madhya Pradesh Madhya Kshetra Vidyut Vitaran Company Limited (MPMKVVCL) at Guna District, to close the year-end order book at Rs. 1,677 crore.

During the year, the focus of this BU was on to improve project execution capabilities and efficient supply chain management and in order to achieve this, the BU took strong strides in implementing TOC as a methodology. This has resulted in increase in the speed of project execution substantially, which has been appreciated by the customers. Due to major improvement in the project execution capabilities, the outlook of the BU for the coming years is positive.

For FY 2016-17, the focus of this BU will be on keeping the working capital under control while achieving the topline growth.

- Illumination

Illumination BU ended the year with a sales turnover of Rs. 332 crore with a year-on-year increase of close to 10% despite an almost flat infrastructure growth market and achieved 8% reduction in the total outstanding resulting in a better utilisation of working capital.

The year saw the acquisition and successful commissioning of many notable orders including Rs. 72 crore EESL order for retrofitting over 86,000 LED Streetlights in Delhi with remote management; Rs. 35 crore order for 611 Nos. Highmasts with floodlights for a Nigerian refinery and the floodlighting of the iconic Mohun Bagan football stadium in Kolkata. The BU is also executing Rs. 50 crore order for LED streetlights and poles with controls based on the Internet of Things (IoT) in Uttar Pradesh which is a first of its kind for a National Highway.

During the year, the Siddeshwar temple in Solapur, Dakshineshwar temple in Kolkata and Chatrapati Shivaji Terminus building of Central Railways were illuminated. The Lighting of the Chatrapati Shivaji Terminus building has become Mumbai''s landmark visual. The tallest Flag Mast in the country with a height of 82 metres is being installed by the BU at Raipur to join the legion of flag masts installed by the Company. The BU is also installing LED floodlights on High Masts & Poles on the international border at Jammu under the most difficult working conditions.

During the year, the Company made significant progress towards stabilizing Leap Ahead initiatives in all facets of EPC business. These initiatives channelize activities of business viz. tendering, engineering & design, sales, supply chain, manufacturing and logistics towards faster completion of project execution. This has resulted in closure and handing over of some of the projects to the customers before time, resulting in improving in working capital turns.

Consumer Durables

- Domestic & Kitchen Appliances

The Company has a wide range of domestic and kitchen appliances comprising of Water Heaters, Room Heaters, Coolers, Irons, Mixers, Induction Cookers, Toasters, Kettles, OTG, Microwave, Rice Cookers, Gas stoves, Non electrical kitchen aids & Pressure Cookers and is a dominant player in small appliances segment in India. The Company enjoys leadership positions in the industry for the product categories such as Mixers, Toasters, Water Heaters, Room Heaters, Coolers and Irons, whereas categories like Gas stoves, OTG & Microwaves are growing significantly year-on-year.

During the year under reporting, domestic appliances sale was Rs. 524 crore, whereas kitchen appliances sales was Rs. 638 crore.

The sale of appliances was impacted due to sluggish market conditions, growing competition and implementation of Range and Reach Expansion Programme (RREP) across the country. However, the implementation of RREP across the country will help the BU in controlling the inventory at all levels and improving margins.

- Fans

Fans BU has a modern assortment of ceiling, table, pedestal, wall, fresh air and industrial fans manufactured at plants in India and abroad that have ISO 9001/9002 quality certifications. The BU is also involved in marketing self-priming, centrifugal & submersible pumps.

Due to sluggish market conditions, growing competitiveness, dominance of newer channels like e-commerce, the market remained price sensitive leading to drop in sales vis-a-vis the previous year. However, the BU has been able to maintain profitability and market share.

During FY 2015-16, the BU has achieved a sales turnover of Rs. 639 crore. Robust distribution, launch of new models in premium range, better product mix and disciplined maintenance of market operating price has resulted in improvement of margins. The BU''s focus for FY 2015-16 continued on implementation of RREP. The CSD channel continued on its growth path by delivering 11% growth over the previous year.

Chakan Unit:

The production at this Unit showed increase during the year under review with the production of 6,00,934 numbers of fans as against 4,57,436 numbers of fans in the previous year. This Unit has been developed to cater to the demand of export market.

Lighting

- Luminaires

Luminaires BU design and market total lighting solution to all key market segments covering commercial lighting, industrial lighting, street lighting and area lighting. The BU is certified ISO 9000 while most of the products are manufactured in plants conforming to ISO 9000:2000 and select plants are certified for ISO 14001 which sets out the criteria for environmental management.

With lighting industry moving to LED technology big time, the BU has designed and developed high end LED Luminaires to suit to wide variety of applications ranging from office lighting, retail lighting, power plants, manufacturing industry, warehouses, street lighting, area lighting and city beautification. The BU is working to offer energy efficient, value for money and environment friendly lighting solutions to the customers under one roof.

For FY 2015-16 the BU achieved a turnover of Rs. 460 crore with a growth of 15% in a relatively tough business environment. The BU continues to maintain its dominant position in the Indian Luminaires market.

The demand for LED Luminaires is gaining momentum with tremendous push from the Government and hence, the BU has focused on the development of LED luminaires. Other than the government and local bodies, the BU has serviced private corporates including Asian Paints, Accenture, Capgemini and Godrej.

Creating Smart Cities is one of the major agenda of the Central Government and the BU has taken the challenge to provide high end lighting and smart solutions to such cities. The beginning has already been done by the Company by signing an agreement for developing & launching City Infrastructure Management for Intelligent Public Street Lighting Solution and commissioning of pilot installations with satisfactory results.

With thrust to harness renewable energy, the BU has launched solar solutions under brand "Sunsoko" for street lighting, power packs, roof top panels, hand pumps and semi high masts. The Company''s solar product has received an award "Outstanding contribution towards development of roof top solar industry" during Indian Roof- top Solar Summit 2016 held in January, 2016 at New Delhi.

The BU also offers a range of sophisticated Integrated Building Management Solutions (IBMS) in creating smart and efficient buildings. The Company was awarded the "Best Company in Integrated Building Management Solutions" at the Hospital Management Conference 2015 by a jury consisting of the NHBA panel, UBM Medica, CMIS and Hospital Associations. The Company has contracts with Securiton from Switzerland, Delta Controls from Canada and Vivotek from Taiwan for IBMS systems.

During FY 2015-16, the BU has made a significant progress in stabilizing Leap Ahead initiative in supply chain of luminaires, which has resulted in timely availability of material against confirmed orders and increase in sales.

- Lighting

The Lighting BU makes a wide range of conventional light sources, LED based lighting products, Domestic Luminaires, HID Lamps, Torches and Lanterns. The light sources includes General Lighting Service (GLS) Lamps, Fluorescent Tube Lights (FTL), Compact Fluorescent Lamps (CFL) and special purpose lamps. In line with the emerging trend from all segments of the distribution set up, the BU made concentrated efforts in developing LED based products by launching LED Bulbs, Panel Lights, Down Lighters, portable lanterns and torches. The competition is very intense on the LED business with various segments vying for market share.

A strong distribution network exists for marketing these products both in urban and rural areas and the special focus is on rural penetration.

The manufacturing of GLS and FTL Lamps is undertaken at Company''s Kosi Unit and Hind Lamps Limited''s Shikohabad Unit, whereas CFL Lamps and LED Lamps are manufacture by Starlite Lighting Limited at its Nashik plants.

During FY 2015-16, the Lighting BU has achieved a turnover of Rs. 615 crore with growth of 20%. The growth is mainly because of steep increase in LED turnover to Rs. 112 crore from Rs. 18 crore for last year, which includes sales of Rs. 61 crore to EESL.

Considering the shift in demand for LED products, the BU has introduced good future ready LED products. With fast growing trade business of LED products and LED Bulb orders from EESL, the LED lights business will be the front runner for the Lighting business in the coming years.

The BU has continued on the path of RREP to spread its reach and range to a much higher level, the benefits of which will start accruing now onwards. The BU with its improved distribution network, wide product range and efficient sourcing strategies is poised for a better than the industry growth in the coming years.

The Company has consolidated quality function with an objective to give a thrust on improvement of product quality and manufacturing processes.

Supply Chain Management

In the year 2013, Supply Chain Management (SCM) was identified as a function to develop core competencies and bring competitive edge to the business. The Company''s management took a decision to integrate the SCM of all separate verticals of Consumer Products into one integrated SCM. The objective was to create a group which could standardize process, focus on consistent quality while getting the muscle power of aggregated purchase. The entire group was galvanized into one body to relentlessly push the agenda of improving "availability of products for sale at lower inventories". The main tenets of this strategy was to improve "supplier relation with joint planning" and "rationalisation of product costing". Last two years saw a steady improvement in both these parameters. In the year 2015-16 SCM was truly established as supply system based on the replenishment model of the "Theory of Constraints" waiting to go into the next cycle of improvement.

Encouraged with the results of Consumer Products segment, in July 2015, the Luminaries business procurement group was integrated with SCM. In Luminaries business where a large portion of business is of customised nature and made against specific orders, the strategy identified was to deliver "On Time In Full (OTIF)" and create a decisive competitive edge by reducing the "lead time in servicing of the customer orders". Using a combination strategy of replenishment and order queuing, the team worked with the suppliers to implement systems and processes which lead to measurement parameter of OTIF climbing to over 85%. In FY 2016-17 the focus will be on bringing down the lead time in servicing of customer orders. The other significant impact of this drive was the transformation of a motley group of buyers into a self- driven and motivated team of SCM.

The Company has also integrated EPC (including Ranjangaon Units) with the SCM to create strategic tie-ups with suppliers for consistent quality and supply schedules and started using e-sourcing tool for aggregation of demand, price discovery and systematizing procurement of direct and indirect material and services.

Green Energy - Wind Energy

The Company''s 2.8 MW Wind Farm located at Village- Vankusawade in Satara District of Maharashtra has generated 29,80,491 electrical units during the year under review as compared to 30,67,570 electrical units in the previous year.

Internal Control Systems and its adequacy

The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the scale and complexity of its operations and the same were operating effectively throughout the year. These controls are routinely tested and certified by statutory as well as internal auditors and cover all offices, factories and key areas of business.

The Company has an in-house internal audit function. The scope of internal audit is decided by the Audit Committee. To maintain its objectivity and independence, the internal audit function reports to the Chairman & Managing Director of the Company and the Chairman of the Audit Committee of the Board.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

Internal Controls over Financial Reporting

The Company has in place adequate internal financial controls commensurate with the size and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedure in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information.

The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. Changes in policies, if required, are made in consultation with the Auditors and are approved by the Audit Committee.

The Company has robust financial closure, certification mechanism for certifying adherence to various accounting policies, accounting hygiene and accuracy of provisions and other estimates.

Indian Accounting Standards (Ind AS) - IFRS converged standards

The Ministry of Corporate Affairs vide its notification dated 16 February 2015 has notified the Companies (Indian Accounting Standards) Rules, 2015.

In pursuance of this notification, the Company will adopt Ind AS with effect from 01 April 2016 with the comparatives for the period ending 31 March 2016.

The implementation of Ind AS is a major change process for which the Company has set up a dedicated team and is providing desired resources for its completion within the time frame. The impact of the change on adoption of Ind AS is being assessed.

Information Technology (IT)

The Company continues to invest in Information Technology for automating various business processes to be productive. One of the primary requirement for running all the business functions in automated manner is to keep ERP, CRM, BI and Intranet on for the employees and extranet portal for all other stakeholders. During the year, the IT focus was on developing new modules on Intranet for automating business processes for EPC BU based on TOC processes and mobile application for Customer Care team. These applications are completely integrated with Core ERP & CRM.

As more and more business processes are getting automated and dependency on IT systems is increasing for all business units, there is continuous focus on IT security and reliable disaster recovery management processes to ensure all critical systems are always available. These are periodically reviewed, upgraded and tested for efficacy, security and reliability.

During FY 2015-16, the Company has received following recognitions from various media agencies for its IT projects:

i. EMC Transformation Award 2015 for Private Cloud Implementation;

ii. CIO 100 Award from IDG for Project Leap Ahead for EPC Business;

iii. CIO Hall of fame 2015 from IDG for getting four CIO-100 awards for various projects; and

iv. PCQUEST Best IT implementation award for Project Leap Ahead for EPC (Project with maximum business impact).

Customer Care

The Company has maintained its tradition and reputation of providing efficient after sales service to its customers through a strong network of 400 service franchisees and service dealers. Some of the important actions that it took during the year were to provide toll free call registration facility to customers and dealers, mobile application to end customers to register calls any time, higher than ever before call resolution, providing home service to all its consumer products across all deep interior areas and monitoring of performance through feedback mechanism from customers through SMS facility. The Survey Monkey web surveys confirmed more than 98% customer satisfaction.

To help customers with spare parts requirements, the Company has started selling key required spare parts through its website giving comfort and convenience to meet their requirements.

Brand Development and Protection

FY 2015-16 saw many new communication initiative by the Company. The first major step was taken by the Company was to consolidate all its sub-brand to have unified brand approach, under an umbrella brand "Bajaj" and the same was implemented across all internal and external touch points.

To support the RREP, the Company implemented retail branding across Traditional Trade Channels, Canteen Store Department, Modern Retail Stores, etc. and branded over 10,000 stores Pan India.

''We are Family'', the latest advertising campaign, was conceived with the idea that the Company''s Products completes a home and have been a part of the Indian families for over 75 years. The media exposure for this campaign has been phenomenal considering more than 10 Million video views across all the platforms viz. more than 6.9 Million video views on YouTube; 2.5 Million video views on Facebook; 0.85 Million video views on Hotstar; 0.25 Million video views on Inmobi; and 0.8 Million video views on Vdopia.

Bajaj LED "The Science of Light" - Reinforcing its focus in the lighting segment, the Company launched a massive mass media campaign which was promoted through a Television Commercial, Print ads, Digital and Social Mediums. The campaign was strategically planned keeping in mind the futuristic nature of the product and the communication clearly articulated the key benefits to the consumer of Bajaj LEDs, namely long life, energy efficiency, multi coloured light source, environmentally friendly and inbuilt voltage surge protector.

The Company also organised Regional Lighting Dealer events - "Upgrade" across various region and launched series of new LED products, educate the dealers about the benefits of evolving LED technology and also to felicitate top performing dealers from respective regions.

The age old Indian game of Kabaddi in its third season, the Pro Kabaddi League (PKL) was much bigger and better. Enhanced graphics, analytics and the in-vision commentary elevated the viewer experience. The Company was associate sponsors for PKL in 2nd and 3rd seasons. The Company achieved unmatched mileage with branded kiosks, perimeter branding, ground mat branding, stadium branding, digital banners on hotstar app and through Television Airtime. Pro Kabaddi reached out to a huge global audience by reaching over 109 countries as it was relayed in five different languages namely Hindi, English, Kannada, Telugu, Marathi, etc.

In response to market need and potentials of LED Luminaires, the Company has taken the next logical step and organised a first ever customer focused program ".nxt Upgrade". Ten display booths were specially created to showcase the products segments and its actual lighting design for Commercial, Retail, Industrial, Urban Architectural, Area, Street, IBMS, Solar lighting. Also, a day long conclave included media interaction, talks on LED technology, Marketing and Product initiatives. Architects and Consultants from various industries, Channel partners, Government and other Institutional customers were the recipients of these events. This show went through 4 major cities in southern region at the first step; Chennai, Hyderabad, Bangalore and Cochin.

Your Company has taken significant actions against counterfeits, fakes and other forms of unfair competition/trade practices.

Corporate Social Responsibility (CSR)

The Company''s CSR activity is guided by the 4 pillars - Sustainability, Diversity (gender inclusion), Employee Volunteering and Community Outreach.

In our endeavour to work for the benefit of the communities where we operate, all our community outreach programs are planned and executed with a focus on the following:

- Ensuring Environmental sustainability & promoting its education;

- Employment, enhancing vocational skills and livelihoods;

- Promoting Preventing Health Care; and

- Promotion of Arts & Culture.

As a part of environmental & sustainability initiatives, the Company partnered with environmental organisations to educate masses on environment protection and to undertake renewable energy projects viz. setting up solar powered libraries, solar computer laboratory, solar street lights and solar education centres which will benefit to the rural off grid communities.

In celebration of the International Year of Light and Light- based Technologies (IYL 2015), the Company conducted Science of Light workshops in schools with an objective to create awareness amongst the students about the fundamentals of light based technologies, energy efficiency and use of alternative renewable energy like solar.

The Company also took initiatives to establish a "Peace Park" in Almora district of Uttarakhand by motivating selected self- help groups of women, to create awareness amongst local communities and school children about the fragility of eco-systems in the Himalayas. The Company also planted about 7,660 trees.

The Company continued with Project Disha in partnership with specialised organisations to impart vocational skills like masonry, electrical works etc. to about 1,000 rural youth to enable them to upgrade their skills and enhance their employability.

The Company has joined hands with NGOs and created a pool of anti-tobacco crusaders to spread awareness among different stakeholders about healthy and tobacco free living.

The Company also supported two organisations working to preserve Indian heritage, promote art and culture and Indian Classical Music.

The Company and its employees contributed to support those affected from Nepal Earthquake & Chennai Flood and undertook several activities viz. tree plantation, blood donation, cleanliness drives, health check-up camps and tobacco awareness sessions across India through employee volunteering. Through dedicated efforts of about 1,250 employees and 200 social organisations, over 16,600 trees have been planted across the country.

The Company and its employees also participated in Mumbai, Kolkata & Delhi Marathon in support of ''Paryavaran Mitra'' to propagate the cause of environment protection and supported the cause of raising awareness for breast cancer and well being of women by supporting Pinkathon (women''s only marathon) in 9 cities.

Total CSR expenditure incurred by your Company during the year was Rs. 1,35,95,069/-.

The CSR Policy Statement and Report on CSR initiatives taken during the year pursuant to Sections 134 & 135 of the Act is annexed to the Board''s Report as Annexure ''B''.

Human Resources

The Company''s human resource function is committed to make the organisation future ready. A diverse pool of lateral talent has been hired to enhance the bench strength. This includes professional experts with excellent academic credentials and professional track record. The Company has also successfully attracted management and engineering graduates through a focused annual campus hiring program. The Company has also identified a pool of best human resources who are being groomed for future leadership roles. Talent mobility within the Company is encouraged through job posting process.

To enhance the engagement, retention and work life balance of the employees, the Company has introduced progressive policies & programs like flexible working hours, compensatory off policy, flexible pay policy, diverse reward & recognition program and other employee interaction programs.

The Company has invested in its human capital regularly with an aim to enhance organisation & individual capabilities to make them effective and efficient in the short run and long run. The Company is driving the learning & development agenda through a mix of in-house and external learning interventions in the functional, behavioral and cross functional areas. Select employees are encouraged to attend management development programs conducted by renowned institutes across the country and best practices learnt are being implemented in the Company. A unique knowledge sharing platform has been developed to share the knowledge amongst the colleague through short duration learning interventions.

The Company is in the process of developing a robust performance and talent management system which would be pathbreaking, progressive and totally aligned to the organisation''s and employee''s needs.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

Pursuant to the legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013" introduced by the Government of India, which came into effect from 09 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace.

Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no cases reported during FY 2015-16 under the Company''s Policy on Prevention of Sexual Harassment at Workplace.

Whistle Blower Policy / Vigil Mechanism

The Company has a Whistle Blower Policy adopted in May 2011, which enables its directors and employees to report their concerns about unethical behavior, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy and provides safeguards against victimisation of director(s)/employee(s), who avail of the mechanism. The said Policy was amended in February, 2015 to extend its applicability to other persons dealing with the Company viz. contractors, vendors, customers and business consultants. The Policy has been appropriately communicated to the employees within the organisation and posted on the website of the Company.

Business Risk Management

The Company has a proper framework in place to identify, evaluate and mitigate business risks. The key business risks identified by the Company and their mitigation plans are as under:

(a) Business environment

The competitive environment in small appliances continues to be tough and to take care of that the Company has embarked on RREP to extend its demographics and offer value proposition to the customers to develop and grow in consumer facing business further.

(b) Currency fluctuation related risk

The weakening of the Indian Rupee, though slightly, has impacted our cost of imports. The Company had undertaken some foreign exchange forward contracts to hedge the risks against the currency fluctuations for the imports.

(c) Hiring and retention risk

The Company has been continuously working on retaining the best talent in the industry to work with, but it is a constant challenge to retain the good talent. There is imminent short term risk from new entrants and existing domestic players to hire talent from our Company. The Company''s human resource agenda focuses mainly on building a robust and diverse talent pipeline by hiring fresh management graduates to cater to various businesses and functions, enhancing individual and organisational capabilities for future readiness, driving greater employee engagement and strengthening employee relations. The Company has also taken a number of employee initiatives like benchmarking compensation structure with the industry, stock options, innovative management training programmes, job rotations, etc. to retain and grow talent.

(d) Occupational health and safety risk

Safety of employees and workers is of utmost importance to the Company. To reinforce the safety culture in the Company, it has identified Occupational Health & Safety as one of its focus areas. Various training programmes have been conducted at the plants and project sites such as behavior based safety training program, safety leadership program, logistics safety program, etc.

Economic Scenario, Future Outlook and Sector Overview

India''s economic growth rate in FY 2015-16 was estimated at 7.6% by RBI, an improvement to the previous year (7.2% in FY 2014-15), mainly on the back of recent policy initiatives, pick up in investments and lower oil prices. Going forward, growth rate is estimated at 7.5% by IMF (7.6% by RBI), which would mean that India will outpace most emerging economies including China and Africa. This is achieved mainly because of restoring macro-economic stability achieved on account of fiscal consolidation; control over inflation and support from fall in the global commodity prices.

On the forecast of normal monsoon this year and the steps taken by the government in recent times have shown positive results. These initiatives are expected to increase the purchasing power of an average Indian consumer, which would further boost demand and lead to spurt in development.

Currently the manufacturing sector in India contributes 15% of GDP. The Government of India under its "Make in India" initiative is trying to boost the contribution of manufacturing sector and aims to take it to 25%. Experts'' view is that Indian Economy is expected to grow by 7.75% during FY 2016-17.

Consumer Durable Sector:

India is expected to become the fifth largest consumer durables market in the world by 2025. Rural markets are likely to witness growing demand for consumer durables in the coming years as the government plans to invest significantly in rural electrification.

Lighting Industry:

It is expected that the market size of Indian LED industry may touch Rs. 21,600 crore by 2020 on the back of government''s decision to switch to LED for all street lamps and public space lighting.

The Indian LED industry was pegged at Rs. 1,925 crore out of the lighting industry''s aggregate turnover of Rs. 13,000 crore in 2013.

As projected, the turnover of Indian lighting industry by 2020 will be Rs. 35,000 crore and LED will account for Rs. 21,600 crore, which is significantly over 60 per cent of this total turnover.

In the wake of continual government''s support for the promotion of LED lighting and its decision to switch to LED for all street lamps and public space lighting, this market is expected to grow substantially.

The Company''s prime focus is on to educate and promote the sustainable energy efficiency and drive the LED.

Power Sector:

Indian power sector is undergoing a significant change that has redefined the industry outlook. Sustained economic growth continues to drive electricity demand in India. The Government of India''s focus on attaining ''Power For All'' has accelerated capacity addition in the country. At the same time, the competitive intensity is increasing at both the market and supply sides (fuel, logistics, finances, and manpower).

The Government of India has identified power sector as a key sector of focus so as to promote sustained industrial growth and has taken many initiatives to boost the power sector such as:

- Ujwal DISCOM Assurance Yojna (UDAY) for financial turnaround and revival of power distribution companies (DISCOMs), which will ensure accessible, affordable and available power for all;

- Resolution of issues regarding transfer of mining leases and grant of forest clearances to the winning bidders of coal blocks;

- Provision of electricity to 18,500 villages in three years under the Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY); and

- Implementation of two national level programmes, namely Grid Connected Rooftop & Small Solar Power Plants Programme and Off-Grid & Decentralised Solar Applications, in order to promote installation of solar rooftop systems.

India''s wind energy market is expected to attract investments totaling Rs. 1,00,000 crore by 2020, and wind power capacity is estimated to almost double by 2020 from over 23,000 MW in June 2015, with an addition of about 4,000 MW per annum in the next five years.

Directors

Appointment of Directors:

During the year under review, Shri Anant Bajaj was re- appointed as the Joint Managing Director of the Company for a further period of five years w.e.f. 01 February 2016. His appointment was approved by the shareholders by way of a special resolution passed through postal ballot.

In order to strengthen the Board, on the recommendation of the Nomination & Remuneration Committee, the Board of Directors has appointed Shri Anuj Poddar and Shri Siddharth Mehta, as Additional Directors of the Company with effect from 30 May 2016 in the category of Non-Executive & Independent Directors.

In accordance with Section 161 of the Act, aforesaid Additional Directors hold office upto the date of the forthcoming Annual General Meeting of the Company and being eligible offer their candidature for re-appointment as Directors. Your approval for their appointment as Directors in the category of Non- Executive Independent Directors has been sought in the Notice convening the forthcoming Annual General Meeting of the Company.

As on the date of this report, Company''s Board comprises of 10 (ten) Directors, out of which, 8 (eight) are Non-Executive Directors (NEDs) including 1 (one) Woman Director. NEDs represent 80% of the total strength. Further, out of said 8 NEDs, 7 are independent directors representing 70% of total strength of the Board.

Directors coming up for retirement by rotation:

In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Anant Bajaj retires by rotation and being eligible offers his candidature for re- appointment as a Director. The information as required to be disclosed under Regulation 36 of the SEBI LODR Regulations in case of re-appointment of the said director is provided in the notice of the ensuing Annual General Meeting.

Independent Directors:

The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation.

In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBI LODR Regulations.

Board Effectiveness:

- Familiarisation Programme for the Independent Directors:

In compliance with the requirement of SEBI LODR Regulations, the Company has put in place a familiarisation programme for the Independent Directors to familiarise them with their role, rights and responsibility as Directors, the working of the Company, nature of the industry in which the Company operates, business model etc. The details of the familiarisation programme are explained in the Corporate Governance Report. The same is also available on the website of the Company www.bajajelectricals.com.

- Evaluation of the performance of the Board, its Committees and the Directors:

Pursuant to the provisions of the Act and the SEBI LODR Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit and Nomination & Remuneration Committee. The criteria applied in the evaluation process are explained in the Corporate Governance Report.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Company pursuant to Section 2(51) and Section 203 of the Act, read with the Rules framed thereunder:

- Shekhar Bajaj, Chairman & Managing Director and CEO;

- Anant Purandare, Executive Vice President & Chief Financial Officer (CFO); and

- Mangesh Patil, Vice President - Legal & Company Secretary and Compliance Officer

None of the Key Managerial Personnel of the Company have resigned during the year under review.

Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Leadership Positions

Your Company has laid down a well-defined criteria for the selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Leadership Positions.

Directors'' Remuneration Policy & Criteria for matters under Section 178

Information regarding Directors'' Remuneration Policy & Criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Act are provided in the section of Corporate Governance Report.

Directors'' Responsibility Statement

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statement in terms of Section 134 of the Act:

(a) that in the preparation of the annual accounts for the year ended 31 March 2016, the applicable accounting standards have been followed and that no material departures have been made from the same;

(b) that the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state-of-affairs of the Company as at 31 March 2016 and of the profits of the Company for the year ended on that date;

(c) that the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and

(f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

Meetings

A calendar of meetings is prepared and circulated in advance, to the Directors.

Board Meetings:

During the year, seven (7) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and SEBI LODR Regulations.

Audit Committee:

The Audit Committee comprises of three Independent Directors as its Members. During the year five (5) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report.

CSR Committee:

The CSR Committee comprises of three Members of which one is the Independent Director. The Committee met twice during the reporting period. Details of the Committee and meetings are given in the Corporate Governance Report.

Particulars of Contracts or arrangements with Related Parties

All transactions with Related Parties are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature.

The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly and on annual basis.

The Policy on Related Party Transactions as approved by the Board is available on the Company''s website: www.bajajelectricals.com.

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of its business. There were no materially significant related party transactions i.e. transactions exceeding ten percent of the annual turnover of the Company as per the last audited financial statements, entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, the disclosure in ''Form AOC-2'' is not applicable.

None of the Directors or the Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.

The details of Related Party Transactions are given in the notes to the financial statements.

Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of Section 124 of the Act, relevant amounts which remained unpaid or unclaimed for a period of seven (7) years have been transferred by the Company to the Investor Education and Protection Fund.

The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 06 August 2015 (date of last Annual General Meeting) on the website of the Company (www.bajajelectricals.com), as also on the website of the Ministry of Corporate Affairs.

Material Changes & Commitments

There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this report.

Significant and Material Orders Passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators or Courts or Tribunals, which may impact the going concern status of the Company and its future operations.

Subsidiaries / associates

The Company has no subsidiary as on 31 March 2016.

Details of the company which is an associate company of the Company:

Name of the company % shareholding of the Company Status

Starlite Lighting Limited 19% Associate (SLL)

For the purpose of Section 2(6) of the Act, "associate company", in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. For the purposes of this clause, "significant influence" means control of at least twenty per cent of total share capital, or of business decisions under an agreement. Though, the holding of the Company in the equity share capital of SLL is less than 20%, the Company is in a position to influence the operating and financial policies of SLL and hence the financial statements of SLL are consolidated with the Company''s financial statements considering it as an Associate of the Company.

Statutory disclosures

The summary of the key financials of the Company''s associate company (Form AOC-1), is included in this Annual Report. A copy of audited financial statements of the said company will be made available to the members of the Company, seeking such information at any point of time. The audited financial statements of the said company will be kept for inspection by any member of the Company at its registered office during business hours. The same are placed on the Company''s website www.bajajelectricals.com.

Presentation of financial results

The financial results of the Company for the year ended 31 March 2016 have been disclosed as per Schedule III to the Act.

(Amount: Rs. in Crore)

Particulars 2015-16 2014-15

Standalone revenue 4,634.80 4,286.80

Standalone profit for the year 95.60 (13.95)

-Consolidated revenue 4,634.80 -

-Consolidated profit for the year 95.45 -

*This being the first year Consolidated Financial Statements are drawn up, the previous year''s comparative figures have not been presented.

Secretarial Standards of ICSI

The Act has mandated the Secretarial Standards on Board Meetings & General Meetings specified by the Institute of Company Secretaries of India (ICSI). The secretarial standards issued by ICSI from time to time have been complied with by the Company during the year under review.

Auditors

Statutory Auditor:

The Company''s Auditors M/s. Dalal & Shah LLP, Chartered Accountants, Mumbai (Firm Registration No.: 102021W/ W100110), who retire at the ensuing AGM of the Company are eligible for re-appointment. They have confirmed their eligibility under Section 141 of the Act and the Rules framed thereunder for re-appointment as Auditors of the Company. As required under Regulation 33 of SEBI LODR Regulations, the auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The notes on financial statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments. The Auditors'' Report does not contain any qualification, reservation or adverse remark or disclaimer.

Cost Auditor:

The cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited pursuant to Section 148 of the Act and Rules made thereunder. The Board of Directors has, on the recommendation of the Audit Committee, appointed M/s. R. Nanabhoy & Co., Cost Accountants (Firm Registration No.000010), to audit the cost accounts of the Company for FY 2016-17. As required under the Act, the remuneration payable to the Cost Auditor is required to be placed before the Members in the General Meeting for their ratification. Accordingly, a Resolution for seeking Members ratification for the remuneration payable to M/s. R. Nanabhoy & Co., Cost Accountants, is included at Item No.7 of the Notice convening the AGM.

The particulars of the Cost Auditor and cost audit conducted by them for FY 2014-15 are furnished below:

ICWA Membership No. 1337

Registration No. of Firm 000010

Address Jer Mansion, 70, August Kranti Marg, Mumbai 400 036

Cost Audit Report FY 2014-15

Due date of filing of Report 30 September 2015

Actual date of filing of Report 24 September 2015

Secretarial Auditor:

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed, M/s. Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No.:1860) to undertake the Secretarial Audit of the Company. The Report of the Secretarial Auditor for FY 2015-16 is annexed to the Board''s Report as Annexure ''C''. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditor.

Corporate Governance

Pursuant to Regulation 34 of the SEBI LODR Regulations, a separate report on corporate governance has been included in this Annual Report together with a certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance.

All Board members and senior management personnel have affirmed compliance with the Code of Conduct for the year 2015-16. A declaration to this effect signed by the Chairman & Managing Director/CEO of the Company is contained in this Annual Report.

The Chairman & Managing Director and CFO have certified to the Board with regard to the financial statements and other matters as required under Regulation 17(8) of the SEBI LODR Regulations and the said certificate is contained in this Annual Report.

Business Responsibility Reporting

Regulation 34 of the SEBI LODR Regulations provides that the Annual Report of the top hundred listed entities, based on market capitalisation (calculated as on March 31 of every financial year), shall include business responsibility report describing the initiatives taken by them from an environmental, social and governance perspective, in the format as specified by the Board from time to time.

SEBI vide its Notification dated 22 December 2015 issued SEBI (Listing Obligations and Disclosure Requirements) (Amendment) Regulations, 2015, providing that for the word "hundred" the words "five hundred" shall be substituted and which shall come into effect from 01 April 2016.

The Company was ranked 426th in the list of top 500 companies as per NSE list and thus the requirement of publishing Business Responsibility Report shall now be applicable to the Company w.e.f. 01 April 2016. First such report shall be printed for the year 2016-17.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure ''D'' to the Board''s Report.

Extract of Annual Return

The extract of Annual Return as provided under sub-section (3) of Section 92 of the Act, in the prescribed Form MGT- 9 is enclosed as Annexure ''E'' to the Board''s Report.

Particulars of Employees and related disclosures

Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed as Annexure ''F'' to the Board''s Report.

The information on employees who were in receipt of remuneration of not less than Rs. 60 lacs during the year or Rs. 5 lacs per month during any part of the year forms part of this Report and will be provided to any Member on a written request to the Company. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days upto the date of the ensuing Annual General Meeting. If any Member is interested in inspecting the same, such Member may write to the Company Secretary in advance.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the associate prepared in compliance with the Act, applicable Accounting Standards and the Listing Agreement as prescribed by SEBI.

A separate statement containing the salient features of the associate in the prescribed ''Form AOC-1'' is enclosed herewith as Annexure ''G'' to the Board''s Report.

Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, customers, investors, business associates, vendors, regulatory and government authorities, stock exchanges and members. Your Directors also wish to place on record their deep sense of appreciation to employees at all levels for their sincere personal efforts as well as their collective dedication and contribution to the Company''s performance.

Cautionary Statement

Statements in the Board''s Report and the Management Discussion & Analysis describing the Company''s objectives, expectations or forecasts may be forward looking within the meaning of applicable securities laws and regulations. Actual results may differ materially from those expressed in the statement. Important factors that could influence the Company''s operations include demand and supply conditions affecting selling prices of finished goods, input availability and prices, changes in government regulations, tax laws, economic developments within the country and other factors such as litigation and industrial relations.

For and on behalf of the Board of Directors

Mangesh Patil Anant Bajaj Shekhar Bajaj

V P - Legal & Company Secretary Jt. Managing Director Chairman & Managing Director

FCS No.: 4752 DIN: 00089460 DIN: 00089358

Mumbai, 30 May 2016


Mar 31, 2014

Dear Shareholders,

The Directors are pleased to present the 75th Annual Report and the audited accounts for the financial year ended 31 March 2014.

The Companies Act, 2013:

The long-awaited Companies Bill 2012 got its assent in the Lok Sabha on 18 December 2012 and in the Rajya Sabha on 8 August 2013. After having obtained the assent of the President of India on 29 August 2013, it has now become the Companies Act, 2013 ("the Act") which replaced the Companies Act, 1956.

Since this report pertains to financial year that commenced prior to 1 April 2014, the contents therein are governed by the relevant provisions / schedules / rules of the Companies Act, 1956, in compliance with General Circular No.08/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs.

Financial Performance:

Rs. in crore

Particulars FY 2013-14 FY 2012-13

Revenue from Operations & Other Income 4079.98 3419.37

Gross Profit before Finance Cost & Depreciation 97.08 127.69

Less : Finance Cost 78.29 68.99

Less : Depreciation 24.75 14.45

Profit/(Loss) before Exceptional Items & Taxes (5.96) 44.25

Add: Profit on sale of Investments - 24.72

Profit/(Loss) before Taxes (5.96) 68.97

Less : Provision for Taxation (0.65) 17.76

Profit/(Loss) after Tax (5.31) 51.21

Add : Balance in Profit & Loss Account 31.55 28.69

Balance available for appropriation 26.24 79.90

Less : Appropriations :

(i) Dividend paid on exercise of Stock Options

including dividend distribution tax - 0.01

(ii) Proposed Dividend on Equity Shares 15.00 19.95

(iii) Tax on Dividend 2.55 3.39

(iv) Transferred to General Reserve - 25.00

Closing Balance 8.69 31.55

Results of Operations:

The net revenue from operations increased by 19.3% to Rs. 4,079.98 crore, despite the industry-wide slow down but has resulted in a loss of Rs. 5.31 crore.

The drop in profit was the result of various factors, including a challenging business environment. The infrastructure sector saw a low-key investment, mainly due to environmental clearances and land acquisition issues. The other major challenges faced by the Company include weakening of rupee, right-of-way issues, commodity price fluctuations, high interest rates, cost & time overrun in some of the turnkey projects and low margins in power sector projects. Even the margins in both lighting and consumer durable business have come down.

During the year under review, the management has taken several measures to ensure better management of working capital, monitoring of project performance on continuous basis and completion of projects as per schedule to avoid cost and time over run.

The operations of the company are elaborated in the annexed Management Discussion and Analysis Report.

Increase in number of shares

The increase in number of shares is due to the issue of 2,13,847 equity shares of Rs. 2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS.

Dividend

The Directors of your Company are pleased to recommend a dividend of Rs. 1.50 per equity share (previous year Rs. 2 per share) for the financial year ended 31 March 2014, subject to the approval of the shareholders. The amount of dividend and the tax thereon aggregate to Rs. 17.55 crore (previous year Rs. 23.34 crore). The dividend will be paid to the members whose names appear in the Register of Members as on 31 July 2014; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date.

Shares that may be allotted on exercise of Options granted under the Employee Stock Option Scheme before the Book Closure date for payment of dividend will rank pari passu with the existing shares and be entitled to receive the dividend.

Issue of Debentures on Private Placement basis

During the year under review, the Company issued 1000 Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) of Rs. 10,00,000/- each, aggregating to Rs. 100 crores, on private placement basis, in two series, Series – 1 of 400 NCDs & Series – 2 of 600 NCDs, which are listed on National Stock Exchange of India Limited (NSE) under ISIN ''INE193E07014'' and ''INE193E07022'', respectively.

Axis Trustee Services Limited is the Debenture Trustee for the Debenture holders, whose details are provided in the corporate governance section of the Annual Report.

Employees Stock Option Scheme

The Company implemented the Employees Stock Option Scheme ("Scheme") in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI Guidelines'') as a measure to reward and motivate employees as also to attract and retain the talent. Details of the shares issued under the Scheme, as also the disclosures in compliance with Clause 12 of the SEBI Guidelines, are set out in the Annexure to this Report. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.

During the year under review, 5,05,000 Stock Options were granted to the eligible employees under Growth Plan at the market price prevailing on National Stock Exchange of India Ltd (NSE) as on the date of the grant plus taxes as applicable. The issuance of equity shares pursuant to exercise of Stock Options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolutions passed by the shareholders. The Certificate would be placed at the Annual General Meeting for the inspection of members.

Corporate Governance

Your Company is committed to achieving the highest standards of Corporate Governance and continues to lay a strong emphasis on transparency, accountability and integrity.

A separate report on Corporate Governance is provided in this Annual Report, together with a Certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with the Stock Exchange(s). A Certificate of the CEO and CFO of the Company in terms of sub-clause (v) of Clause 49 of Listing Agreement, inter alia, confirming the correctness of the financial statements, adequacy of the internal control measures and reporting of matters to the Audit Committee is also annexed.

SEBI vide its Circular No.CIR/CFD/POLICY CELL/2/2014 dated 17 April 2014 has notified the revised Clause 49 of the Listing Agreement to be applicable with effect from 01 October 2014. This Report therefore stands complied against the previous Clause 49 of the Listing Agreement.

All Board members and senior management personnel have affirmed compliance with the code of conduct for the year 2013-14. A declaration to this effect signed by the Chief Executive Officer (CEO) of the Company is contained in this annual report.

Management Discussion and Analysis Report

A Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Corporate Social Responsibility

Section 135 of the Companies Act, 2013 concerning Corporate Social Responsibility along with the Rules there under and revised Schedule VII were notified on 27 February 2014 to come into effect from 01 April 2014.

Your Company welcomes the initiative taken by the MCA with an aim to embrace responsibility for the corporates actions and encourage a positive impact through its activities on the environment, consumers, employees, communities and all other members of the public sphere who may also be considered stakeholders.

The Company, being covered under the provisions of the said Section, has formed a Committee of Directors, titled "Corporate Social Responsibility Committee" comprising of the following three Directors as its members:

Shri Shekhar Bajaj, Chairperson

Shri Anant Bajaj, and

Dr.(Smt) Indu Shahani

The purpose of the Committee is to formulate and monitor the CSR Policy of the Company. The Committee has in place a CSR Policy.

The said Section being enacted with effect from 01 April 2014, necessary details as prescribed under the said Section shall be presented to the members in the annual report for the year 2014-15.

Even when the said provisions were not mandated by the Ministry of Corporate Affairs, your company demonstrated a sense of responsibility towards society and environment through the Company''s culture of trust and caring. The sound business practices adopted by the Company are perfectly in sync with its value system. In keeping with the Company''s commitment towards contribution to community welfare, the Company and its employees continue to whole heartedly support and closely associate with "Paryavaran Mitra" (Friends of Environment) a non-government organization (NGO) and involved in numerous activities like tree plantation, cleanliness drive, tobacco free environment and creation of social awareness, training & dissemination of information concerning Environment (Paryavaran) and Pollution and host of other activities for the cause of environment protection at all its business locations. Employee volunteers and spouses of employees are important drivers of our social initiatives. The Company has made green thinking a part of its business agenda to reduce its carbon footprint, energy & water conservation, waste reduction and product innovation. The Company has been enlisting more green champions through regular communications in the form of e-mails, posters and banners that are disseminated across the Company and organizing various events outside the Company to propagate the cause of environment protection. The green thinking is now the order of the day in the functioning of the Company.

Subsidiaries

The Company has no subsidiary as on 31 March 2014.

Directors

In view of the provisions of the Companies Act, 2013 (''Act''), Shri Anant Bajaj has now become retiring director and retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under Clause 49 of the Listing Agreement in case of re-appointment of directors is provided in the notice of the ensuing annual general meeting.

Pursuant to Section 149(4) of the said Act, every listed company is required to appoint at least one third of its directors as Independent Directors. The Board already has more than half of its directors in the category of Independent Directors in terms of the provisions of Clause 49 of the Listing Agreement. The Board therefore, in its meeting held on 29 May 2014 appointed the existing Independent Directors under Clause 49 as ''Independent Directors'' pursuant to provisions of the said Act, subject to the approval of shareholders.

As required under the said Act and the Rules made there under, the same is now put up for approval of members at the ensuing annual general meeting. Necessary details have been annexed to the notice of the meeting in terms of Section 102(1) of the said Act.

The Independent Directors have submitted the Declaration of Independence, as required under Section 149(6) of the Act, declaring that they meet the criteria of independence.

With the appointment of Independent Directors, the conditions specified in the Act and the Rules made there under as also under revised Clause 49 of the Listing Agreement stand complied.

Auditors

M/s.Dalal & Shah, Chartered Accountants, the statutory auditors of the Company, will retire at the conclusion of the forthcoming Annual General Meeting and are eligible to hold office for a period of three years, upto 2017, pursuant to the provisions of Sections 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 (corresponding to Section 224 and other applicable provisions, if any, of the Companies Act, 1956), subject to the approval of the Members and thereafter, ratification by the shareholders annually.

The members are requested to appoint M/s Dalal & Shah, Chartered Accountants, as auditors for three years from the conclusion of the ensuing annual general meeting till the conclusion of the 78th annual general meeting in 2017 and to fix their remuneration for the year 2014-15.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Cost Auditors

M/s.R.Nanabhoy & Co., Cost Accountants, was appointed as Cost Auditor to conduct audit of cost accounts maintained by the Company in relation to the manufacture of fans and generation of wind energy as also to conduct compliance audit in relation to manufacturing of High Masts, Transmission Line Towers etc for the financial year 2013-14

The full particulars of the Cost Auditor and Cost Audit conducted by them for the financial year 2012-13 are furnished below:

ICWA Membership No. 1337

Registration No. of Firm 000010

Address Jer Mansion, 70, August Kranti

Marg, Mumbai 400 036

Cost Audit Report FY 2012-13

Due date of filing of Report 30 September 2013

Actual date of filing 27 August 2013

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure to this Report.

Particulars of Employees

In terms of the provision of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace

During the year under review, pursuant to the new legislation "Prevention, Prohibition and Redressal of Sexual Harassment of Women at Workplace Act, 2013" introduced by the Government of India, which came into effect from 9 December 2013, the Company has framed a Policy on Prevention of Sexual Harassment at Workplace. There were no cases reported during the year under review under the said Policy.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the year ended 31 March 2014, the applicable accounting standards have been followed and that no material departures have been made from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2014 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) the annual accounts of the Company have been prepared on a ''going concern'' basis.

Presentation of Financial Results

The financial results of the Company for the year ended 31 March 2014, as in the previous year, have been disclosed as per the revised Schedule VI of the Companies Act, 1956, pursuant to Notification dated 28 February 2011 issued by the Ministry of Corporate Affairs.

Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provision of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 6 August 2013 (date of last Annual General Meeting) on the website of the Company (www.bajajelectricals.com), as also on the Ministry of Corporate Affairs website.

Secretarial standards of ICSI

During the year under review, secretarial standards issued by the Institute of Company Secretaries of India (ICSI) from time to time, though were recommendatory in nature, your Company complied with the same.

Brand Protection

Your Company has taken significant actions against counterfeits, fakes and other forms of unfair competition.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, customers, investors, business associates, vendors, regulatory and government authorities, stock exchanges and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation to employees at all levels for their sincere personal efforts as well as their collective dedication and contribution to the Company''s performance.

For and on behalf of the Board of Directors

Mangesh Patil Anant Bajaj Shekhar Bajaj

V P - Legal & Company Secretary Jt. Managing Director Chairman & Managing Director

Mumbai, 29 May 2014


Mar 31, 2013

Dear Shareholders,

The Directors are pleased to present the 74th Annual Report and the audited accounts for the financial year ended 31st March, 2013.

Financial Performance:

Rs. in crore

Particulars FY 2012-13 FY 2011-12

Revenue from Operations & Other Income (Gross) 3429.71 3144.26

Gross Profit before Finance Cost & Depreciation 127.68 251.51

Less : Finance Cost 68.98 63.04

Less : Depreciation 14.45 12.52

Profit before Exceptional Items & Taxes 44.25 175.95

Add: Profit on sale of Investments 24.72 -

Profit before Taxes 68.97 175.95

Less : Provision for Taxation 17.76 58.07

Profit after Tax 51.21 117.88

Add : Balance in Profit & Loss Account 28.69 43.47

Balance available for appropriation 79.90 161.35

Less : Appropriations:

(i) Dividend paid on exercise of Stock Options including dividend distribution tax 0.01 0.24

(ii) Proposed Dividend on Equity Shares 19.95 27.90

(iii) Tax on Dividend 3.39 4.52

(iv) Transferred to General Reserve 25.00 100.00

Closing Balance 31.55 28.69

Results of Operations:

FY 2012-13 was a challenging year for the Company, due to slow down in the industry and infrastructure facing businesses. The profitability of the Company was badly impacted due to lower margins, abnormal increase in site expenses on account of closure of overrun sites and de- growth in E&P BU turnover by 17.3% over the corresponding previous period. Further, on the basis of the financial closures of some old projects, the Company had to make provision for write off of certain old outstanding amounts. This is a onetime hit and is not likely to recur in future as the management has taken appropriate measures to monitor the projects performance on a continuous basis and take timely corrective actions to ensure the completion of projects as per schedule to avoid cost and time over-run.

The highlights of the performance are as under :

- Gross Revenue from operations increased by 9.1% to Rs.3429.71 crore.

- PBDIT decreased by 49.2% to Rs.127.68 crore.

- PBT decreased by 60.8% to Rs.68.97 crore.

- Net Profit decreased by 56.5% to Rs.51.21 crore. Increase in number of shares

The increase in number of shares is due to the issue of 1,15,002 equity shares of Rs.2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS.

Dividend

The Directors of your Company are pleased to recommend a dividend of Rs.2 per equity share (Previous year Rs.2.80 per share) for the financial year ended 31st March, 2013, subject to the approval of the shareholders. The dividend will be paid to the members whose names appear in the Register of Members as on 6th August, 2013; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date.

Shares that may be allotted on exercise of Options granted under the Employee Stock Option Scheme before the Book Closure date for payment of dividend will rank pari passu with the existing shares and be entitled to receive the dividend.

Employees Stock Option Scheme

The Company implemented the Employees Stock Option Scheme ("Scheme") in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 (''the SEBI Guidelines'') as a measure to reward and motivate employees as also to attract and retain the talent. The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2013 are provided in Annexure I to this Report. Details of the shares issued under ESOP, as also the disclosures in compliance with Clause 12 of SEBI Guidelines are set out in the Annexure to this Report.

During the year under review, 5,25,000 Stock Options were granted on 25th October, 2012 and 1,10,000 Stock Options were granted on 6th February, 2013 under Growth Plan to the eligible employees at the prices of Rs.224.65 and Rs.183.15 per Stock Option respectively, being the closing equity prices of the Company on the National Stock Exchange of India Ltd where the trading volume was high.

The issuance of equity shares pursuant to exercise of Stock Options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for the inspection of members.

Depository System

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on March 31, 2013, 97.43% of the Company''s total paid-up capital representing 97,196,445 shares was in dematerialised form. In view of the numerous advantages offered by the Depository Systems, members holding shares in physical mode are advised to avail of the facility of dematerialization from either of the Depositories.

Risk and Internal Controls Adequacy

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors and cover all offices, factories and key areas of business. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations including those relating to strengthening of the Company''s risk management policies and systems.

Your Company has an elaborate process for Risk Management. The Company''s Risk Management Policy is backed by strong internal control systems. The risk management framework consists of policies and procedures designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the Company''s financial reporting and its related disclosures. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed with both Management Committee and Audit Committee. Some of the risks relate to competitive intensity and cost volatility.

Corporate Governance

Your Company is committed to achieving the highest standards of Corporate Governance. Accordingly, your Board functions as trustees of the shareholders and seeks to ensure that the long term economic value for its shareholders is achieved while balancing the interest of all the stakeholders.

A separate section on Corporate Governance standards followed by your Company, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is enclosed as an Annexure to this report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

Management Discussion and Analysis Report

A Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Environment, Health & Safety

Your Company understands the importance of responsible Environment, Health and Safety (EHS) management in it growth, profitability and long term sustainability. Your Company is committed to meeting the highest standards of corporate citizenship by protecting the health and safety of its employees and others working at its facilities, by safeguarding the environment, and by creating long lasting positive impact on the communities where it does business.

Your Company''s one of the highest priorities is to provide a safe and healthy workplace. The Company also expects all its employees to take individual responsibility for their health and safety and to exhibit and encourage safe work behaviours. The Company has implemented several company-wide processes at its work places, including improved awareness and communication programmes, safety audits, periodic health check-ups for its employees as well as accident prevention and investigation programs, to further improve its track record. Safety procedures related to hazardous processes are also regularly reviewed, monitored and strengthened. Further, PUC checks of Company and employee owned vehicle, organized training sessions on First Aid and emergency preparedness are also conducted at regular intervals. Special attention is being given to safety standards and awareness at project sites through regular training, induction, tool box talk, workshops, etc. for the safety of workforce. A "Safety Cell" has been created to address the management concern on safety and well being of workmen.

Other initiatives include waste segregation and recycling of waste including cardboard and plastics, review and monitoring of the energy, paper & water consumption, etc.

The Company has achieved ISO 14001 Environmental Standards and Management Certification and OHSAS 18001 Certification for Occupational Health & Safety Assessment Systems. The Company periodically conducts surveillance audits of both ISO 14001 and OHSAS 18001, to ensure continued conformity with these standards.

Corporate Social Initiatives

A sense of responsibility towards society and environment is demonstrated through our culture of trust and caring. The sound business practices adopted by the Company are in sync with its value system. In keeping with the Company''s commitment towards contribution to community welfare, the Company and its employees continue to support and closely associated with "Paryavaran Mitra" (Friends of Environment) a non-government organization (NGO) and involved in numerous activities like tree plantation, cleanliness drive, tobacco free environment and creation of social awareness, training & dissemination of information concerning Paryavaran (Environment) and Pollution and host of other activities for the cause of environment protection at Company''s various locations. Employee volunteers and spouses of employees are important drivers of our social initiatives. The ''green'' thinking needs continuous motivation. The Company on its part is doing its bit by making green thinking a part of its business agenda to reduce its carbon footprint, energy & water conservation, waste reduction and product innovation. The Company is helping enlist more green champions through regular communications in the form of e-mails, posters and banners that are disseminated across the Company and organizing various events outside the Company to propagate the cause of environment protection.

Subsidiaries

The Company has no subsidiary as on 31st March, 2013. Directors

In accordance with the provisions of the Companies Act, 1956 and the Articles of Association of the Company, Shri Ashok Jalan and Dr.R.P.Singh retire by rotation at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointment.

Auditors

M/s. Dalal & Shah, Chartered Accountants, who are the statutory auditors of the Company, will retire at the conclusion of the forthcoming Annual General Meeting and are eligible for re-appointment, subject to the approval of the Members.

The Company has received a certificate from them to the effect that their reappointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

Members are requested to consider their re-appointment on a remuneration to be decided by the Board or Committee thereof for the ensuing financial year i.e. 2013-14.

The Notes on Financial Statements referred to in the Auditors'' Report are self-explanatory and do not call for any further comments.

Cost Auditors

The Company has appointed M/s.R. Nanabhoy & Co., Cost Accountants, ICWA Membership No.1337, to audit the cost accounts related to Fans manufacturing and Wind Energy generation, and for conducting Compliance Audit in relation to manufacturing of High Masts, Transmission Line Towers etc carried out at Ranjangaon Units, for the financial year 2012-13.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure to this Report.

Particulars of Employees

In terms of the provision of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors'' Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors'' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the year ended March 31, 2013, the applicable accounting standards read with requirements set out under Schedule VI of the Companies Act, 1956, have been followed and that no material departures have been made from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) the Directors have prepared the annual accounts of the Company on a ''going concern'' basis.

Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provision of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

Pursuant to the provisions of Investor Education and Protection Fund (Uploading of information regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, the Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on July 26, 2012 (date of last Annual General Meeting) on the website of the Company (www.bajajelectricals.com), as also on the Ministry of Corporate Affairs website.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, customers, investors, business associates, vendors, regulatory and government authorities and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation to all the executives, staff and workers of the Company for their sincere personal efforts as well as their collective dedication and contribution to the Company''s performance.

For and on behalf of the Board of Directors

Mangesh Patil Anant Bajaj Shekhar Bajaj

V.P. - Legal & Company Secretary Jt. Managing Director Chairman & Managing Director

Mumbai, May 27, 2013


Mar 31, 2012

The Directors are pleased to present the 73rd Annual Report and the audited accounts for the financial year ended 31st March, 2012.

Financial Performance:

Rs. in crore FY FY 2011-12 2010-11

Revenue from Operations & Other Income (Gross) 3144.31 2781.47

Gross Profit before Finance Cost & Depreciation 251.52 271.01

Less : Finance Cost 63.05 36.65

Less : Depreciation 12.52 10.80

Profit before Taxes & Provisions 175.95 223.56

Less : Provision for Irrecoverable portion of Loan - 5.00

Less : Provision for Taxation 58.07 73.99

Less : Taxes in respect of earlier years - 0.78

Profit after Tax 117.88 143.79

Add : Balance in Profit & Loss Account 43.47 32.02

Balance available for appropriation 161.35 175.81

Less : Appropriations:

(i) Dividend paid on exercise of Stock Options including dividend distribution tax 0.24 0.17

(ii) Proposed Dividend on Equity Shares 27.90 27.68

(iii) Tax on Dividend 4.52 4.49

(iv) Transferred to General Reserve 100.00 100.00

Closing Balance 28.69 43.47

Results of Operations:

FY 2011-12 was a challenging year. The global economy witnessed lower economic growth resulting primarily from high commodity and oil prices. Despite the challenging environment, the Company performed reasonably well and the highlights of the performance are as under :

Gross Revenue from operations increased by 13.1% to Rs.3125.13 crore.

PBDIT decreased by 7.2% to Rs.251.52 crore.

PBT decreased by 21.3% to Rs.175.95 crore.

Net Profit decreased by 18.0% to Rs.117.88 crore

Lighting

The turnover of lighting products viz. Lamps, Tubes and Luminaires increased by about 21.1% at Rs.765 crore during

FY 2011-12 from Rs.631 crore in the previous financial year. The CFL (Compact Fluorescent Lamps) sales has increased by 41% over last year and crossed Rs.250 crore mark. During the year, Lighting and Luminaires, both have seen improvement in their margins. The thrust is on developing energy-efficient consumer luminaire and lighting products based on LED and lighting control technologies which is a global mandate to arrest global warming.

Consumer Durables

The turnover of consumer durables, which include fans and small appliances, increased by over 17.5 % at Rs.1,500 crore during the year under review from Rs.1,277 crore in the previous year. The Company's Morphy Richard brand has emerged as the fastest growing brand in premium segment with a growth of 36% and a CAGR of 35%. The Company has continued to introduce new range of products with varied models and improve the technology and quality in order to gain a competitive advantage.

The slowdown in the housing and real estate sector has adversely affected the fan industry. For the first time since 2002-03, the industry, which has been growing at 20-25% on a year-on-year basis for the last couple of years, has recorded negative growth of about 6.16% in production and 6.18% in domestic sales during the year.

The production at Chakan Unit showed increased during the year under review with production of 4,68,347 nos. of fans as against 4,28,259 nos. of fans in the previous year.

Engineering & Projects

During the year, the top line performance of E & P BU was flat at Rs.830 crore as compared to Rs.832 crore in the previous year. The Ranjangaon Unit produced 4,655 nos. of Highmasts and 53,279 nos. of Street Lighting Poles as against 4,200 nos. and 45,000 nos. respectively in the previous year. The Unit also manufactured 24,035 MT of transmission line towers as against 19,004 MT in the previous year. The BU's order book position at the end of the year 2011-12 stood at Rs.604 crore. The year gone by was tough for the BU as its performance was adversely impacted by slower order inflow, increased competition, pressure on margins and time and cost overrun in some of the projects.

The infrastructure development continues to be the Government's focus area. Projects under Restructured- Accelerated Power Development and Reform Programme (R-APDRP), new packages under Rajeev Gandhi Gramin Vidyutikaran Yojana and Governments plan to add power generation capacity will give good opportunity to this division to improve its growth and profitability in the future.

Wind Energy

The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated 46,49,716 electrical units during the year under review (Previous Year 36,02,359 units).

Increase in number of shares

The increase in number of shares is due to the issue of 7,95,522 equity shares of Rs.2 each to the employees upon exercise of their stock options. These shares were included, on weighted average basis, for the computation of EPS.

Dividend

Your Directors have recommended a dividend of Rs.2.80 per equity share (Previous year Rs.2.80 per equity share) for the financial year ended 31st March, 2012, amounting to Rs. 32.43 crore (inclusive of tax of Rs.4.53 crore). The dividend will be paid to the members whose names appear in the Register of Members as on 26th July, 2012; in respect of shares held in dematerialized form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as on that date.

Shares that may be allotted on exercise of Options granted under the Employee Stock Option Scheme before the Book Closure for payment of dividend will rank pari passu with the existing shares and be entitled to receive the dividend.

Employees Stock Option Scheme

The Company implemented the Employees Stock Option Scheme ("Scheme") in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ('the SEBI Guidelines'). The applicable disclosures as stipulated under the SEBI Guidelines as at March 31, 2012 are provided in Annexure I to this Report.

During the year under review, 24,55,000 Options were granted on 29th August, 2011 and 1,40,000 Options were granted on 28th March, 2012 under Growth Plan to the eligible employees at the prices of Rs.164.85 and Rs.182.20 per option respectively, being the closing equity prices of the Company on the National Stock Exchange of India Ltd.

The issuance of equity shares pursuant to exercise of Options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

None of the management employees or Whole-time Directors has received options exceeding 5% of the value of the options issued for the year ended March 31, 2012. Likewise, no employee has been issued share options, during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.

The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI Guidelines and the resolution passed by the shareholders. The Certificate would be placed at the Annual General Meeting for inspection of members.

Depository System

As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2012, almost 96.94% of the Company's total paid-up capital representing 9,65,85,099 shares were in dematerialised form.

Risk Management

Risk management forms an integral part of the business planning and review cycle. The Company's Risk Management Policy is backed by strong internal control systems. The risk management framework consists of policies and procedures designed to provide reasonable assurance that objectives are met by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the company's financial reporting and its related disclosures. It makes management responsible for identifying the critical business risks and take appropriate actions to mitigate risks. The risk policy and internal Audit Reports are periodically reviewed by the Board and Audit Committee with emphasis on maintaining its effectiveness in dynamic business environment.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best Corporate Governance practices.

The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49, is attached to this Report.

Management Discussion and Analysis Report

A Management Discussion and Analysis Report for the year under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

Social Initiatives

Your Company is a socially responsible corporate citizen. In keeping with the Company's commitment towards contribution to community welfare, the Company and its employees continue to support and closely associated with "Paryavaran Mitra" (Friends of Environment) a non- government organization (NGO) and involved in numerous activities like tree plantation, cleanliness drive, tobacco free environment and creation of social awareness, training & dissemination of information concerning Paryavaran (Environment) and Pollution and host of other activities for the cause of environment protection at Company's various locations. The Company also sponsored Mumbai, Delhi & Hyderabad Marathons, which received overwhelming participation from the employees to propagate the cause of environment protection.

Subsidiaries

The Company has no subsidiary as on 31st March, 2012.

Directors

In accordance with the provisions of the Companies Act, 1956, Shri Madhur Bajaj and Dr.(Mrs.) Indu Shahani retire by rotation and being eligible, offer themselves for re- appointment.

Brief resumes of the Directors proposed to be re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of the Annual General Meeting forming part of the Annual Report.

Auditors

M/s. Dalal & Shah, Chartered Accountants, Statutory Auditors of the Company, hold office until the conclusion of the ensuing Annual General Meeting and are eligible for reappointment.

The Company has received a certificate from them to the effect that their reappointment , if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for reappointment within the meaning of Section 226 of the said Act.

The observations made in the Auditors' Report read together with the relevant notes thereon, are self-explanatory and hence do not call for any comments under section 217 of the Companies Act, 1956.

Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo

The particulars relating to energy conservation, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 are set out in the Annexure-II to this Report.

Particulars of Employees

In terms of the provision of Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended, the names and other particulars of the employees are set out in the annexure to the Directors' Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

Directors' Responsibility Statement

Pursuant to the requirement under Section 217(2AA) of the Companies Act, 1956, with respect to Directors Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts for the year ended March 31, 2012, the applicable accounting standards read with requirements set out under Schedule VI of the Companies Act, 1956, have been followed and that no material departures have been made from the same;

(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2012 and of the profit of the Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) the Directors have prepared the annual accounts on a 'going concern' basis.

Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provision of Section 205A(5) of the Companies Act, 1956, relevant amounts which remained unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Acknowledgement

Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, customers, investors, business associates, vendors, regulatory and government authorities and members during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the sincere efforts put in by the executives, staff and workers of the Company, in helping it reach its current growth levels.



For and on behalf of the Board of Directors

Mangesh Patil Anant Bajaj Shekhar Bajaj

Company Secretary Jt. Managing Director Chairman & Managing Director

Mumbai, May 28, 2012


Mar 31, 2011

The Companys Directors are pleased to present the 72nd Annual Report of the Company along with the audited accounts for the year ended 31st March, 2011.

Financial Performance

Rs. in Crore

FY 2010-11 FY 2009-10

Gross Sales Turnover and Other Income * 2770.55 2253.02

Gross Profit before Interest & Depreciation 263.69 246.30

Less : Interest 29.08 31.47

Less : Depreciation 10.76 9.20

Profit before Taxes & Provisions 223.85 205.63

Less : Provision for Irrecoverable portion of Loan 5.00 5.00

Less : Provision for Taxation (including deferred taxation & FBT) 73.99 75.35

Profit after Tax 144.86 125.28

Less : Prior Period Adjustments 0.29 0.55

Less : Taxes in respect of earlier years 0.78 -

Less : Provision for Taxation in respect of earlier years - 7.63

Add : Balance brought forward from previous year 32.02 21.73

Balance available for appropriation 175.81 138.83

Appropriations :

(i) Dividend paid on exercise of Stock Options 0.15 -

(ii) Tax on Dividend paid on exercise of Stock Options 0.02 -

(iii) Proposed Dividend on Equity Shares 27.68 23.42

(iv) Tax on Dividend 4.49 3.89

(v) Transferred to General Reserve 100.00 79.50

Balance carried to Balance Sheet 43.47 32.02

* Other income Rs.5.73 crore (Previous year - Rs.3.62 crore)

Increase in number of shares

The increase in number of shares is due to the issue of 13,00,312 equity shares of Rs. 2 each to the employees upon exercise of their stock options. These shares were included, on weighted average basis, for the computation of EPS.

Dividend

Directors are pleased to recommend a dividend of Rs.2.80 per equity share of the face value of Rs.2 for the year ended 31st March, 2011 (Previous year Rs.2.40 per equity share of the face value of Rs.2). The payment of dividend, subject to the approval at the AGM on July 28, 2011 will be paid to the shareholders whose names appear on the Register of Members with reference to the book closure from July 22, 2011 to July 28, 2011 (inclusive of both dates). The dividend will absorb Rs.32.17 crore (including dividend tax of Rs.4.49 crore).

Shares that may be allotted on exercise of Options granted under the Employee Stock Option Scheme before the Book Closure for payment of dividend will rank pari passu with the existing shares and be entitled to receive the dividend.

Operations:

Lighting

The turnover of lighting products viz. Lamps, Tubes, Luminaires, and Domestic fittings increased by about 17.8% at Rs.631 crore during the year under review from Rs.536 crore in the previous year.

The Luminaires BU is continuously working on developing energy-efficient consumer luminaire. It has successfully launched LED based luminaries for landscape & decorative lighting. It has also entered into an arrangement with Helvar Ltd of Finland for Dimming & non-Dimming electronic ballasts as also for Lighting Controls to offer complete energy saving solutions to discerning class of customers and has partnered with Securiton of Switzerland & Delta Controls of Canada to offer the latest and cutting edge Security and BMS (Building Management Systems) to its institutional customers. The CFL (Compact Fluorescent Lamps) sales has increased significantly and crossed Rs.175 crore mark.

Consumer Durables

The turnover of consumer durables, which include fans and small appliances, increased by over 33.8% at Rs.1,277 crore during the year under review from Rs. 954 crore in the previous year. The Companys Morphy Richard brand has emerged as the fastest growing premium brand with a growth of 34% and a CAGR of 35%. The Company has continued to introduce new range of products with varied models and improve the technology and quality in order to gain a competitive advantage.

Chakan Unit

The production at this Unit showed increase during the year under review with production of 4,28,259 nos. of fans as against 3,47,434 nos. of fans in the previous year. We are developing this Unit to cater to our growing export requirement.

Engineering & Projects

The E & P BU has achieved a turnover of Rs.850 crore as compared to Rs.755 crore in the previous year, registering a growth of 14% and a CAGR of 25%. The Unit produced 4,200 nos. of Highmasts and 45,000 nos. of Street Lighting Poles as against 4,600 nos. and 33,255 nos. respectively in the previous year. The Unit also manufactured 19004 MT of transmission line towers as against 17,446 MT in the previous year. The BUs order book position at the end of the year 2010-11 stood at Rs.750 crore. The overall margins for this BU during the year under review were depressed, because of abnormal increase in raw materials prices and extra efforts for time bound completion of prestigious CWG Projects under critical time constraints and adverse weather conditions.

The infrastructure development continues to be the Governments focus area, which offers a good opportunity to this division to improve its growth and profitability in the future.

Wind Energy

The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated 36,02,359 electrical units during the year under review (Previous Year 41,51,102 units).

Stock Options

During the year under review 6,95,000 Options were granted under Growth Plan to the eligible employees at a price of Rs.313.95 per option, being the closing equity price of the Company on the National Stock Exchange of India Ltd.

Details of the shares issued under ESOP, as also the disclosures in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure to this Report.

None of the management employees or Wholetime Directors has received options exceeding 5% of the value of the options issued for the year ended March 31, 2011. Likewise, no employee has been issued share options, during the year equal to or exceeding 1% of the issued capital of the Company at the time of grant.

Deposits

From the financial year 2008-09, the Company has stopped accepting and/or renewing public deposits and the deposits aggregating to Rs.211.34 lacs, which were due for repayment after March 31, 2009, were prepaid along with interest accrued thereon as on March 31, 2009. Out of this, as on the date of this report, pre-payment cheques in respect of 5 deposits aggregating to Rs.1.46 lacs have not been encashed and therefore remains to be paid.

Depository System

As the members are aware, the Companys shares are compulsorily tradable in electronic form. As on March 31, 2011, almost 94.92% of the Companys total paid-up capital representing 9,38,18,582 shares were in dematerialised form.

Risk Management

The Companys Risk Management Policy is backed by strong internal control systems. The risk management framework consists of policies and procedures framed at management level and strictly adhered to and monitored at all levels. The Company also has a sound internal audit system in place. The audit consists of an independently constituted team in the Company and outside auditors appointed for the purpose. The risk policy and internal Audit Reports are periodically reviewed by the Board and Audit Committee with emphasis on maintaining its effectiveness in dynamic business environment.

Corporate Governance

Pursuant to Clause 49 of the Listing Agreement with BSE, NSE and DSE, the Corporate Governance Report together with a certificate from the Companys Auditors confirming compliance, is set out separately, forming part of this Report.

All the Directors in the Board and the senior management personnel of the Company have affirmed compliance with the Code of Conduct for the financial year 2010-11. A declaration to this effect signed by the Chief Executive Officer (CEO) of the Company is contained in this Annual Report.

The CEO and CFO have certified to the Board with regard to the financial statements and other matters as required in Clause 49 of the Listing Agreement and the said Certificate is contained in the Annual Report.

Management Discussion and Analysis Report

A Management Discussion and Analysis Report is been attached and forms part of the Annual Report.

Social Initiatives

Your Company is a socially responsible corporate citizen. In keeping with the Companys commitment towards contribution to community welfare, the Company and its employees continue to support and closely associate with "Paryavaran Mitra" (Friends of Environment) a non- government organization (NGO) and involved in numerous activities like tree plantation, cleanliness drive, tobacco free environment and creation of social awareness, training & dissemination of information concerning Paryavaran (Environment) and Pollution and host of other activities for the cause of environment protection at Companys various locations.

Subsidiaries

The Company has no subsidiary as on 31st March, 2011.

Directors

In accordance with the provisions of the Companies Act, 1956, Shri H.V.Goenka and Shri V.B.Haribhakti retire by rotation and being eligible, offer themselves for re-appointment.

Brief resumes of the Directors proposed to be re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of the Annual General Meeting forming part of the Annual Report.

Auditors Report

The observations made in the Auditors Report read together with the relevant notes thereon, are self-explanatory and do not call for any comments under Section 217 of the Companies Act, 1956.

Auditors

The Members are requested to appoint Auditors and fix their remuneration. M/s.Dalal & Shah, the retiring Auditors have furnished a certificate of their eligibility for re-appointment as required under Section 224(1B) of the Companies Act, 1956.

Disclosure of Particulars

The particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure

of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. to the extent applicable are set out in the Annexure hereto.

Particulars of Employees

Information to be provided under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, as per the provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and Accounts are being sent to the shareholders of the Company excluding the statement of particulars of employees under Section 217(2A) of the Act and the same will be made available to any shareholder on request.

Directors Responsibility Statement

The Directors based on the information / representations received from the Operating Management, confirm that:

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

(b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) they have prepared the annual accounts on a going concern basis.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Acknowledgement

The Board wishes to place on record its appreciation of the sincere efforts put in by employees of the Company, in helping it reach its current growth levels.

Your Directors place on record their appreciation for the support and assistance received from the customers, investors, business associates, bankers, vendors, regulatory and government authorities.

For and on behalf of the Board of Directors

Mangesh Patil R. Ramakrishnan Shekhar Bajaj Company Secretary Executive Director Chairman & Managing Director

Mumbai, May 23, 2011


Mar 31, 2010

The Companys Directors are pleased to present the 71sl Annual Report of the Company along with the audited accounts for the year ended 31st March, 2010.

Financial Performance

Rs. in Crore FY 2009-101 FY 2008-09 Gross Sales Turnover and Other Income * 2252.27 1794.13 Gross Profit before Interest & Depreciation 246,27 185.54 Less : Interest 31.45 36.97 Less : Depreciation 9.20 8.55 Profit before Taxes & Provisions 205.62 140.02 Less : Provision for Irrecoverable portion of Loan 5.00 - Less : Provision for Taxation (including deferred taxation & FBT) 75.35 50.67 Profit after Tax 125.27 89.35 Less : Prior Period Adjustments 0.55 0.21 Less : Provision for Taxation in respect of earlier years 7.63 - Add : Balance brought forward from previous year 21.73 17.82 Balance available for appropriation 138.82 106.96 Appropriations: (i) Dividend on Equity Shares 23.41 17.29 (ii) Tax on Dividend 3.89 2.94 (iii) Transferred to General Reserve 79.50 65.00 Balance carried to Balance Sheet 32.02 21.73

* Other income Rs.2.86 crore (Previous year - Rs.5.70 crore)

Placement of Equity Shares of the Company with Qualified Institutional Buyers

The Company completed a private placement of shares under Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, during the second week of December, 2009. Pursuant to Members approval at the Extra-Ordinary General Meeting of the Company held on November 18,2009, the Company allotted 20,48,339 Equity Shares of Rs. 10 (Rupees Ten) each at the Issue Price of Rs. 785/- (Rupees Seven Hundred Eighty Five), to various Qualified Institutional Buyers (QIBs) on December 11, 2009. This was at a slight premium over Rs. 782.44 (Rupees Seven Hundred Eighty Two and paise forty four), the floor price as determined by the formula prescribed by SEBI. In the immediate term, the money raised has been used to retire some of the short-term debts on the Companys books. This is in line

with the issue purpose mentioned in the Placement Document filed with various authorities.

Increase in number of shares

The increase in the number of shares is due to the allotment of 20,48,339 equity shares of Rs.10 each on account of allotment of shares to Qualified Institutional Buyers in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and issue of 1,74,800 equity shares of Rs.10 each to the employees upon exercise of their stock options. These shares were included, on weighted average basis, for the computation of EPS.

Sub-division in face value of Equity Shares of the Company

By Postal Ballot, the results of which were announced on November 18, 2009, shareholders of the Company approved a sub-division of the Companys equity shares to 5 shares of a face value of Rs. 2 for every share of a face value of Rs.10. It is expected that the lower face value of Equity Shares will bring in additional interest from retail investors and contribute towards enhancement in the liquidity in the Companys scrip on the Stock Exchanges.

It may be noted that the number of shares, for the purpose of computation of Earnings Per Share (EPS), has been suitably adjusted following the sub-division of equity share of Rs. 10 each to 5 equity shares of Rs. 2 each in January, 2010.

Dividend

Directors are pleased to recommend a dividend of Rs.2.40 per equity share of the face value of Rs.2 for the year ended 31st March, 2010 (Previous year Rs.10 per equity share of the face value of Rs.10). The dividend, subject to the approval at the AGM on July 28, 2010 will be paid to the shareholders whose names appear on the Register of Members with reference to the book closure from July 21, 2010 to July 28, 2010 (inclusive of both dates). The dividend will absorb Rs.27.30 crore (including dividend tax of Rs.3.89 crore).

Shares that may be allotted on exercise of Options granted under the Employee Stock Option Scheme before the Book Closure for payment of dividend will rank pari passu with the existing shares and be entitled to receive the dividend.

Operations :

Lighting

The turnover of lighting products viz. Lamps, Tubes, Luminaires, and Domestic fittings increased by about 9.8% at Rs.536 crore during the year under review from Rs.488 crore in the previous year.

The Luminaires BU is continuously working on developing energy-efficient consumer luminaires. It has successfully launched LED based luminaries for landscape, commercial and retail lighting applications. It has partnered with Securiton of Switzerland & Delta Controls of Canada to offer cutting edge solutions in Fire Alarms, Security systems and Integrated Building Management Systems (IBMS) to its institutional customers. The CFL (Compact Fluorescent Lamps) sales has increased significantly and crossed the Rs.150 crore mark.

Consumer Durables

The turnover of consumer durables, which include fans and small appliances, increased by over 26.6% at Rs.957 crore during the year under review from Rs.756 crore in the previous year. Bajaj Platini range of premium appliances have been launched successfully. The Companys Morphy Richards brand has emerged as the fastest growing premium appliances brand with a growth of 32.9% and a CAGR of 26.0%. The Company has continued to enhance its product portfolio with new categories and models, invest in technology and quality improvement in order to gain a competitive advantage.

Chakan Unit

The production at this Unit increased during the year under review to 3,47,434 nos. of fans as against 3,12,035 nos. of fans in the previous year. This unit has also contributed significantly to our new product innovation initiatives and value engineering efforts.

Engineering & Projects

The E & P BU has achieved a turnover of Rs.755 crore as compared to Rs.543 crore in the previous year, registering a growth of 39.0%. The Unit produced 4,600 Highmasts and 33,255 Poles as against 3,682 and 38,078 respectively in the previous year. The Unit also manufactured 17,446 MT of transmission line towers as against 20,106 MT in the previous year. The BUs order book position at the end of the year 2009-10 stood at Rs.750 crore.

Infrastructure development and the power sector continue to be the Governments focus areas, which offer a good long term opportunity to this division to improve its growth and profitability in the future.

Wind Energy

The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated 41,51,102 electrical units during the year under review (Previous Year 47,84,467 units).

Stock Options

The Remuneration & Compensation Committee of your Company has, in its meeting held on 30th April, 2009 cancelled 5,55,000 outstanding options and re-granted 4,66,385 stock options under Growth Plan to the eligible employees, at an exercise price of Rs.215.55. This

revision was in consideration of the unusual meltdown of the stock market, which had resulted in a steep fall in the market price of the Companys shares compared to the price prevalent when the stock options were granted. The revision would achieve the basic objectives of the ESOP Scheme of motivating the employees to contribute to the growth and profitability of the Company as also to attract and retain talent in the organization.

The Remuneration & Compensation Committee has also, in its meeting held on 28th January, 2010, granted 1,44,000 incremental stock options under Growth Plan to 69 eligible employees consisting of promotees and new joinees, at a price of Rs.866.75 per option, being the closing equity price of the Company on the National Stock Exchange of India Ltd., where the trade volume was high. This is as per their eligibility under ESOP 2007 of the Company.

Details of the shares issued under ESOP, as also the disclosures in compliance with Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 are set out in the Annexure to this Report.

None of the management employees or Wholetime Directors has received options exceeding 5% of the value of the options issued for the year ended March, 2010. Likewise, no employee has been issued share options during the year equal to or exceeding 1 % of the issued capital of the Company at the time of grant.

Deposits

From the financial year 2008-09, the Company has stopped accepting and/or renewing public deposits and the deposits aggregating to Rs.211.34 lacs which were due for repayment after March 31, 2009 were prepaid along with interest accrued thereon as on March 31,2009. As on the date of this report, pre-payment cheques in respect of 80 deposits aggregating to Rs. 16.14 lacs have not been encashed and therefore remains to be paid.

Information Systems

In order to strengthen the internal control systems and improve the management information system, last year the Company rolled out Oracle based ERP which went live with effect from April 1,2009. The Board is pleased to state that the application has been successfully implemented and the system has stabilized well. The Board places on record its deep sense of appreciation for the contribution made by the employees of the Company in rolling out the Oracle based ERP. The Company received the prestigious "NASSCOM CNBC IT User Award 2009" for its ERP implementation success.

Depository System

As the members are aware, the Companys shares are compulsorily tradable in electronic form. As on March 31, 2010, almost 94.51% of the Companys total paid-up

capital representing 9,21,84,485 shares were in dematerialised form.

Risk Management

The Companys Risk Management Policy is backed by strong internal control systems. The risk management framework consists of policies and procedures framed at management level and strictly adhered to and monitored at all levels. The Company also has a sound internal audit system in place. The audit consists of an independently constituted team in the Company and outside auditors appointed for the purpose. The risk policy and internal Audit Reports are periodically reviewed by the Board and Audit Committee with emphasis on maintaining its effectiveness in a dynamic business environment.

Corporate Governance

The Company is committed to maintain the highest standards of Corporate Governance. The Company has complied with the recommendations of the Corporate Governance code as provided in Clause 49 of the Listing Agreement with the stock exchanges.

A separate section of Corporate Governance, together with a certificate from the Companys Auditors confirming compliance, is set out separately, forming part of this Report.

The members of the Board and the senior management personnel have affirmed compliance with the Code of Conduct for the financial year 2009-10. A declaration to this effect signed by the Chief Executive Officer (CEO) of the Company is contained in this Annual Report.

The CEO and Chief Financial Officer (CFO) have certified to the Board with regard to the financial statements and other matters as-required in Clause 49 of the Listing Agreement and the said Certificate is contained in the Annual Report.

Management Discussion and Analysis Report

A Management Discussion and Analysis Report is been attached and forms a part of the Annual Report.

Social Initiatives

Your Company is a socially responsible corporate citizen. In keeping with the Companys commitment towards contribution to community welfare, the Company and its employees continue to support and are closely associated with "Paryavaran Mitra" (Friends of Environment) a non- government organization (NGO) and are involved in numerous activities like tree plantation, cleanliness drive, tobacco free environment, creation of social awareness, training & dissemination of information concerning Paryavaran (Environment), Pollution control and a host of other activities for the cause of environmental protection at the Companys various locations.

Subsidiaries

The Company has no subsidiary as on 31 st March, 2010.

Directors

In accordance with the provisions of the Companies Act, 1956, Shri A.K. Jalan and Shri Ajit Gulabchand retire by rotation and being eligible, offer themselves for re- appointment.

Brief resumes of the Directors proposed to be re-appointed as required under Clause 49 of the Listing Agreement are provided in the Notice of the Annual General Meeting forming part of the Annual Report.

Auditors Report

The observations made in the Auditors Report, read together with the relevant notes thereon, are self- explanatory and hence do not call for any comments under Section 217 of the Companies Act, 1956.

Auditors

The Members are requested to appoint Auditors and fix their remuneration. M/s.Dalal & Shah, the retiring Auditors have furnished a certificate of their eligibility for re- appointment as required under Section 224(1 B) of the Companies Act, 1956.

Disclosure of Particulars

The particulars prescribed under Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 regarding Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo, etc. to the extent applicable are set out in the Annexure hereto.

Particulars of Employees

Particulars of employees as required under Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) Rules, 1975, as amended, forms part of this Report. However, pursuant to Section 219(1)(b)(iv) of the said Act, the Report and Accounts are being sent excluding the statement containing the particulars to be provided under Section 217(2A) of the said Act and the same will be made available to any shareholder on request.

Directors Responsibility Statement

The Directors, based on the information / representations received from the Operating Management, confirm that:

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

(b) they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit or loss of the Company for that period;

(c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

(d) they have prepared the annual accounts on a going concern basis.

Industrial Relations

The relations with the employees of the Company have continued to remain cordial.

Group

Pursuant to an intimation from the Promoters, the names of the Promoters and entities comprising "Group" as defined under the Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Acknowledgement

The Board wishes to place on record its appreciation of the sincere efforts put in by employees of the Company, in helping it reach its current growth levels.

Your Directors place on record their appreciation for the support and assistance received from the customers, investors, business associates, bankers, vendors, regulatory and government authorities.

For and on behalf of the Board of Directors Mangesh Patil R. Ramakrishnan Anant Bajaj Shekhar Bajaj Company Secretary Executive Director Executive Chairman & Director Managing Director Mumbai, May 26, 2010

 
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