Directors Report of Bosch Ltd.
Mar 31, 2021
The Directors have pleasure in presenting the SIXTY NINTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2021.
1. Financial Results
The following are the financial highlights for the
|
Financial Year 2020-21: |
[Mio INR] |
|
|
Particulars |
2020-21 |
2019-20 |
|
Sale of Products |
89,646 |
89,441 |
|
Of which Export Sales |
8,606 |
7,869 |
|
Profit before exceptional item and tax |
13,110 |
16,364 |
|
Exceptional items |
7,439 |
7,167 |
|
Profit before Tax |
5,671 |
9,197 |
|
Provision for tax |
846 |
3,349 |
|
Profit After Tax from continuing operations |
4,825 |
5,848 |
|
From discontinued operations |
- |
650 |
|
Profit for the year |
4,825 |
6,498 |
|
Other Comprehensive income (Net of tax) |
3,799 |
(1,333) |
|
Total Comprehensive income |
8,624 |
5,165 |
The Company does not propose to transfer any amount to Reserves for the year under review.
2. Dividend
Pursuant to the requirements of regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on the website of the Company and can be accessed at https://www.bosch.in/media/our_ company/shareholder_information/2017_2/dividend_ distribution_policy_2017.pdf. This policy is enclosed as Annexure âAâ to this Report.
In line with the Dividend Distribution Policy, the Board has recommended a Dividend of INR 115/- per share for the Financial Year 2020-21, aggregating to Mio INR 3,392. The dividend payout ratio is approximately 70.3%. The Dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting.
3. Management Discussion and Analysis
In order to avoid duplication between the Directorsâ Report and Management Discussion and Analysis, a composite summary of the Companyâs performance and its various business segments is given below:
3.1 Economic Scenario3.1.1 Global Economy
The year 2020 has been an unprecedented year. Covid-19 struck the global economy inflicting high and rising human cost worldwide. Governments and central banks across the world stepped in with fiscal and monetary support and global economic recovery from the depths of the Covid-19 plunge has proceeded significantly faster than what most envisioned.
The global economy is headed into a goldilocks scenario over the next couple of years. Vaccine production and distribution is picking up to the point where the achievement of herd immunity to Covid-19 will be within reach for significant portions of the globe over the quarters ahead. Pent-up consumer demand fueled by ample fiscal support for household incomes will be boosting growth as economic activity normalizes. Major central banks have essentially committed to look through -indeed to look favourably upon - any transitory price pressures that arise in sectors that struggle to keep up with surging demand. And while market yields will have risen enough to eat part way into very favourable financial conditions, those back-ups will be more reflective of strong growth prospects than fears of persistently higher inflation, which according to the Fed is transitory in nature.
IMF now projects global growth at 6% in 2021 moderating to 4.4% in 2022. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine-powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility.
India was one of the worst hit economies between April - June 2020 quarter with GDP growth contracting by 23.9% primarily driven by the rigorous nature of our lockdown. That said, our economy came back strongly and while FY 20-21 will still be a contraction of ~7.3%, the pace of contraction is much lower contrary to most expectations.
Most recently, India witnessed a sharp second wave and while resultant health and humanitarian crisis was most severe, the economy is expected to bounce back and grow between 8-10% in FY 21-22. At present, the biggest challenge for India continues to be vaccinating its large population more so given the impending third wave.
RBI in-turn has remained proactive in supporting the economic and financial markets through a series of rate easing, liquidity, bond purchase and regulatory measures, without which there would have been a further growth sacrifice. Conventional rate easing measures have been supplemented by unconventional measures such as Open market operations, Operation Twist, Special Liquidity Facility, Long Term Repo Operations, Targeted long-term repo operation, Government Securities Acquisition Programme, most of which were unthinkable even a few years back.
INR has largely been range bound against the USD (72-75) primarily driven by record balance of payment surplus and massive amount of Forex reserves accumulated by RBI.
3.2 Industry Structure and Development
Automotive:
The Covid-19 pandemic has added to the woes of an already ailing automotive industry. New-vehicle sales and production had already been falling before the pandemic. Automotive sales volumes were subdued during FY 20-21 marred by multiple factors such as slowing economic growth, increased cost of ownership because of mandatory insurance and safety regulations. However, the decline deepened during the lockdown imposed in April-June (the first quarter of the FY 20-21) and restrictions imposed since then. Apart from economic turmoil and sales restrictions, the transition to Bharat Stage VI (BS VI) emission norms, mandated from April 1st, 2020, led to an increase in purchase prices, further affecting sales and output.
Post unlocking of the economy, the automobile industry has been continuously witnessing strong sales month on month, driven by improvement in economic activities, low interest rate regime, and improvement in financing availability.
Demand for Passenger Vehicles was stronger than expected once Covid-19 related lockdown restrictions were lifted due to shift in preference
towards personal mobility. This was reflected in strong demand with first-time buyer (FTB) share increasing to 50% in FY 20-21 (from 45% in FY20) of domestic volumes. Industry registered healthy retail numbers during the festive season. Moreover, traction in the PC market continued post festive season as well. Preference of compact SUV, SMART cars with infotainment & connected features and attraction towards automatic over manual transmission is triggering replacement demand attracting the present youth. Government has ensured abundant liquidity through Reserve Bank of India. This has created attractive lending rates which leads to demand creation.
The pandemic has hit sales of Commercial Vehicles, especially medium and heavy Commercial Vehicles, even harder than those of passenger cars. This will be the second consecutive year of decline in the market, which suffered decline in FY 19-20, after peaking in FY 18-19. Sales slumped in 2019 as the economy slowed and manufacturers ended output of some models to meet BS-VI emission standards, which became mandatory from April 2020.
Domestic demand has been weak over the last two years due to reasons such as excess capacity created after new axle load norms, slowdown in the economy and limited driver availability. However, strong rural recovery, increased fleet utilization and governmentâs measures to revive the economy through infra spending will likely drive volume going forward. Infrastructure development in Bharat Mala and Sagar Mala projects - out of 84,000 kms road development projects 34,800 kms is targeted to be completed by 2022. Tippers and construction vehicles are required to execute this massive project.
LCV dealer inventory was on the lower side as transition from BS IV to BS VI, boom in e-Ecommerce
and Last mile delivery created massive demand for LCV. Increasing penetration of e-Commerce in tier 2 and tier 3 city supported growth. This was driven mostly by commute between warehouse in outskirts to inside the cityâs door delivery.
Agriculture output has consistently seen double digit growth coupled with government stimulus which ensures demand from rural economy.
Buoyant rural sentiments owing to good monsoon in CY21 positive farm sentiments on account of better crop profitability, high government support through income support schemes, higher rural expenditure (agriculture expenditure estimated to
be higher by ~52% on-year in H1 FY21), good water reservoir levels, high crop acreage (Rabi acreage at highest level of 65 million hectares), procurement (Kharif procurement up 27% YoY in 9M FY21) and remunerative prices has led to strong tractor demand outperforming the overall automotive industry.
Two-wheeler demand for FY 20-21 was impacted and key reason for the fall in two-wheeler sales is the BS-VI price hike which has increased two-wheeler prices by 10-15%. Moreover, Covid-19 and its associated lockdown had impacted income sentiments especially in the first half of the fiscal year while high fuel prices have pushed up cost of ownership in the second half.
The Indian Professional Tools market is estimated to be around INR 16 billion by value in the year 2020 (factoring Covid-19 impact) and is expected to grow at a CAGR of 10% (2021). This is in line with the estimated government spends on infrastructural projects, and expected investment in manufacturing industries. Since the impact of second wave of Covid-19 is very severe in India, we would need to evaluate further on the market scenario and market trends. Spending power of people has come down considerably and people would be looking for most affordable solution from power tools industries.
The Building technology (Security technology) market in India is growing at 5% driven by the need to secure Critical Infrastructure, Government Buildings, Public and Private Spaces. The technology trends in this
space are evolution and maturity of IP Convergence, analytics and seamless integration. The market is also preparing itself to deal with the challenging threats and changes driven by fast changing hardware and software. The Industry is also maturing driven by the renewed scope in Regulation and Bottoms-up desire to feel safe and secure.
The overall slowdown in the economy has resulted in slowing demand for Solar PV EPC projects and Energy Efficiency solutions from commercial and industrial segment customers. Solar PV projects has seen an upward trend mainly in the Opex model during this period. Energy Efficiency solutions demand is supported by pollution control and energy savings measures adopted by the government agencies and many corporations.
3.3. Business and segment wise performance
The overall performance of the Company witnessed a marginal decline of 1.3%. Mobility business (Automotive) revenue increased by 0.4%, while the
Business beyond mobility (Others) reduced by 9.6%, Domestic mobility business witnessed increase of 1.2%, mainly driven by Powertrain Solutions due to various economic, industrial and emission norms factors driving the auto industry.
As the Company predominantly operates in manufacturing and trading of mobility solutions, this constituted 84.6% of total sales for the Financial Year 2020-21. The Business beyond mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of 15.4%.
Thus, the operating segment is broadly classified into âMobility Businessâ (Automotive Products) and âBusiness beyond mobilityâ (Others).
3.3.1 Operating Segment Mobility Business:
Powertrain Solutions
The division Powertrain Solutions (PS) combines the strengths of the smart, diversified and sustainable
powertrain under the vision PASSION TO MOVE. PS offers integrated solutions in the market segments Electric Vehicles (EL), Passenger Cars (PC) and Commercial Vehicles / Off-Road (CV/OR) and aims to become no. 1 provider of products and solutions in the diversified powertrain sector ranging from gasoline and diesel injection to electrified drives with battery and fuel cell technologies. Powertrain Solutions is pushing ahead with the further development of innovative, eco-friendly technologies and systems based on diesel and gasoline. They include engine management systems, fuel supply modules, fuel injectors, pumps, and ignition systems. For diesel systems, the division is developing even more fuel-efficient and eco-friendly injection systems for applications ranging from passenger cars and commercial vehicles of all kinds to industrial power-generation units.
During Q1 of FY 20-21, the Covid-19 situation had necessitated a nation-wide Lockdown which resulted in supply chain restrictions, man power constraints, semiconductor crisis, absenteeism and liquidity crisis. Despite this we made a sound recovery commencing from Q3 of FY 20-21.The implementation of BSVI also helped us witness a good turnover for new generation products.
Overall automotive market during FY 20-21 was effected by unfavourable economic conditions owing to the Covid-19 pandemic. We still managed to end the year on a positive note due to the increase in demand in the tractor market that is owing to favourable monsoon, expansion in Rabi acreage, very high reservoir levels, government incentives and greater liquidity in the hands of farmers. The overview in HCV and LCV has also been good due to infrastructural projects across the nation such as road construction, mining, etc. and growing demand for better last mile connectivity.
With the onset of Covid-19, we also witnessed a growing demand for personal mobility contributing to increased demand in the two wheeler and PC segment. In addition to this, the growing demographic
of the earning class has also contributed to this spike in demand in the two wheeler and PC segment.
During the FY 20-21, we witnessed good demand for A-Pump for tractor market (106k pcs produced in Feb-21), Exhaust gas sensors for PC Segment, EPM 44 for two-wheelers.
In future, the growing working population and expanding middle class will remain the key drivers of growth for automobile industry. Further the increasing infrastructural activities across the nation, the growth in E-commerce activity and need for last mile connectivity, increasing demand for electric, battery and hybrid vehicles offers ample growth opportunity in the Indian automobile front.
Automotive Aftermarket (AA)
The automobile sector was battered and so was the automotive aftermarket after abrupt nationwide lockdown with severe economic contraction and reduced vehicle mobility. During these tough times, our main priority was to keep communication channel open with all our business partners and we rolled out massive training programs (product, sales, and digital offerings). Our approach of being closer to customer
and generating demand for our products helped tremendously in this direction. Close monitoring of net cash flow became the norm for even cash surplus businesses. It was important for us that we support our partners in these unprecedented difficult times through innovative solutions including temporary waiver of penal interest and higher cash discounts to sustain their businesses.
AA created a task force to prepare our market approach as soon as markets open up and the same is continuing. With agility and high commitment we were able to capitalize on opportunities and go above and beyond expectations in times of crisis. Spark plugs, Batteries and Filters were one of the first products which started seeing spurt in demand right from unlock of lockdown, while bottlenecks linked to transportation still continued. Covid-19 has given a further push to independent workshop community to adopt more professional practices. Our journey through our Bosch Car Service has been phenomenal. Hygiene services & equipments are seeing increasing demand. In order to overcome the unprecedented challenge, AA embraced digitization to adapt to the new normal to serve customers. In 2020, even though
we had a decline of 19.9%, we ensured the EBIT was same compared to PY. We continue to deliver the highest level of customer satisfaction through our purpose âCustomer & Employee success through Demand generationâ.
The Business beyond Mobility sales have declined by 9.6%; which was driven predominantly by Power Tool and Bosch Energy & Building Solution Division in domestic market; which contributed to 81% of total business beyond mobility during the year under review as compared to 81.7% during the previous financial year. However, export sales of total business beyond mobility decreased by 26% as compared to previous financial year.
Consumer Goods - Power Tools The Power Tools division supplies power tools, power-tool accessories, and measuring technology. The division has an extensive product range aimed at professional users in trade and industry, the DIY market, and amateur crafters. One of the divisionâs focal points is convenient, high-performance cordless tools, and great engineering progress.
During the year under review, the divisionâs revenue had an increase of 2.2%, which is mainly driven by increase in dealership and e-commerce sales.
The Division aims at reducing the distance to its users and will continue to focus on improving their lives by providing affordable solutions. Its focus on the loyalty program and E-commerce channels for business would also continue to be essential contributors to the overall business growth.
Energy and Building Technology (Building Technology, Bosch Energy & Building Solutions)
Building Technology (Security Technology)
The Building Technology division manufactures innovative
products and solutions in the field of security, safety and communications primarily for infrastructure and commercial applications. The product portfolio includes video surveillance, intrusion detection, fire detection and voice evacuation systems as well as access control and management systems. Critical Communication Systems, Professional audio and conference systems for communication of voice, sound and music complete the range. Bosch security division offers wide range of security solutions for every application to minimize risks and maximize security irrespective of the nature of security risk.
The business saw a decline in revenue over the previous year by 28%, with the slowdown in the economic activities. However, verticals of Transportation,
Government, Energy and Commercial sector contributed for the business growth. Futuristic products like the new Mega-Pixel 4K Cameras with user Interface, IP based Public Audio system, Professional Audio speakers and Amplifiers which were introduced during this period were well received.
Bosch Energy & Building Solutions
During this year, overall demand for Energy Efficiency solutions were muted due to prevailing economic situation. This has resulted in the overall energy
divisionâs de-growth compared to previous financial year. Division will concentrate on the business of energy efficiency projects for industrial heating and cooling efficiency improvement, with the end objective of enabling its customers in achieving energy cost saving and CO2 footprint reduction. The division continues to focus on sectors like pharma, FMCG, process and healthcare as strategic measures.
3.3.2 Revenue by geographical area
Contribution of export sales to the total sales increased
to 9.4% for the year under review as compared to 9.1% during the previous financial year. The Companyâs exports, bulk of which were to Germany, China, Brazil and Bangladesh increased by 9.4% as compared to previous year majorly in Powertrain Solutions, Power Tools and Building Technology.
3.4 Financial Performance and Condition Sale of products
Sale of products increased by 0.2% over previous year on a comparable basis and stood at Mio INR 89,646.
Sale of services decreased by 8.8% over previous year. There is a lower recognition of income on R&D contracts relating to BS-VI projects completed during the current year.
Other operating revenue
Other operating revenue stood at Mio INR, 2,328 decreased by 28.8% over the previous year. This decrease is mainly contributed by higher Government Grant in Companyâs Nashik Plant under Package Scheme of Incentives received in the previous year as compared to current year.
Other income
Other income, which mainly comprises of mark-to-market gains, profit on sale of marketable securities and dividend income declined by 7.8% over the previous year.
Income from net gain on financial assets measured at Fair Value through Profit and Loss (FVTPL) was Mio INR 2,311 for the year under review as against Mio INR 2,054 in previous year.
Income from interest on bank and inter-company deposits decreased by 27.2% due to fall in interest rates.
The cost of materials consumed as a percentage of total revenue from operations increased to 59.4% in FY 20-21 from 53.9% in FY 19-20. The increase is contributed by higher freight costs, change in product mix with higher traded goods, higher imports and higher material cost due to BS-VI components, currency fluctuations, partially offset by the cost reduction measures with our suppliers.
Personnel cost for the year under review was Mio INR 9,316 as against Mio INR 12,685 of the previous year. The reduction is mainly due to transformation projects and EVR schemes.
The Company continues to focus on restructuring, redeploying and re-skilling its workforce based on its business needs in a fair manner, while sustaining productivity and competence.
Depreciation and amortization
The depreciation charge for the year under review was Mio INR 3,414 as against Mio INR 3,833 during the previous year ended on March 31, 2020. This is mainly on account of reduction in new investments.
During the year, the company has made a provision of Mio INR 7,439 towards various restructuring, reskilling and redeployment initiatives. These provisions are in line with the companyâs transformation initiatives and to capitalize on opportunities emerging in electro mobility and other mobility solution businesses.
Tax Expense represents a net charge of Mio INR 846 in the year under review, as compared to Mio INR 1,901 in previous year. The effective tax rate for year under review was 14.9% as compared to 20.7% in previous year.
The reduction is mainly on account of higher credit on account of tax adjustments of earlier years in the period under review.
Profit after tax declined by 25.8%% to Mio INR 4,825 in the period under review from Mio INR 6,498 in previous financial year.
Other Comprehensive Income
The investment in equity securities is classified as financial assets through other comprehensive income as per the requirements of Ind AS 109. The changes in fair value of equity securities is recognized under other comprehensive income. Accordingly, the impact of Mio INR 3,799 (net of taxes) during the year under review is mainly due to increase in the fair value of those Investments.
Earnings per Share (EPS)
EPS (basic and diluted) of the Company for Financial Year 2020-21 was INR 164 per share as against INR 220 in FY 2019-20.
Share capital
As on March 31, 2021, the Authorized Share Capital comprises of 38,051,460 equity shares of INR 10 each. The issued, subscribed and paid-up capital is Mio INR 294.94 divided into 29,493,640 equity shares of INR 10 each.
199,84,324 equity shares of the Company held by Robert Bosch GmbH (Promoter) were transferred to Robert Bosch Internationale Beteiligungen AG (Wholly-owned subsidiary of Promoter) on February 24, 2021, by way of Inter-se Transfer.
Reserves & Surplus as on March 31, 2021 stood at Mio INR 87,776, which includes retained profits of Mio INR 87,350.
Other Reserve increased from Mio INR 6,636 to Mio INR 10,150 mainly due to change in the fair value of equity investments valued in line with Ind AS.
The total Shareholdersâ fund increased to Mio INR 98,221 as on March 31, 2021 from Mio INR 92,694 as on March 31, 2020, contributed from the retained earnings for the year.
Fixed assets - capital expenditure
The gross fixed asset value (including Capital Work-InProgress) as on March 31,2021 was Mio INR 37,041 compared to Mio INR 35,100 as on March 31, 2020.
The Company made capital investments of Mio INR 2,456 during the year under review with major spend on the expansion of our Adugodi campus into a smart campus.
The total investments (excluding investment in property) as on March 31, 2021 was Mio INR 51,353 as against Mio INR 40,207 as on March 31, 2020.
During the year under review, the Company has made downstream investments in compliance with applicable provisions of Foreign Exchange Management Act, 1999.
Inventory as on March 31, 2021 increased by 16.3% to Mio INR 12,985 from Mio INR 11,159 as on March 31, 2020.
Trade receivables as on March 31, 2021 stood at Mio INR 13,894 as against Mio INR 14,130 as on March 31, 2020. This is supported by improved collections against overdue receivables.
The total cash and bank balances as on March 31, 2021 was Mio INR 24,505 (including cash and cash equivalent of Mio INR 2,889), compared to Mio INR 22,560 (including cash and cash equivalent of Mio INR 2,552) as on March 31,2020.
|
Key Ratios: |
||
|
Ratio |
2020-21 |
2019-20 |
|
Debtor Turnover Ratio (in days) |
57 |
61 |
|
Inventory to Sales Turnover Ratio (in days) |
49 |
52 |
|
Interest Coverage Ratio (percent) 1 |
NA |
NA |
|
Current Ratio 1 |
1.7 |
1.5 |
|
Debt Equity Ratio (percent) 1 |
NA |
NA |
|
Operating Profit Margin (percent) |
8.4% |
11.2% |
|
Net Profit Margin (percent) |
5.0% |
6.6% |
|
Return On Capital Employed (ROCE) (percent) |
8.0% |
11.4% |
|
Return On Net Worth (RONW) (percent)2 |
5.5% |
7.7% |
|
Working Capital (No. of days)1 |
102 |
81 |
|
No. of Employees (average) |
7,589 |
8,986 |
'' The Company does not have any interest bearing debts, borrowings or long term liabilities.
2 RONW increased due to higher PAT contributed by increase in turnover, cost efficiency measures and one time Gratuity impact in the previous year.
& 3R (Restructure, Reskill, Redeploy), in a SCRUMM approach was also extended to the corporate areas under the initiative âLibertyâ which helped to have a similar approach across the organization at Bosch Limited to make the organization âFit for Futureâ.
The year gone by, industry was hit by pandemic and we are also no exception. During this pandemic, Covid-19, as an organization we showed extreme sensitivity towards our associates and made many changes in our people policies keeping in mind the need for business and employee well-being. The flexible work from home policy, with financial support for our associates to work from home/anywhere was implemented during this period. The organization tied up with external hospitals to ensure timely support to the associates and their family members in Covid-19 related treatments.
Towards the last quarter of 2020, we had undergone GPTW (Great Place to Work) survey across the Company to hear from our employees on how they trust the organization and also to understand where we stand as Bosch Limited. We were recognized now certified as a âGreat Place to workâ. This is a great achievement for the organization as it comes in the midst where organization has undergone extensive people transformation initiatives and COVID situation impacted the way we interact with people from physical connect to remote connect as well as in the mental well-being of the associates. During this period we also engaged with top talent through a dedicated talent conversations, which was aimed at engaging, retaining and harnessing talent. The organization took special care to keep the communication channels active and at an intense level to ensure that all the queries of employees are answered and addressed in timely manner.
The Company continued its efforts to foster and drive
younger generation towards future Leadership, through participations at the National Competition for Young Managers 2020 conducted by the All India Management Association. The Company, through its Integrated Talent Management initiatives, continued to enable learning, networking and collaboration by emphasizing on cross entity movement between different Bosch legal entities enabling holistic development and encouraging integration across different entities/Locations.
3.5.2 Industrial Relations (Employee Relations)
Transition from Industrial Relations to Employee Relations through increased employee engagement and increased collaboration lead to cordial atmosphere in the plants during the year under review.
The long-term wage settlement for manufacturing facility at Nashik and Naganathapura was concluded with bipartite settlement during August and October 2020 subsequently. The long drawn negotiations and conclusion of settlement in a fair and firm manner ensures and strengthens our journey towards âFit for Futureâ.
The year under review has also witnessed two months lockdown of entire business and also shock of pandemic for the entire year. The Workmen and Unions at our plants showed great maturity and collaboration in handling a once-in-a-Lifetime situation. The Management and Union collaborated to newer heights to ensure highest safety for its employees and reciprocated generous support for business continuity to ensure sustainability.
As the automotive market slowdown continues, a number of restructuring initiatives have been announced and implemented from 2019. Accordingly, rightsizing of the company is an absolute need of the hour. A total of around 1,700 blue-collar associates from Jaipur, Nashik, Bidadi and Naganathapura plant have availed the attractive early voluntary retirement scheme amicably in FY 20-21. As a part of people obsession, our blue-collar workers also have participated in initiatives like âGreat Place to Workâ to express their views.
The year saw increased connect with Government and statutory bodies, structured engagement calendar, stringent compliance monitoring through self-audits and cross-audits etc. to strengthen employee relations.
The company received appreciation from various stakeholders for its excellent practices and approach in the domain of Employee Relations focusing on engagement, collaboration and trust building.
3.6 Internal Audit and Internal Financial Controls
The Company has an Internal Audit function. The Internal Audit department provides an appropriate LeveL of assurance on the design and effectiveness of internaL controLs, its compLiance with operating systems and poLicies of the Company at aLL Locations. Based on the internaL audit report, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations
and corrective measures thereon are presented to the Audit Committee.
The Company has an effective and reliable internal financial control system commensurate with the nature of its business, size and complexity of its operations. The internal financial control system provides for well-documented policies and procedures that are aligned with Bosch global standards and processes, adhere to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. This also identifies opportunities for improvement and ensures that good practices are imbibed in the processes that develop and strengthen the internal financial control system and enhances the reliability of the Companyâs financial statements.
The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures. It also reviews functioning of the Whistle BLower mechanism and reviews the action taken on the cases reported.
The efficacy of the internal checks and control systems is validated by seLf-audits and verified by internal as weLL as statutory auditors.
The worLd continues to remain in the grip of Covid-19, and whiLe the second wave is even more severe, this too wiLL not Last forever. At some point in not too distant future, the fear of this pandemic wiLL most probabLy dissipate through some combination of effective treatments, vaccines and herd immunity.
WhiLe there continues the threat of third wave, but Like past infectious diseases that remain present today, the ingenuity of humankind has successfuLLy contained them and Learned how to Live with them. On one hand, Covid-19 has been an extraordinary economic shock, the sharp recovery post first wave was even more surprising. Covid-19 is sure to Leave Long-Lasting scars through muLtipLe channeLs, incLuding through unempLoyment, bankruptcies and debt. On the other hand, Covid-19 presents a once-in-a-Lifetime opportunity for change. The Indian automotive market was aLready in a sLowdown since Last quarter of 2018. Pandemic worsened the demand, but with sharp recovery, suppLy chain was put under tremendous pressure to cope up. The chaLLenge wiLL be to manage the fluctuating demand, LocaLized Lockdowns, suppLy chain crisis and changing consumer behavior.
After this Long sLowdown, it is an opportunity for the Company to transform itseLf in its ways of working and diversify itseLf in areas of growth. DigitaL technoLogies wiLL pLay an important part and adoption wiLL be fast tracked in every sphere of work. Government too wiLL push for the fast adoption of technoLogy in India to capitaLize of opportunities emerging in the new worLd order. Companyâs mobiLity division wiLL gain in this
aspect from bringing newer technologies including electrification and digital services.
Upgradation of infrastructure and e-Commerce will play a big role too post Covid-19. Building and workplaces need to become smarter. Security and analytics on top of existing products will play an important role. This will bring opportunity for the Companyâs Beyond Mobility divisions dealing in domains like Building Technology and Consumer Goods (Power Tools).
From the various pronouncements of the government and its agencies, it is clear that climate change and reducing the oil bill is of paramount importance and thus use of alternate fuel viz. hydrogen, natural gas and electrification in mobility is the way forward. While we have worked closely with OEMs in various concurrent projects to deliver the BS-VI mandate, electrification also opens up new opportunities and challenges in the mobility space. FAME 2 (Faster Adoption for Manufacturing of Electric and Hybrid Vehicles) has been announced providing incentives for all EVs and
promoting EV infrastructure. National Hydrogen Energy Mission (NHEM) was announced in Union Budget 2021. The government will, pursuant to the mission, draw a roadmap for using hydrogen as an energy source. This has the potential to transform the transport sector, as well as, other industries. These steps clearly show the impetus given to create a demand for transport with alternate energy sources in the country. Voluntary scrappage policy will help to increase the demand and bring in cleaner technology in the automotive sector.
Two and three-wheelers, will be the early adopters of electrification. This will gradually move towards fleet passenger cars, but the Internal Combustion Engine (ICE) will continue to be the dominant technology in the remaining segments. Bosch with its focus on environment, continuous research and improvements in conventional ICE technology and applications has been able to achieve even lower emissions than what is mandated. Other key areas of focus which is emerging is around asset utilization and use of analytics in Mobility. To cater to these new age businesses we have created
agile project houses, both on Electrification and Mobility Services to understand the local requirements and use the global expertise to provide localized solutions for the Indian market. These project houses being a step towards future-proofing of the Company will need time to translate to mature businesses.
Another opportunity for the Company is to increase the manufacturing footprint with the announced PLI (Production Linked Incentive) scheme by the government. While the scheme is still in draft stage (at the time of writing this report), early indications are that it will help the Company to increase its manufacturing footprint as well as increase its export to identified regions across the world.
The Company follows a specific, well-defined risk
management process which is integrated with its operations, for identification, categorization and prioritization of operational, financial and strategic business risks. Across the organization, there are teams responsible for the previously mentioned processes who report to the Senior Management.
The Risk Management Committee headed by Mr. Soumitra Bhattacharya, Managing Director, reviews the effectiveness of the process at regular intervals.
Following are the major risks reviewed by the Risk Management Committee and with applicable mitigation measures:
a) COVID-19 and Global economy:
India is witnessing the second wave, worse than the first wave itself. The wave is effecting the
major industrial states Like Maharashtra, Tamil Nadu and Karnataka. This presents a risk to growth forecast as the re-imposition of virus management measures will curb economic activity and could dampen market and consumer sentiment. However, given the focus on âmicro-containment zonesâ to deal with the current wave of infections, as opposed to a nationwide lockdown like 2020, the impact on economic activity will be less severe than that seen in previous year. We continue to closely monitor and assess global developments, implementing mitigation plans where appropriate. Operations at plants have resumed with strengthened process controls and revised guidelines in place across the Company to ensure effective social distancing, hygiene and health monitoring to ensure business continuity.
b) Disruptive norms:
⢠Technological changes: The Indian Automotive sector will witness many new regulations in next few years like CAFE, iRDE, FAME, TREM, apart from governmentâs initiative of exploring alternate
fuels (Electrification, Natural Gas, Bio-Fuel blend among others). The changes are spread across market segments. With many fuel technology available for the end consumer, identification of customer demand and volume will take more effort and time. Bosch being a global leader in automotive technology, the solution is already available with the parent company. Shift to these technologies, will lead to higher imports content in the initial years. Once the company sees an opportunity, based on demand or volumes, it opts for localization.
The investments in machinery for production in Bosch Limited will be at a cost, considering the technology transfer fee and higher royalty for new products as compared to old generation products. These will also have low replacement requirements in the aftermarket in the initial years and will have an adverse financial impact on the Company.
⢠Electrification: There have been discussions on electrification by various stakeholders including the Government, OEMs, media and auto component manufacturers with uncertainty on volume and pace of electrification across market segments. However, the Company, being a global end-to-end technology solution provider in mobility sector, has its own advantage and is working closely with some of the top customers in the industry.
c) Supply chain risk:
We rely on third parties for sourcing raw materials, parts and components used in the manufacture of our products. Our ability to supply components to manufacturing operations at the required time is key to achieving production schedules and due to various reasons we have witnessed shortage in few components (example- semiconductors, plastics, etc.) which constitute as an essential to manufacture and supply our products to Customers. However,
respective business unit teams undertake a comprehensive production schedule and are aligned with the customer demand.
d) Dependency on mobility sector:
About 85% of the business is dependent on the auto sector. Performance of the Company, therefore, is dependent on this sectorâs growth.
Automobile industry was deeply impacted between April - June 2020 given the Covid-19 related lockdown. 2021 started off on a positive note on economy front further supported by a growth-oriented budget. However, starting April 2021, India is witnessing the second Covid wave which has resulted in regionalized lockdowns. Economic activity is definitely going to see impact between April - June 2021 quarter and rest of the year will largely depend on the pace of vaccination drive.
That said, the outlook across the industry continues to remain positive primarily driven by the postponement of replacement demand by consumers over last 2 years. Hence, the demand will come back sharply with increase in mobility. Bosch has a long term strategy to shape the market in key technologies with innovative products and solutions. Bosch Limited thus continues its stance to be a technology agnostic partner to customers, government and other stakeholders. While we have successfully managed the transition from BS IV to BS VI, next challenge will be transitioning to TREM 4 and 5, adoption of CAFE norms phase 2 and BS VI stage 2. Amidst the crisis, Bosch in India will continue with the investments in competence development in addition to the solutions designed and developed in India and for India. For all Bosch businesses beyond Mobility Solutions, the company has a two-pronged approach. On the one hand, Bosch continues to bring in âFit for marketâ products and solutions while on the other, the company will increase its âGo to Marketâ footprint using both offline and digital platforms. Scaling up E-commerce activities will remain one of the key initiatives in FY 2021-22.
4. Manufacturing Facilities
The Bangalore Plant was opened in 2014-15. In 2019 the plant moved to a new location in the south-west of Bangalore. The entire plant facility is spread over an area of 300km2 and can further extend to 100km2. Being the youngest manufacturing plant, it has the capacity to cater to the futuristic and strategic needs of Powertrain Solutions in India. At this plant, various products are manufactured, like the conventional Diesel Multi-Cylinder A Pump, one of the oldest products of Bosch (99 years). As well as PF conventional Pumps, Elements, Delivery Valves and Glow Plugs. For new generation application BidP is producing PF Pumps, Common Rail Pumps (CBx, CP4, PFcrs), Common Rails and as latest addition the Lambda Sensors, started in November 2020. Even during the challenging COVID times in 2020-2021, the Bidadi plant has rapidly transformed itself into a low-cost manufacturing destination by restructuring via a flexible
Labor model. With its current 40% temporary manpower, the plant is moving forward in order to become fit for future. AI (Artificial Intelligence) based video analytics system (AVIS) and Shainin Problem Solving Approach ensure highest Industry Quality Standards. This is also reflected in several awards as from Ashok Leyland, ISUZU and Mahindra. Standard I4.0 solution and continual search of advance Digital Solutions support the plant in increasing profitability and performance. With a focus on giving back to the society, Bidadi had volunteered to distribute more than 75,000 meals to the needy during the Covid-19 pandemic with the help of its highly motivated employees who became the torchbearers of goodwill during the difficult times of pandemic. Step was taken in 2020 towards restructuring by offering Early Voluntary retirement which, looking into the future, the Plant is growing steadily by attracting new products even as we are steadfastly working on creating a great place to work for all our present and future employees.
Nashik Plant manufactures Common Rail Injectors (CRI) and components including nozzles for both common rail and conventional diesel injectors. During the year under review, the Plant diversified its product lineup from passenger cars until off high way applications. A new generation CR1-18 was launched successfully, equipping the Plant with BS-VI compliant products. In addition, the Plant is also certified IATF: 16949. The plant has a strong focus on System CIP approach to reach the VSD. Speed week is done almost every week to bring in speed. In H2 2020, 24 speed week workshops were done. Shainin has strong roots and used extensively for problem solving and cost reduction. 38 projects were done in 2020 realizing 50 mINR savings. To improve agility, based on data culture, speed Shainin concept was also developed and bringing in good results. Scrum as an agile tool is extensively used in the plant successfully, for example in value addition cost elements control. Systematic focus is given for I4.0 drive, with clear PoC success for non-Opcon controls. AI was successfully used for self-correcting CRI assembly line station, resulting in both IDC savings and competency enhancement. More than 95 assets were removed which helped fixed cost reduction and also floor space generation. The Plant continued its endeavor to use renewable source of energy and green initiatives. The Plant has an overall capacity of 13.6 MWp of solar energy generation. The plant is the first Bosch Plant in India and fifth worldwide to receive ISO 50001:2001 certification for Energy Management. Globally in the Bosch Group, Nashik Plant was awarded the best in âEnergy Efficiency & Environment Categoryâ. Miyawaki based tree plantation has been done in 200 sq. mts. and more is in the planning. The Plant has been focusing on behavior-based safety, reduction of first aid cases and capturing & working on near miss incidents digitally. It was awarded by âEnergy Conservation & Resource efficiencyâ from the reputed âVDA (Germany Industries Association)â. The Plant was also awarded by many OEMs for the quality standards like âSupplier Samratâ from AL, âBest Q problem solvingâ from Tata
Q circle. Step was taken in 2020 towards restructuring by offering Early Voluntary Retirement which helped the plant in securing overall interest of its employees and organization at large.
The Jaipur Plant produces Distributor (VE) Mechanical and Electronic Control Diesel Pumps and Conventional Injectors (NHA) used in Light and Heavy Commercial Vehicles, tractors and other off-highway applications. Jaipur Plant celebrated the production of 10 millionth NHA in 2019 after successful relocation of NHA production from Nashik Plant in 2017. Since the Jaipur plant is located in water scarcity area hence various initiatives are taken in the field of Water Conservation which were also appreciated by IGBC (Indian Green Building Council), which is an integral part of Confederation of India Industry (CII) and hence the Plant was presented first Water Conservation award 2019. The Plant has also secured third position in âBosch EHS award 2019â announced by Bosch Corporate Safety under the category of âResource Efficiencyâ for taking water conservation initiatives. Jaipur plant has taken a big step to maintain its cost-competitiveness through restructuring by offering EVR (Early Voluntary Retirement) in 2020. It helped the plant in securing overall interest of its employees and organization at large. Jaipur Plant is always known for employee involvement in improvement activities and has secured first position in âSuggestion per Employeeâ and âEmployee Involvementâ across all Bosch Powertrain Solutions plants worldwide for second consecutive year in 2020. Jaipur Plant is always committed towards âZero Accidentâ approach and has won the âRajasthan State factory Safety award-2019â under the category of Best Industry of Rajasthan in Engineering.
The Naganathapura Plant produces Spark Plugs, a product produced by the Bosch group for over a century. The Plant won the Karnataka State Safety Award in 2020 for Best Safety Officer and Best Safety Worker. The Plant became a zero liquid discharge plant with installation of an evaporator along with a boiler and thereby exceeds the requirements specified in the Karnataka State Pollution Control Board and has become a benchmark for the same. It is a Carbon Neutral plant since July 2020. Productivity improvement projects were implemented in addition to safety and quality improvement programs. Digital Transformation is a strategic focus area and the Plant is moving towards improving its digital footprint for Industry 4.0. The Plant is improving its operational excellence through structured implementation of Bosch Production System (BPS) together with focus on low cost automations. Through these measures, we are able to restructure our machinery and equipment and improve our cost competitiveness together with higher productivity. Naganathapura plant was rated highest across all Bosch Plants, Locations in India for the Trust Index survey which is one of the key indicators of âGreat Place to Workâ initiative.
Gangaikondan Plant in Tamil Nadu is a proven strategic Low cost location in Asia and has made its presence felt with the competitive labor cost and quality levels, that meet IPN standards. The Plant continues to have product portfolio which comprises mainly of Gasoline power train sensors, Fuel Supply modules, Air management products & Fuel Charge assemblies. Business Units like Sensor Division (SD), Components & Connectors (CC) and Gasoline Injection (GI) are further trying to enhance in-house manufacturing by way of relocation of lines from other overseas locations to support the âLocal for Localâ strategy. In 2020, plant has kick started the Digitalization and i4.0 Connectivity projects like MES and MAS based Manufacturing lines, Data analytics, etc. The Plant has been recognized for its Manufacturing Excellence, by Frost & Sullivan India Manufacturing Excellence Award (IMEA) under âGold Categoryâ during 2018. The Plant has won the âBest Newcomerâ award in 2019 for its Lean Manufacturing Practices among Bosch India Locations. Also, in Customer forefront the plant has won the âBest 4M Change Managementâ award given by precious Customer Ashok Leyland in 2020 for its best 4M Change Management practices.
The Power Tools facility admeasuring approximately 8,500 sq. meters is located at Indospace Industrial Park, Orgadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. It primarily manufactures Small Angle grinders, Large Angle grinders, and Marble cutters, Blowers, Drills and two-kg Hammers, along with their motors. The Plant produces Blowers for the entire global market. The main highlight of the Plant is that 100% of associates on the Assembly lines at the shop floor are women. The Plant celebrated production of 10 Millionth Power Tool in December 2020. The Plant is certified for ISO14001:2015 and OHSAS 18001:200. More than 65% of consumption in 2020 was green energy. The Plant was accredited with Power Tools Plant excellence award for three consecutive years since 2016 and awarded second Best Plant during 2019 within Power Tools international network. Power Tools Plants is one among the TOP 3 Plants across Bosch Plants to have recognized for Best Safety Practices [Global EHS award].
5. Information Technology (IT)
IT Organization built on the principles of reliable, robust and secure solution keeping agility in mind to support business needs has helped to manage the challenges of COVID and enable new ways of working without disturbing the business continuity. Entire business was able to switch over to remote working in seamless way when the need arose. We continued with our efforts to encourage and popularize virtual collaborative working tools. Democratization of video connect facility with necessary enhancement of IT infrastructure helped the business to stay connected with people even during remote working. During COVID times and later when business had to return to office we enabled all the
entities with necessary solutions for safe working e.g. self-declaration, COVID tracking dashboards for crisis management, Canteen and transport booking solutions, COVID helpline. To digitally connect with employees âAssociate connectâ app was launched to all the management staff and a platform was built on which multiple employee related solutions can be introduced.
We continued our efforts to ensure the Digital Core of the organization is future ready with OneM project (ERP migration project). Project focuses on standardizing the process and ERP solutions across Bosch mobility solutions. This enables the organization towards future initiatives like Digital business while keeping the running cost of IT optimized and improves business efficiency. Amidst the COVID crisis also IT organization with business team support is ensuring on time roll out of project.
We have embarked on Digital Transformation journey to be a Digital Company and holistically focusing on Product, Process, People and Infrastructure as key pillars. IT organization is driving key initiatives of Digital Transformation. Digital Fluency has been rolled out for all the employees. This initiative is aimed at enhancing the capability of our organization in appreciation and application of Digital. It will focus on driving âDigital Ways of Workingâ across various business functions.
This program is part of organization wide effort to create digital awareness and develop digital fluency to prepare them towards the digital transformation.
Supply Chain Excellence is focused on enabling technology solutions, which lifts the performance to next level and bring digitally interconnected supply chain networks that would not only improve the existing operational performance but also enable an end-to-end visibility, agility, collaboration, and optimization.
In order to be âfit for futureâ, Bosch has taken a step ahead to position an operational ecosystem that would understand the existing complexity, anticipate potential disruption, and quickly develop a response.
Digital Transformation team focuses on various process digitalization, automation activities to bring visibility of data, enable quick decision making and improved productivity. Multiple technologies like Robotic Process Automation, Cloud based applications and Block chain are evaluated and pilot studies completed. Several projects in the area of supply chain, reverse logistics were already implemented.
All our solutions are built with clear emphasis on IT Security. We continued reinforcing the awareness of IT security by conducting campaigns across all locations and ensuring necessary infrastructure.
6. Change Initiatives
In June 2020, a comprehensive manufacturing strategy was launched across Bosch with a purpose of making Bosch India manufacturing globally competitive. Our vision statement âWe Make India a Global Manufacturing
Hubâ is also complimented by Indian National Governmentâs Aatmanirbhar Bharat initiatives.
Our Mission - We. Perform. Transform. is a sentence in itself towards reorienting our manufacturing process in India. Manufacturing strategy has 12 strategic action fields with defined KPIs and KPRs focusing on manufacturing excellence, collaboration and leadership topics.
6.2 Bosch Production System (BPS)
BPS as base is one of the strategic action field in our manufacturing strategy. Through this, focus is to promote Intrapreneurship, high speed execution and enable flexible manufacturing systems.
BPS has framed improvable systems, which encompasses System CIP framework holistically. Coaching initiatives are undertaken to work on various system CIP projects and thereby align with the business objectives. Also initiatives are taken to bring in digital tools like âMy measuresâ to ensure transparency in measurements and remove manual coordination in order to improve efficiency.
In order to increase speed and agility, Speed weeks are being encouraged where improvement initiatives are identified and completed within a week. In order to promote the culture of speed week, speed week coaches are being trained and certified. In total 25 speed week coaches are certified who are taking this journey forward in Bosch India. Focus is given to improve Machine
utilization (OEE), Reduce Change over time, improve productivity, reduce lead time for manufacturing and thereby meet the expectations of the Customer and business case.
In order to implement a continuous improvement culture across organization, monthly immersions called âSystem CIP: Be Inspiredâ and âShare and Learnâ is introduced as an experience sharing platform across Bosch entities. Objective is to exchange ideas, increase belief system and aim for Benchmarking practices.
Focus is also to improve standardized work and aim for benchmark BPS maturity.
Bosch adopted an ambitious CO2 strategy to become climate neutral worldwide as of beginning of 2020. To
align with this strategy, Bosch India is working through four levers of carbon neutrality - energy efficiency, new clean power, green electricity and carbon offsets. Through energy efficiency projects year on year, there is a reduction of 2% of energy requirement. Bosch India has installed cumulative capacity of 27 MW Solar photo voltaic power plants across different locations.
Bosch India is carbon neutral from the beginning of 2020 with 40% contributed through green electricity and new clean power. The rest 60% is compensated through measures like carbon credits and international renewable energy certificates. Further, renewable energy share would go up to 50% in the year 2021 through signing of long term power purchase agreements under âGroup Captiveâ model.
At Bosch India, health and safety of associates have the highest priority. Bosch takes responsibility of its associates to promote and safeguard their health and working environment. The target is to realize âZero Accidentsâ. Bosch India is one among the best regions in
terms of safety performance. During the current year, the focus will be on deploying âSafety Basicsâ phase II and campaign on âSafe Handsâ.
Near miss capturing will continue to be the focus across all locations. During the year 2020, more than 13,038 near misses were captured. More than 7,400
improvement measures were taken up across locations to realize next level of maturity in terms of work safety. Accident rate of 0.18 and reportable incidents as 4 during the year 2020 is an outcome of systematic approach and safety mindset at all locations.
Considering our true north âZero defectâ, leadership came together and defined 7 strategic topics to be driven across all the plants. The focus was mainly on making our value streams robust and establish the base for zero defect.
These strategic topics are also part of our manufacturing strategy. Quality campaigns were launched across plants like FMEA line walk. Plant shutdown and restart due to COVID situation was well managed by systematic approach and review mechanism which helped to contain quality deviations.
There was a 26% reduction in â0â km customer incidences in 2020. Logistics incidences were reduced to the tune of 40%. Internal defect cost was reduced by 19%.
Bosch India received three customer awards and DL
Shah Platinum Quality Award. In addition our Nasik plant won Quality circle competition. Bosch India was also awarded 2 Dorian Shainin awards (Global competition) for their expertise in problem solving.
7. Awards and Recognition
During the year under review, the Company won several awards for excellence. Few such awards are:
1. Nashik Plant - Ranked No.1 in âQuality Circle Competitionâ (QCC) held in Novâ20 by Tata Motors Ltd;
2. âOverall Quality Excellenceâ from Volvo Eicher Commercial Vehicles Ltd;
3. âBest 4M Change management Practices Awardâ from Ashok Leyland;
4. Nashik Plant - Runner up position in Ashok Leylandâs prestigious competition âSUPPLIER SAMRATâ;
5. Nashik Plant - VDMA Manufacturing Excellence award;
6. Jaipur Plant - FW Quality Award - ACMA Pokayoke competition;
7. Bidadi Plant - FORD Q1 certification;
8. Jaipur Plant - Winner of Quality Award ACMA Award (northern region)
8. Directors and Key Managerial Personnel
8.1 Directors Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. Soumitra Bhattacharya (DIN: 02783243) retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election at the said meeting.
Brief profile of Mr. Soumitra Bhattacharya forms part of the Notice convening the 69th Annual General Meeting of the Company.
8.2 Changes in the Board and Key Managerial Personnel8.2.1 Board of Directors
Mr. Peter Tyroller resigned as a Non-Executive Director of the Company with effect from December 31, 2020 in view of retirement from the services of Robert Bosch GmbH. The Board places on record its sincere appreciation for the valuable contribution made by Mr. Tyroller during his tenure as a Director of the Company.
In view of resignation of Mr. Tyroller with effect from December 31, 2020, Mr. Sandeep N ceased to be an alternate director and also ceased to be a whole-time director of the Company with effect from December 31, 2020.
The Board of Directors at its meeting held on November 06, 2020, appointed Dr. Stefan Hartung (DIN: 08940088) as an Additional Director designated as Non-Executive Director of the Company with effect from January 01, 2021.
Based on the recommendation of the Nomination & Remuneration Committee and subject to the approval of shareholders the Board of Directors, at its meeting held on November 06, 2020, appointed Mr. Sandeep N as an Alternate Director to Dr. Stefan Hartung, designated as a Whole-time Director with effect from January 01, 2021 till December 31, 2022.
Mr. Jan-Oliver Roehrl resigned as a Joint Managing Director of the Company with effect from December 31, 2020 due to assuming new responsibility as an Executive Vice-President at Robert Bosch GmbH. The Board places on record its sincere appreciation for the valuable contribution made by Mr. Roehrl during his tenure as a Director of the Company.
Mr. Sandeep N ceased to be an Alternate Director to Dr. Stephan Hartung with effect from February 11, 2021.
The Board of Directors, at its meeting held on February 11, 2021, appointed Mr. Sandeep N as an Additional Director designated as an Executive Director, for a period of three years with effect from February 12, 2021 till February 11, 2024.
The Board of Directors, at its meeting held on February 11, 2021, appointed Mr. Karsten Mueller (DIN: 08998443) as an Alternate Director to Dr. Stefan Hartung, designated as a Whole-time Director for a period of three years with effect from February 12, 2021 to February 11, 2024.
The Board of Directors, at its meeting held on February 11 2021, re-designated Mr. S.C. Srinivasan (DIN: 02327433) as a Joint Managing Director for a period of three years with effect from February 12, 2021 to February 11, 2024.
Dr. Bernhard Straub submitted his resignation as a Chairman & Non-Executive Director of the Company with effect from May 20, 2021 due to change in area of responsibility at Bosch global level. The Board places on record its sincere appreciation for the valuable guidance provided by Dr. Straub during his tenure as NonExecutive Chairman of the Company.
Mr. Bernhard Steinruecke has submitted his resignation as an Independent Director of the Company with effect from May 20, 2021 due to preoccupation. The Board places on record its sincere appreciation for the valuable contribution provided by Mr. Steinruecke during his tenure as a Director of the Company. Pursuant to Schedule V of SEBI (LODR) Regulations, 2015, a confirmation has been received by Mr. Steinruecke stating there are no other material reasons other than those mentioned herein.
The existing tenure of Mr. S.V. Ranganath (DIN: 00323799) as an Independent Director of the Company ends on June 30, 2021. The Board of Directors, at its meeting held on May 20, 2021 appointed Mr. S.V. Ranganath as an Additional Director with effect from July 01, 2021 and further re-appointed him as an Independent Director for a second tenure of three years with effect from July 01,2021 till June 30, 2024.
The Board of Directors, at its meeting held on May 20, 2021, appointed Mr. Markus Bamberger as an Additional Director designated as a Non-Executive Director with effect from June 1, 2021 or from the date of allotment of Directors Identification number, whichever is later.
Mr. Bamberger was also appointed as a Chairman of the Board with effect from the date mentioned above.
The Board of Directors, at its meeting held on May
20, 2021, appointed Dr. Pawan Kumar Goenka as an Additional Director designated as an Independent Director for a period of five years with effect from May
21, 2021 till May 20, 2026.
In addition to re-appointment of Mr. Soumitra Bhattacharya, who retires by rotation, the following resolutions will form part of the Notice convening the 69th Annual General Meeting of the Company:
i. Re-appointment of Mr. S.V. Ranganath
(DIN: 00323799) as an Independent Director for a further period of three years with effect from July 01, 2021 to June 30, 2024;
ii. Appointment of Dr. Pawan Kumar Goenka
(DIN: 00254502) as an Additional Director designated as an Independent Director for a period of five years with effect from May 21, 2021 till May 20, 2026;
iii. Re-designation of Mr. S.C. Srinivasan (DIN: 02327433) as a Joint Managing Director for a period of three years with effect from February 12, 2021 to February 11, 2024;
iv. Appointment of Mr. Sandeep Nelamangala
(DiN: 08264554) as an Additional Director designated as an Executive Director for a period of three years with effect from February 12, 2021 till February 11, 2024;
v. Appointment of Dr. Stefan Hartung (DIN: 08940088) as an Additional Director designated as Non-Executive Director of the Company with effect from January 01, 2021;
vi. Appointment of Mr. Karsten Mueller (DIN: 08998443) as an Alternate Director designated as a Whole-time Director to Dr. Stefan Hartung for a period of three years from February 12, 2021 to February 11, 2024;
vii. Appointment of Mr. Markus Bamberger as an Additional Director designated as a Non-Executive Director of the Company with effect from June 1,
2021 or from the date of allotment of Directors Identification number, whichever is later.
Brief profiles of Mr. Markus Bamberger, Dr. Stefan Hartung, Dr. Pawan Goenka, Mr. S.V. Ranganath, Mr. Soumitra Bhattacharya, Mr. S.C. Srinivasan, Mr. Sandeep Nelamangala and Mr. Karsten Mueller form part of the Notice convening the 69th Annual General Meeting of the Company.
8.2.2 Key Managerial Personnel
As on the date of this report, the following persons have been designated as the Key Managerial Personnel of the Company pursuant to Section 2 (51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
⢠Mr. Soumitra Bhattacharya - Managing Director
⢠Mr. S.C. Srinivasan - Joint Managing Director & Chief Financial Officer
⢠Mr. Sandeep Nelamangala - Executive Director
⢠Mr. Karsten Mueller - Alternate Director designated as a Whole-time Director
⢠Mr. Rajesh Parte - Company Secretary & Compliance Officer
8.3 Independent Directors & Lead Independent Director
In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs (âIICAâ). The
Independent Directors of the Company are either exempt from the requirement to undertake online proficiency self-assessment test or have passed the necessary test.
All the Independent Directors have given a declaration to the Company that they meet the criteria of independence prescribed under section 149 (6) of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
The Board is of the opinion that all the Independent Directors meet the criteria regarding integrity, expertise, experience and proficiency.
The Board of Directors, at its meeting held on May 20, 2021, on the recommendation of Independent Directorsâ, appointed Mr. Bhaskar Bhat as the Lead Independent Director.
As the Lead ID, he shall be responsible for the following:
(a) Lead exclusive meetings of the IDs and provide feedback to the Chairperson/Board of directors after such meetings;
(b) Serve as liaison between the chairperson of the Board and the IDs;
(c) Have the authority to call meetings of the IDs; and
(d) If requested by shareholders (case to case basis), ensure that he/she is available for consultation and direct communication.
The Lead ID shall be paid additional compensation by way of commission of Rs. 0.6 million per annum.
8.3.1 Familiarization Programme for Independent Directors
Regular presentations are made at the Board Meetings by the Executive Directors and other Senior Management persons which gives an opportunity to the Directors to interact with the Management and get an overview of the operations and familiarize with matters related to the Companyâs values and commitments. The Directors are provided with all information on regular basis to enable them to have a better understanding of the Company, its operations and the industry in which it operates.
The Directors are also made aware about their roles and responsibilities on regular basis.
For details of programmes of familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and number of hours, please refer to the Corporate Governance Report.
8.4 Performance Evaluation of Directors
In line with the provisions of the Act and the Listing Regulations, the Nomination & Remuneration Committee and the Board have carried out an annual performance evaluation of its own performance, Committees and
individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
9. Board Meetings and Annual General Meeting
During the year under review, five meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
The 68th Annual General Meeting was held on August 27th, 2020 through video conferencing.
10. Corporate Social Responsibility (CSR) Committee and Initiatives
Consequent to changes in the Board of Directors during the year under review, the CSR Committee was reconstituted by inducting Mr. S.C. Srinivasan and Dr. Pawan Kumar Goenka as members of the Committee.
As on the date of this report, the CSR Committee comprises of Mr. Bhaskar Bhat (Independent Director) as its Chairman, Ms. Hema Ravichandar (Independent Director), Mr. S.V. Ranganath (Independent Director),
Dr. Gopichand Katragadda (Independent Director), Mr. Soumitra Bhattacharya (Managing Director), Mr. S.C. Srinivasan (Joint Managing Director) and Dr. Pawan Kumar Goenka (Independent Director) as its members.
The CSR Committee oversees the Companyâs CSR initiatives.
Details of the CSR Committee meetings and attendance thereat forms a part of the Corporate Governance Report.
The Board of Directors at its meeting held on May 20, 2021 have amended the CSR policy in line with the provisions of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. The CSR policy, inter-alia, deals with the objectives of the Companyâs CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key CSR initiatives during the year under review include the following:
1. Combating COVID and other continuing projects:
Combating COVID-19 was the major focus of the Company during the year. The support enabled the upgradation of Primary Health Centers (PHCs) around Bosch Plants at Jaipur, Chakan, Naganathapura and Gangaikondan, making them more Covid-19 responsive. Further, Covid-19 impacted needy families have been supported in the areas of Livelihood, Skilling and Health; migrantsâ re-employment facilitated across India; and training of paramedics undertaken. In addition, the Company manufactured masks were distributed freely to second-level Covid-19 warriors (police personnel, municipal corporation employees, non-Covid hospital staff) and other needy people. Apart from the above
support to combating Covid-19, a Government school in Jaipur has been renovated. Two new Artisan Training Centers were set up in Bangalore and Kanchipuram; and primary and secondary School Teachersâ Capacity Building program has also been initiated this year.
2. Collaboration and Partnerships:
The Company continues to build scalable and sustainable CSR partnerships with like-minded organizations for maximizing the impact of its social engagement programs. On 2nd November 2020, the âBosch-Art of Living Skill Centerâ was inaugurated at The Art of Living, Bengaluru, which comprises a BRIDGE Center, Artisan Center to offer training in modern carpentry, and a Collaboration Center to facilitate multi-stakeholder partnerships. Earlier, on 24th September 2020, the Bosch CSR team participated in NHRDâs Virtual Thought Leadership Meet led by the CHRO and detailed out by CSR Head on our different CSR initiatives. India CSR Summit held on 8th-9th of December 2020 included Bosch participation in the virtual CEOs Forum, which focused on âLeadership Perspective on Social Impact through Business and CSRâ and in a panel discussion titled âAligning Industry-Academia Collaboration with the New Education Policy-2020â. External bodies have recognized our CSR efforts. Two awards given to BRIDGE in 2020 included FICCI CSR Award for Livelihood & Skill Development (presented by Shri. Anurag Singh Thakur, Honâble Minister of State for Finance and Corporate Affairs, Government of India) and the Grant Thornton SABERA Award for âEnablementâ.
Annual Report on Corporate Social Responsibility Activities of the Company including the Impact Assessment Reports is enclosed as Annexure âBâ
(Page No.-75) to this Report.
11. Audit Committee
Consequent to changes in the Board of Directors during the year under review, the Audit Committee was re-constituted by inducting Mr. Markus Bamberger (Non-Executive Director & Chairman, with effect from June 1, 2021 or from the date of allotment of Directors Identification number, whichever is later), Dr. Pawan Goenka (Independent Director) and Dr. Gopichand Katragadda (Independent Director) as members. As on the date of this report, the Audit Committee comprises of Mr. S.V. Ranganath (Independent Director) as its Chairman, Dr. Pawan Goenka (Independent Director),
Mr. Bhaskar Bhat (Independent Director) Ms. Hema Ravichandar (Independent Director) and Dr. Gopichand Katragadda as its members.
The Members of the Committee possess Accounting and Financial Management knowledge. The Company Secretary of the Company is the Secretary of the Committee.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
Details of the roles and responsibilities, particulars of meeting and attendance thereat are mentioned in the
Corporate Governance Report.
12. Subsidiary, Associate and Joint Venture Companies12.1 Subsidiary Company
MICO Trading Private Limited (MTPL)
The Company has a subsidiary viz., MICO Trading Private Limited. The highlights of performance of MTPL and its contribution to the overall performance of the company during the period under report:-
|
(TINR) |
||
|
Particulars |
FY 2020-21 |
FY 2019-20 |
|
Total Revenue |
61 |
69 |
|
Profit/(Loss) before tax |
(16) |
(26) |
|
Profit/(Loss) after tax |
(16) |
(26) |
The Directorsâ Report along with the Audited Statement of Accounts of MTPL have been uploaded on the website of the Company at www.bosch.in under the âShareholder Informationâ section.
Robert Bosch India Manufacturing & Technology Private Limited (RBIM)
The Company has a subsidiary viz. Robert Bosch India Manufacturing & Technology Private limited, which was incorporated on May 31,2020. The Company is the manufacturer of automotive products and all kinds of motors automotive machinery and electrical machinery.
The Directorsâ Report along with the Audited Statement of Accounts of RBIM have been uploaded on the website of the Company at www.bosch.in under the âShareholder Informationâ section.
Newtech Filter India Private Limited (NTFI)
The Company has one Associate Company viz., Newtech Filter India Private Limited. The Company holds 25 percent and Robert Bosch Investment Nederland B.V. holds 75 percent of the paid-up share capital of NTFI.
NTFI is the manufacturer of automotive filters, selling their products to the Company, which further sells the same to end customers.
NTFI has successfully ramped up fuel filters for BS-VI applications.
|
(Mio INR) |
|||
|
Particulars |
FY 2020-21 |
2019-20 |
% Growth |
|
Turnover |
612 |
568 |
7.4 |
|
Profit/(Loss)before tax |
16 |
15 |
|
|
PBT % on Turnover |
2.6 |
2.6 |
|
12.3 Joint Venture Company PreBo Automotive Pvt Ltd. (PreBo)
The Company has one Joint Venture Company viz., PreBo. The Company holds 40% of the paid-up share capital of PreBo.
PreBo is in the business of manufacturing/assembly and supply of mechanical and electromechanical components and assemblies for automobile and non-automobile industry.
The financial performance of PreBo is as under:
|
Particulars |
FY 2020-21 |
FY 2019-20 |
|
Total Revenue |
274,663 |
51,463 |
|
Profit/(Loss) before tax |
18,369 |
(13,640) |
|
Profit/(Loss) after tax |
16,394 |
(13,640) |
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiaries, Associate and Joint Venture is enclosed as Annexure âCâ (Page No.112) to this Report.
13. Remuneration Policy
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to Directors, Key Managerial Personnel, etc. The policy can be accessed at the following link: https://www.bosch.in/ media/our_company/shareholder_information/2015/ nomination_and_remuneration_policy.pdf
14. Particulars of Employees
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed thereunder is enclosed as Annexure âDâ (Page No.114) to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended made available before the Annual General Meeting in electronic mode to any shareholder upon request sent at [email protected].
15. Corporate Governance
A report on Corporate Governance in terms of the requirements of the Listing Regulations and a certificate from the Practicing Company Secretary, forms part of this Annual Report (Page No.233).
16. Risk Management
The Company follows a specific, well-defined risk management policy which is integrated with its operations. The Policy has been developed after taking cognizance of the relevant statutory guidelines, Bosch Guidelines on risk management, empirical evidences,
stakeholdersâ feedback, forecast and expert judgment.
The Company has a Risk Management Committee (RMC) consisting of Board Members to examine, and review the risk inventory as well as certify the risk mitigation plan. The RMC functions as per Regulation 21 of the SEBI Listing Regulations. Further to RMC, the other subordinate risk management teams comprising of Senior Executives of the Company addressing functional, operational and strategic risk management in their corresponding area of responsibility covering overall risks in the area of commercial, technical, information technology and statutory compliance.
The Company has constituted a Corporate Risk Council to support RMC with assessing the risk situation.
This includes periodical review, exchange of relevant information as well as the submission of statements and evaluation on risk related subjects.
17. Whistle Blower Policy/Vigil Mechanism
The Company has a Whistle Blower Policy, which includes vigil mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the Corporate Governance Report. The Whistle Blower Policy has also been uploaded on the website of the Company and can be accessed at the following link: https://www.bosch.in/media/our_ company/shareholder_information/2018/whistle_blower_ policy-3.pdf
18. Business Responsibility Report
In terms of the requirements of Regulation 34 (2)
(f) of the Listing Regulations, a report on Business Responsibility in the prescribed format forms a part of this Annual Report (Page No.249).
19. Related Party Transactions
The Audit Committee accords omnibus approval for Related Party Transactions which are in ordinary course of business, foreseen, repetitive in nature and satisfy the armâs length principles. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transactions entered pursuant to the aforementioned omnibus approval. Additionally, the Company obtains a half yearly certificate from an independent Chartered Accountant in Practice confirming that the related party transactions during the said period were in ordinary course of business, repetitive in nature and satisfy the armâs length principles.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC - 2 pursuant to Section 134(3) of the Act is enclosed as Annexure âEâ (Page No.116) to this Report.
The Company has framed a Policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. The said Policy is hosted on the website of the Company and can be
accessed at the following link: https://www.bosch.in/
media/our_company/shareholder_information/2020/
related_party_transaction_policy.pdf
20. Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, is enclosed as Annexure âFâ (Page No.117) to this Report.
21. Auditors
The shareholders at the 65th Annual General Meeting of the Company held on September 01,2017 appointed M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) as Statutory Auditors of the Company for a period of 5 years until the conclusion of the 70th Annual General Meeting.
The Auditorsâ Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2020-21 is unmodified i.e. it does not contain any qualification, reservation or adverse remark or disclaimer.
21.2 Cost Audit & Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (Registration No.000065) as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2021-22 in terms of the provisions of Section 148 of the Companies Act, 2013.
In terms of the requirements of the said section, the members are required to ratify remuneration payable to the Cost Auditors. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates will form a part of the Notice convening the 69th Annual General Meeting.
As per Section 148 (1) of the Companies Act, 2013, the Company is required to maintain Cost Records. Accordingly, Cost Records and Cost Accounts are duly maintained by the Company.
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, the Company has appointed Mr. Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice No. 6029) to undertake Secretarial Audit of the Company for the Financial Year 2020-21. The Report of the Secretarial Auditor is enclosed as Annexure âGâ (Page No.119) to this Report.
The Secretarial Auditor has, in the aforementioned report, observed delays in reporting downstream investments to the Reserve Bank of India (RBI). As regards observations made by the Secretarial Auditor in
his Report, we wish to clarify that the Company is in the process of filing the returns for Downstream Investments with RBI.
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee under Section 143 (12) of the Act, details of which needs to be mentioned in this Report.
22. Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
i. In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. They have selected and consistently applied accounting policies and have 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 March 31, 2021 and
the profit of the Company for the year end date on the date;
iii. Proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
iv. The annual accounts have been prepared on a âgoing concernâ basis;
v. Proper internal financial controls are in place and that such controls are adequate and are operating effectively; and
vi. Proper systems to ensure compliance with the provisions of all applicable laws are in place and that such systems are adequate and operating effectively.
23. Details of Loans, Advances, Guarantees or Investments
Particulars of loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are provided in Note Nos. 6 & 7 to the Financial Statements.
The particulars of loans/advances, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Para A of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are furnished separately.
24. Deposits
Your Company has not accepted any deposits from the public and as such, no amount on account of principal or
interest on public deposits is outstanding as on the date of the balance sheet.
25. Material Changes and Commitments
There were no material changes and commitments between the end of the year under review and the date of this report affecting the financial position of the Company.
26. Annual Return
In terms of the requirements of Section 134(3)(a) of the Act, the complete Annual Return is available on the Companyâs website: https://www.bosch.in/our-company/ shareholder-information/. Also, Extract of Annual Return is enclosed as Annexure âHâ (Page No.121) to this Report.
27. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013
The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information as regards the number of cases filed and their disposal under this Act is given in the Business Responsibility Report.
28. Secretarial Standards
The applicable Secretarial Standards i.e. SS - 1 and SS - 2, relating to âMeeting of the Board of Directorsâ and âGeneral Meetingsâ, respectively, have been duly complied by the Company.
29. Cautionary Statement
Statements in the Boardâs Report and the Management Discussion & Analysis describing the Companyâs objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
30. General
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events on these items during the year under review:
i. Issue of Equity Shares with differential rights as to dividend, voting or otherwise.
ii. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any scheme.
iii. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Companyâs operations in future.
iv. Voting rights which are not directly exercised by the employees in respect of shares for the subscription/purchase of which loan was given by the Company (as there is no scheme pursuant
to which such persons can beneficially hold shares as envisaged under Section 67 (3) (c) of the Act).
31. Acknowledgements
The Directors express their gratitude to the various Central and State Government Departments for their continued cooperation extended to the Company. The Directors also thank all customers, dealers, suppliers, banks, members, and business partners for the excellent
support received from them. The Directors would also like to acknowledge the exceptional contribution and commitment of the employees of the Company during the year under review.
For and on behalf of the Board of Directors
Soumitra Bhattacharya S.C. Srinivasan
DIN: 02783243 DIN: 02327433
Managing Director Joint Managing Director & CFO
Date: May 20, 2021
Without current investments
3.5 Human Resource Development and Industrial Relations
3.5.1 Human Resource Development
During the year under review, Human Resources (HR) continued its transformation initiatives, in a volatile and uncertain business environment, to cater to the organizational requirements. Initiatives like PARINATI
Mar 31, 2018
Board of Directors,
Bosch Limited
Directorsâ Report including Management Discussion and Analysis
The Directors have pleasure in presenting the SIXTY SIXTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2018.
1. Financial Results
The following are the financial highlights for the Financial Year 2017-18:
[Mio INR]
|
Particulars |
2017-18 |
2016-17 |
|
Sale of Products (including excise duty) |
113,929 |
107,500 |
|
Of which Export Sales |
10,346 |
8,240 |
|
Profit Before Tax (from Continuing Operations) |
20,406 |
20,944 |
|
Provision for tax |
(6,698) |
(6,503) |
|
Profit After Tax from Continuing Operations from Discontinued Operations |
13,708 |
14,441 2,970 |
|
Total |
13,708 |
17,411 |
|
Other Comprehensive income (Net of tax) |
1,415 |
1,401 |
|
Total Comprehensive income |
15,123 |
18,812 |
The Company does not propose to transfer any amount to its Reserves for the year under review.
2. Dividend
Pursuant to the requirements of the regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on website of the Company and can be accessed at https://www.bosch.in/media/our company/shareholder information/2017 2/dividend distribution policy 2017.pdf. This policy is enclosed as Annexure âAâ (Page No. 67) to this Report.
In line with the Dividend Distribution Policy, the Board has recommended a Dividend of INR 100 per share for the Financial Year 2017-18, aggregating to Mio INR 3,679.4 including Dividend Distribution Tax. The dividend payout ratio is approximately 26.8 percent based on the profits as per Ind AS.
The Dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting.
3. Management Discussion and Analysis
In order to avoid duplication between the Directorsâ Report and Management Discussion and Analysis, a composite summary of the Companyâs performance and its various business segments is given below:
3.1 Economic Scenario
3.1.1 Global Economy
The global economy grew by 3.8 percent in 2017.
The pick-up in global growth has been broad-based with notable upside surprises in Europe and Asia. The global growth forecast for 2018 is expected to tick up to 3.9 percent. [Source: IMF]
Advanced economies are expected to continue their growth trajectory while emerging markets and developing economies are projected to show an improvement. Risks to the global economy arises from increasing protectionism as was witnessed by the tariffs introduced by US and China, rising commodity prices and increase in global interest rates.
3.1.2 Indian Economy
GDP growth for 2017-18 is projected at 6.6 percent against 7.1 percent in 2016-17 which is ascribed to the temporary slow-down induced by the rollout of structural reforms such as GST and demonetization. Subsequently, there has been a revival in the last few quarters and the quarterly GDP for the December quarter improved to 7.2 percent. This is based on a revival in demand post-demonetization. Strong infrastructure spending, pick-up in rural growth and supportive global factors are also other positive factors.
Continuing strength in economic indicators like IIP indicate that an economic recovery is in place. Recently, the GST collections of above the INR 1 Trillion mark in April also reinforced the positive trend. It is important that this momentum continues and improves into a consistent economic trend. Some of the concerns for the Indian economy are increase in prices of crude oil and other commodities putting pressure on the trade deficit and the challenge of financing the budget deficits of the central government as well as state governments.
Consumer inflation has been under control so far but recent movements in the fixed income market suggests that markets have concerns on this aspect. Going forward, monsoons in 2018 and political risk in the run-up to the general elections in 2019 will be the key factors affecting the Indian Economy.
3.2 Industry Structure and Development Automotive:
Heavy Commercial Vehicles (HCVs) production posted a subdued growth of 3 percent due to changeover in the emission norms and GST impact.
The Light Commercial Vehicles (LCVs) market grew by 18 percent predominantly due to changeover in the emission norms, GST impact and increased thrust in agriculture based FMCG and e-commerce sectors.
In 2017-18, Passenger Car production grew by 6 percent on account of new launches and a favorable GST impact.
Three-wheelers production increased by 31 percent due to higher demand driven by abolition of permit system in Maharashtra and Karnataka and granting of new permits in Delhi.
The Tractor market grew by 14 percent driven by a good monsoon and positive farmer sentiments.
The Automotive Aftermarket industry grew by ~5.5 percent in 2017 driven predominantly by Passenger Cars and Tractor segments.
Vehicle Production Growth Rates:
|
Production |
/(-) PY |
|||||
|
Segment |
FY 1213 |
FY 1314 |
FY 1415 |
FY 1516 |
FY 1617 |
FY 1718 |
|
HCV |
-26% |
-20% |
26% |
23% |
2% |
3% |
|
LCV |
5% |
-14% |
-10% |
3% |
6% |
18% |
|
Car UVâs |
3% |
-4% |
6% |
6% |
11% |
6% |
|
3 Wheeler |
-4% |
-1% |
14% |
-2% |
-16% |
31% |
|
Tractors |
-8% |
22% |
-13% |
-8% |
21% |
14% |
|
TOTAL |
-1% |
-3% |
4% |
4% |
7% |
11% |
Non-Automotive:
The Indian Power Tools market is expected to grow at 6 percent in 2018 over the previous year. This is in line with the estimated growth of the construction sector, which is its biggest customer. The market trend is shifting towards the mid-price category indicating that the users are steadily upgrading from hand tools to power tools. The Indian Professional Tools market is estimated to be around INR 16.9 billion by value in year 2017 and is expected to grow at 5-6 percent over the next few years, year-on-year.
The Security technology market in India is evolving rapidly. The overall market is expected to grow at around 4 percent in 2018 over the previous year, on account of the increased awareness around Security, Safety and Communication topics and convergence of technology around Intellectual Property and Software Analytics. The growth in this space will be supported by growth in segments of Transportation and
Government led Infrastructure projects. Additionally, the market is preparing itself to deal with security threats originating at different locations and levels.
The growth of the Indian packaging industry is heavily influenced by changing demographics such as growing urbanization and rising proportion of middle class consumers in the country. These changes drive the need for new packaging formats like different sizes, materials and material strength. Flexible packaging, the leading pack type in the Indian packaging industry, is expected to continue its growth. Over the last few years, the demand for flexible packaging, which is used extensively in food, household and cosmetics and toiletries industries, has been largely driven by innovative and convenient designs from manufacturers, thus making the packaging more appealing to consumers.
The solar energy sector in India experienced uncertainties during the year under review mainly due to changes in tax structure (GST) and increase in the price of imported solar modules. Despite these uncertainties, the cumulative solar installations in India crossed the 20 GW mark in January 2018.
The momentum in the solar energy is expected to strengthen in the current fiscal year with continued investments in the sector by domestic and international players. It continues to be a focus sector for the governmentâs plans for sustainable economic growth.
3.3. Business and segment wise performance
The overall performance of the Company witnessed a growth of 12.8 percent. Mobility business (Automotive) posted a growth of 15.0 percent, while the Business beyond mobility (Others) grew by
0.3 percent. Domestic mobility business witnessed an increase of 14.8 percent, higher than the automotive market growth of 11 percent, mainly driven by Power train Solutions with the increased demand from LCV segment and demand of new generation products subsequent to the introduction of BS IV emission norms effective April 01, 2017.
As the Company predominantly operates in manufacturing and trading of mobility solutions, this constituted 86.4 percent of total sales for the Financial Year 2017-18. The Business beyond mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of
13.6 percent. Hence, the operating segment consists of âMobility Solutionsâ (Automotive Products) and âBusiness beyond mobilityâ (Others).
3.3.1 Operating Segment Mobility Solutions:
Power train Solutions
The Power train Solutions division was formed effective January 01, 2018. The former Diesel Systems and Gasoline Systems divisions were merged to form this division. The objective of the merger of the divisions is to develop comprehensive and flexible solutions in power train technology regardless of the energy source.
The Diesel Systems division (now a part of Power train Solutions) is a systems supplier of key power train components. It offers an extensive range of energy efficient, eco-friendly diesel injection systems for applications ranging from passenger cars and all kinds of commercial vehicles and agricultural equipments to large-scale industrial power-generation units. It focuses primarily on the common-rail system, which comprises of a high-pressure injection pump, the rail and various injectors.
The Diesel Systems business grew by 17.9 percent over the previous year. Higher sales volume of new generation Common Rail System (CRS) coupled with higher price of the said system due to nation-wide implementation of BS IV emission norms, with effect from April 01, 2017, resulted in this increase. The Diesel Systems business will continue to ride on new generation CRS in the majority of vehicle segments for future growth. The distributor pump injection system has seen a considerable reduction post implementation of BS IV emission norms. The In-line pump system continues to be stable on account of demand from Tractor and Genset segments.
Gasoline Systems division (now a part of Power train Solutions) registered a growth of 40.8 percent over the previous financial year. This growth is mainly due to growth in demand for 2-Wheeler products (Fuel System Maintenance, Injectors and Sensors), overall growth in the passenger car market and new launches having Gasoline Products manufactured by the Company.
During the year under review, the 2-Wheeler business acquired major customers which will secure its future business. The current year is vital for the division on account of key customer acquisition due to proposed BS VI implementation in both 2-Wheeler and passenger car businesses.
Automotive Aftermarket
The Automotive Aftermarket division (AA) offers a comprehensive range of spare parts for passenger cars, commercial vehicles and 2-Wheelers for the after sales-market and repair solutions including diagnostic and repair-shop solutions. The product portfolio consists of Bosch manufactured products
like Fuel Injection Equipment and Spares, Spark Plug and Filter, as well as products and services like Battery, Lubricant and Lighting developed and manufactured by other manufacturers.
The Automotive Aftermarket division is the largest Independent Aftermarket (IAM) network in India. During the year under review, the Division de-grew by
0.5 percent due to liquidity constraint in secondary market post-demonetization and apprehensions due to GST roll out.
The division re-organized its IAM sales structure to address the specific needs of each vehicle segment and unlock growth potential, especially in the 2-Wheeler and passenger car segments. During the year under review, first ever âOrder Pe Offerâ campaign was completed in November 2017, reaching out to more than 10,000 retailers across India, to help in increasing the secondary sales.
Business beyond Mobility:
The Business beyond Mobility witnessed a muted growth of 0.3 percent. It was driven predominantly by exports which contributed to 16.8 percent of total business beyond mobility during the year under review as compared to 10.3 percent during the previous financial year.
Industrial Technology - Packaging Technology
The Packaging Technology Division is a provider of packaging solutions for the food and confectionery industries. The range includes individual machines, system solutions including secondary packaging and a comprehensive service portfolio.
Packaging Technology division witnessed a moderate growth of 6.7 percent. During the year under review, the division made progress in Horizontal Form, Fill and Seal (HFFS) product line and bagged orders primarily on the on-edge technology which ensures an optimal product control throughout the packaging line. In the confectionery (CC) product line, the Company has been designated as the global supplier for Bosch CC machines and the first such order to Japan will be executed during the current financial year.
The export sales increased by 70.8 percent over the previous financial year due to new System Solution projects with customers in Bangladesh.
Consumer Goods - Power Tools
The Power Tools business comprising of Electric tools, Accessories, measuring instruments and spare parts for Power Tools witnessed a growth of 3.7 percent.
The Division achieved 100 percent growth in terms of Channel expansion to Tier 3 and Tier 4 markets. âZero distance to userâ strategy also supported the core tool business. Launch of more affordable products has played vital role in business growth and also helped in overcoming systematic risk. E-commerce channels emerged as important contributors to the overall business.
Energy and Building Technology (Building Technology, Bosch Energy & Building Solutions and Thermo-technology)
Building Technology (Security Technology)
The Building Technology division offers innovative products and solutions in the field of security, safety and communications primarily for commercial applications. The product portfolio encompasses video-surveillance, intrusion-detection, fire-detection, public address and voice-alarm systems, access-control, building management systems, professional audio and conference systems.
The business achieved a growth of 13.3 percent, driven by orders in the verticals of Transportation, Commercial and Energy. Trend-setting products like the new range of IP Cameras, Professional Audio speakers and Amplifiers, Conference Systems, Loudspeakers and Microphones introduced were well received.
During the year under review, the exports increased due to rise in demand of Video Systems (VS) from SAARC customers.
Bosch Energy & Building Solutions The divisionâs revenue de-grew over the previous year owing to challenging market conditions in the Solar Photovoltaic (PV) segment. The Solar PV market witnessed a slowdown during the year under review due to change in tax structure and an unexpected increase in price of solar modules. Despite the above challenges, the business was successful in executing various key projects with reputed customers like Bangalore International Airport Limited.
With the momentum in the market set to regain in the current fiscal year, the division has set its sights on a large segment of the market that needs captive power generation, thus enabling âenergy self-relianceâ for its customers.
The Energy Efficiency (EE) business, which is part of the said division since January 2014, has grown over the previous financial year. This business primarily focuses on providing energy cost savings to industries and commercial buildings through customized solutions for optimization in heating and cooling processes.
Thermo-technology
Electric water heater continues to dominate the water heater space. Though the market for Solar water heater and heat pumps for hot water is small, there is increasing trend of heat pump and hybrid of solar water heater and heat pump picking up due to their overall energy efficiency and potential savings. KUSUM initiative of Government is expected to provide thrust to the solar water pump market.
3.3.2 Revenue by geographical area
The export sales of the Company contributed 9.2 percent to the total sales for the year under review as compared to 8.3 percent during the previous financial year. The Companyâs exports, bulk of which were to Germany, China, Turkey, Bangladesh and Brazil increased by 39.9 percent majorly from Power train Solutions and Energy & Building Technology Divisions.
3.4 Financial Performance and Condition Sale of products
Sale of products grew by 12.8 percent over previous year on a comparable basis and stood at Mio INR 113,929. The Power train Solutions division consisting of Diesel and Gasoline power train products has mainly driven this growth.
Sale of services
Sale of services registered a growth of 15.1 percent over previous year, mainly contributed by increase in development receipts from BS VI projects.
Other operating revenue
Other operating revenue at Mio INR 2,108, decreased by 18.7 percent over the previous year, due to higher provision written back in the previous year.
Other income
Other income, which mainly comprises of mark-to-market gains, profit on sale of marketable securities, dividend and interest income, decreased by 17.1 percent over the previous year. Income from net gain on financial assets measured at Fair Value through Profit and Loss (FVTPL) was Mio INR 2,185 for the year under review as against Mio INR 3,172 in previous year.
Income from interest on bank and inter-company deposits increased by 1.9 percent due to higher asset base.
Cost of materials consumed
The cost of materials consumed as a percentage of revenue increased from 50.9 percent to 53.9 percent during the year under review. This increase is mainly due to change in the product mix from conventional to new-generation in the Power train Solutions division subsequent to the change in the emission norms.
Personnel cost
Personnel cost as a percentage of revenue decreased from 12.9 percent to 11.6 percent during the year under review. This is attributed to continuous productivity improvement measures and reduced
depth of production of new generation products.
The Company continues to focus on rationalizing its workforce based on its business needs in a fair manner, while sustaining productivity and competence.
Depreciation and amortization
The depreciation charge for the year under review was Mio INR 4,672 as against Mio INR 4,562 during the previous year ended on March 31, 2017. The addition of fixed asset is mainly on account of the expansion of new generation products at facilities situated in Bidadi (Karnataka) and Nashik (Maharashtra).
Provision for Tax
Income tax expenses for the year under review is 3.0 percent higher due to discontinuation of investment allowance exemption and additional depreciation.
Profit After Tax (PAT)
PAT for the Financial Year 2017-18 was Mio INR 13,708, a decrease of 5.1 percent mainly due to higher tax expenses as above.
Other Comprehensive Income
The investment in equity securities is classified as financial assets through other comprehensive income as per the requirements of Ind AS 109. The changes in fair value of equity securities is recognized under other comprehensive income. Accordingly, the impact of Mio INR 1,415 during the year under review is mainly contributed by increase in fair value of those investments.
Earnings per Share (EPS)
EPS (basic and diluted) of the Company for Financial Year 2017-18 was INR 449 per share.
Share capital
As on March 31, 2018, the Authorized Share Capital comprises of 38,051,460 Equity Shares of INR 10 each. The issued, subscribed and paid-up capital is Mio INR 305.21 divided into 30,520,740 equity shares of INR 10 each.
Reserves & Surplus
Reserves & Surplus as on March 31, 2018 stood at Mio INR 92,298, which includes retained profit for the year under review of Mio INR 70,313.
Other Reserve
Other Reserve increased from Mio INR 5,962 to Mio INR 7,210 mainly due to change in the fair value of equity investments valued in line with Ind AS. Shareholdersâ fund
The total Shareholdersâ fund increased to Mio INR 99,813 as on March 31, 2018 from Mio INR 87,996 as on March 31, 2017, mainly due to profit for the year under review.
Fixed assets - capital expenditure
The gross fixed asset value (including Capital Work-In-Progress) as on March 31, 2018 was Mio INR 27,629 compared to Mio INR 23,257 as on March 31, 2017.
The Company made capital investments of Mio INR 4,600 during the year under review in addition to Mio INR 6,267 invested during previous year. Major investments were made towards development of new products and facilities in Bidadi (Karnataka) and Nashik (Maharashtra) as well as towards solar power project at Belagavi (Karnataka).
Investments
Surplus funds not required for immediate operational needs were invested prudently in tax effective low risk instruments. The total investments (excluding investment in property) as on March 31, 2018 was Mio INR 52,228 as against Mio INR 39,090 as on March 31, 2017.
Working capital Inventories
Inventory as on March 31, 2018 increased by 3.9 percent to Mio INR 12,258 from Mio INR 11,804 as on March 31, 2017 to support growth in sales. However, Inventory Turnover Ratio has reduced by 1 day as an effect of GST implementation, which enabled consolidation of warehouses and continuous focused measures on Inventory reduction.
Trade receivables
Trade receivables as on March 31, 2018 increased to Mio INR 16,156 as against Mio INR 11,862 as on March 31, 2017. This increase is a result of an increase in sales, change in the product mix and increase in average collection period in Power train Solution Division majorly affected by liquidity constraint in OE market.
Cash and Bank balances
The total cash and bank balances as on March 31, 2018 was Mio INR 18,878 (including cash and cash equivalent of Mio INR 3,633), compared to Mio INR 17,176 (including cash and cash equivalent of Mio INR 1,312) as on March 31, 2017.
Key Ratios:
|
Ratio |
2017-18 |
2016-17 |
|
Return On Capital Employed (ROCE) (percent) |
17.0% |
20.1% |
|
Inventory Turnover ratio (in days) |
39 |
40 |
|
Trade Receivable Turnover ratio (in days) |
45 |
43 |
|
Current Ratio |
1.8 |
1.9 |
|
Number of Days in Working Capital |
79 |
80 |
|
No. of Employees (average) |
9,517 |
9,704 |
3.5 Human Resource Development and Industrial Relations Human Resource Development
During the year under review, Human Resources (HR) continued its transformation initiatives, in a volatile and uncertain business environment, to cater to the organizational requirements.
The Company has collaborated with the global organization âGreat Place to Workâ, in its endeavor to become a great place to work. The objective is to bring about a High Performance Culture and Ownership and build a High Trust Culture of collaboration and thereby achieve Organizational Objectives.
The Company continued its efforts to foster and drive younger generation towards future leadership.
The Company was again recognized at the National competition for Young Managers 2017 conducted by the All India Management Association with the Company bagging the national level award.
The Company, through its Integrated Talent Management initiatives, continued to enable learning, networking and collaboration by emphasizing on cross entity movement between different Bosch legal entities enabling holistic development and encouraging integration across different entities/locations.
Industrial Relations (Employee Relations)
Industrial Relations in all plants generally remained cordial during the year under review. Transitioning from âIndustrial Relationsâ to âEmployee Relationsâ, a more focused approach on increased Employee Engagement and increased collaboration between various plants, corporate departments and amongst all level of employees was continued.
The Company, during the first week of May 2017, successfully concluded the long-term settlement with the Associates of the Jaipur Plant effective June 01, 2017 for a period of 4 years, in an amicable and fair manner, with support of the Labour department, Government of Rajasthan.
As on the date of this report, negotiations over the longterm settlements at the manufacturing facilities situated at Bengaluru, Nashik and Naganathapura are ongoing. The Company continues to deal with the said matters in a fair and firm manner.
During the year under review, several initiatives such as introduction of Grievance policy, increase connect with Government and statutory bodies, Engagement calendar, Compliance checklist, self-audits and cross audits, etc. were continued to strengthen Employee Relations.
3.6 Internal Audit and Internal Financial Controls
The Company has an Internal Audit function. The Internal Audit Department evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company 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.
The Company has an effective and reliable internal financial control system commensurate with the nature of its business, size and complexity of its operations.
The internal financial control system provides for well-documented policies and procedures that are aligned with Bosch global standards and processes, adhere to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. This also identifies opportunities for improvement and ensures that good practices are imbibed in the processes that develop and strengthen the Internal financial control systems and enhances the reliability of the Companyâs financial statements.
The efficacy of the internal checks and control systems is validated by self-audits and verified by internal as well as statutory auditors.
The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures. It also reviews functioning of the Whistle Blower mechanism and reviews the action taken on the cases reported.
3.7 Opportunities and Threats
The various government initiatives put in place to bridge the gap of India and the developed nations offers a gamut of opportunities for the fast adaptation of technology in India. The budget demonstrates a very significant push on infrastructure including rural infrastructure which opens up opportunities for the Companyâs beyond mobility divisions like Building Technology and Consumer Goods (power tools).
In the mobility scenario, the various initiatives of NITI Aayog/Ministry of Road Transport and Highways have provided an impetus to close the technology gap as India moves from BS IV to BS VI in three years, time typically taken for one step. In this challenging environment, the Company is closely working with the OEMs in various concurrent projects to deliver the BS VI mandate. In the new product mix that will evolve with BS VI, localization and dieselization trends are the focus areas.
The push for digital India and the digital trendy demographics of India encourages the use of technology to create a connected mobility ecosystem. The Company has this trend in its radar and is working actively towards catering to this demand.
With regard to the Business beyond mobility, the Company is providing integrated solutions in the areas of industrial technology, consumer goods and energy and building solutions for turn-key mega infrastructure projects such as airports, metro stations and smart cities.
3.8 Risks and Concerns
The Company follows a specific, well-defined risk management process which is integrated with its operations, for identification, categorization and prioritization of operational, financial and strategic business risks. Across the organization, there are teams responsible for the previously mentioned processes who report to the senior management.
The Risk Management Committee headed by Mr. Soumitra Bhattacharya, Managing Director reviews the effectiveness of the process at regular intervals.
Following are the major risks and mitigation measures:
1. Disruptive norms:
Major changes influencing the industry like BS IV, BS VI, Electrification, etc., are considered by the Company as a major risk(s).
(a) Shift to BS VI: The jump from BS IV to BS VI in a short span of about 3 years, the pace of change and the short time duration for preparedness are challenging. Shift to BS VI products, which are largely based on imports and have low replacement requirements in the Aftermarket, may have an adverse financial impact on the Company. The Company is currently working on customer project acquisitions and measures are being enforced to minimize the financial impact.
(b) Electrification: There has been a lot of discussion on electrification by various stakeholders including the Government, OEMs and auto component manufacturers. The technological dominance, which the Company currently has in the auto component industry, might not be available once electrification has its way into the industry. However, the Company, being an end-to-end solution provider, has its own advantage and is working closely with some of the top customers in the industry.
2. Competition: The Company operates in a highly competitive environment due to which there are risks of pressure on pricing, loss of market due to de-risking from some customers, judicial changes and increased import content. Spurious parts and cheap imitations continue to put pressure on existing market share, primarily for Automotive Aftermarket and Power Tools divisions.
The Company, as a strategy, localizes products over a period resulting in reduction of price of the product and consequent increase in the market share. Respective business unit teams undertake a comprehensive competitor analysis periodically to evaluate competitorsâ strategies vis-a-vis, our own products and services and define our counter strategic and marketing plans.
3. Industrial Relations (IR): IR-related risks continue on account of surplus capacity at the Companyâs Diesel systems plants and high lead time for wage settlement. These include possible risks arising from stoppage of production and/or leading to unpredictable cost structure and/or possible lay-off.
The Company adopts more focused continuous action plan for wage settlement, offers attractive EVR schemes, Firm and Fair approach for settlement with contract labour and implement âselectedâ best practices. As continued process in building capability initiative, special trainings were conducted on Employee Relations and adding value to Front line leadership development in the plant.
4. Heavily auto sector dependent: About 85 percent of the business is dependent on the auto sector. Performance of the Company, therefore, is dependent on this sectorâs growth.
5. Low diesel image: Diesel engines are being portrayed as polluter & environment unfriendly due to anti-Diesel lobbying. One of the major challenges currently faced is poor market for alternate fuels segment. The share of diesel in the total passenger carsâ sales has reduced in the last 4-5 years and possess further challenges. The Company has proactively taken steps to mitigate the risk in a socio-environmentally responsible manner.
6. Economy:
Geopolitical Scenario: The Company is operating in a Global business environment and continues to be impacted by any major geopolitical changes. The build up to the general elections in India from second half of 2018 might also impact the performance of the Company.
3.9 Outlook
The signs of growth indicate that an economic recovery is underway in India. Sustaining and enhancing the momentum would be the key factors determining this recovery.
The Company is optimistic of an overall growth in the automotive industry in 2018-19, with continued strong upward trend in passenger cars, LCVs and tractors. Predicted favorable monsoon and faster economic growth this year are likely to boost farm income, which, in turn, will boost rural sales of 2-Wheelers, passenger cars and tractors.
For the non-automotive segment, the Company is cautiously optimistic in spite of having positive economic indicators like robust economic growth, rising household incomes and increase in consumer spending due to unprecedented business exigencies.
4. Manufacturing Facilities
4.1 Bengaluru (Karnataka)
The 67 year old Bengaluru plant is transforming itself into a lean and agile plant with its 90 year old product âA Pumpâ still going strong in the tractor and diesel genset segments of Automotive Market. During the year under review, the plant achieved a milestone of manufacturing its 20th million A-pump.
The Plant has implemented an intensive System Continuous Improvement Process for improving and sustaining quality and remaining cost competitive. With this as a blueprint, the restructuring of machinery and equipment together with focus on increasing operational efficiency on the shop floor have made value streams even leaner. Additionally, the Plant is using low cost automation solutions for process optimization and reduction of manual effort resulting in better quality and speed in the value chain.
4.2 Bidadi (Karnataka)
The Bidadi plant progressed by integrating low cost Cobots (Collaborative Robots) for common rail pumps, simultaneously achieving two targets: creating a clear finish time for products within the manual line and significant cost reduction.
Locally developed Industry 4.0 solution for deviation management are implemented at all stations. These applications are developed locally instead of using standard solutions available in Europe.
The plant has commenced lake rejuvenation project in the area adjacent to its facilities.
During the year under review, 1.2 MW of solar power capacity has been installed in addition to the existing 3.5 MW of solar power capacity.
4.3 Nashik (Maharashtra)
Nashik plant manufactures the Common Rail Injectors (CRI) and components including nozzles for both common rail and conventional diesel injectors. During the year under review, the plant successfully transferred the production facility of Conventional Injectors (NHA) to Jaipur plant. Additional capacity was added for CRI product by relocation of a high volume line from Bosch Turkey plant. Nashik plant celebrated the production of 25th million CRI and became the second largest manufacturer of CRI 2-16 injectors in the Bosch group globally.
During the year under review, the Nashik Plant continued its endeavor to use renewable source of energy. The Plant has an overall capacity of 13 MWp of solar energy generation. The plant is the first Bosch plant in India and fifth worldwide to receive ISO 50001:2001 certification for Energy Management.
Focusing on behavior based safety, reduction of first aid cases and capturing & working on near miss incidents, the Plant recorded a âzero accidentâ year. The Plant was awarded by CII for the Manufacturing excellence practices of Industry 4.0.
4.4 Jaipur (Rajasthan)
The Jaipur Plant produces Distributor (VE) Mechanical and Electronic Diesel Control Pumps used in Light and Heavy Commercial Vehicles, Sports and Multi-Utility Vehicles and tractors. Relocation of manufacturing of Conventional Injectors from Nashik to Jaipur was successfully completed during the year under review. These are used in both on-highway and off-highway applications including Light and Heavy Commercial Vehicles, Locomotives, Tractors and Gensets.
Growth in the domestic LCV and tractor markets resulted in good turnover inspite of reduction in other OE volumes due to implementation of BS IV Emission Norms with effect from April 01, 2017.
The Plant is the first Bosch plant in India to win the âNational Safety Awardâ in two categories âAccident free yearâ and âLowest Average Frequency Rateâ from the Government of India in September 2017. The Plant also won other awards including CII Lean Award for lean manufacturing.
4.5 Naganathapura (Karnataka)
The Naganathapura Plant produces Spark Plugs, a product produced by the Bosch group for over a century. The year under review witnessed an increase in the turnover mainly due to higher demand from OE and Independent Aftermarket segments.
Focusing on improving cost competitiveness, productivity improvement projects were implemented in addition to safety and quality improvement programs.
During the year under review, Machine building division and manufacturing of automotive service solutions were relocated from the Bengaluru Plant to Naganathapura Plant.
4.6 Verna (Goa)
The Verna Plant provides a variety of applications and solution relating to packaging market in India and SAARC countries. The products and solutions of the Plant also have good presence in Africa.
During the year under review, Verna plant executed many challenging projects, made successful product transfers and took big steps in Horizontal Form, Fill & Seal product line. The plant also introduced new products like SVI 4000WR and BVK 1200 in the market.
4.7 Gangaikondan (Tamil Nadu)
Situated at Tirunelveli, Tamil Nadu with a 6,200 sq. meters of built up area, the state-of-the-art Gangaikondan plant is the Power train Solutions plant in India catering to the needs of growing Gasoline automobile market (both four and two-wheelers) in India. This plant was inaugurated in 2015 and achieved a break-even during the year under review.
The Plant mainly produces Power train Sensor products, Air Management products, Fuel supply Modules, Fuel Injection products for Gasoline vehicles. Year on year, the Plant has increased its output by 30 percent and is ready to face the market demands.
4.8 Chennai (Tamil Nadu)
The Power Tools facility admeasuring approximately 8,500 sq. meters is located at Indospace Industrial Park, Orgadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. It primarily manufactures Small Angle grinders, Large Angle grinders, Marble cutters, Blowers, Drills and two-kg Hammers, along with their motors. The Plant produces Blowers for the entire global market.
The Plant was accredited with Power Tools plant excellence award for the second consecutive year as well as best improving plant within the Power Tools international network.
5. Information Technology (IT)
As part of GST preparedness and business process readiness, all relevant IT systems have been upgraded with necessary changes as per GST time line. Additional GST changes are being incorporated in respective IT systems based on GST notifications on an ongoing basis.
During the year under review, the Company continued to enhance its IT Infrastructure to facilitate better internal as well as external communication providing an opportunity to employees to âwork from anywhereâ seamlessly.
6. Change Initiatives
6.1 Continuous Improvement Process (CIP)
Considering the potential for further improvement in CIP practices at the Company to foster a culture of process orientation and problem solving, a project has been undertaken for defining CIP road map by end 2018 and for its structured deployment and review by Senior Leadership. This project has supported in considerable improvement in various Key Performance Indicators like Number of Implemented Suggestions per Employee, Savings from CIP Activities, No. of CIP Workshops, No. of VSDIA (Value Stream Design in Indirect Areas) Projects, Key CIP Competencies, Processing Time per Suggestion, etc. with involvement of associates across the Company.
6.2 Bosch Production System (BPS)
In this competitive business scenario where Customers demand zero defects, reduction in costs and quick response, the only way to stay competitive and be agile is to practice BPS as a way of life. During the year under review, the theme has been on âCollaboration and Synergyâ across all the Companyâs manufacturing facilities.
The focus has been primarily on People. âImproved Competence in People result in effective processes and thereby products which lead marketsâ.
While leaders were coached on Key BPS element twice a year by Bosch central experts, BPS week was conducted at different plants where all associates had a chance to work on simulation with a concept âLearn by Doingâ enabling a better understanding on BPS which will lead to swift implementation of BPS Projects.
Through various forums like âShare and Learnâ, benchmark practice sharing by visiting different plants and training, the Company was able to achieve increase in productivity, reduction in inventories and on-time delivery fulfillment to customers.
7. Business Excellence
Agility, Customer centricity and Empowered teams are the founding principles forming the basis for all transformation. Strategy Management, Risk Management, Process Management, Benchmarking & Good Practices, which are core to business excellence are integrated, bringing in uniformity & cross learning within the organization.
The year under review saw major organizational transformation both in Bosch world and the Company. Two of the biggest units - Diesel Systems & Gasoline Systems were merged to form Power train Solutions (PS) effective January 01, 2018. Business Excellence has played a pivotal role in integrating the two and creating synergy, agility and efficiency.
8. Awards and Recognition
During the year under review, the Company won several awards for excellence. Few such awards are:
- CII National Energy Efficiency Circle Competition
- CII Lean Award - Jaipur Plant
- National Safety Award by Government of India in two categories : Accident free years and Lowest Average Frequency Rate - Jaipur Plant
- Confederation of Indian Industry: Business Practices Competition Award - Bengaluru Plant
- 3R Award 2018 - Nashik Plant
- Quality and OPPM awards from Toyota Kirloskar Motors
- Business Award from Maruti Suzuki India Limited
- Best New Product Development Award from Greaves
- PHD Annual Award 2017 for outstanding contribution to Social Welfare - Jaipur Plant
- Best Supplier Quality Award from General Motors, India - Nashik Plant
- KOEL Supplier Quality Improvement Contest Award - Bengaluru Plant
- Award for energy conservation and management by Government of Maharashtra -Nashik Plant
- Environmental Best Practice - Most Innovative Award Greenco. - Nashik Plant
- CSR Award for Quality Education by Government of Rajasthan - Jaipur Plant
- Finest India Skills and Talent Award 2017 -Bengaluru Plant
- The Machinist Super Shop Floor Award for Safety - Bengaluru Plant
- Supplier of the year award from SMLI
- Zero Defect Supplier for 2017 by Hyundai India
- Nashik Plant
9. Directors and Key Managerial Personnel
9.1 Director Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. V.K. Viswanathan retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election at the said Meeting.
9.2 Changes in the Key Managerial Personnel and Board
9.2.1 Board of Directors
Mr. Prasad Chandran resigned from the Directorship of the Company with effect from the close of business hours on September 01, 2017. The Board places on record its sincere appreciation for the valuable guidance provided by Mr. Chandran during his tenure as Director of the Company.
The Board of Directors, on recommendation of the Nomination & Remuneration Committee, appointed Ms. Hema Ravichandar and Mr. S.V. Ranganath as Additional Director(s) in capacity of an Independent Director(s) for an initial term of 5 years and 3 years respectively with effect from September 02, 2017 and July 01, 2018 respectively.
Mr. Jan-Oliver Rohrl resigned as Alternate Director to Mr. Peter Tyroller with effect from the close of business hours on June 30, 2018.
The Board of Directors, on recommendation of the Nomination & Remuneration Committee appointed Mr. Rohrl as an Additional Director and Executive Director with effect from July 01, 2018.
The Company has received notice(s) from member(s) under section 161 of the Companies Act, 2013, proposing candidature of Ms. Ravichandar,
Mr. Ranganath and Mr. Rohrl for the office of Director(s) of the Company at the forthcoming Annual General Meeting.
Mr. S.C. Srinivasan, who joins the Company as Chief Financial Officer with effect from July 01, 2018 was appointed as an Alternate Director to Mr. Peter Tyroller with effect from the aforementioned date. Mr. Srinivasan, by virtue of being in employment of the Company on July 01, 2018, would be placed in position of a Whole-time Director. The Board of Directors, therefore, approved his appointment as a Whole-time Director from July 01, 2018 to June 30, 2021, subject to the approval of the shareholders.
The following resolutions, in addition to re-appointment of Mr. Viswanathan, who retires by rotation, relating to the aforementioned re-constitution of the Board of Directiors of the Company will form part of the Notice convening the 66th Annual General Meeting of the Company:
(i) Appointment of Mr. Jan-Oliver Rohrl as Director.
(ii) Appointment of Mr. Jan-Oliver Rohrl as Executive Director with effect from July 01, 2018.
(iii) Appointment of Ms. Hema Ravichandar as Independent Director for a period of 5 consecutive years with effect from September 02, 2017.
(iv) Appointment of Mr. S.V. Ranganath as Independent Director for a period of 3 consecutive years with effect from July 01,2018.
(v) Appointment of Mr. S.C. Srinivasan as a Wholetime Director with effect from July 01, 2018.
Brief profiles of Mr. V.K. Viswanathan, Ms. Hema Ravichandar, Mr. S.V. Ranganath, Mr. Jan-Oliver Rohrl and Mr. S.C. Srinivasan will form part of the Notice convening the 66th Annual General Meeting of the Company.
9.2.2 Key Managerial Personnel
Mr. Soumitra Bhattacharya, Managing Director &
Chief Financial Officer and Mr. S Karthik, Joint Chief Financial Officer have relinquished their positions as Chief Financial Officer and Joint Chief Financial Officer respectively with effect from the close of business hours on June 30, 2018. Mr. Bhattacharya and Mr. Karthik will continue to discharge their responsibilities as Managing Director and Vice-President (Corporate Finance & Accounts) respectively.
The Board of Directors, on the recommendation of the Nomination & Remuneration Committee and Audit Committee appointed Mr. S.C. Srinivasan as Chief Financial Officer of the Company with effect from July 01, 2018. Mr. Srinivasan has also been appointed as an Alternate Director to Mr. Peter Tyroller with effect from the aforementioned date and consequently as a Wholetime Director. The appointment as Whole-time Director is subject to approval of the members at the forthcoming Annual General Meeting.
Mr. R Vijay, Company Secretary and Compliance Officer resigned from the Company with effect from the close of business hours on May 23, 2018. The Nomination and Remuneration Committee will identify and recommend to the Board appointment of new Company Secretary. In the interim, the Board of Directors, on recommendation of the Nomination & Remuneration Committee, appointed Mr. Anuj Sharma as the Compliance Officer of the Company (interim) in terms of the requirements of Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, with effect from May 24, 2018.
As on the date of this report (i.e. May 22, 2018), the following are the Key Managerial Personnel of the Company:
- Mr. Soumitra Bhattacharya (Managing Director & Chief Financial Officer)
- Dr. Andreas Wolf (Joint Managing Director)
- Mr. Jan-Oliver Rohrl (Chief Technical Officer & Alternate Director)
- Mr. S Karthik (Joint Chief Financial Officer)
- Mr. R Vijay (Company Secretary)
9.3 Independent Directors
The Independent Directors have given a declaration to the Company that they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
9.3.1. Familiarization Programme for Independent Directors
For details of the familiarization programme for Independent Directors, please refer to the Corporate Governance Report.
9.4 Performance Evaluation of Directors
In line with the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, its Committees and individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
10. Board Meetings
During the year under review, five meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
11. Corporate Social Responsibility (CSR) Committee and Initiatives
Consequent to changes in the Board of Directors during the year under review, the CSR Committee was re-constituted by inducting Ms. Hema Ravichandar as a member and re-designating Mr. Bhaskar Bhat as Chairman of the Committee with effect from September 02, 2017. As on the date of this report, the CSR Committee comprises of Mr. Bhaskar Bhat (Independent Director) as its Chairman and Ms. Hema Ravichandar (Independent Director), Mr. Soumitra Bhattacharya (Managing Director) & Dr. Andreas Wolf (Joint Managing Director) as its members.
The CSR Committee oversees the Companyâs CSR initiatives.
The Board of Directors have adopted a CSR policy in line with the provisions of the Companies Act, 2013.
The CSR policy, inter-alia, deals with the objectives of the Companyâs CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key CSR initiatives during the year under review include the following:
- Reaching out to less-educated, lesser-privileged youth and bringing them into the fold of employment through BRIDGE (Boschâs Response to Indiaâs Development and Growth through Employability Enhancement) program in 148 BRIDGE Centers across India. Approximately 16,000 youth have been trained and placed at entry level jobs through the BRIDGE program till date. During the year under review, 25 Model BRIDGE Centers were established with technical facilities of a smart classroom.
- Expansion of Child Health Development Program (CHDP) under Health, Hygiene and Education Initiative to other cities besides Bengaluru covering approximately 300 government schools in Nashik, Bidadi and Jaipur, benefitting 70,000 children.
- Upgradation of local dispensary in Adugodi, Bengaluru at par with a private healthcare facility.
- Make Your Own Lab (MYOL) initiative was launched to enable Science Teachers in Government schools develop innovative kit.
- Neighbourhood project as per the local needs identified the Companyâs plants: Setting up of Reverse Osmosis Plant in Jaipur, Check Dams in Nashik, construction and operation of âBosch-Akshaya Patraâ kitchen in Jigani, etc.
Details of the CSR Committee meetings and attendance thereat forms a part of the Corporate Governance Report.
Annual Report on Corporate Social Responsibility Activities of the Company is enclosed as Annexure âBâ (Page No. 69) to this Report.
12. Audit Committee
Consequent to changes in the Board of Directors during the year under review, the Audit Committee was re-constituted by inducting Ms. Hema Ravichandar as a member in place of Mr. Prasad Chandran with effect from September 02, 2017. As on the date of this report, the Audit Committee comprises of Ms. Renu S. Karnad (Independent Director) as its Chairperson and Mr. V.K. Viswanathan (Non-Executive and Non-Independent Director), Mr. Bernhard Steinruecke (Independent Director), Mr. Bhaskar Bhat (Independent Director) & Ms. Hema Ravichandar (Independent Director) as its members.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
Details of the roles and responsibilities, particulars of meeting and attendance thereat are mentioned in the Corporate Governance Report.
13. Subsidiary and Associate Companies
13.1 Subsidiary Company
MICO Trading Private Limited (MTPL)
The Company has only one subsidiary viz., MICO Trading Private Limited. The financial performance of MTPL is as under:-
|
Particulars |
FY 2017-18 |
FY 2016-17 |
|
Total Revenue |
68 |
76 |
|
Profit/(Loss) before tax |
(51) |
7 |
|
Profit/(Loss) after tax |
(51) |
5 |
The Directorsâ Report along with the Audited Statement of Accounts of MTPL has been uploaded on the website of the Company at www.bosch.in under the âShareholder Informationâ section.
13.2 Associate Company
Newtech Filter India Private Limited (NTFI)
The Company has one Associate Company viz., New tech Filter India Private Limited. The Company holds 25 percent and Robert Bosch Investment Nederland B.V. holds 75 percent of the paid-up share capital of NTFI.
NTFI is the manufacturer of automotive filters, selling their products to the Company which further sells the same to end customers. Aftermarket contributed to 72 percent of the product sales while 28 percent were attributed to OEM and OES channels in 2017-18.
The financial performance of NTFI is as under:
[Mio INR]
|
Particulars |
2017-18 |
2016-17 |
% Growth |
|
Turnover |
666 |
694 |
(4.0%) |
|
Profit/(Loss) before tax |
16 |
17 |
(5.9%) |
|
PBT % on Turnover |
2.4 |
2.4 |
4.7 |
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiary and Associate is enclosed as Annexure âCâ (Page No. 74) to this Report.
14. Remuneration Policy
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to Directors, Key Managerial Personnel, etc. The policy is enclosed as Annexure âDâ (Page No. 75) to this Report. The policy can also be accessed at the following link: https://www.bosch.in/media/our company/shareholder information/2015/nomination and remuneration policy. pdf.
15. Particulars of Employees
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed there under is enclosed as Annexure âEâ (Page No. 78) to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended will be provided on request. In terms of Section 136 of the Act, the Reports and Accounts are being sent to the Members and others entitled thereto excluding the aforementioned particulars of employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on any working day. Any member desirous of obtaining a copy of the same may write to the Company at [email protected].
16. Corporate Governance
A report on Corporate Governance in terms of the requirements of the Listing Regulations and a certificate from the Practicing Company Secretary, forms part of this Annual Report (Page No. 191).
17. Risk Management
The Company has a well-defined Risk Management policy. The policy has been developed after taking cognizance of the relevant statutory guidelines, Bosch Guidelines on risk management, empirical evidences, stakeholdersâ feedback, forecast and expert judgment.
The policy, inter-alia, provides for the following:
Risk Management framework;
(i) In-built pro-active processes within the Risk Management Manual for reporting, evaluating and resolving risks;
(ii) Identifying and assessing risks associated with various business decisions before they materialize. Take informed decisions at all levels of the organization in line with the Companyâs risk appetite;
(iii) Ensuring protection of shareholdersâ stake by establishing an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting all risks;
(iv) Strengthening Risk Management through constant learning and improvement;
(v) Adoption and implementation of risk mitigation measures at every level in order to achieve long-term goals effectively and sustainably;
(vi) Regularly review Risk Tolerance levels of the Company as they may vary with change in the Companyâs strategy; and
(vii) Ensuring sustainable business growth with stability.
In the opinion of the Board, there are no risks that may threaten the existence of the Company.
18. Whistle Blower Policy/Vigil Mechanism
The Company has a Whistle Blower Policy, which includes vigil mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the Corporate Governance Report. The Whistle Blower Policy has also been uploaded on the website of the Company and can be accessed at the following link: https://www.bosch.in/media/our company/shareholder information/2014/whistle blower policy.pdf.
19. Business Responsibility Report
In terms of the requirements of Regulation 34(2)(f) of the Listing Regulations, a report on Business Responsibility in the prescribed format forms a part of this Annual Report (Page No. 204).
20. Related Party Transactions
The Audit Committee accords omnibus approval to Related Party Transactions which are in ordinary course of business, foreseen, repetitive in nature and satisfy the armâs length principles. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transactions entered pursuant to the aforementioned omnibus approval. Additionally, the Company obtains a half yearly certificate from a Chartered Accountant in Practice confirming that the related party transactions during the said period were in ordinary course of business, repetitive in nature and satisfy the armâs length principles.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC - 2 pursuant to Section 134(3) of the Act is enclosed as Annexure âFâ (Page No. 80) to this Report.
The Company has framed a policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. The said policy is hosted on the website of the Company and can be accessed at the following link: https://www.bosch.in/ media/our company/shareholder information/2014/ rpt policy.pdf.
21. Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, as amended, is enclosed as Annexure âGâ (Page No. 81) to this Report.
22. Auditors
22.1 Statutory Auditor
The shareholders at the 65th Annual General Meeting of the Company held on September 01, 2017 appointed M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) as Statutory Auditors of the Company for a period of 5 years until the conclusion of the 70th Annual General Meeting of the Company subject to ratification of their appointment at every subsequent AGM. The Ministry of Corporate Affairs vide notification dated May 07, 2018 obliterated the requirement of seeking Membersâ ratification at every AGM on appointment of Statutory Auditors during their tenure of 5 years.
The Auditorsâ Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2017-18 is unmodified i.e. it does not contain any qualification, reservation or adverse remark.
22.2 Cost Audit & Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (Registration No.000065) as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2018-19 in terms of the provisions of Section 148 of the Companies Act, 2013.
In terms of the requirements of the said section, the members shall ratify remuneration payable to the Cost Auditors. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates will form a part of the Notice convening the 66th Annual General Meeting.
22.3 Secretarial Auditor
The Company appointed Mr. Sachin Bhagwat, Practicing Company Secretary, to conduct Secretarial Audit as per the provisions of the Act for the Financial Year 2017
18. The Report of the Secretarial Audit is enclosed as Annexure âHâ (Page No. 83) to this Report.
There were no qualifications, reservations or adverse remarks in the Report of the Secretarial Auditor.
22.4 Reporting of Fraud
There have been no instances of fraud reported by the aforesaid Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.
23. Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
(ii) they have selected and consistently applied accounting policies and have 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 the profit of the Company for that period;
(iii) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the annual accounts have been prepared on a âgoing concernâ basis;
(v) proper internal financial controls are in place and that such controls are adequate and are operating effectively; and
(vi) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
24. Details of Loans, Guarantees or Investments
Details of loans, guarantees or investments covered under section 186 of the Act, are provided in the Notes to the Financial Statements.
25. Deposits
During the year under review, there were no deposits as per the provisions of Companies Act, 2013.
26. Material Changes and Commitments
There were no material changes and commitments between the end of the year under review and the date of this report affecting the financial position of the Company.
27. Material Order Passed by Regulators or Courts
No material orders impacting the going concern status of the Company or its operations in future were passed by the Regulators or Courts or Tribunals during the year under review.
28. Extract of Annual Return
In terms of the requirements of Section 134(3)(a) of the Act, an Extract of Annual Return as provided under Section 92(3) of the Act is enclosed as Annexure âIâ
(Page No. 85) to this Report.
29. Cautionary Statement
Statements in the Boardâs Report and the Management Discussion & Analysis describing the Companyâs objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
For and on behalf of the Board of Directors
V. K. Viswanathan
DIN: 01782934
Chairman
Date: May 22, 2018
Mar 31, 2017
The Directors have pleasure in presenting the SIXTY FIFTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2017.
1. Financial Results
Attention of the members is drawn to the notification dated February 16, 2015, issued by the Ministry of Corporate Affairs relating to the Companies (Indian Accounting Standards) Rules, 2015. Pursuant to the said notification, the Company has adopted Indian Accounting Standards (Ind AS) with effect from the year under review. Consequently, the financial statements for the previous year (FY 15-16) have been reinstated as per Ind AS to facilitate a like-to-like comparison.
(Rs. Million)
|
2016-17 |
2015-16* |
|
|
Sale of products (including excise duty) |
107,500 |
100,130 |
|
Of which Export Sales |
8,240 |
8,712 |
|
Profit Before Tax (from Continuing Operations) |
20,944 |
20,824 |
|
Provision for tax |
(6,503) |
(5,701) |
|
Profit After Tax from Continuing Operations |
14,441 |
15,123 |
|
from Discontinued Operations |
2,970 |
191 |
|
Total |
17,411 |
15,314 |
|
Other comprehensive income - net of tax |
1,401 |
(825) |
|
Total comprehensive income |
18,812 |
14,489 |
* Re-stated on account of sale of the Starter Motors and Generators business with effect from August 01, 2016 and adoption of Ind AS.
The Company does not propose to transfer any amount to its Reserves for the year under review.
2. Dividend
Pursuant to the requirements of the regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on the website and can be accessed at http://www.boschindia.com/media/in/documents/ our company 1/shareholder information 1/2017 2/ Bosch Limited - Dividend Distribution Policy.pdf This policy is enclosed as Annexure âAâ (Page No. 56) to this Report.
The Board of Directors declared a Special Dividend of INR 75 per equity share aggregating to Mio INR 2,755 including Dividend Distribution Tax, on account of consideration received from sale of the Starter Motors and Generators business. The Special Dividend was paid in the month of February 2017.
In line with the Dividend Distribution Policy, the Board has recommended a Final Dividend of INR 90 per share for the Financial Year 2016-17, aggregating to Mio INR 3,306 including Dividend Distribution Tax. The dividend payout ratio (excluding Special Dividend) is approximately 22.9 percent, based on the profits as per Ind AS. The Final Dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting.
3. Manufacturing Facilities
3.1 Bengaluru (Karnataka)
The Bengaluru plant, with an eminent history of six decades, presently houses the manufacturing of Multi-cylinder pumps & Single-cylinder pumps.
The Plant, following a systematic approach of âContinuous Improvementâ, is in the process of transforming itself from âFit for Futureâ to âWe Shape the Futureâ, its new vision statement.
Relocation from Bengaluru to Bidadi, which started in February 2015, has been one of the major strategic actions for the year under review and will continue in the current year. The Plant has adopted a focused and proactive approach to meet the customer demands on account of change in emission norms from BS III to BS IV and thereafter to BS VI. The relocation to the Bidadi facilities is expected to be completed by early 2019.
3.2 Bidadi (Karnataka)
The Bidadi Plant, which manufactures Common Rail Pumps and components, strives to remain lean and agile by improvising on productivity using Industry 4.0 solutions, an enabler of manufacturing excellence.
The Plant undertook various CSR activities like Health camp for women and children, School renovation, RO-drinking water facility in and around its location along with Bidadi Industrial Association which were well appreciated.
During the year under review, the plant successfully installed and commissioned a 3.5 MW solar power plant resulting in carbon dioxide reduction by 10 tons/day.
3.3 Nashik (Maharashtra)
The Nashik Plant, which manufactures diesel injectors and components, achieved a production milestone of 20th million Common Rail Injector in 2016. During the year under review, the Plant successfully ramped up CR 2-20 body production to cater to the export demand of CKD. Further, investments were made for capacity expansion of new generation products and installation of new coating equipment.
As an eco-friendly measure, 10 MW capacity Solar Power Plant has been installed, resulting in carbon dioxide reduction by 32 tons/day.
3.4 Jaipur (Rajasthan)
The Jaipur Plant produces Distributor (VE) Mechanical and Electronic Diesel Control Pumps which are used in Light and Heavy Commercial Vehicles, Sports and Multi-Utility Vehicles (MUV) and tractors. Manufacturing of Conventional Injectors (NHA), which are used in Light and Heavy Commercial Vehicles, Locomotives, Tractors and Gensets, is being relocated from the Nashik Plant to Jaipur.
Growth in the domestic LCV and MUV markets resulted in good turnover despite slight contraction in OE volumes due to demonetization in last quarter of 2016. The BS III to BS IV Emission Norm changeover with effect from April 01, 2017 resulted in higher demands for VE pumps towards the end of the last quarter of the year under review. The Plant successfully met the customer demands and achieved Zero obsolescence of pumps with 100 percent delivery fulfillment.
During the year under review, the plant implemented various cost-reduction measures across the value chain.
3.5 Naganathapura (Karnataka)
The Naganathapura Plant produces Spark Plugs, a product produced by the Bosch group for over a century. The year under review witnessed an increase in the turnover mainly due to higher demand from OE and Independent Aftermarket segments.
Focusing on improving cost competitiveness, productivity improvement projects were implemented along with safety and quality improvement programs.
3.6 Verna (Goa)
During the year under review, Verna plant opened account in secondary packaging product line with the first sale of Baling Machine (GSV 4800). The Plant, with focused approach, continued its efforts to innovate and develop new products. Verna plant also celebrated successful 20 years of Bosch Packaging Technology in India with an âin-house showâ which was a well-attended and appreciated event.
3.7 Gangaikondan (Tamil Nadu)
Situated at Tirunelveli, Tamil Nadu with a 6,200 sq. meters of built up area, the state-of-the-art Gangaikondan plant is the only Gasoline Systems plant in India catering to the needs of growing Gasoline automobile market (both four and two wheelers) in India.
The Plant mainly produces Power Train Sensor products, Air Management products, Fuel supply products, Fuel Injection products for Gasoline vehicles. Effective utilization of production lines ensures that the Plant is ready to face higher demands.
The Plant has installed 40KW solar energy panels to harness solar power and reduce dependency on conventional electric supply.
3.8 Chennai (Tamil Nadu)
The Power Tools facility admeasuring approximately 8,500 sq. meters is located at Indospace Industrial Park, Orgadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. It primarily manufactures Small Angle grinders, Large Angle grinders, Marble cutters, Blowers, Drills and two-kg Hammers, along with their motors.
4. Information Technology (IT)
For GST preparedness, IT projects were rolled out for making the Regional SAP system GST compliant. Pre-readiness check and necessary upgrades have been completed in July 2016. Further upgradations are being made to the Regional SAP system to meet the GST go-live date.
5. Change Initiatives
5.1 Continuous Improvement Process (CIP)
Considering the potential for further improvement in CIP practices at the Company to foster a culture of process orientation and problem solving, a project was undertaken for defining CIP road map by end 2018 and for its structured deployment and review by Senior Leadership. This project has supported in considerable improvement in various Key Performance Indicators (KPIs) e.g. Number of Implemented Suggestions per Employee, Savings from CIP Activities, Number of CIP Workshops, No. of VSDIA (Value Stream Design in Indirect Areas) Projects, Key CIP Competencies, Processing Time per Suggestion, etc. with involvement of associates across.
5.2 Bosch Production System (BPS)
To augment the BPS Vision âCompetitive Products from Agile and Sustainable Waste-free Supply Chainâ, BPS principles have been deployed to interface âSource - Make - Deliverâ. Using the âPull principleâ improvements have been on âPeople, Process and Productsâ. During the year under review, the Company focused on âLead from the Frontâ for Plant Managers through mentoring by Bosch BPS Experts. These initiatives led to streamlining of the process in the Value stream and has yielded sustained results like increase in productivity, first pass yield and reduction in throughput time and inventories.
6. Business Excellence
Striving for Excellence is one of the âStrategic focal pointsâ in our mission statement âWe are Boschâ.
The thrust on Business Excellence is predominantly visible in the Diesel Systems business locations in India.
As excellence is a comparative and improvement oriented journey, many initiatives have been taken up to bring in a culture of âOutside-inâ with aspects of learning good practices and benchmarking with other organizations in a structured way. Agility as a theme is one of the key focal points for this year at Diesel Systems division in order to transform ourselves towards an âAgile Organizationâ. Agility is being fostered at individual, team and division levels. With visible success in Diesel Systems divisions, Business excellence concepts are now being used across other divisions.
7. Awards and Recognition
During the year under review, the Company won several awards for excellence. Few such awards are:
- Confederation of Indian Industries EXIM Bank Award for Business Excellence 2016 - Jaipur Plant
- Confederation of Indian Industries - Business Practices Competition Award - Bengaluru Plant
- Confederation of India Industries Award -Excellent Energy Efficient Unit - Nashik Plant
- CSR Award for âBest Overall sustainable performanceâ by CSR World Congress
- Excellence in Fire Safety from Finest India Skills & Talent - Bengaluru Plant
- Award for Special Support at Maruti Suzuki India Limited Vendor Conference 2016
- Supplier Excellence Award from Mahindra & Mahindra Limited
- Best Supplier Award from MITSUBSHI
- Best New Product Development Silver award -Greaves
- ABO Supplier Innovation Award from Cummins India
- âExcellent Support in New Product Developmentâ -SML Isuzu Limited
- Outstanding Support in Sales Promotion - Honda India
- Certificate of Appreciation from Kirloskar Oil Engines Limited
8. Directors and Key Managerial Personnel
8.1 Director Retiring by Rotation
Mr. Peter Tyroller retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election at the said Meeting of the Company.
8.2 Changes in the Board and Key Managerial Personnel
8.2.1 Board
Dr. Steffen Berns who was re-appointed as the Managing Director of the Company for a period of 2 years at the 64th Annual General Meeting, resigned as Director and Managing Director with effect from close of business hours on December 31, 2016 upon assuming responsibility as President - Car Multimedia business with Robert Bosch, Germany. The Board places on record its sincere appreciation for contribution made and leadership provided by Dr. Berns during his tenure as the Managing Director of the Company.
Consequent to Dr. Berns returning to Germany,
Mr. Soumitra Bhattacharya who was re-appointed as Joint Managing Director for the period January 01, 2017 to June 30, 2020 was re-designated as Managing Director for the said term.
Pursuant to changes at the Senior Management level, Dr. Andreas Wolf was appointed as Joint Managing Director for the period January 01, 2017 to February 28, 2019.
Mr. Jan Oliver Rohrl, who joined the Company as Executive Vice-President (Engineering) & Regional President (Diesel Systems) was appointed as Alternate Director to Mr. Peter Tyroller in place of Dr. Andreas Wolf. Mr. Rohrl, by virtue of being in employment of the Company has been placed in position of a Whole-time Director. The Board of Directors, therefore, approved his appointment as Whole-time Director from February 11, 2017 to December 31, 2020, subject to the approval of Central Government and shareholders.
Approval of the members for the aforementioned re-designation and appointments is being sought at the forthcoming 65th Annual General Meeting.
Brief profiles of Mr. Peter Tyroller, Mr. Soumitra Bhattacharya, Dr. Andreas Wolf and Mr. Jan Oliver Rohrl forms a part of the Notice convening the 65th Annual General Meeting.
8.2.2 Key Managerial Personnel
The Board of Directors, on recommendation of the Nomination and Remuneration Committee, appointed Mr. S Karthik as Joint Chief Financial Officer (Joint CFO) of the Company with effect from February 11, 2017.
Consequent to his appointment as the Joint CFO, Mr. S Karthik relinquished his position as the Company Secretary and Compliance Officer.
Mr. R Vijay was appointed as the Company Secretary of the Company with effect from February 11, 2017
As on the date of this report, the following are the Key Managerial Personnel of the Company:
Mr. Soumitra Bhattacharya (Managing Director & Chief Financial Officer)
Dr. Andreas Wolf (Joint Managing Director)
Mr. Jan Oliver Rohrl [Executive Vice-President (Engineering) & Regional President (Diesel Systems) & Alternate Director]
Mr. S Karthik (Joint Chief Financial Officer)
Mr. R Vijay (Company Secretary)
8.3 Independent Directors
The Independent Directors have given a declaration to the Company that they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
8.3.1. Familiarization Programme for Independent Directors
For details of the familiarization programme for Independent Directors please refer to the Corporate Governance Report.
8.4 Performance Evaluation of Directors
In line with the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of its own perfomance, its Committees and individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
9. Board Meetings
During the year under review, six meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
10. Corporate Social Responsibility (CSR) Committee and Initiatives
Consequent to resignation of Dr. Steffen Berns from directorship of the Company, the CSR Committee was reconstituted by inducting Dr. Andreas Wolf as a member in place of Dr. Steffen Berns. As on the date of this report, the CSR Committee comprises of four members. Mr. Prasad Chandran, Independent Director, is the Chairman of the Committee. The other members are Mr. Bhaskar Bhat, Independent Director; Mr. Soumitra Bhattacharya, Managing Director and Dr. Andreas Wolf, Joint Managing Director. The CSR Committee oversees the Companyâs CSR initiatives.
The Board of Directors has adopted a CSR policy in line with the provisions of the Companies Act, 2013. The CSR policy, inter-alia, deals with the objectives of the Companyâs CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key initiatives during the year under review were as under:
(i) Health, Hygiene and Education in Government schools: Medical camps, follow-up and treatment including surgeries for school children, hands on training in science, life skill, computer/English education and Infrastructure development in schools.
(ii) Vocational training focused on employable skills: Short term skill development and training programme for school dropouts; and
(iii) Neighbourhood projects as per the local needs identified by Companyâs Plants: Setting up Reverse Osmosis Plant in villages near Jaipur, Check dams near Nashik; Kitchen setup near Jigani, Bengaluru, etc.
Details of the CSR Committee meetings and attendance of the member thereat forms part of the Corporate Governance Report.
Annual Report on Corporate Social Responsibility Activities of the Company is enclosed as Annexure -âBâ (Page No. 58) to this report.
11. Audit Committee
The Audit Committee comprises of five members.
Mrs. Renu S Karnad, Independent Director, is the Chairperson of the Committee. The other members are Mr. V. K. Viswanathan, Non-Executive & Non-Independent Director, Mr. Bernhard Steinruecke, Mr. Prasad Chandran and Mr. Bhaskar Bhat, Independent Directors.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
Details of the roles & responsibilities, particulars of meeting and attendance thereat are mentioned in the Corporate Governance Report.
12. Subsidiary and Associate Companies
12.1 Subsidiary Company
MICO Trading Private Limited (MTPL)
The Company has only one subsidiary viz., MICO Trading Private Limited. The financial performance of MTPL is as under:-
(Amount in TINR)
|
Particulars |
2016-17 |
2015-16* |
|
Total Revenue |
75.8 |
86.2 |
|
Profit/(Loss) Before Tax |
6.8 |
(19.6) |
|
Profit/(Loss) After Tax |
4.7 |
(19.6) |
*Re-stated on account of adoption of Ind AS.
The Directorsâ Report along with the Audited Statement of Accounts of MTPL has been uploaded on the website of the Company at www.boschindia. com under the âShareholder Informationâ section.
122 Associate Company
Newtech Filter India Private Limited (NTFI)
The Company has one Associate Company viz., Newtech Filter India Private Limited. The Company holds 25 percent and Robert Bosch Investment Nederland BV holds 75 percent of the paid-up share capital of NTFI.
NTFI is the manufacturer of automotive filters, selling their products to the Company which further sells the same to end customers. Aftermarket contributed to 73 percent of the product sales while 27 percent were attributed to OEM and OES channels in 2016-17.
The turnover and results of NTFI are as follows:
(Mio INR)
|
Particulars |
2016-17 |
2015-16 |
% Growth |
|
Turnover |
694 |
778 |
11.5 |
|
Profit / (Loss) Before Tax |
17 |
14 |
NA |
|
PBT % on Turnover |
2.4 |
1.8 |
NA |
1. The numbers given above are for April to March period. For 2015-16 numbers are for the 15 month period from January 01.01.15 to 31.03.16
2. Percentage growth in 2016-17 is over 2015-16 on a prorata basis.
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiary and Associate is enclosed as Annexure âCâ (Page No. 62) to this Report.
13. Remuneration Policy
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to directors, key managerial personnel, etc. The policy is enclosed as Annexure âDâ (Page No. 63) to this Report. The policy can also be accessed at the following link:
http://www.boschindia.com/media/in/documents/ our company 1/shareholder information 1/2015/ Nomination and Remuneration Policy.pdf
14. Particulars of Employees
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed thereunder is enclosed as Annexure âEâ (Page No. 66) to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, will be provided on request. In terms of Section 136 of the Act, the Reports and Accounts are being sent to the Members and others entitled thereto excluding the aforementioned particulars of employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on any working day. Any member desirous of obtaining a copy of the same may write to the Company at [email protected].
15. Corporate Governance
A report on Corporate Governance in terms of the requirements of the Listing Regulations and a certificate from the Practicing Company Secretary, forms part of this Annual Report (Page No. 193).
16. Risk Management
The Company has a well-defined Risk Management policy. The policy has been developed after taking cognizance of the relevant statutory guidelines, Bosch Guidelines on risk management, empirical evidences, stakeholderâs feedback, forecast and expert judgment.
The policy, inter-alia, provides for the following:
1. Risk Management framework;
2. In-built pro-active processes within the Risk Management Manual for reporting, evaluating and resolving risks;
3. Identifying and assessing risks associated with various business decisions before they materialize. Take informed decisions at all levels of the organization in line with the Companyâs risk appetite;
4. Ensuring protection of shareholdersâ stake by establishing an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting all risks;
5. Strengthening Risk Management through constant learning and improvement;
6. Adoption and implementation of risk mitigation measures at every level in order to achieve longterm goals effectively and sustainably;
7. Regularly review Risk Tolerance levels of the Company as they may vary with change in the Companyâs strategy; and
8. Ensuring sustainable business growth with stability.
In the opinion of the Board, there are no risks that may threaten the existence of the Company.
17. Whistle Blower Policy
The Company has a Whistle Blower Policy which provides a vigil mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the Corporate Governance Report. The Whistle Blower Policy has also been uploaded on the website of the Company and can be accessed at the following link: http://www.boschindia.com/ media/in/documents/our company 1/shareholder information 1/2014/Whistle blower policy.pdf
18. Business Responsibility Report
In terms of the requirements of Regulation 34(2)(f) of the Listing Regulations, a report on Business Responsibility in the format prescribed by Securities and Exchange Board of India forms a part of this Annual Report (Page No. 205).
19. Related Party Transactions
The Audit Committee accords omnibus approval to Related Party Transactions which are foreseen and repetitive in nature. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transaction entered pursuant to the aforementioned omnibus approval. Additionally, the Company obtains a half yearly certificate from a Chartered Accountant in Practice confirming that the related party transactions during the said period were in ordinary course of business, repetitive in nature and satisfy the Armâs length principles.
Consequent to the approval of the shareholders for sale of the Starter Motors and Generators business (SG Business) of the Company, the said business was transferred to Robert Bosch Starter Motors Generators India Private Limited with effect from August 01, 2016.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC - 2 pursuant to Section 134(3) of the Act is enclosed as Annexure âFâ (Page No. 68).
The Company has framed a policy on determining materiality of Related Party Transaction and dealing with Related Party Transaction. The said policy has been uploaded on the website of the Company and can be accessed at the following link: http://www.boschindia.com/media/in/documents/ our company 1/shareholder information 1/2014/ RPT Policy.pdf
20. Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, as amended, is enclosed as Annexure âGâ (Page No. 70) to this Report.
21. Auditors
21.1 Statutory Auditor
In terms of the provisions of Section 139 of the Companies Act, 2013, the term of office of Price Waterhouse & Co Bangalore LLP (âPWCâ) will end at the conclusion of the forthcoming Annual General Meeting. The Board places on record its appreciation for services rendered by PWC as Statutory Auditors of the Company.
The Board has recommended appointment of M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) (DHS LLP) as Statutory Auditors of the Company. The aforementioned appointment is subject to approval of the shareholders at the forthcoming Annual General Meeting. Accordingly, resolution for appointment of DHS LLP as Statutory Auditors of the Company for a period of 5 consecutive years from the conclusion of the 65th (forthcoming) Annual General Meeting till the conclusion of the 70th Annual General Meeting to audit the Financial Statements of the Company from Financial Year 2017-18 is proposed for approval of the members at the forthcoming AGM.
The Auditorsâ Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2016-17 is unmodified i.e. it does not contain any qualification, reservation or adverse remark.
21.2 Cost Audit & Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (Registration No.000065) as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2017-18 in terms of the provisions of Section 148 of the Companies Act, 2013. As per the requirements of the said section, remuneration payable to the Cost Auditors is required to be ratified by the shareholders at the General Meeting. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates forms a part of the Notice dated May 25, 2017 convening the 65th Annual General Meeting.
21.3 Secretarial Auditor
The Company appointed Mr. Sachin Bhagwat, Practicing Company Secretary, to conduct Secretarial Audit as per the provisions of the Act for the Financial Year 2016-17. The report of the Secretarial Audit is enclosed as Annexure âHâ (Page No. 72) to this report.
There were no qualifications, reservations or adverse remarks in the Report of the Secretarial Auditor.
21.4 Reporting of Fraud
There have been no instances of fraud reported by the aforesaid Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.
22. Directorsâ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
(a) in the preparation of the annual accounts, the applicable accounting standards were followed along with proper explanation relating to material departures;
(b) they have selected and consistently applied accounting policies and have 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 the profit of the Company for that period;
(c) proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,
(d) the annual accounts have been prepared on a âgoing concernâ basis
(e) proper internal financial controls are in place and that they are adequate and are operating effectively; and
(f) proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
23. Details of Loans, Guarantee and Investments
Details of loans, guarantee and investments covered under section 186 of the Act, are given in the Notes to the Financial Statements.
24. Deposits
During the year under review, there were no deposits as per the provisions of Companies Act, 2013.
25. Material Changes and Commitments
There were no material changes and commitments between the end of the year under review and the date of this report, which could have an impact on the Companyâs operation in the future or its status as a âgoing concernâ.
26. Significant and Material Orders passed by the Regulators or Courts
Companyâs manufacturing facility at Jaipur was closed for a day in the month of October 2016 consequent to notice of closure by Rajasthan State Pollution Control Board (RSPCB). Based on the representation made by the Company, RPSCB revoked their closure order.
Karnataka State Pollution Control Board (KSPCB) had vide Public Notification dated May 05, 2017 directed closure of all industrial units in the catchment area of the Bellandur Lake, Bengaluru. As an abundant caution, operations at the facility of the Company situated at Adugodi, Bengaluru were temporarily halted for a day. Based on the clarification by KSPCB regarding non-applicablity of the said public notice to the Companyâs Adugodi facility, operations were resumed with effect from May 08, 2017.
There was no financial impact on account of temporary closure of the facilities situated at Jaipur and Adugodi, Bengaluru pursuant to the above orders.
Further, there were no significant or material orders passed by the Regulators or Courts impacting the going concern status and Companyâs operations in future.
27. Buyback
During the year under review, the Company has bought back 878,160 Equity Shares of face value of INR 10 each representing 2.796 percent of the pre-buyback paid up share capital of the Company for an aggregate consideration of Mio INR 20,197 (representing 24.99 percent of the paid up share capital and free reserves). Robert Bosch GmbH, the holding company, also participated in the Buyback.
The Post Issue capital of the Company is Mio INR 305.21 consisting of 30,520,740 Equity Shares of INR 10 each. The present shareholding pattern is as under:
|
% of the |
||
|
Particulars |
No. of shares |
paid-up |
|
share capital |
||
|
Promoter and Promoter |
21,512,705 |
70.49 |
|
Group |
||
|
Others/Public |
9,008,035 |
29.51 |
28. Extract of Annual Return
In terms of the requirements of Section 134(3)(a) of the Act, an Extract of Annual Return as provided under Section 92(3) of the Act is enclosed as Annexure âIâ (Page No. 74) to this Report.
29. Acknowledgements
The Directors express their gratitude to the various Central and State Government Departments for their continued cooperation extended to the Company. The Directors also thank all customers, dealers, suppliers, banks, members and business partners for the excellent support received from them. The Directors would also like to acknowledge the exceptional contribution and commitment of the employees of the Company during the year under review.
30. Cautionary Statement
Statements in the Boardâs Report and the Management Discussion & Analysis describing the Companyâs objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
For and on behalf of the Board of Directors
V. K. Viswanathan
DIN: 01782934
Chairman
Date: May 25, 2017
Mar 31, 2015
Dear Members,
The Directors have pleasure in presenting their SIXTY THIRD Annual
Report together with the Audited Financial Statements for the fifteen
months period from January 01, 2014 to March 31, 2015.
The Board of Directors of the Company at their meeting held on June 05,
2014, inter-alia, approved the change in the financial year of the
Company to commence from April 01 of every year and to end on March 31
of the following year to comply with Section 2(41) of the Companies
Act, 2013 ('Act'). Consequently, as a transitionary arrangement, the
current annual accounts and Directors' Report of the Company are for a
period of fifteen months from January 01, 2014 to March 31, 2015.
Therefore, figures for the period under review are not comparable with
the last financial year.
1. Financial Results
The following are the financial results:
(Rs. Million)
Net Sales
(excluding
recovery of 117,414 85,151
duties and taxes)
Of which Export Sales 14,625 10,578
Profit Before Tax 19,559 12,566
Less: Provision for tax 7,463 4,070
Add: Deferred tax and tax
adjustments relating to 1,281 351
earlier years
Profit After Tax 13,377 8,847
Appropriations:
Dividend:
- Dividend
recommended at 2,669 1,727
Rs.85 per share
(previous year:
Rs.55 per share)
Tax on Dividend 543 308
General Reserve 1,337 885
Balance carried forward 8,828 5,927
Total 13,377 8,847
Net sales for the fifteen months period ended March 31, 2015 grew by
37.9 percent over the previous twelve months period ended December 31,
2013. The Profit Before Tax (PBT) for the period ended March 31, 2015
as a percentage of net sales was at 16.7 percent as compared to 14.8
percent for the previous year. The improved performance of the Company
is mainly due to increased operational efficiencies and favourable
product mix.
The Profit After Tax (PAT) as a percentage of net sales was 11.4
percent for the fifteen months period ended March 31, 2015 as against
10.4 percent for the twelve months period ended December 31, 2013.
2. Dividend
The Board of Directors recommend a dividend of Rs.85 per equity share
for the fifteen months period ended March 31, 2015 as against a
dividend of Rs.55 per equity share for the twelve months period ended
December 31, 2013. This dividend is subject to the approval of the
shareholders at the forthcoming Annual General Meeting.
4. Key Manufacturing Facilities
4.1 Bengaluru (Karnataka)
The Bengaluru Plant, established in 1953, is a pioneer in diesel system
products catering to both domestic and export customers,
The Plant achieved a milestone of 1 millionth Common Rail production in
March 2014, In line with the strategic focus to be fit for the future,
various initiatives such as manpower restructuring, cost reduction and
productivity improvement, etc, were undertaken during the year,
4.2 Nashik (Maharashtra)
The main products manufactured at Nashik Plant are Nozzles, Nozzle
Holder Assemblies and the Common Rail Diesel Injection system,
The Plant faced a huge challenge mainly on account of steep drop in
customer demand, This led to pressure on cost competitiveness and
profitability, This was countered by various measures such as closures,
break to temporary workmen, inventory reduction, focus on localization,
etc,
As an eco-friendly measure, a 68 kWp solar powered generator for
generating electricity in the administrative block of the Plant was
installed, This is expected to bring down the carbon footprint by
approximately 94 tons of C02 per year,
4.3 Jaipur (Rajasthan)
The Jaipur Plant mainly produces Distributor (VE) Mechanical and
Electronic Diesel Control Pumps which are used in light and heavy
commercial vehicles, sports and multi-utility vehicles and tractors,
The Plant witnessed 7 percent increase in the volumes as compared to
2013 owing to good export orders and local demand, The year also
witnessed a significant reduction in the field complaints, resulting in
enhanced customer confidence,
4.4 Naganathapura (Karnataka)
The Naganathapura Plant completed 25 years of operations in 2014, The
Plant was able to sustain its growth despite a weak domestic market and
uncertain export markets, Improvement in plant productivity and lean
concepts enabled both Starter Motors and Generators and the Spark Plug
businesses to remain competitive,
4.5 Verna (Goa)
During the period under review, the Verna Plant completed two years in
its new state-of-the-art manufacturing facility, In line with the
business strategy the plant transformed from being a single equipment
seller to complete line solution seller, The plant is gearing up to
cater to markets beyond geographical boundaries,
4.6 Kumbalgodu (Karnataka)
The Solar Thermal Collector production facility made a steady progress
in 2014, almost doubling production compared to the previous year in a
very competitive market, New product variants such as the Evacuated
Tube Collector were successfully introduced,
4.7 New Facilities
The year 2014 saw the setting up of three new facilities at Bidadi (for
Diesel Systems), Gangaikondan (for Gasoline Systems) and Chennai (for
Power Tools),
A brief overview of these facilities is given below:
4.7.1 Bidadi (Karnataka)
With the addition of new products in the upcoming years and restriction
on expanding the existing facility at the Bengaluru Plant, identifying
a new location to supplement the existing facility was the need of the
hour,
The Bidadi Plant is located in the Bidadi Industrial area at a distance
of 35 kms from Bengaluru and has a super builtup area of approximately
38,000 sq, meters,
While one assembly line for Common Rail has been commissioned,
full-fledged operation is expected by 2017-18,
4.7.2 Gangaikondan (Tamil Nadu)
This manufacturing unit is set up at State Industries Promotion
Corporation of Tamil Nadu (SIPCOT) Gangaikondan, Tamil Nadu. It will
facilitate the Company's Gasoline Systems business to further localize
manufacturing and increase cost- competitiveness. Prior to the setting
up of this new manufacturing facility, the Gasoline Systems division
shared the Company's Naganathapura manufacturing facility for its local
production.
This facility will produce powertrain sensors, fuel delivery modules
and air management components for automotive and two-wheeler systems.
4.7.3 Chennai (Tamil Nadu)
The Company has set up a new Power Tools manufacturing plant
approximately 37 km from Chennai at Oragadam, Tamil Nadu.
The Plant will cater to the requirements of new products for the Indian
market and aims to be a low cost location in Asia Pacific region.
Commercial production at the Chennai Plant is expected to commence in
later half of 2015.
5. information Technology (IT)
As part of customer focused initiatives, System to System communication
has been enabled for select global OEMs from specific supplying
locations. For Indian OEMs, SIAM-ACMA initiatives are being pursued. In
an effort to empower the field representatives in Automotive
Aftermarket, a new CRM software has been implemented in October 2014 to
reap the benefits of advancement in IT and communication fields.
Bosch ERP systems have been enabled for the new manufacturing locations
at Bidadi and Gangaikondan, providing end to end business operations.
6. Change initiatives
6.1 Continuous Improvement Process (CIP)
The "System CIP" concept is being widely used in the direct areas. The
maturity level of "System CIP" in the direct areas has been on the
rise. Extending of "System CIP" concept to indirect areas has been
started. The existing Self Assessment Methodology of CIP activities
have been modified to incorporate "System CIP" and other
simplifications and the new assessment methodology is planned across
all units by the end of 2015. CIP in indirect areas is gaining momentum
with increasing focus on savings through CIP activities in indirect
functions.
6.2 Bosch Production System (BPS)
The BPS Maturity Assessment methodology is being used for improving the
maturity level of BPS implementation in the plants. "System CIP" is
playing an important role for strengthening BPS implementation.
Manufacturing lines are further improved using BPS tools before moving
these lines to new manufacturing locations.
Bosch Connect is being used for quick and easy interaction amongst
plants. This platform is aimed at worldwide communication of best
practices of BPS and also for finding solutions to existing issues
through knowledge sharing and experience from like cases.
7. Business Excellence
The Diesel Systems business division has adopted the European
Foundation for Quality Management (EFQM) model for Business Excellence
at its manufacturing locations in Bengaluru, Nashik and Jaipur from
2004. 'Living Business Excellence' is one of the key strategic themes
and is included in the Vision and Mission statements of this division
as 'Business Excellence at work'. Strategic measures/ targets are
developed, deployed and reviewed across plants and connected corporate
functions through a structured strategy management process. Key
performance indicators are measured to enable the achievement of
required business results.
8. Awards and Recognition
During the period under review, the Company won several awards as
recognition for its commitment to excellence. Few such awards are:
* Fortune India's third annual survey of the country's most admired
companies ranked the Company number one in the Auto Components sector.
* The Company received the Export Excellence Award 2014 for "Best
Manufacturer Exporter" from the Federation of Karnataka Chambers of
Commerce & Industry (FKCCI)
* The Innovation award from Mahindra & Mahindra - Auto and Farm sector
for its "Innovation Driven Approach" by introducing 'Innovative,
Overall Cost Effective & Field Fuel Efficient A-Pump System for Arjun
605 DI BSIIIA Tractors >50HP category'.
* The Intersolar Award 2014 for the Best Solar Project in the
Industrial and Commercial category for the 1 MW first-of-its-kind solar
project on a water lagoon for the Maruti Suzuki Manesar plant.
9. Corporate Social Responsibility (CSR) Policy and Initiatives
The Board of Directors have constituted a CSR Committee comprising of
Mr. Prasad Chandran, Independent Director, Mr. Bhaskar Bhat,
Independent Director, Dr. Steffen Berns, Managing Director and Mr.
Soumitra Bhattacharya, Joint Managing Director as its members. Mr.
Prasad Chandran, is the Chairman of the Committee. The CSR Committee
oversees the Company's CSR initiatives under the overall supervision
and guidance of the Board of Directors.
For details of the CSR initiatives and activities of the Company please
refer Principle 8 of the Business Responsibility Report and Annual
Report on CSR Activities enclosed as Annexure 'B' to the Directors'
Report.
10. Subsidiary Companies
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on
March 31, 2015 are not material, no consolidated financial statements
under Accounting Standard 21 "Consolidated Financial Statements" as
notified under Section 211(3C) of the Companies Act, 1956, has been
prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors' Report for the fifteen months period ended
March 31, 2015 of MICO Trading Pvt. Ltd. A separate statement
containing the salient features of the financial statement of
subsidiary, associates and joint ventures under the prescribed format
has also been enclosed with the Directors' Report of the Company as per
the requirements of Section 129 of Companies Act, 2013 as Annexure 'E'.
11. Directors
Mr. Franz Hauber (DIN : 06485529) was appointed as an Alternate
Director to Mr. Peter Tyroller with effect from January 01, 2014.
Mr. Hauber ceased to be a Director of the Company with effect from the
close of business hours on February 28, 2015. The Board of Directors
places on record their deep appreciation for the contribution and
services rendered by Mr. Franz Hauber during his tenure as Director of
the Company.
Dr. Andreas Wolf, Executive Vice President was appoined as an Alternate
Director to Mr. Peter Tyroller with effect from March 01, 2015.
Consequent to his appointment as an Alternate Director, Board appointed
him as Whole-time Director for a period of four years with effect from
March 01, 2015.
Brief profile of Dr. Andreas Wolf forms part of the Explanatory
Statement of the Notice dated May 29, 2015, convening the 63rd Annual
General Meeting of the Company.
Names of companies/firms in which Directors of the Company hold office
as Director, etc. as on the date of this report are given below:
Mr. V. K. Viswanathan (DIN : 01782934)
* Magma HDI General Insurance Company Limited
* Bharti Airtel Limited
* HDFC Standard Life Insurance Company Limited
* Century Metal Recycling Private Limited
* Indo-German Chamber of Commerce (Committee Member)
* K S B Pumps Limited
* Credit Information Bureau (India) Limited
Mr. Peter Tyroller (DIN : 06600928)
* Robert Bosch Korea Limited
* Robert Bosch (South East Asia) Pte. Limited
* United Automotive Electronic System Co. Ltd.
* DEKRA SE (Member of the Supervisory Board)
Mr. Bernhard Steinruecke (DIN : 01122939)
* Zodiac Clothing Company Limited
* Nuremberg Messe India Private Limited
* HDFC ERGO General Insurance Company Limited
* Apollo Munich Health Insurance Company Limited
Mrs. Renu S Karnad (DIN : 00008064)
* GRUH Finance Limited
* Housing Development Finance Corporation Limited
* HDFC Bank Limited
* HDFC Asset Management Company Limited
* HDFC ERGO General Insurance Company Limited
* HDFC Standard Life Insurance Company Limited
* Indraprastha Medical Corporation Limited
* EIH Limited
* ABB Limited
* Feedback Infrastructure Services Private Limited
* Lafarge India Private Limited
* HT Parekh Foundation
* HDFC PLC Maldives
* WNS (Holding) Limited
* HIREF International LLC
* HIREF International Fund II PTE. Ltd.
* HIREF International Fund PTE Ltd.
Mr. Prasad Chandran (DIN : 00200379)
* Indo German Chamber of Commerce (Committee Member)
* Coromandal International Limited
* HDFC Standard Life Insurance Company Limited
* Public Concern for Governance Trust (Trustee)
* SEEGOS (Proprietorship Firm)
Mr, Bhaskar Bhat (DIN : 00148778)
* Titan Company Limited
* Titan International Middle East FZE
* Trent Limited
* Titan Time Products Limited
* Favre Leuba AG, Switzerland
* Tata Ceramics Limited
* Titan Engineering & Automation Limited
Dr, Steffen Berns (DIN : 06449396)
* Robert Bosch Engineering and Business Solutions Private Limited
* MICO Trading Private Limited (Director & Member)
* Robert Bosch (Bangladesh) Limited
* Confederation of Indian Industry (National Council Member)
* Robert Bosch Lanka (Private) Limited
* Indo German Chamber of Commerce (Committee Member)
Mr, Soumitra Bhattacharya (DIN : 02783243)
* Bosch Electrical Drives India Private Limited
* MICO Trading Private Limited (Director & Member)
* Automotive Component Manufacturers Association of India (Executive
Committee Member)
* Bosch Rexroth (India) Limited
* Confederation of Indian Industries (Southern Council Member)
Dr, Andreas Wolf (DIN : 07088505)
(Alternate Director to Mr. Peter Tyroller w.e.f. 01.03.15)
* Bosch Automotive Electronics India Pvt. Ltd.
* Bosch Chassis Systems India Ltd.
Dr, Steffen Berns is liable to retire by rotation and being eligible,
offers himself for re-election, Brief profile of Dr, Berns is given in
the Notice convening the forthcoming Annual General Meeting,
12. Board Meetings
During the period, January 01, 2014 to March 31, 2015, seven meetings
of the Board of Directors were held,
The particulars of the meetings and attendance thereat are mentioned in
the Corporate Governance Report,
13. Key Managerial Personnel
The following are the Key Managerial Personnel of the Company as on the
date of this Report:
Dr, Steffen Berns (Managing Director)
Mr, Soumitra Bhattacharya
(Joint Managing Director & Chief Financial
Officer)
Dr, Andreas Wolf (Whole-time Director)
Mr, S, Karthik (Company Secretary)
14. Remuneration Policy
During the period under review, the Board of Directors on
recommendation of the Nomination and Remuneration Committee approved
"Nomination and Remuneration Policy for Directors and Senior
Management,"
The Policy, inter-alia, provides for criteria and qualifications for
appointment of Director, Key Managerial Personnel and Senior
Management, Board diversity, remuneration to directors, key managerial
personnel, etc, The policy is enclosed as Annexure 'F' to this Report,
The policy can also be accessed at www.boschindia.com under the
"Shareholder Information" section,
15. Independent Directors
The Board has an optimum combination of Independent and Non-Independent
Directors, In line with the requirements of the Listing Agreement and
Companies Act, 2013, half of the Board comprises of Independent
Directors,
The following are the Independent Directors of the Company as on the
date of this Report:
1, Mr, Bernhard Steinruecke
2, Mrs, Renu S Karnad
3, Mr, Prasad Chandran
4, Mr, Bhaskar Bhat
16. Declaration as to Independence
The Independent Directors have given a declaration to the Company that
they meet the criteria of independence as per section 149(6) of the
Act,
17. Familiarization programme for Independent Directors
During the year under review, a separate training session for
independent directors was organized by the Company, The session covered
roles, responsibilities, rights, liabilities and other duties imposed
on the independent directors under the new Companies Act, 2013 and the
Listing Agreement, It also involved a brief overview on the vital
provisions of the relevant latest statutory regulations,
The independent directors are apprised at Board meetings on important
developments in various business divisions of the Company, They are
also updated on important changes in the regulatory framework and
business environment having an impact on the Company,
The aforementioned details have also been uploaded on the website of
the Company at www.boschindia.com under the "Shareholder Information"
section.
18. Performance Evaluation of Directors
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out the annual performance
evaluation of the Board as a whole, the Directors individually as well
as the working of the Board and its Committees.
A structured questionnaire was circulated to the Board members in this
connection. The feedback from the Directors was summarized and ideas
for further improving effectiveness of the Board processes, etc. were
discussed.
19. Particulars of Employees
The information required pursuant to section 217 (2A)of the Companies
Act, 1956 in respect of employees of the Company will be provided upon
request. In terms of section 136 of the Act / 219(1) (b) (iv) of
Companies Act, 1956, the Reports 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 any
working day. Any Member, if interested in obtaining a copy thereof, may
write to the secretarial department in this regard.
20. Corporate Governance
A report on Corporate Governance approved by the Board of Directors of
the Company and a certificate from the Practicing Company Secretary
forms part of this Annual Report. The Company has fully complied with
the Corporate Governance practices specified under the Listing
Agreement.
A Code of Conduct for Directors and Senior Management, Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy, Rules and
Regulations of Service Conduct for Managerial and Superintending Staff
and Code of Business Conduct effectively support the Corporate
Governance processes.
21. Risk Management
The Company has a well defined Risk Management Policy. The policy has
been developed after taking cognizance of the relevant statutory
guidelines, Bosch Guidelines on risk management, empirical evidences,
stakeholder feedback, forecast and expert judgment.
The policy, inter-alia, provides for the following:
1. Risk Management framework;
2. In-built pro-active processes within the Risk Management Manual for
reporting, evaluating and resolving risks;
3. Identifying and assessing risks associated with various business
decisions before the materialization of the risks and making informed
decisions at all levels of the organization in relation to the
Company's capacity to accept certain risks in business ventures;
4. Ensuring protection of shareholder's value through the establishment
of integrated Risk Management Framework for identifying, assessing,
mitigating, monitoring, evaluating and reporting all risks;
5. Strengthening Risk Management through constant learning and
improvement;
6. Adoption and implementation of risk mitigation measures such that
they are effective in achieving long-term goals of sustainability by
becoming embedded in the business processes and culture of the Company;
7. Regularly review Risk Tolerance levels of the Company as they may
vary with change in Company's strategy; and
8. Ensuring sustainable business growth with stability.
In the opinion of the Board, there are no elements of risks that may
threaten the existence of the Company.
22. Whistle Blower Policy
The Company has a Whistle Blower Policy which provides a vigil
mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the
Corporate Governance Report. The Whistle Blower Policy has also been
uploaded on the website of the Company at www.boschindia.com under the
"Shareholder Information" section.
23. Business Responsibility
Pursuant to Clause 55 of the Listing Agreement, listed companies are
required to submit Business Responsibility Report as part of their
annual report, covering the principles enunciated in the said clause.
Accordingly, a report on Business Responsibility forms part of this
Annual Report.
24. Related Party Transactions
All Related Party Transactions entered during the period January 01,
2014 to March 31, 2015 were in ordinary course of business and on an
arm's length basis. No materially significant transactions were entered
between the Company and its Promoters, Directors, Key Managerial
Personnel etc. which may have a potential conflict with the interest of
the Company at large. There were no material related party transactions
pursuant to the provisions of section 188 of the Act.
Prior approval of the Audit Committee is obtained for all foreseeable
related party transactions on a quarterly basis. Details of all related
party transaction entered on the basis of the aforementioned approval
are placed before the Audit Committee on quarterly basis for their
review.
The Company has also formulated a "Related Party Transaction Policy"
specifying the manner for dealing with transactions with related
parties. The same has also been uploaded on the website of the Company
www.boschindia.com under the "Shareholder Information" section.
25. Energy Conservation, Technology Absorption, Foreign Exchange
Earnings & Outgo
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under section 217
(1)(e) of the Companies Act, 1956 is enclosed as Annexure 'A' to this
Report.
26. Auditors
Company's Auditors M/s. Price Waterhouse & Co. Bangalore LLP
(Membership No. 007567S/S-200012) retire at the forthcoming Annual
General Meeting and are eligible for appointment. They have confirmed
to the Company that they are eligible to be appointed as Auditors in
terms of Sections 139 & 141 of the Companies Act, 2013 and Rules framed
thereunder.
27. Cost Audit & Cost Auditors
Pursuant to General Circular no. 15/2011 dated 11.04.2011 and order
dated 06.11.2012 issued by Ministry of Corporate Affairs (MCA) under
section 233B(1) of the Companies Act, 1956, M/s.Rao,
Murthy & Associates, Cost Accountants, Bengaluru (Regn. No.000065, PAN:
AAAFR8892D) were appointed as Cost Auditors for the period January 01,
2014 to March 31, 2015. The due date of filing of the cost audit report
is September 28, 2015 in terms of erstwhile Companies (Cost Audit)
Report Rules, 2011. Cost Audit report for the year 2013 was filed on
June 27, 2014.
Pursuant to section 148 of the Act read with Companies (Cost Records
and Audit) Rules, 2014 (as amended), the Board of Directors on
recommendation of the Audit Committee appointed M/s. Rao, Murthy &
Associates, Cost Accountants, Bengaluru as Cost Auditors to audit the
cost accounts of the Company for the financial year 2015- 16. As per
the requirements of the Companies Act, 2013, remuneration payable to
the Cost Auditors is required to be ratified by the shareholders at the
General Meeting. Accordingly, resolution ratifying the remuneration
payable to M/s. Rao, Murthy & Associates is included in the Notice
dated May 29, 2015, convening the Annual General Meeting of the Company.
28. Secretarial Audit
The Company appointed Mr. Sachin Bhagwat, Practicing Company Secretary,
to conduct Secretarial Audit particularly with reference to compliance
with Companies Act, 1956/2013, Listing Agreement and relevant SEBI
Regulations for the financial year 2014-15. The report of the
Secretarial Audit is enclosed as Annexure 'C' to this report.
29. Directors' Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors report that:
a. in the preparation of the annual accounts, the applicable accounting
standards had been followed along with proper explanation relating to
material departures;
b. they have selected such accounting policies and applied them
consistently and made judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit of the
Company for that period;
c. proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of this
Act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. proper internal financial controls are in place and that such
internal financial controls are adequate and are operating effectively;
and
f. systems to ensure compliance with the provisions of all applicable
laws were in place and that such systems were adequate and operating
effectively.
30. Details of Loans, Guarantee and investments
Details of Loans made during the period under review pursuant to
section 186 (4) are enclosed as Annexure 'D' to this report.
31. Deposits
During the period January 01, 2014 to March 31, 2015, there were no
deposits as per the provisions of Companies Act, 2013.
32. Material Changes and Commitments
There were no material changes and commitments between the end of the
period under review and the date of this report which could have an
impact on the Company's operation in the future or its status as a
"going concern".
33. Significant and Material Orders passed by the Regulators or Courts
There are no significant or material orders passed by the
Regulators/Courts which would impact the going concern status of the
Company and its future operations.
34. Acknowledgements
The Directors express their gratitude to the various Central and State
Government Departments for their continued cooperation extended to the
Company. The Directors also thank all customers, dealers, suppliers,
banks, members and business partners for the excellent support received
from them. The Directors would also like to acknowledge the exceptional
contribution and commitment from the employees of the Company during
the period under review.
35. Disclaimer
The Ministry of Corporate Affairs vide its Circular No. 08/2014 dated
April 04, 2014 clarified that the financial statements and documents
required to be attached thereto, in respect of financial year
commencing prior to April 01, 2014 shall continue to be governed by the
provisions of Companies Act, 1956, schedules and rules made thereunder.
Though the financial statements and the Auditors' Report have been
prepared as per the provisions of Companies Act, 1956, the Company has
to the extent possible provided the information in the Board's Report
as per the provisions of Companies Act, 2013.
36. Cautionary Statement
Statements in the Board's Report and the Management Discussion &
Analysis describing the Company's objective, expectations or forecasts
may be forward - looking within the meaning of applicable laws and
regulations. Actual results may differ materially from those expressed
in the statement.
For and on behalf of the Board of Directors
V. K. Viswanathan
Chairman
Date: May 29, 2015
Dec 31, 2013
The Directors have pleasure in presenting their SIXTY SECOND Annual
Report together with the Audited Statement of Accounts for the year
ended December 31, 2013.
Financial Results
The following are the financial results:
(Rs. Million)
2013 2012
Net Sales (excluding recovery
of duties and taxes) 85,405 84,172
Of which Export Sales 10,578 9,402
Profit before tax 12,566 13,462
Less: Provision for tax 4,070 4,163
Add: Deferred tax and tax
adjustments relating to earlier years 351 284
Profit after tax 8,847 9,583
Appropriations:
Dividend:
- Dividend recommended at Rs. 55 per
share (previous year: Rs. 60 per
share) 1,727 1,884
Tax on Dividend 308 306
General Reserve 885 958
Balance carried forward 5,927 6,435
Total 8,847 9,583
Net sales for the year 2013 grew by 1.5%. The Profit Before Tax (PBT)
in 2013 as a percentage of net sales was at 14.7% as compared to 16.0%
in 2012. The Profit After Tax (PAT) as a percentage of net sales was
10.4% in 2013 as against 11.4% in 2012.
Material costs as a percentage to sales decreased from 56.5% in 2012 to
55.9% in 2013.
Overall, the Profit Before Interest, Depreciation and Taxes for the
year shows a decrease of 6.6% over the previous year.
Investments
Capital investment during 2013 was lower than previous year at Rs. 5,113
Mio. as against Rs. 7,262 Mio. in 2012.
Dividend
The Board of Directors recommends a dividend of Rs. 55 per equity share
for the year 2013 as against a dividend of Rs. 60 per equity share in
2012. This dividend is subject to the approval of the shareholders at
the forthcoming Annual General Meeting.
Business Situation
The global economy remained stable in 2013, with a modest recovery from
the advanced economies especially in the United States of America and a
relatively subdued domestic performance of the emerging and developing
economies.
The situation in India was no different, with the domestic market
suffering from weak consumer offtake and poor industrial production
growth. However, the biggest challenge for India was the weakening
rupee, which had to be stabilized to curb the capital outflows. The
high inflation and interest rates did not boost the consumer sentiment
in the market and thus did not lead to a favorable business environment
in 2013 either.
The automotive segment in 2013, which constitutes a major share of our
business, continued to lose ground from an already weak growth year in
2012. The domestic sales reflected a decline from 2012, while the
export market continued to excel mainly due to good volumes from the
three-wheeler segment. The overall production volumes declined by 3%
over 2012.
Segment-wise, the tractor industry recorded a positive growth of 15%
mainly driven by a good monsoon season and state specific sops. Despite
many new model launches in the passenger car segment, the production
volumes reduced to 5%. Within the passenger car segment, diesel share
was at 46% in 2013, 2% points down from 2012. Production volumes of
utility vehicles grew by only 1% over 2012. Commercial vehicles
registered a negative growth of 13%. Heavy commercial vehicles were the
worst affected with a negative growth of 29%. Light commercial
vehicles which started the year on a positive note, ended up with a
reduction of 4%. Three- wheeler production volumes registered a
moderate 2% growth on account of the demand from export market.
Within this unrelenting tough market that prevailed in 2013, the
Company performed moderately better ending up with an overall growth of
1.5%. The non- automotive business continued to grow by 19.1% in 2013
mainly on account of good performances in Power Tools, Packaging,
Machine building and the Energy divisions. Sales from automotive
segment could not match up to the growth of 2012 and ended up almost
flat. Exports aided by the rupee depreciation grew at 12.5% over 2012.
Automotive Technology
Diesel Systems business which maintained its market share declined
further by 5.0% in the year 2013 due to the slowdown witnessed by the
automotive market throughout the year.
As a clear testimony to the Company''s strong innovation culture and its
focus on providing value to customers, a CO2 program has been initiated
which will benefit passenger car customers with fuel consumption
reduction. The price sensitive and technology intensive low priced
vehicle segment portfolio was strengthened further during the year
under review with the launch of the Generation 3 Common Rail Systems.
The development of a robust and cost effective selective catalytic
reduction system was started, which will help in achieving future
emission norms and improve fuel efficiency in commercial vehicles.
The launch of A5000 inline type fuel injection pump along with an
electronic governor provides off - highway genset manufacturers a
robust system solution for the upcoming Stage II emission norms of
Central Pollution Control Board.
Despite challenging conditions in the automotive passenger car market,
Gasoline Systems division achieved a 4.9% growth over 2012. New
technology initiatives at Gasoline Systems for profitable growth
include two wheeler Engine Management Systems and Alternate Fuel
Systems. Gasoline Systems business has further improved its customer
base.
Continuing the journey of transformation, Starter Motors and Generators
business registered a 16.3% growth in 2013, despite difficult market
conditions.
The New Base Line Generator is an ongoing success which enabled new
customer acquisitions along with a good export volume. The business was
further strengthened by extending to a second location for the
manufacturing of the new Starters.
The Automotive Aftermarket division recorded a growth of 2.5% over
2012.
The existing product range was expanded with new product lines such as
batteries, fork oils for two- wheelers and premium / spot lamps for
cars.
The division expanded its width and depth of distribution by appointing
more than 250 new first trade level customers. A "highlight" of the
year was opening of Bosch Car Service Center in Leh at an altitude of
11,562 feet.
A new workshop module named Optimal Diesel Partner for diesel service
was launched during the year. In the endeavor to constantly improve
the supply chain, new and modern warehouses at Bhubaneswar and Indore
for independent Aftermarket and at Pune for OE Spares were set up.
The division has been accredited with ISO 9001:2008 by TUV Nord (India)
for design, development, manufacture and service of automotive
diagnostic equipments and product marketing, sourcing, supply and
warehousing of Bosch Automotive products. Significant progress was made
in integration of automotive service solution business acquired from
SPX India in the year 2012. Takeover of SPX Service Solutions opened up
avenues of becoming a complete solution provider of diagnostic services
in the Indian market. Good synergies are established with the current
business offerings.
Industrial Technology Packaging Technology
Despite an economic slowdown, Bosch Packaging Technology division
recorded a strong growth of 19.2% in net sales in 2013. Especially
business unit Confectionery and Food has grown significantly by
offering a wide range of products and services.
Confectionery & Food unit saw a big transformation in 2013 from a
packaging machine supplier to system solution provider. Focus in the
year 2013 was on the development of new products for product line
Vertical Form Fill Seal Machine (VFFS). Product line Horizontal Form
Fill Seal Machine (HFFS) also picked up very well in the market.
Packaging industry has great potential and is expected to see a double
digit growth in the coming years.
Industrial Equipment
The Industrial Equipment division registered an overall growth of 62.4%
in the internal and external market segments. The division acquired
orders from new customers in the four-wheeler and two- wheeler
automotive segment. The division also continued to export assembly
lines to Bosch companies across Europe and Asia, during the year 2013.
Consumer Goods Power Tools
The Power Tools division achieved a steady growth of 9.9% in a trying
and challenging business environment reinforcing another year of solid
growth. For the first time, a unique concept event called ''Construction
Monster'' was held in Delhi, Chennai and Mumbai. The event showcased the
complete range of construction tools and solutions from Company to the
large and medium construction companies. The year also witnessed the
launch of Home and Car Washer range.
India''s first Do-It-Yourself store, aptly named ''DIY
Square'' was launched in Bangalore. The store showcases Company''s latest
offering of products for the Home, Hobby and Garden segment with
opportunity for live DIY experience in a fun way. The division had a
spectacular success at the India International Trade Fair (IITF)
exhibition, Delhi, with its Home, Hobby & Garden concept attracting
more than 2 lakh visitors. The division went online through third
party e-retailers which will be one of the key drivers in future.
Energy and Building Technology Security Technology
Security Technology business, excluding onetime project business, grew
by 3.4%. The Business Unit (BU) Public Address and Conference Systems
(PACo) performed very well recording a growth of 14%. Impressive
performances were also registered by BUs of Fire at 17% and Critical
Communication Systems at 26% over the previous year. Projects in both
public and private sector were successfully executed - covering key
verticals such as transportation, government, industry, commercial and
places of worship. The highlight project was Adlabs Imagica which uses
products from all the business lines of Security Technology. It is one
of the largest theme parks in the country.
During the year 2013, the division organized ''Technology Day'' events in
key cities across India to showcase its latest technology and product
range. Additionally, participation in product introduction days and
trade shows like Palm Expo and Broadcast India helped in strengthening
the brand presence and product exposure to the target audience. Key
products like HD starlight cameras, DCN multimedia and Plena Matrix
digital sound system which are technology trend setters were introduced
in the market and were well received.
Bosch Security Training Academy continued to impart technology/product
training to the concerned target audience across India, including
certain Certification Programs in select domains. Bosch Security
Systems (CCTV) won the Readers'' Choice
Award  awarded by EFY Group in 2013.
Solar Energy
The division was successful with a healthy order book in both kW and MW
scale projects. The division made its foray into the residential
sector, by becoming an empanelled solution provider with Agency for Non
Conventional Energy and Rural Technology (ANERT), Govt. of Kerala, for
the supply of 1 kW solar power packs for homes. Another key highlight
of the year 2013 was the empanelment for mini and micro grid rural
electrification by Solar Energy Corporation of India (SECI), which is a
milestone in itself. The Company proposes to enter into the promising
energy efficiency sector of India, Asia and Middle East in 2014 and in
this regard the Company has been accredited by Bureau of Energy
Efficiency (BEE) as a Grade-1 ESCO (Energy Services Company), which
adds to its long lasting credibility and eminence. An extensive network
of channel partners and dealers has been developed which will help to
leverage substantial growth in 2014 and beyond.
Thermo technology
Bosch Thermo technology division booked revenue across Solar Thermal
Systems and Commercial and Industrial Boilers. The export markets for
Commercial & Industrial Boilers in Bangladesh and Sri Lanka yielded
good results with encouraging customer response. With efforts being
made towards customization of products for the Indian market, the
Company is investing for future growth opportunities in this area. On
the production front, the Kumbalgodu facility commenced the series
production of solar flat plate collectors.
Competition and challenges in our business sectors
The year 2013 was seen as challenging year for the Indian economy in
general and in particular for the automotive industry. The weak
consumer demand and suppressed liquidity in the market triggered by the
slowdown and weak market sentiments placed additional pressure on all
the manufacturing companies. High inflation and adverse foreign
exchange increased the cost pressures and continued to challenge the
businesses across all domains.
However, the Company continuously strived to capture every opportunity
with its efficient processes and systems. The Company also placed
itself with the ever changing demands and requirements from the market.
The Company has always considered its people as its most valuable asset
and this has always been its core strength. Though the business growth
in the year 2013 has been tepid, the year 2014 is expected to revive
the growth momentum, while continuing to be demanding. Amidst these
challenging times, the Company remains bullish about the future growth
prospects of the country and will continue to invest to meet the
growing demands of the market.
To improve the competitiveness and to be fit for future in the medium
term, focused activities are being carried out on growth, profitability
and personnel related areas.
Plants
Bangalore (Karnataka)
The Bangalore Plant faced a big challenge due to steep drop in customer
demand which led to huge pressure on cost and flexibility. The Plant
was able to mitigate the situation by closures, discontinuation of
temporary manpower, budgetary control, inventory reduction and manpower
redeployment.
On the employee welfare front, the Plant conducted several cardiac,
cancer detections and dental camps in conjunction with the associated
hospitals from Bangalore for the benefit of its employees and their
dependants.
The Plant participated in the Excellence Awards for Innovation and
Creative Automation at the Chennai Trade Centre and won an award under
the theme ''Sustaining good performance with grassroots Innovation''.
The Plant also won the runners-up award in ''Supplier Quality
Improvement Contest (SQIC)'' held by one of the Company''s prestigious
customer viz., Kirloskar Oil Engines Ltd.
Nashik (Maharashtra)
The cascading effect of the sluggish demand in the automobile sector
was also noticed in the Nashik Plant. The Plant took rigorous cost
reduction measures like budget control, postponement of investments
etc., to mitigate the cost impacts. The weak market demand, lead to
correction in stocks through block closures. The Plant accelerated its
value engineering projects for sustainable cost advantage.
In the year 2013, the Nashik Plant initiated standard operating
procedures of high technology plasma process called ''C'' coating. This
diamond-like carbon coating helps to increase the wear resistance of
parts along with high hardness grade. This high investment technology
is being used by Nashik Plant to cater to the demand for various
products by other Company''s Plants.
In the year 2013, the Nashik Plant won the most coveted ''CII-EXIM Bank
Award'' for Business Excellence which signifies the exemplary effort of
excellent processes in the Plant.
Jaipur (Rajasthan)
Jaipur Plant crossed a milestone by producing its 5 millionth
distributor pump in 2013. The production of the distributor pump ( VE
pump) was started in the year 1990.
In the year 2013, the Plant was successful in transferring and
commissioning of an assembly line from the Feuerbach Plant in Germany
to enhance flexibility in production.
The focus in 2013 for the Plant was ''Quality'' and customer
satisfaction. Various quantity initiatives were undertaken by the Plant
towards reduction of 0 -km & Field complaints.
2013 was a very challenging year for the Plant due to the downturn of
the heavy commercial vehicle market. The market shrunk by ~ 29%
impacting the volumes manufactured at the Plant which fell by ~15%.
Various pull back measures were initiated to remain cost competitive
and sustain profitability.
During the year, a Reverse Osmosis water plant was added as a part of
clean water initiative in nearby Vatika village catering to more than
1500 families.
2013 has also been a year of many awards and accolades for the Plant.
The Plant was honoured with "PRIZE" In Cll-EXIM Bank Awards for
Business Excellence 2013. Awards were also won from Rajasthan State
Industrial Development and Investment Corporation (RIICO) for overall
best performance, 1st Runner Up in innovative practices and 2nd Runner
Up in most efficient water use, recycling and recharge category.
Naganathapura (Karnataka)
Naganathapura witnessed a strong growth of 13 % over previous year
inspite of the weak domestic market driven strongly by Starter Motors
and Generators, Spark Plugs and Gasoline
Systems divisions. The dip in the domestic market was countered by
increased market share , while increasing export business
significantly.
Along with significant improvements in productivity and quality, the
Plant was able to equally contribute through improvements in facility
maintenance and Health/Safety/Environment aspects, while driving many
key initiatives with high associate involvement. The Plant was awarded
the "Uttama Suraksha Puraskara" by National Safety Council (NSC) Â
Karnataka for its focus on higher levels of safety within the Plant
which manifested itself in a significant reduction in safety linked
incidents inside the Plant.
In 2013, the Plant continued to drive corporate social responsibility
activities with focus on health & hygiene and road safety.
Verna (Goa)
The Verna Plant, which is the production unit for the packaging
division provided a solid base for growth in 2013. Aided by the
pro-active measures to tackle the economic slowdown, the Plant made
good progress during the year.
Development initiatives towards products suited to the Indian market
gained momentum. Some of the initiatives were - positioning the Plant
as a solution provider rather than just a machine manufacturer;
stabilizing the Horizontal Machine portfolio; partnering with customers
right from the product development stage thus enabling the Company to
develop highly specific requirements such as a stainless steel version
of confectionery machines, dual mixed product in the same pouch etc.,
and localizing the critically manufactured parts leading to cost and
lead-time benefits.
The year 2013 also saw the Verna Plant acting as a facilitator and
providing assistance to Don Bosco Konkan Development Society in
introducing Bosch India Foundation''s skill training program. This
society works for the poor and under privileged children, youth and
women in Goa, Karnataka and Maharashtra in the areas of education,
skill training and income generation.
Kumbalgodu (Karnataka)
The new Solar Thermal Collector production facility was set up during
the latter half of 2012 at Kumbalgodu which is approximately 25 kms
from Bangalore. Products like solar flat plate collectors, a renewable
energy product used to heat water for domestic and industrial
applications are manufactured at the Plant. The Plant is equipped with
state-of-the-art machines to produce screwless, single piece collector
frames and full sheet absorbers for better efficiency.
The Plant commenced commercial production in January 2013. The variants
include both standard systems and customised solution for large scale
applications.
Bommasandra (Karnataka)
The Company has set up a new conversion / manufacturing plant at
Bommasandra, Bangalore, in second quarter of the year 2013 for
production of flexible abrasives under the Power Tools division of the
Company. This facility is being used for conversion of coated
abrasives into finished products viz., wide belts, narrow belts, rolls,
velcro discs and hand sanding discs.
These finished products are mainly used in wood industries as well as
metal and automobile industries.
This indigenous facility would enable the Company to bring down
delivery time and cater to customer demands in a cost effective manner.
The Company is optimistic that this facility will help to enhance its
market share in the coated abrasive segment of Bosch Power Tools
accessories. The commercial production at the Plant commenced in June
2013.
Industrial Relations
Industrial Relations at all Plants and other establishments generally
continued to be cordial throughout the year 2013, except in the
Bangalore Plant, where the Union and workmen went on tool down strikes
on two occasions for 3 to 6 days. First, on an issue connected with
introduction of scientific cycle time based working method. Second, for
initiating disciplinary action against an office bearer of the Union
for his misbehavior/misconduct. In spite of the above, various
bipartite and tripartite settlements were signed by different Plants in
cordial atmosphere on issues that concerned the management and the
workmen. On the expiry of the Long Term Settlements in three of the
Company''s Plants (Bangalore, Naganathapura and Nashik) on 31.12.2012
and in the Jaipur Plant on 31.05.2013, the Unions have submitted their
Charter of Demands for the consideration of the respective Plant
managements. Managements of the respective Plants have also submitted
counter proposals to the concerned Unions. Intense negotiations are
being carried out on the Charter of Demands and the management
proposals for arriving at amicable settlements.
Information Technology (IT)
The Company has implemented a new system viz., SAP-HR. With this
system, the Company has now a global personnel administration system
with country-specific development for payroll and time management. This
HR system supports not only the daily administrative business of the
personnel departments but also allows the employees and managers to
access relevant data through a self- service portal.
As a B2B initiative, the Company has participated in SIAM-ACMA EDI
standards definition in 2013 and is part of pilot rollout for specific
transactions with select OEM customers as per SIAM-ACMA roadmap.
Order management functionality, which was being used, has been replaced
with new features in existing SAP system in December 2013. This reduces
the number of systems used by end user and is first-of- its-kind change
over in the Bosch world. It is in line with corporate information
strategy of legacy system migration.
As part of Windows XP phase-out by Microsoft by March 2014, the Company
has initiated a project for replacement of workstations. Upgrade is in
progress for WIN 7 migration.
In 2013, the Company was able to considerably bring down the virus
incident rate. This was possible with the concerted efforts from ISP
community to address the root causes and improved awareness amongst the
end users. Additionally, local administrative rights on workstations
have been revoked centrally to avert the threat from malwares.
With continued focus on IT enabled business process maturity, a new and
improved model has been adopted in alignment with the Business
Excellence model, from seven dimensions to nine dimensions to enhance
focus on process improvements and risks. Current year assessment
included the assessors from Business Excellence team as well as to
bring in the business perspective.
Bosch Connect is the IT platform for cooperation and communication,
which aims to generate value- addition by increased productivity,
development of ideas and intensive knowledge sharing amongst the
workforce. With Bosch Connect, the Company is ready to be a globally
connected company. In 2013, many activities including access permission
for users and reverse mentoring sessions to senior management were
carried out.
Change Initiatives
Continuous Improvement Process (CIP)
The CIP movement is now running since two decades and has attained a
matured level. The focus in 2013 was to enhance the involvement of our
associates and to bring in a culture of self assessments. The CIP
assessment methodology was extended to various departments and plants
using the Value Stream Design in Indirect Areas (VSDiA) which plays a
vital role for holistic improvement and sustenance of business
processes in indirect areas.
Associate involvement in the shop floor has been further improved by
strengthening the Shop-Floor CIP (SFC) activities, encouraging internal
competition among various CIP implementation teams, integration of
suggestion scheme ideas and reducing the lead time in processing of
suggestions by employees.
Bosch Production System (BPS)
BPS maturity assessment has been playing an important role in further
implementation of BPS in manufacturing areas. Considerable overall
improvement in various important parameters of BPS viz., maturity
score, leveling compliance, overall equipment effectiveness, milk-run
coverage, pull to suppliers, total inventory etc., have been refined in
comparison to 2012.
Manufacturing lines planned for relocation have been subjected to Lean
Line Design analysis for further improvements before being shifted,
apart from making improvements related to logistics and shop floor
layout. Further refinement of BPS maturity level, increasing System CIP
cycles, leveling compliance, pull implementation, strengthening review
mechanism of BPS implementation etc., have been identified as focus
points for 2014.
Diesel Systems Business Excellence (DBE)
The Diesel Systems Business Excellence integrates various functions in
the Corporate and Plants aligning them to the journey of achieving the
Diesel Systems, India vision and mission. All the Diesel Systems''
manufacturing plants in India viz., Bangalore, Nashik and Jaipur; and
the business unit as a whole have aligned their business according to
the European Foundation for Quality Management (EFQM) model.
Additionally, Business Excellence has served as the basis for further
development of business unit''s effectiveness in a holistic manner.
Business units and Plants carry out regular assessments as health
checks in the endeavor to continuously improve the systems / processes
in their journey towards Business Excellence. Key performance
indicators are measured to enable the achievement of required business
results as cause and effect balancing all the key stakeholders. Diesel
Systems, India is striving towards institutionalizing a culture of
''Living Business Excellence'' as ''Business Excellence at work'' by
incorporating the same in its vision and mission. Strategic
measures/targets are developed, deployed and reviewed across plants and
connected corporate functions through a structured strategy management
process. In 2013, this was extended to other business units of the
Company making significant progress.
Diesel Systems, India has attained a good level of maturity in this
exciting journey. Diesel Systems, India as a business unit was
assessed for the first time in 2012 and it achieved a milestone
equivalent to the EFQM ''Recognized for Excellence'' (R4E) level.
Bangalore Plant won the coveted ''CII Â Exim Bank award for Business
Excellence'' in 2009 and Nashik Plant won the same in 2013. Jaipur
Plant was also recognized with the ''CII-EXIM Bank Prize for Business
Excellence'' in 2013.
Bosch Vocational Centre (BVC)
Bosch Vocational Centre is one of its kind in the country running Trade
Apprenticeship Program, similar to German Vocational & Training
Education (VET) System with a perfect mix of classroom theory, workshop
practice and in-plant training.
The state-of-the-art facilities at Bosch Vocational Centre include CNC
labs with machines and programming facilities, hydraulic labs with the
latest trainer kits and teaching aids, mechatronics lab with PLC and
robotics, computer training, cutting tool technology, metrology and
plastics technology. This is apart from well-equipped classrooms, CAD
lab for drawings, shop floor for training apprentices and the
electrical and electronics lab to teach apprentices the basics of the
trade.
Sustaining its excellent performance over the years, Bosch Vocational
Centre has been declared as best establishment 46 times up to the year
2013. This laurel was received by BVC tenth time in a row. The gold
medal tally by the apprentices reached 211 during the year.
Awards and Recognition
The Company won several awards, as recognition of its efforts. Few
examples are:
- Automotive giant Mahindra & Mahindra Limited presented the Company
with the Panchratna award ''Hira (Diamond)'' for ''Business Partner of the
Year'' (2012-2013) at a supplier meet held in Copenhagen, Denmark on May
31, 2013.
- The Federations of Karnataka Chambers of Commerce & Industry (FKCCI)
conferred the ''Star Exporter'' award in 2013.
- The Company was named as the ''Star MNC of the year'' by India''s one of
the leading financial newspaper Business Standard.
- ''Best Supplier 2013'' was bestowed by Tata Motors Limited at the
Annual Supplier Conference held at Macau.
Bosch India Foundation
Bosch India Foundation (BIF) is the trust of the Bosch
companies in India. Established in 2008, BIF touched the lives of 6936
youth in the focus areas of vocational skill development and healthcare
through its many programs in 17 locations across India in 2013.
In the area of vocational training, with support from 33 implementing
partner NGOs, the Foundation conducted over 80 skills training programs
in 32 trades. Held over an average of three months, these short
duration trainings aimed primarily to impart much needed soft and hard
skills required to propel over 6400 drop-out youth onto career paths of
their choice and aptitude, thus enabling economical upliftment of both
youth and their families.
Through, 5 healthcare projects, the Foundation offered support to
create sustainable and lasting change in the health conditions of 528
people. These projects included reducing maternal / infant mortality,
rehabilitation of 66 spinal cord injury patients, rectification of
severe orthopedic conditions of 20 underprivileged children and cleft
lip and palate corrections of 236 very young rural children. Each of
these interventions aimed at enabling the beneficiaries to live
dignified and worthwhile lives in society through the changes gained in
their health conditions.
Subsidiary Company
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on
December 31, 2013 is not material, no consolidated financial statements
under Accounting Standard 21 "Consolidated Financial Statements" as
notified under section 211(3C) of the Companies Act, 1956, has been
prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors'' Report for the year ended December 31, 2013,
of MICO Trading Pvt. Ltd.
Directors
Mr. Peter Tyroller joined the Board as Additional Director with effect
from July 01, 2013.
Mr. Tyroller, 57, completed his engineering studies at the University
of Applied Sciences in Ulm, Germany (1984). This was followed by a
second course of studies in Engineering Management from the University
of Applied Sciences in Frankfurt (am Main). He began his professional
career with Alfred Teves GmbH (ITT Automotive) in Frankfurt, Germany in
1985. He served as the Director of the Airbag Systems Unit of Robert
Bosch GmbH and Managing Director of United Airbag Systems GmbH, both in
Schwieberdingen, Germany. He has been the Managing Director of the
Wiper Systems & Electrical Motors Division of Valeo Autoelectric GmbH &
Co. KG, Bietigheim. He held the position as Executive Vice- President
Sales, Gasoline Systems Division, Robert Bosch GmbH, Schwieberdingen in
2000 and later as President in 2003.
He has been the member of the Board of Management, Robert Bosch GmbH
from 2006 with corporate responsibility in Marketing and Sales,
Automotive Original Equipment Sales and divisional responsibility in
Automotive Aftermarket and since July 01, 2013 he took over the
responsibility of Asia Pacific. Mr. Tyroller has been the president of
CLEPA, the European Association of Automotive Suppliers since January
2010.
With effect from January 01, 2014, the Board of
Directors of the Company appointed Mr. Franz Hauber, as Alternate
Director to Mr. Peter Tyroller.
Mr. Franz Hauber, 54, is a Mechanical Engineering degree holder from
Fachhochschule Konstanz. He has been associated with Bosch Group for
the last 26 years.
Mr. Hauber started his career in Bosch Group as a development engineer
in ABS Hydraulics in Stuttgart. During these 27 years of association,
he has worked in several management positions mainly in manufacturing,
quality, logistics, safety, project management, and corporate functions
as well. He has varied experience in divisions like Chassis System
Control, Diesel System and Gasoline System.
He joined the Company on January 01, 2013 as the Executive Vice
President, Manufacturing & Quality.
Dr. Albert Hieronimus ceased to be the Chairman and Director of the
Company from the close of office hours on June 30, 2013. Mr. V.K.
Viswanathan, Non- Executive Director, was appointed as Chairman of the
Board with effect from July 01, 2013.
Dr. Bernd Bohr and Mr. B. Muthuraman ceased to be directors of the
Company from the close of office hours on June 30, 2013.
The Board of Directors places on record their deep appreciation for the
outstanding contributions and services rendered by Dr. Hieronimus, Dr.
Bohr and Mr. Muthuraman during their tenure as Directors of the
Company.
Names of companies/firms in which Directors of the Company hold/held
office as Director/Partner are given below:
Mr. V. K. Viswanathan
- BSH Household Appliances Mfg. Pvt. Ltd.
- FLSmidth Pvt. Ltd.
- Indo-German Chamber of Commerce (Committee Member)
- Magma HDI General Insurance Co. Ltd.
- Bharti Airtel Ltd. (w.e.f. January 14, 2014).
Mr. Peter Tyroller (from 01.07.2013)
- Bosch Automotive Products (Suzhou) Co. Ltd.
- Robert Bosch Korea Ltd.
- Robert Bosch (South East Asia) Pte. Ltd.
Mr. Bernhard Steinruecke
- Indo-German Chamber of Commerce (Director General)
- FAG Bearings India Ltd.
- Zodiac Clothing Company Ltd.
- HDFC ERGO General Insurance Company Ltd.
- Apollo Munich Health Insurance Company Ltd.
- Nuremberg Messe India Pvt. Ltd
Mrs. Renu S Karnad
- HDFC Property Ventures Ltd. (Chairperson)
- Credila Financial Services Pvt. Ltd. (Chairperson)
- Housing Development Finance Corporation Ltd. (Managing Director)
- HDFC Asset Management Co. Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- HDFC Standard Life Insurance Co. Ltd.
- Credit Information Bureau (India) Ltd.
- GRUH Finance Ltd.
- HDFC Bank Ltd.
- AKZO Nobel India Ltd.
- Indraprastha Medical Corporation Ltd.
- Feedback Infrastructure Services Pvt. Ltd
- G4S Corporate Services (India) Pvt. Ltd.
- Lafarge India Pvt. Ltd.
- EIH Ltd.
- HT Parekh Foundation
- WNS (Holdings) Ltd.
- HDFC PLC, Maldives
- United Spirits Ltd
- ABB Ltd.
- Hiref International LLC
Mr. Prasad Chandran
- Indo-German Chamber of Commerce. (Committee Member)
- Federation of Indian Chamber of Commerce. (Executive Committee
Member)
- Bombay Chamber of Commerce and Industry.
(Managing Committee Member)
- The Energy and Resources Institute (Committee Member)
Mr. Bhaskar Bhat
- Tata Ceramics Ltd. (Chairman)
- Virgin Mobile India Pvt. Ltd. (Chairman)
- Titan Industries Ltd. (Managing Director)
- Titan International Middle East FZE.
- Titan Watches & Jly Intl. (Asia Pacific) Pte. Ltd.
- Titan International Marketing Ltd.
- Trent Ltd.
- Titan Time Products Ltd.
- TA Pai Management Institute, Manipal (Member of Governing Council)
- SDM Institute of Management, Mysore (Member of Governing Council)
- National Institute of Technology, Uttarkhand (Chairman, Board of
Governance)
- Titan Foundation for Education (Chairman)
- Tata International Wolverine Brands Ltd.
- Favre Leuba AG, Switzerland (Director)
Dr. Steffen Berns
- Robert Bosch Engineering and Business Solutions Ltd. (Chairman)
- Bosch Automotive Electronics India Pvt. Ltd. (Chairman)
- MICO Trading Pvt. Ltd.
- Robert Bosch (Bangladesh) Ltd.
Mr. Soumitra Bhattacharya
- Bosch Electrical Drives India Pvt. Ltd.
- Automotive Component Manufacturers'' Association of India (Chairman of
Consumers Affairs and Anti-Counterfeiting Committee)
- Confederation of Indian Industry (Chairman, Karnataka State Council)
- MICO Trading Pvt. Ltd.
- Karnataka State Industrial and Infrastructure Development Corporation
Ltd.
Mrs. Renu. S. Karnad and Mr. Prasad Chandran are liable to retire by
rotation and offer themselves for re-election.
Mrs. Karnad, 61, holds a Bachelor Degree in Law from the University of
Bombay and Masters Degree in Economics from Delhi School of Economics.
She joined HDFC Ltd. in 1978 in the legal and credit department and
grew to become the head of lending business of HDFC Ltd. Presently, she
is the Managing Director of HDFC Ltd.
In 1984, she was awarded Pravin Fellow  Woodrow Wilson School of
International Affairs, Princeton University, Princeton, NJ.
Mrs. Karnad is an Independent Director of the Company (appointed on
April 1, 2007). She is the Chairperson of the Audit Committee and
member of Shareholders'' and Investors'' Grievance Committee of the
Company. She does not hold any shares in the Company.
Mr. Prasad Chandran, 61, is a post-graduate in Chemistry and has a
Masters degree in Business Administration. He has also received
Advanced Management Education from Institutes in the US, UK and Japan.
Mr. Chandran was a former president of Indo-German Chamber of Commerce
(IGCC) and is presently serving as Committee Member. He is also the
Managing Committee Member of the Bombay Chamber of Commerce and
Industry and Member of the Executive Committee of Federation of Indian
Chambers of Commerce & Industry (FICCI) and The Energy and Resources
Institute (TERI). He is also an active participant in a number of
trade industry delegations of the Government of India.
Mr. Chandran initiated the "Million Minds" Project which aims at
improving governance and fighting corruption. Whilst implementing the
BASF Global values and principles, he addressed policy issues on
corruption to raise the standards of governance in India. The "Million
Minds" project aims to sensitize stakeholders and creates voluntary
action groups in different parts of the country. He is presently
associated with a number of NGOs and is also an invited Board Trustee
of the Public Concern for Governance Trust (PCGT) Mumbai.
Mr. Chandran was the Chairman & Managing Director of BASF India
Limited. He was also the Chairman of BASF Group Companies in India and
Head-South Asia.
Mr. Chandran is presently an Independent Director of the Company. He
is the member of Audit Committee, Shareholders''/ Investors'' Grievance
Committee, Remuneration Committee, Share Transfer Committee and
Corporate Social Responsibility Committee of the Board. He does not
hold any shares in the Company.
Particulars of Employees
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this
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 Companies Act, 1956. Any shareholder interested in
obtaining a copy of the said Statement may write to the Company
Secretary of the Company.
Corporate Governance
A Report on Corporate Governance approved by the Board of Directors of
the Company and a certificate from the Practicing Company Secretary is
set out in the Annexure to the Directors'' Report. The Company has fully
complied with the Corporate Governance practices specified under the
Companies Act, 1956, and the listing agreement with the Stock
Exchanges.
A Code of Conduct for Directors and Senior
Management, Code of Conduct for Prevention of Insider Trading, Whistle
Blower Policy, Rules and Regulations of Service Conduct for Managerial
and Superintending Staff, Code of Business Conduct etc., effectively
support the Corporate Governance processes.
A Management Discussion and Analysis Report also accompany this report.
Business Responsibility
Pursuant to clause 55 of the listing agreement, listed companies are
required to submit Business Responsibility Report as part of their
annual report covering the principles enunciated in the said clause.
Accordingly, a report on Business Responsibility is set out in the
annexure to this Directors'' Report.
Energy, Technology, Foreign Exchange, etc.
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(1)(e) read with The Company''s (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in the Annexure
to the Directors'' Report.
Auditors
M/s. Price Waterhouse & Co., Bangalore, (Regn. No.007567S) Chartered
Accountants, the retiring auditors, are eligible for re-appointment.
Cost Auditors
Pursuant to MCA Cost Audit order no. 52/26/CAB- 2010 dated 06.11.2012,
M/s. Rao, Murthy & Associates, Cost Accountants, Bangalore (Regn.
No.000065, PAN: AAAFR8892D) have been appointed as Cost Auditors of the
Company for the financial year 2013.
Due date of filing cost audit report for financial year 2013 is June
29, 2014.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
- Accounting policies have been selected and applied consistently and
the judgments and estimates made 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.
- Proper and sufficient care has been taken 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.
- The annual accounts have been prepared on a going concern basis.
Acknowledgements
The Directors express their gratitude to the Central Government and the
State Governments of Karnataka, Maharashtra, Rajasthan, Goa and Tamil
Nadu for the support given to the Company. The Directors also thank all
customers, dealers, suppliers, financial institutions and banks,
members and others connected with the business of the Company for their
co-operation.
For and on behalf of the Board of Directors
Bangalore V. K. Viswanathan
February 27, 2014 Chairman
Dec 31, 2012
The Directors have pleasure in presenting their SIXTY FIRST Annual
Report together with the Audited Statement of Accounts for the year
ended 31st December, 2012.
Financial Results
The following are the financial results:
(Rs. Million)
2012 2011
Net Sales (excluding recovery of duties and taxes) 84,172 79,295
Of which Export Sales 9,402 10,344
Profit before tax 13,462 15,740
Less: Provision for tax 4,163 4,709
Add: Deferred tax and tax adjustments
relating to earlier years 284 196
Profit after tax 9,583 11,227
Appropriations:
Dividend:
- Dividend recommended at Rs. 60 per share
(previous year: Rs. 50 per share) 1,884 1,570
- Special dividend at Rs. 85 per share - 2,669
Tax on Dividend 306 255
Tax on Special Dividend - 434
General Reserve 958 5,000
Reversal of Dividend Distribution Tax - (4)
Balance carried forward 6,435 1,303
Total 9,583 11,227
Net sales for the year 2012 grew by 6.2%. The Profit Before Tax (PBT)
in 2012 as a percentage of net sales was at 16.0% as compared to 19.8%
in 2011. The Profit After Tax (PAT) as a percentage of net sales was
11.4% in 2012 as against 14.1% in 2011.
Material costs as a percentage to sales increased to 56.5% in 2012 as
compared to 55.4% in 2011.
Overall, the Profit Before Interest, Depreciation and Taxes, for the
year shows an decrease of 8.5% over the previous year.
Investments
Capital investment during 2012 was higher than previous year, at Rs.
7,262 mio. as against Rs. 5,388 mio. in 2011.
Dividend
The Board of Directors recommends a dividend of Rs. 60 per equity share
for the year 2012 as against a dividend of Rs. 50 per equity share in
2011 besides a special dividend of Rs. 85 per share in 2011 . This
dividend is subject to the approval of the shareholders at the
forthcoming Annual General Meeting.
Business Situation
The automotive market growth momentum slowed down considerably in the
year 2012. The vehicle sales performance in the second half of the year
resulted from low market sentiments, culminating from a slowdown in
India''s GDP, Industrial production, high inflation, interest rates
and with delayed monsoons. The Global scenario aided to the woes by
continuing to remain weak and limiting exports. During the last 3
quarters (April''12 to December''12), automobile exports registered
de- growth of 2.98 percent compared to the same period last year.
However, the 4th quarter saw a slight recovery in the Passenger car
segment owing to the festive season demand and some positive measures
from the Government on the fuel prices. But it was far from
compensating the overall situation in the market. Overall, the
automotive production volumes grew by a mere 2 % over 2011.
Segment-wise, the Passenger Cars & Utility Vehicles recorded positive
growth of 7.4% mainly with growth in Utility Vehicles supported by new
model launches. Within Passenger cars, dieselization continued to
remain strong with diesel share going up from 37% in 2011 to 48% in
2012. Commercial vehicles de-grew by 2% with Heavy Commercial Vehicles
posting a de- growth of 12%. The Light Commercial Vehicles posted
positive growth of 5.3% supported by a good growth in retail sector and
ramp up of new models by OEM''s in the premium segment. Tractors
de-grew by 6.6% with poor & delayed monsoons playing a major role.
Three Wheelers registered a 5% de-growth due to the tumbling export
market particularly in Sri Lanka and flat domestic sales. Two Wheeler
market grew by 10% in the first half of the year but the growth
considerably declined in the second half to end up with a year on year
growth of 4%.
In view of the market conditions that prevailed in 2012, the Company
performed moderately with sales from automotive segment growing by 4.7%
and exports at Rs. 8,823 mio. with a de-growth of 11.4% over 2011. Our
non-automotive business grew by 19.5% in 2012 as compared to 28.5% in
2011 and was mainly attributed to very good performance in the Power
Tools, Security Technology and Machine building division.
Automotive Technology
Diesel Systems business de-grew by 0.9 % in the year 2012 as compared
to the growth of 19.2% in the previous year owing to the slowdown
witnessed by the automotive market during the last two quarters of the
year 2012. As a clear testimony to the Company''s strong innovative
culture and its focus on providing value to customers, shift from
Product to System solution provider was reinforced with introduction of
not only Fuel Injection equipments but also Air & Exhaust After
Treatment solutions across segments. The Price sensitive and
technology intensive Light Passenger Vehicle segment (LPV) portfolio
was strengthened further in the year 2012 with the development of the
Generation 3 Common Rail Systems.
Total Cost of Ownership (TCO) in the Commercial
Vehicle (CV) segment can be improved with the Denoxtronic solution for
emerging markets. This has resulted in ~3% improvement in fuel
efficiency with Selective Catalytic Reduction (SCR) technology in
combination with Common Rail System (CRS). Integration of Inline pump
with an electronic governor provided Genset manufacturers a robust
system solution for the upcoming Central Pollution Control Board (CPCB)
- Bharat Stage 2 norms planned for introduction in the year 2013.
Gasoline Systems Division witnessed a tough market situation in 2012
driven by the economy slow down and also the price parity effect
between gasoline and diesel fuel affecting the gasoline Passenger Car
segments. This has resulted a de-growth of 9.4% in 2012. However, the
past year witnessed good market response for the 2 Wheeler EMS with
continued interest from OEMs.
Starter Motors and Generators registered an impressive growth of 51.1%
for the second consecutive year powered by New Base Line Generators
both in the domestic and export market and also increasing the share of
business with already existing products, thus doubling their turnover
in two years. The division achieved significant overall productivity
improvement over the previous year.
The division received recognitions from the customers Volkswagen and
Ashok Leyland for Quality and ramp-up support.
The Automotive Aftermarket division recorded a turnover of Rs. 1,917
crores in 2012; with a growth of 9.6%. This included over 25% growth in
2 wheelers and almost 20% growth in Passenger Car business. The
division received Quality awards from its customers Bajaj and Mahindra
& Mahindra. In our endeavor to get closer to our customers, two new
sales offices were established in the year 2012 - one in Jodhpur
(Rajasthan) and the other at Jabalpur (MP). Aggressive network
expansion at primary and secondary trade level continued and more than
one new customer appointed per day to create demand in the slowing
markets. eFOCuS, the Dealer ERP system, was implemented at ~250
distributor locations. Innovative customer binding programmes have
resulted in increased demand generation from retailers and mechanics.
A new workshop module Bosch Tractor Point was launched; Express Bike
Service was rolled-out across India. Novel training concepts such as
Mobile Training Van, web-based Training portal, 2 Wheeler Training
Concept were the other launches. Totally more than 25000 people were
trained across the country in 2012. Bosch System Technicians (BST),
hitherto available to Bosch Diesel Service, was extended to Bosch Car
Service personnel in 2012. A new Annual Maintenance Contract (AMC) kit
to strengthen the Quality standards of Bosch Diesel Service workshops
was released. The year 2012 witnessed increased market coverage across
vehicle segments through launch of new part numbers and seven new
suppliers were taken on board. The division acquired the Diagnostic
Tools & Technical Services Solutions business from SPX India to
strengthen the Company''s presence in the diagnostic business area.
SPX Diagnostics team launched 9 new test equipments for the Indian
market in the year 2012.
Industrial Technology Packaging Technology
In line with the general business scenario, Packaging Technology
division recorded a moderate 8.7% growth in 2012.The Confectionery
division grew by about 56%.
The focus in the year 2012 was on the development of SVI (Vertical form
fill Seal machine), Twin SVI basic machines for the market. The
machines were showcased at the industrial exhibitions held at Mumbai
and New Delhi in 2012.
The belt weigher was another significant addition to our portfolio as
it is a locally developed product and showcases our development
capabilities on a global platform. With the new FDI policy in retail,
we anticipate higher expectations from our customers in choosing
suppliers with capabilities to provide complete solutions to their
packaging needs. Industrial Equipment
The Industrial Equipment division registered an overall growth of 12.1%
both in the internal and external market segments. The division
exported Special Purpose Machinery items to Bosch works in Europe and
China during the year 2012.
Consumer Goods and Building Technology Power tools
The Power Tools division achieved an impressive growth of 16.7% thus
sustaining its consistent record of strong double digit growth over the
last decade in India. The division successfully opened 49 Bosch System
Specialist Stores(BSS) in 2012. Also, for the first time, the division
in partnership with Swan Machine Tools launched Accessorize -its
exclusive Power tools Accessories store in July at Ahmedabad with a
100% focus on Accessories. Skil Hand tool was launched for the first
time in India as lifestyle designer tools for home use and achieved an
amazing success. The division in association with National Institute of
Design (NID) launched a nationwide design contest called "India
Changers" to recognize industrial design projects that use innovative
design concepts to create socially relevant solutions for the
betterment of India.
Security Technology
Security Technology business posted an impressive 31.4% growth in sales
for the year 2012 compared to the sales achieved in 2011. Business unit
of Video Systems made the highest contribution to this, growing at 29%
over the last year. During the year 2012, the division enhanced its
local product portfolio by releasing a new range of highly competitive
mixer-amplifiers. The division participated in key Industry Trade shows
- IFSEC, Secutech and PALM Expo, few of the key trade shows in the
industry, in addition to certain road shows in key cities across India,
to strengthen the brand presence and product exposure to target
audience.
Solar Energy
The division started the year 2012 with the commissioning of 1 MW solar
project which installed Bosch solar photo voltaic panels. The division
also got empanelled as a certified channel partner for system
integration, with the Ministry of New and Renewable Energy. With the
empanelment, Bosch Limited can directly offer Government benefits to
its customers. The division faced challenges due to accelerated price
erosion of solar panel prices and is now focusing on the crystalline
technology based solution.
Thermo Technology
New manufacturing facility was setup in the last quarter of the year
2012 at Kumbalgodu, Kengeri- Hobli, Bangalore, and the division geared
up for the series of manufacturing of solar flat plate collectors,
solar thermal water heaters and accessories upon completing validation
trials in the current year 2013.
Competition and challenges in our business sectors
As in other regions of the world, the year 2012 was a challenging year
for the Indian automotive industry.
The demand fluctuation from customers owing to the slowdown and weak
market sentiments put additional pressure on the manufacturers. High
inflation and adverse foreign exchange increased the cost pressures and
challenged the businesses across all domains.
However, the Company continuously strived to capture every opportunity
with its efficient processes and systems. The Company also paced itself
with the changing requirement of the market and its developments. The
Company has always considered its people as its most valuable asset and
this has always been its core strength. Though the business growth in
the year 2012 has been far from satisfactory, the year 2013 seems even
more challenging but not without its fair share of opportunities and
growth. The Company aims to continue its successful march ahead by
focusing on customer satisfaction and meet expectation of all
stakeholders.
Plants
Bangalore
In the year 2012, the Bangalore Plant attained moderate production
level in all its products viz., Inline Pumps, Elements, Delivery
Valves, Common Rail Pumps, Glow Plugs and Single Cylinder Pumps. The
Plant had a big challenge in 2012 due to drop in customer demand which
led to huge pressure on cost and flexibility. However, the Plant
successfully tackled the productivity by taking measures such as
inventory reduction, budgetary control, temporary closures and manpower
re-deployment.
For the first time in the history of Bangalore Plant, the Bosch Board
of Management from Germany comprising of eight Board members visited
the Plant and the Technical Centre in Feb''12. The Bosch Board of
Management were highly appreciative of how a Plant more than half a
century can churn out market relevant products that are high on
technology but low on costs.
The Plant received the "Golden Peacock Environment management
Award" for excellence and ''Greentech Safety Award'' for EHS best
practices. The young team of Managers from the Plant became the
National Champions for Young Managers (NCYM) in a competition and were
the winners as well as runners at National level.
Nashik
The Nashik Plant has achieved the highest production levels in Common
Rail Injectors (CRI) by crossing a milestone of 2.5 million production
mark. The Plant produced 50 million DSLA Nozzle. In the conventional
products, the Plant faced sharp fall in demand due to general
sluggishness in the market. To reduce the adverse impact of
underutilisation of capacities, the Plant strongly focussed on cost
reduction measures. Though, the Plant went through a tough time, it saw
the year 2012 as an opportunity to closely review all the processes and
improve in all areas to prepare for the future to meet the market
demand. The Plant invested ~ 3,600 Mio INR for mainly expanding the
capacity in CRI and for building a new production hangar.
The Plant was recognized with the "CII-EXIM Bank''s Prize in
Business Excellence" for the year 2012. It was also awarded with the
''Greentech Safety Award 2012 (Silver)'' for outstanding achievements
in Safety Management and "Bajaj Gold award 2011 to 2012" towards
achieving and sustaining its quality of products. Seven apprentices
from the Bosch Vocational training Centre (BVC) of the Plant won 1st
and 2nd positions in the 24th Regional Work Skill Competition conducted
by the CII and Director General of Employment & Training, Maharashtra.
Jaipur
Jaipur Plant produced its four millionth VE Pump in the year 2012. The
Plant has successfully transferred VE components from Bangalore to
Jaipur and initiated an all important strategic project on ''End of
Production'' (EoP) at Feuerbach, Germany. This has reduced Value chain
complexities and increased its cost competitiveness. Also, the Plant
has created ready to use production space with state of the art
facilities for further potential expansion.
The Plant was honoured with CII-EXIM Bank''s
''Commendation for significant achievements in Business Excellence''
award for the year 2012. The other awards received were: Co-creation
award from M&M, Quality improvement award from KOEL, Smiley award from
M&M, the national award for excellence in Water Management by CII, Best
Employer Certificate by Rajasthan Government, AIMA Award for Best CSR
Practices leading towards Responsible Business & Sustainability, an
award from RIICO (Rajasthan Industrial Corporation) for Commendable
Performance in Efficient Water use and Energy conservation award from
Rajasthan Government.
Naganathapura
In the year 2012, good productivity improvement of the products
manufactured was achieved by the Plant with substantial ramp-up. The
Plant recorded major milestones in the production of NBL Generators in
2012.
Increased localization of power train sensors, accelerator pedal and
fuel supply modules were the other highlights in the Gasoline system
Plant. Improvements in Environment Health and safety were achieved.
Verna (Goa)
The year 2012 witnessed a very significant milestone for the Verna
Plant. The year saw the scheduled completion of the construction
activities for the new Plant that had commenced in 2011, and the same
was inaugurated on the 10th of August 2012 by the Honorable Chief
Minister of Goa in the presence of senior Bosch officials as well as
our key suppliers and customers. The new facility has provided the
division with the right platform to scale to greater growth levels in
the coming years.
The Plant augmented internal processes by introducing "Project
Management'' as one of its key process, the BPS initiatives also
stabilized with the Point CIP, Flow production, and various process
improvements contributing to reduced lead times. The Plant''s Supply
Chain continued to focus on cost reduction initiatives, vendor
development and lean inventory management.
Industrial Relations
Industrial relations at all Plants and other establishments continued
to be cordial through out the year 2012. Various bipartite and
tripartite settlements were signed by different Plants on issues that
concerned the management and the workmen in a cordial atmosphere. On
the expected expiry of the Long Term Settlements in three of the Plants
on 31.12.2012, the respective Unions have submitted their charter of
demands, for the consideration of the management, and the same are
under the active consideration for negotiations along with the
management proposals.
Information Technology (IT)
The annual assessment of the maturity of IT enabled business processes
showed further improvement during the year 2012 on all seven dimensions
- significant improvements in the areas of process organization,
authorizations, documentation, training and communication.
A portal based solution was implemented to track goods in transit with
the freight forwarders prior to being received by the customers.
Electronic Data Interchange (EDI) of customer schedules and advanced
shipment notifications was implemented with one customer. New IT tools
and central authorizations concept was implemented which supported the
purchase group and purchase organization harmonization across the
region.
An initiative in the Bangalore Plant and corporate areas that focused
on removal of unwanted and obsolete IT hardware, software and clean up
of data on central storage achieved significant savings. This was made
possible with the active involvement and enthusiasm of more than 100
internal "Data Security Partners" and more than 1000 IT users.
Change Initiatives Continuous Improvement Process (CIP)
The journey of CIP activities in the Company attained the completion of
2 decades in the year 2012 and during these 20 years CIP has
contributed to orient the associates of the Company towards Continuous
Improvement mindset. Focus on indirect areas has been improved over the
years with the introduction of LeaderCIP approach in the Company. For
optimizing repetitive processes (e.g. Machine Ordering Process,
Recruitment Process, Customer Complaint Resolving Process), VSDiA
(Value Stream Design in Indirect Areas) as an integral part of
LeaderCIP, has been gaining a lot of importance since its inception.
VSDiA has become most sought tool of CIP in 2012 for optimizing
processes in indirect areas. A direction has been set to apply
SystemCIP model to bring a clear focus for continuous and proactive
improvements even in indirect areas to address application of LEAN
philosophy.
Associate level involvement at lower level is being motivated by means
of various CIP tools (e.g. Shop Floor CIP, Voluntary Lernstatt Team,
Waste Elimination Process) and encouraging them to participate in
internal as well as external competitions. Our CIP teams received
accolades in the regional competitions. Deep rooted CIP philosophy
practiced in the Company helped to bring increased amount of savings in
the difficult year of 2012 in comparison to 2011 by means of systematic
improvements.
Bosch Production System (BPS)
BPS has been playing a prominent role in the
Company in bringing improvements on the shop- floor by following
principles and approach of Bosch Production System. To improve upon the
understanding of associates regarding BPS implementation, 2 days'' BPS
Basic program has been launched. This program has replaced the earlier
3 days'' "BPS 100" training program inline with the recent
learning to give focus to implementation related with goal/s
achievement rather than just addressing the principles of BPS. Further,
to improve upon the contribution of process planners in the progress
related with BPS implementation, "Leading BPS Plant - Process
Planners" module has been launched.
The assessment methodology being used as part of BPS implementation
progress has been instrumental in improving important aspects on
shop-floor for improving BPS implementation maturity in
conceptualization and execution. Considerable improvements in Leveling,
Lean Line Design and reduction in Performance losses have been achieved
in 2012.
Diesel Systems Business Excellence
The Diesel Systems Business Excellence integrates the various cross
functions in the Plants and aligns them towards meeting the Company''s
Diesel Systems Business (INDS) Vision and Mission. This has been
implemented at all the Diesel Systems (DS) manufacturing Plants in
India viz., Bangalore, Nashik and Jaipur. The Company adopted the
European Foundation for Quality Management (EFQM) model of Business
Excellence to improve the organization''s effectiveness in a holistic
manner.
The Company carries out regular assessments at all Diesel Plants as a
health check in order to continuously improve the systems and processes
in its journey towards Business Excellence. Key performance indicators
are measured to enable the achievement of required results as a cause
and effect with respect to all the key stakeholders. INDS is striving
towards institutionalizing a culture of ''Living Business
Excellence'' as ''Business Excellence at work'' by incorporating the
same in the INDS Vision & Mission. The strategic measures / targets are
deployed across Plants & connected corporate functions through Policy
Deployment process.
INDS has won many accolades in this exciting journey. Diesel Systems,
India as a business unit was assessed for the first time in 2012 by a
team of senior management from DS worldwide with an external EFQM lead
assessor. INDS achieved a milestone equivalent to the EFQM
''Recognized for Excellence'' (R4E) level. Bangalore Plant won the
coveted ''CII- EXIM Bank award for Business Excellence'' in 2009,
Nashik Plant won the ''CII -EXIM Bank Prize for Business Excellence''
in 2012 and Jaipur Plant was recognized with ''Significant Achievement
on Journey towards Business Excellence'' in 2012.
Bosch Vocational Centre
The year 2012 was devoted to intensify training of Associates (workmen
and staff) and sustaining of our excellence in the field of training in
the country.
Bosch Vocational Centre conducted and extended its support to various
programs such as On Job Training, Skill Enhancement Training, CIP & 5S,
Quality and Safety, Training Program on Mechatronics, Advanced
Measurement Technique, Pneumatics, Hydraulics & CNC, Need based
programmes like OHSAS, TPM and Knowledge Sharing Sessions for
Company''s executives.
BVC being the "Best in Class" in the country also sustained
excellence in the field of Vocational Training by increasing tally of
Gold medal winners to 204. The Company was declared "Best
Establishment" in the country for the 44th time.
Awards and Recognition
The Company won several awards, as recognition of the efforts put in by
the Company:
- ''Overall Silver award'' for vendor performance at the Maruti
Suzuki India Ltd (MSIL) Vendor Conference held at Bangkok in May 2012.
- ''President''s Award'' conferred by Mahindra and Mahindra on
Bosch Limited, Diesel Systems for outstanding overall performance for
the year 2011-12 at the vendor conference held at Prague in May 2012.
- ''Sustainable Initiative on Reusable Packaging Award'' at the
Cummins Vendor Conference held at Pune in June 2012.
- ''Best Supplier of 2012'' award by New Holland Fiat India (P) Ltd
(NHFIL) for all-round support given to NHFIL on Fuel Injection Systems
for TREM3A Tractors.
- ''Car India & Bike India award 2013'' for being the Automobile
Component Manufacturer of the Year 2013 held at Mumbai in January 2013.
Bosch India Foundation
Bosch India Foundation (BIF), the Trust of the Bosch companies in
India, was able to reach out to an additional 5,700 youths in 2012. Of
the two focus areas of Vocational Skill Development and Health care,
the growth in activity was higher in the area of vocational/ skill
training. Through 30 new proposals in 2012, BIF was able to start
activities in new locations such as Pune, Nashik, Kolkatta, Kolar,
Mysore, Udupi, Hassan, Wayanad and Ernakulam. BIF partnered with 20 new
NGO''s taking the partnership base to a total of 35. Each partnership
was of immense value as it helped the BIF to reach out to those
communities and localities that the NGO''s served and had in-depth
connection. In 2012, BIF partnerships offered short duration training
in 32 trades. Three new areas that the Foundation made an entry was in
supporting vocational training to
i) specially-abled youth
ii) construction workers and
iii) rural farmers.
Subsidiary Company
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on
December 31, 2012 is not material, no consolidated financial statements
under Accounting Standard 21 "Consolidated Financial Statements" as
notified under section 211(3C) of the Companies Act, 1956, has been
prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors'' Report for the year ended 31st December
2012 of MICO Trading Pvt. Ltd.
Directors
Mr. Bhaskar Bhat joined the Board as Additional Director and
Independent Director with effect from 01.01.2013.
Mr. Bhaskar Bhat, aged 58 years, is a B.Tech (Mechanical Engineering)
from IIT Madras (1976) and has the Post Graduate Diploma in Management
from IIM Ahmedabad (1978). He started working as a Management Trainee
at Godrej & Boyce Manufacturing Company Private Limited in 1978. After
spending five years in Godrej, he joined the Tata Watch Project which
was initiated at Tata Press Limited. Since 1983 he has been associated
with the Tata Watch Project which later became Titan Watches Limited
and is now Titan Industries Limited. Presently, Mr. Bhaskar Bhat is the
Managing Director of Titan Industries Limited and is responsible for
Sales & Marketing, Human Resources, International Business and general
managerial assignments of the company.
Mr. Bhaskar Bhat is a member of the Governing Council at the T.A. Pai
Management Institute, Manipal and the SDM Institute of Management and
Development, Mysore. He was appointed as the Chairperson of the Board
of Governors at the new National Institute of Technology established at
Uttarakhand. He received Distinguished Alumnus Award in IIT Madras in
2008. He was conferred the Qimpro Gold Standard Award for Business in
February 2010. He won the Most Admired Retail Professional of the year
2011 at the India Retail Forum 2011 and distinguished Alumnus Award in
IIM Ahmedabad in November 2011. He was ranked as the 4th CEO in a
survey conducted by the Business Today, INSEAD and Harvard Business
Review.
Mr. V.K. Viswanathan retired as Managing Director of the Company with
effect from the close of office hours on 31.12.2012. However, he
continues as Director and Vice Chairman of the Board from 01.01.2013.
Dr. Manfred Duernholz ceased to be Joint Managing Director from the
close of office hours on 31.12.2012 consequent to assuming
responsibility for leading projects in Diesel Systems, Robert Bosch
GmbH.
The Board of Directors places on record their deep appreciation of the
outstanding contributions made by Mr. V.K. Viswanathan and Dr. Manfred
Duernholz to the growth and profitability of the Company.
With effect from 01.01.2013, the Board of Directors of the Company
appointed Dr. Steffen Berns as Additional Director and Managing
Director of the Company responsible for Automotive Aftermarket,
Starters and Generators, Power Tools, Security Technology, Solar Energy
& Thermo Technology and Engineering.
Dr. Steffen Berns, aged 50 years, studied Mechanical Engineering at
Darmstadt Technical University, Germany, and got a Doctorate in
Engineering from the Technical University of Aachen, Germany. He served
the Company as General Manager-R&D and OE Sales during the years 1996
-1998. From 1998 to 1999 he held the position as President of Robert
Bosch India Ltd. (Presently Robert Bosch Engineering and Business
Solutions Ltd.). He then went back to parent company Robert Bosch GmbH
as Senior Vice- President, Diesel Systems, responsible for Engineering
Control Units and Sensors and since 2006 as Executive Vice President,
Gasoline Systems division. He joined the Company from 01.09.2012 and
became the Managing Director of the Company w.e.f. 01.01.2013.
With effect from 01.01.2013, the Board of Directors of the Company
appointed Mr. Soumitra Bhattacharya as Additional Director and Joint
Managing Director of the Company responsible for Finance and
Administration, IT Co-ordinator and Diesel System Business in India.
Consequent, to his appointment as Joint Managing Director, Mr.
Bhattacharya ceased to be Alternate Director to Dr. B. Bohr from the
close of office hours on 31.12.2012.
Mr. Bhattacharya, aged 52 years, is a graduate in Commerce and a
Chartered Accountant. He has been associated with the Company since
1995 and has a valuable experience for over 27 years in the areas of
Finance, Accounts and entire commercial functions including HR, Legal,
Tax, systems etc. He served as a Commercial Director of Robert Bosch,
Turkey. Prior to this assignment he served as Vice President
responsible for the Commercial and Administration functions at the
Company''s Plants at Nashik and Jaipur. He worked in Stuttgart,
Germany, during 1998-99 on deputation to parent company Robert Bosch
GmbH as General Manager at the Feuerbach Plant. He was Executive
Director responsible for Finance and Administration of the Company
until 31.12.2012 and became Joint Managing Director of the Company from
01.01.2013. He was also Alternate Director to Dr. B. Bohr during the
period from 01.07.2011 to 31.12.2012. Mr. Bhattacharya is Vice
Chairman of Confederation of Indian Industry, Karnataka State Council
and Chairman of the Consumer Affairs and Anti-Counterfeiting Committee
of Automotive Component Manufactures Association of India.
Names of companies/firms in which Directors of the Company hold/held
office as Director/Partner are given below:
Dr.A.Hieronimus
- MindTree Ltd. (Vice Chairman)
- Bosch Rexroth AG (Member of Supervisory Board)
Mr.V.K.Viswanathan
- Robert Bosch Engineering and Business Solutions Ltd. (up to 31.12.12)
- Bosch Rexroth (India) Ltd. (up to 31.12.12)
- Bosch Chassis Systems India Ltd. (up to 31.12.12)
- Bosch Automotive Electronics India Private Ltd. (up to 31.12.12)
- Bosch Electrical Drives India Private Ltd. (up to 31.12.12)
- MICO Trading Private Ltd. (up to 31.12.12)
- BSH Household Appliances Mfg. Pvt. Ltd.
- FLSmidth Pvt. Ltd.
- Robert Bosch (Bangladesh)Ltd. (up to 01.02.13)
- Indo-German Chamber of Commerce (President)
- Confederation of Indian Industry (Committee Member, Southern &
National)
Dr. B. Bohr
- ZF Lenksysteme GmbH (Chairman of Supervisory Board)
Mr. B. Steinruecke
- FAG Bearings India Ltd.
- Zodiac Clothing Company Ltd.
- HDFC ERGO General Insurance Company Ltd.
- Apollo Munich Health Insurance Company Ltd.
- Indo German Chamber of Commerce (Director General)
Mr.B.Muthuraman
- Tata International Ltd.(Chairman)
- Tata Africa Holdings (SA) (Pty) Ltd.(Chairman)
- Tata Steel Ltd. (Vice Chairman)
- Tata Industries Ltd.
- Tata Steel Europe Ltd.
- Tulip UK Holdings No.2 Ltd.
- Tulip UK Holdings No.3 Ltd.
- Tata Incorporated, New York.
- Strategic Energy Technology Systems Ltd.
Mrs. Renu S Karnad
- HDFC Property Ventures Ltd. (Chairperson)
- Credila Financial Services Pvt. Ltd. (Chairperson)
- HDFC Education and Development Services Pvt. Ltd. (Chairperson)
- Housing Development Finance Corporation Ltd. (Managing Director)
- HDFC Asset Management Co. Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- HDFC Standard Life Insurance Co. Ltd.
- Credit Information Bureau (India) Ltd.
- GRUH Finance Ltd.
- HDFC Bank Ltd.
- AKZO Nobel India Ltd.
- Indraprastha Medical Corporation Ltd.
- Feedback Infrastructure Services Pvt. Ltd
- G4S Corporate Services (India) Pvt. Ltd.
- Value and Budget Housing Corpn(India)Pvt. Ltd
- Lafarge India Pvt. Ltd.
- EIH Ltd.
- HT Parekh Foundation
- WNS Global Services (P) Ltd.
- HDFC PLC, Maldives
Mr. Prasad Chandran
- BASF India Ltd. (Chairman and Managing Director)
- BASF Asia Pacific (India) Pvt. Ltd. (Chairman)
- BASF Lanka Private Ltd. (Chairman)
- BASF Catalysts (India) Pvt. Ltd.
- BASF Bangladesh Ltd.
- BASF Grameen Ltd.
- Indo German Chamber of Commerce. (Committee Member)
- Federation of Indian Chamber of Commerce. (Executive Committee
Member)
- Bombay Chamber of Commerce and Industry. (Managing Committee Member)
- The Energy and Resource Institute (Committee Member)
Mr. Bhaskar Bhat (from 01.01.2013)
- Tata Ceramics Ltd. (Chairman)
- Virgin Mobile India Pvt. Ltd. (Chairman)
- Titan Industries Ltd. (Managing Director)
- Titan Properties Ltd.
- Titan International Middle East FZE
- Titan Watches & Jly Intl. (Asia Pacific) Pte. Ltd.
- Titan International Marketing Ltd.
- Trent Ltd.
- Titan Time Products Ltd.
- TA Pai Management Institute, Manipal (Member of Governing Council)
- SDM Institute of Management, Mysore (Member of Governing Council)
- Jain University (Member of academic Council)
- National Institute of Technology, Uttarkahand (Chairman, Board of
Governance)
- The Titan Foundation for Education (Chairman)
Dr. Manfred Duernholz (up to 31.12.2012)
- MICO Trading Pvt. Ltd. (up to 31.12.12)
Dr. Steffen Berns (from 01.01.2013)
- Robert Bosch Engineering and Business Solutions Ltd.
- Bosch Automotive Electronics India Private Ltd.
- MICO Trading Private Ltd.
- Robert Bosch(Bangladesh)Ltd. (from 01.02.13)
Mr. Soumitra Bhattacharya (from 01.01.2013)
- Bosch Electrical Drives India Private Limited
- MICO Trading Private Limited
- Automotive Component Manufacturers Association of India (Chairman of
Consumers Affairs and Anti-Counterfeiting Committee)
- Confederation of Indian Industry (Vice - Chairman, Karnataka State
Council)
Dr. Hieronimus and Mr. B. Steinruecke are liable to retire by rotation
and offer themselves for re- election.
Dr. Hieronimus, aged 65 years, holds a Diploma in Mathematics from the
University of Cologne, Germany. He joined Mannesmann AG in 1979 and
held senior positions responsible for materials management, sales and
operation planning in the Mannesmann Group companies in Germany. In
1990, he became a Member of the Management Board of Mannesmann Demag
Baumaschinen GmbH and later of the Board of Management in Mannesmann
Rexroth GmbH. From 1997 to April 2001, he was a Member of Executive
Board of Mannesmann Rexroth AG, Germany and continued in that position
till August 2003, upon the takeover of Rexroth AG by Robert Bosch GmbH.
Dr. A. Hieronimus was Managing Director of the Company from 01.09.2003
and consequent upon assuming new responsibility from 01.02.2008 as
Chairman of the Board of Directors of Bosch Rexroth AG, he ceased to be
the Managing Director of the Company from 01.02.2008. The Board of
Directors appointed Dr. A Hieronimus as Chairman of the Company from
01.02.2008. Dr. Hieronimus holds 640 shares in the Company. He is a
member of Audit Committee and Shareholders''/Investors'' Grievance
Committee of the Company. He is also the Chairman of the
Shareholders''/ Investors'' Grievance Committee and a member of the
Audit Committee in MindTree Limited.
Mr. B. Steinruecke, aged 57 years, studied Law and Economics in Vienna,
Bonn, Geneva and Heidelberg. He has a Law degree from the University
of Heidelberg and passed the Bar Examination of the High Court of
Hamburg. He worked with Coopers and Lybrand, Hamburg before joining
Deutsche Bank in 1984 and rose to become General Manager of the Mumbai
Branch and Joint Chief Executive Officer of Bank''s operations in
India. Later, he became the Managing Partner and Speaker of the Board
of the ABC Privatkunden-Bank, Berlin. In July 2003, he became the
Director General of Indo -German Chamber of Commerce. Mr. Steinruecke
is an Independent Director of the Company, Chairman of
Shareholders''/Investors'' Grievance Committee, member of Audit
Committee, Remuneration Committee and the Share Transfer Committee of
the Board. He does not hold any shares in the Company.
Particulars of Employees
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per
provisions of Section 219(1)(b)(iv) of the Companies Act, 1956, this
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 Companies Act, 1956. Any shareholder interested in
obtaining a copy of the said Statement may write to the Company
Secretary at the Registered Office of the Company and the same will be
sent by post.
Corporate Governance
A Report on Corporate Governance approved by the Board of Directors of
the Company and a certificate from the Practicing Company Secretary is
set out in the Annexure to the Directors'' Report. The Company has
fully complied with the Corporate Governance practices specified under
the Companies Act, 1956, and the listing agreement with the Stock
Exchanges.
A Code of Conduct for Directors and Senior Management, Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy, Rules and
Regulations of Service Conduct for Managerial and Superintending Staff,
Code of Business Conduct etc., effectively support the Corporate
Governance processes.
A Management Discussion and Analysis Report also accompany this report.
Business Responsibility
Pursuant to clause 55 of the listing agreement, listed companies are
required to submit Business Responsibility Report as part of their
annual report covering the principles enunciated in the said clause.
Accordingly, a report on Business Responsibility is set out in the
annexure to this Directors'' Report. The report covers all activities
connected with Corporate Social Responsibility undertaken by the
Company in the year 2012.
Energy, Technology, Foreign Exchange, etc.
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(1)(e) read with The Company''s (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in the Annexure
to the Directors'' Report.
Auditors
M/s. Price Waterhouse & Co., Bangalore, (Regn. No. 007567S) Chartered
Accountants, the retiring auditors, are eligible for re-appointment.
Directors'' Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures, if any.
- Accounting policies have been selected and applied consistently and
the judgments and estimates made 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.
- Proper and sufficient care has been taken 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.
- The annual accounts have been prepared on a going concern basis.
Acknowledgements
The Directors express their gratitude to the Central Government and the
State Governments of Karnataka, Maharashtra, Rajasthan and Goa for the
support given to the Company. The Directors also thank all customers,
dealers, suppliers, financial institutions and banks, members and
others connected with the business of the Company for their
co-operation.
For and on behalf of the Board of Directors
Bangalore Albert Hieronimus
27th February 2013 Chairman
Dec 31, 2011
The Directors have pleasure in presenting their SIXTIETH Annual Report
together with the Audited Statement of Accounts for the year ended 31st
December, 2011.
Financial Results
The following are the financial results:
(Rs. Million)
2011 2010
Net Sales (excluding recovery
of duties and taxes) 79,294.7 66,305.0
Of which Export Sales 10,344.1 8,460.7
Profit before tax 15,739.9 12,027.9
Less: Provision for tax 4,710.0 3,660.0
Add: Deferred tax and tax
adjustments relating to earlier years 195.7 221.1
Profit after tax 11,225.6 8,589.0
Appropriations:
Dividend:
- Dividend recommended
at Rs. 50 per share
(previous year: Rs. 40 per share) 1,569.9 1,255.9
- Special dividend at Rs. 85 per share 2,668.9 -
Tax on Dividend 254.7 208.6
Tax on Special Dividend 432.9 -
General Reserve 5,000.0 3,750.0
Capital Reserve - 0.6
Reversal of Dividend
Distribution Tax (4.8) (3.6)
Balance carried forward 1,304.0 3,377.5
Total 11,225.6 8,589.0
Net sales for the year 2011 grew by 19.6%. The Profit Before Tax (PBT)
in 2011 as a percentage of net sales was at 19.8% as compared to 18.1%
in 2010. The Profit After Tax (PAT) as a percentage of net sales was
14.1% in 2011 as against 13.0% in 2010.
Material costs as a percentage to sales increased to 56% in 2011 as
compared to 54.3% in 2010.
Overall, the Profit Before Interest, Depreciation and Taxes, for the
year shows an increase of 22.7% over the previous year.
Investments
Capital investment during 2011 was higher than previous year, at
Rs. 6,587 mio. as against Rs. 3,021 mio. in 2010.
Dividend
The Board of Directors recommends a dividend of Rs.50 per equity share
for the year 2011 as against a dividend of Rs.40 per equity share in
2010. This dividend is subject to the approval of the shareholders at
the forthcoming Annual General Meeting.
A special dividend of Rs.85 per equity share was paid to the shareholders
in 2011, on the occasion of 125th anniversary of Bosch and to
commemorate 60 years of the Company since its incorporation in the year
1951. The total dividend payout for the year 2011 is at Rs.135 per equity
share.
Business Situation
The automotive market was upbeat in the first half of the year 2011,
continuing the growth momentum from the previous year. However, poor
market sentiments, increased food & fuel prices and interest rates took
their toll, what with the sale of passenger cars in October 2011
falling to the lowest in two years forcing the industry to slash
forward looking forecasts. The widening price differential between
petrol and diesel has further favoured the demand for diesel cars. This
notwithstanding, OEMs continued to launch new models in all market
segments especially passenger cars. Overall, the automotive sector was
able to sustain double digit growth aided by a solid performance in
the first half of the year 2011 and partially aided by stable rural
demand.
Segment-wise, the commercial vehicle sector leads the pack with a
strong 22% growth in 2011 over the previous year. Within this, Light
Commercial Vehicle (LCV) segment grew by 30% driven by robust demand
for sub 3.5 ton LCVs. Tractor segment continued to grow strongly with a
24% growth over 2010 backed by a bumper agricultural output. Two
Wheeler and Three Wheeler segments registered a growth of 18% and 15%
respectively.
In view of the above scenario, the Company outperformed expectations
with sales from the automotive segment growing by 19.1% and exports
breaking previously achieved records and clocking the best ever
performance at Rs.10,344 mio. with a growth of 22.3% over 2010.
Our non-automotive business grew by 28.5% in 2011 as compared to 2010.
This growth is mainly attributed to strong performance in the Power
Tools, Packaging and Machine Building divisions.
Automotive Technology
Diesel Systems business grew by 19.2% in the year 2011 despite the ups
and downs witnessed by the automotive market in 2011. The Diesel
Systems business continued to drive focused innovation on the value
line Common Rail System (CRS) for Light Commercial Vehicles as also
simplification of the
CRS for small engines to create value propositions for our customers.
These value offerings have helped the Company bag significant orders
from key OEMs amidst stiff competition. The growth would have been much
higher for the Diesel Systems business, but for the sluggishrtess
experienced in the second half of the year mainly in the passenger car
segment which grew by just 7% over previous year. Within this, there
was a clear shift in the market from Gasoline to Diesel passenger cars
owing to the high price differential between the two fuels.
Gasoline Systems business suffered a slowdown in 2011 and posted a
de-growth of 6.4% due to reduction in passenger car sales consequent to
gasoline price increase. The division introduced the first 2 Wheeler
Engine Management Systems (EMS) in series production for a customer
project. Focus on system engineering in Low Price Vehicle and 2 Wheeler
systems for innovative and cost effective solutions to the Indian
market, were the other highlights of the division.
Starter Motors and Generators business witnessed a strong growth of
63.1% in the year 2011 powered by New Base Line Generators both in the
domestic and export market. The division also achieved overall
productivity improvement over previous year.
In the year 2011, the division introduced "Thermal Protected Starters"
for Commercial Vehicle applications, which is an Indian platform
project going global. The division added renowned global OEMs to its
portfolio of customers like Renault, Volkswagen and Ford in 2011. The
division bagged "Best Supplier" award from the customer JCB India for
delivery and quality.
The Automotive Aftermarket division registered an impressive growth of
15.2% in the year 2011. This continuous growth over the years is made
possible owing to the division's expanded footprint in the market
through roll-out of new concepts/ modules such as Express Bike Service
(EBS), Tractor Points(TP) as well as extension of existing service
networks at both 1st and 2nd Trade Level. The IT tools and systems
(e.g. e FOCuS, FR Portal {for Field Representatives}) were also
introduced for better sales and dealer management. Customer binding and
brand building initiatives further boosted our market competitiveness.
Infrastructure projects including new sales offices and warehouses
successfully completed in the year 2011, for better customer
responsiveness.
The OE filters, spark plugs and OE service blocks recorded highest ever
sales and acquired new customers. New products from the Diagnostics
Centre of Competence were successfully launched in line with
'local-for-local' strategy. With one new part number released per
working day, the market coverage of all the Company's products further
increased across vehicle segments.
Industrial Technology
Packaging Technology (Verna (Goa) Plant)
The year 2011 was the most defining year for the Packaging Technology
division as it achieved the highest turnover with 40% growth over 2010.
At the end of the first quarter of 2011, the division bagged the single
largest export order for a record number of 60 machines. This project
was successfully executed and the machines delivered within the time
frame.
The division expanded its product portfolio with the development of a
low cost candy wrapping machine. This machine was also exhibited at
Interpack, Germany, for business promotion and was well received. On
the vertical baggers, it had a very successful launch of SVI2600 B, at
the India
Packaging Show in Delhi. A host of features like low height, high
output and easy accessibility allow for improved packaging efficiency.
During the same occasion, the Belt weigher FBW4021B was previewed,
which offers high output and accuracy.
The division continued its success with the horizontal form fill and
seal machines bagging orders from some of the most prestigious
customers in India. It also executed first local order for
pharmaceutical machines of MLF and FLC lines.
The year 2011 was also the year the division took up construction
activities for its new Plant. The enhanced capacity will provide the
division with the right platform to scale higher growth levels.
Industrial Equipment
The Industrial Equipment division registered a good growth of 53.1% in
the year 2011. Business with the Company's customers grew by 23% in a
highly competitive market.
New and prestigious customers from the Auto and Electrical equipment
sectors were added to the Company's customer list. The division
witnessed a substantial growth in Tool Room activities during the year
2011. Exports to Europe were also an important achievement. The
division focused on building up of skills for the manufacture of
machines and equipments to meet international standards.
Consumer Goods and Building Technology Power tools
The Power Tools division achieved an impressive growth of 22% in the
year 2011 making 'PT India' one of the few countries to register a
consistently strong growth in the last 4 years.
In 2011, the division launched its new state-of-the- art training
center in Bangalore created with an investment of Rs.50 mio. making it
one among the largest training centres in the Bosch PT world. With this
initiative, Bosch PT India becomes the first Power Tool player in the
country to offer advanced training programmes to its customers and end
users.
Also launched in the year was the Fischer Exclusive Store at Kolkata to
provide anchoring solutions to meet the growing demand in the region.
The division inaugurated 'Bosch System Specialist' stores in nine
cities across the country including one at Goa which is the largest of
its kind in the world. In the year 2011, Bosch Power Tools India marked
the 125th anniversary of Bosch through an innovative campaign called
'Power Drive 125' spread across 20 different locations in the country.
The division continued to supply tightening and pneumatic system
solutions to major automotive OEMs such as Volkswagen, General Motors,
BMW and Mercedes Benz in India. Localization was one of the core focus
areas of the division. Manufacturing of a 2kg Hammer began at the Bosch
Power Tools Plant in Bangalore making it only the third Plant in the
Bosch Power Tool World to do so. Bosch Accessories showcased tremendous
growth by crossing Rs.100 crores turnover mark in 2011 doubling the
turnover in two years, rising to No.3 position. The division bagged the
Gold and Silver medals at the prestigious 'TOOLYMPICS' contest-2011, in
recognition of the various innovative market oriented activities.
Security Technology
The Security Technology division achieved 18.4% growth in the year 2011
compared to 2010. The division launched its distribution business for
Video System Products under the Brand name of' Advantage Line'. It
established a new business -'Engineering Solutions & Software',
catering to large integrated projects.
There were numerous key projects for the year 2011. To mention a few -
a prominent racing circuit, various state assemblies, a major airport,
steel plant and power plant.
The division participated in IFSEC 2011, lauded as one of the most
important trade exhibitions for Commercial & Homeland Security. A full
range of security, safety, and communications products from Bosch were
showcased at this important platform.
Solar Energy
In the year 2011, the Solar Energy division launched solar energy
products and services in India. To capitalize on the potential of the
nascent Indian solar photovoltaic market, the division introduced 60
cell mono-crystalline silicon module and Micromorph thin film modules.
Along with photovoltaic modules, the division also offered project
development services including engineering, procurement and
construction of solar power plants. Since June 2011, the division
delivered 1000 kWp of thin film modules.
Thermo Technology
The Thermo Technology division started its activities in 2011. It
ventured into sales and service of industrial boilers coming from
Germany and China. The series manufacture of solar flat plate
collector, storage tank and mounting structure for domestic and
commercial hot water applications are planned in 2012.
Competition and challenges in our business sectors
As in other regions of the world, the year 2011 was a testing year for
the Indian automotive industry. In addition to the demand fluctuation
from customers owing to the recession, volatile raw material prices
aggravated the cost pressures of manufacturers. High inflation and
labour issues made it one of the most challenging years to do business
in.
However, the Company was among the very few organizations that were
able to convert this apparent downside into an opportunity. With
efficient processes and systems, the Company ensured that it remained
cost competitive, delivering innovation and value to our customers,
thereby maintaining its market share.
The Company's aggressive engineering, manufacturing, marketing and
sales initiatives will continue into 2012 with renewed vigor, to expand
our reach and strengthen the leadership position. Further, our clear
long-term focus and sustained investments in future technologies,
prepares us for the uncertainities that lie ahead and helps us enhance
the Company's value proposition to all stakeholders.
Plants Bangalore
Bangalore Plant attained the highest production level in all its
products viz., Inline Pumps, Elements, Delivery Valves, Common Rail
Pumps, Glow Plugs and Single Cylinder Pumps in the year 2011.
The Plant invested Rs.185 mio. in 2011 towards expansion projects for
meeting increased demand for the products manufactured. A milestone of
producing 1 million 'Common Rail Pumps' and 15 million 'A pumps' was
reached in the year 2011.
After being awarded the CII-Exim Bank award for Business Excellence at
the national level in the year 2009, the Bangalore Plant sustained and
further improved on living business excellence through the assessment
carried out internally.
Nashik
During the year 2011, the Nashik Plant achieved the highest production
levels of Nozzle holder assembly, DSLA Nozzle and Common Rail
Injectors. The Plant manufactured the 100 mio. NHA-Injector, which was
a new milestone achieved. To keep pace with the growing demand, the
Plant made an investment of Rs.2,715 mio. in its production facilities.
The Plant was honored with CII-EXIM Bank's 'Commendation for
Significant Achievements in Business Excellence' for the year 2011 as
well as the 'Golden Peacock Environment Management Award' from the
Maharashtra State Government.
Jaipur
In 2011, the Jaipur Plant achieved its highest production since its
inception in the year 1999. The Plant realized the highest ever single
investment of Rs.753 mio. towards enhancing the capacities and further
expansion.
The year 2011 has also been a year of awards and accolades for the
Plant. It received the Best Supplier Award from Tata Cummins, Supply
Linearity Award from Ashok Leyland, the National Award for
Excellence in Water Management by CII and the Best Employer Certificate
by the Rajasthan Government.
Naganathapura
In the year 2011, substantial ramp ups in New Base Line generator and
Hx Starter business were resorted to by the Plant. The Plant achieved a
record production of 32 mio. units of Spark Plugs in the year 2011.
Lean Concepts were implemented vigorously in the Plant. Energy
conservation measures were put in place during the year. The Plant
maintained cordial Industrial relations and the employees of the Plant
worked as a team towards achieving better results.
Information Technology (IT)
The maturity of IT-enabled business processes using SAP were assessed
and showed improvements over the previous year. A focused effort on
improving the usage of planning tools within SAP is in progress. A new
Business Intelligence Platform has been put in place to support
business reporting requirements and tracking of Key Performance
Indicators.
Improvements were achieved in Information Security, Data protection and
Control of Authorizations. Formal processes exist to periodically audit
and report results.
Change Initiatives
Continuous Improvement Process (CIP)
The year 2011 was a year which had good balance between CIP in Direct
areas and Indirect areas. Direct areas showcased their strength with
Conventional CIP and LeaderCIP which laid the platform to make
improvements in Quality, Cost and Delivery. Conventional CIP enabled
all value streams to achieve system CIP targets and LeaderCIP enabled
leaders to lay more focus and guide their respective teams in meeting
organizational targets. Value Stream Design in Indirect Areas (VSDiA)
took a front stage in eliminating waste and in reducing lead time which
directly acted as a backbone for direct areas. VSDiA Improvements were
effective in Plants as well as in corporate departments within the
Company.
Team Oriented Production (TOP), Voluntary Lernstatt Team and Shop Floor
CIP increased the involvement in CIP activities in 2011 compared to
2010. LeaderCIP trainings were launched in 2011 across all managerial
levels to follow the PDCA-Guided process approach in CIP. The yearly
"GLS CIP 2011" was held in order to share good CIP practices across the
Company with the participation of Executive Directors. CIP teams
received accolades in regional, national and international competitions
organised by recognized quality circle forums.
Bosch Production System (BPS)
BPS in 2011 played a very prominent role focusing on a set of guided
principles that were implemented in order to achieve business targets
of the Company. The focus in 2011 was to improve in three areas viz.
"Source, Make and Deliver". The Company won the BPS award in the
'Source' category by establishing good BPS Compliant suppliers. BPS
Knowledge training was extended across all Plants with a view to have a
common understanding in all areas and to measure the effectiveness
within the Company. It was found that value stream managers were
orienting / aligning themselves to attain system maturity and business
Key Performance Indicator (KPI) targets.
Standardized and Reusable packaging of raw materials and finished goods
initiatives helped business divisions to eliminate waste in
transportation and adopt environment friendly concepts. In order to
reduce lead time, the entire value chain was focused on many
localization, cost reduction (RPP) projects, inventory reduction
projects were initiated. Shop Floor Management Cycle (SFMC) and TPM
models were implemented successfully in many locations.
Diesel Systems Business Excellence
The Diesel Systems Business Excellence (DBE)
integrates the various cross functions in the Plants and aligns them
towards meeting the INDS (Diesel Systems India) Vision and Mission. DBE
was started in 2005 at the Diesel System manufacturing Plants in India
(Bangalore, Nashik and Jaipur) and have adopted the European Foundation
for Quality Management (EFQM) model of Business Excellence to improve
the organization effectiveness in a holistic manner. Regular
assessments are conducted at all Plants as a health check to identify
strengths and focus areas to work upon. The RADAR approach is used
extensively at INDS where we know the Results that we have to achieve,
a clear cut Approach is defined and they are Deployed. Assessment and
Refinement help us to continuously improve the systems and processes in
our journey towards Business Excellence by enabling maturity of the
organisation and its people. Key performance indicators are measured to
enable the achievement of required results as a cause and effect with
respect to all the key stakeholders.
INDS is striving towards institutionalizing a culture of'Living
Business Excellence' as 'Business Excellence at work' by incorporating
the same in the INDS Vision & Mission. To deploy this vision theme,
INDS long term strategy map has one of the bubbles as 'living BE'. The
strategic measures / targets are deployed across Plants and connected
corporate functions through Policy Deployment process.
The INDS have won many accolades in this exciting journey. Bangalore
Plant won the coveted CII-EXIM Bank award for business excellence in
2009, Nashik Plant won the CII -EXIM Bank Commendation for significant
achievements in Business Excellence' for the years 2010 and 2011 and
Jaipur Plant was recognized with Commitment to Business Excellence in
2008.
First Strategic Assessment was conducted at INDS in January 2012.
Structured assessment document as a description of entire INDS was
prepared by strategy/change teams with respect to 15 key business
related topics such as innovative products, cost competitiveness etc. A
team of senior business leaders from Diesel Systems India and Diesel
Systems Bosch lead by an external Assessor from EFQM carried out the
assessment and presented the key findings to INDS management. The
maturity level of INDS in terms of Business Excellence is currently at
a level of'Recognized for Excellence' based on the band of results
achieved. Based on key areas of improvements identified during the
assessment, teams have initiated projects / measures to further enhance
the organizational effectiveness.
Bosch Vocational Centre
The year 2011 is indeed a special year for Bosch Vocational Centre
(BVC) since it marked the celebration of Golden Jubilee year for having
completed the 50 years of its establishment of the Centre. The BVC was
functional as early as 1960. The BVC's valuable services over the past
fifty years in imparting technical education and training have
benefited many talented young people. Bosch Vocational Centre has the
fame of producing young skilled work force meeting the present day
requirements of Industries.
BVC won five gold medals for all the five trades participated at the
86th All India Skill Competition for Apprentices organized by the
Directorate General of Employment and Training (DGE&T), Ministry of
Labour and Employment, Government of India in May 2011.
BVC being the "Best in Class" in the country also sustained excellence
in the field of Vocational Training by increasing tally of Gold medal
winners to 191. BVC received the 'Best Establishment' Award for the
42nd time. BVC also continuously invests in upgrading facilities and
infrastructure to maintain high standards of training.
Awards and Recognition
The Company won several awards, as recognition of the efforts put in by
the Company:
- Award for achieving targets in delivery year 2010 by Toyota in April
2011 in the area of "Localization for Etios Project".
- Award from Cummins for the best supplier in the category "Assemblies"
at the regional Cummins supplier conference held in Pune in June 2011.
- "Overall Performance of the Year 2010" award from the John Deere at
their Supplier meet held in June 2011.
- Tata Motors award for excellence in "Technology and Innovation" at
the Tata Motors National Vendor Meet 2011, held in Mumbai in July 2011.
- Bosch Group was awarded the 'Presidents Award' given by Mahindra &
Mahindra for overall performance of the Company in streams such as
supplies, quality, development and cost effectiveness.
- Recognition certificate from Maruti Suzuki for superior performance
in the field of timely capacity enhancement for the year 2010-2011.
- Subros Car & Bike award 2012 in the 'Best Automotive Component
Manufacturer' category.
Bosch India Foundation
Bosch India Foundation, with its vision "Enabling Lives and
Livelihood", increased its reach to seven locations in India. By the
end of its 3rd year of its functioning, the Foundation had benefited
3,515 youth of various underprivileged communities through support of
skill trainings and medical projects.
In 2011, vocational trainings were introduced in eight new trades such
as automobile service mechanic, tractor mechanic, motor winding, AC
mechanic, masonry, carpentry etc., through partnership with 20
committed NGOs who are in close contact with the community and its
needs. Yet another highlight was the vocational training support
extended to 84 mentally challenged and spastics youth across three
locations in India.
The Foundation supported 20 surgeries for young children with complex
orthopedic problems and helped them to walk. The surgeries are
conducted by Sparsh Vachana to a select set of 200 underprivileged
children every year. The Foundation also continued its support to the
Gujarat Cleft and Craniofacial Research Institute (GCCRI) which
conducts free corrective surgeries for those born with facial
deformity.
Industrial Relations
Industrial relations at all Plants and other establishments continued
to be cordial excepting Bangalore Plant where the Union and Workmen
went on a sudden Tool Down Strike from September 28, 2011, demanding
that all outsourcing and ancillarization activities must be stopped.
The unreasonable demand was rejected outright by the management and
taking note of facts by the State Government of Karnataka, in exercise
of powers vested in them vide section 10(3) of Industrial Disputes Act
(amendment) 1947, issued orders on October 12,2011 prohibiting the
strike forthwith. The Union called off their strike unconditionally on
October 13,2011. Normal Plant operations had been restored for all
workmen from October 14,2011 The Directors place on record their deep
appreciation of the sincere and dedicated teamwork by employees at all
levels to meet the quality, cost and delivery expectations of our
customers.
Subsidiary Company
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on
December 31,2011 is not material, no consolidated financial statements
under Accounting Standard 21 "Consolidated Financial Statements" as
notified under section 211(3C) of the Companies Act, 1956, has been
prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors' Report for the year ended 31st December 2011
of MICO Trading Pvt. Ltd.
Directors
Dr. Manfred Duernholz has been re-appointed by the Board as Joint
Managing Director of the Company for a further period of one year with
effect from January 01,2012. The Board also appointed Mr. Soumitra
Bhattacharya, Executive Vice President of the
Company as Alternate Director to Dr. B. Bohr with effect from July
1,2011.
Names of companies/firms in which Directors of the Company hold/held
office as Director/Partner are given below:
Dr. A. Hieronimus
- MindTree Ltd. (Chairman)
- Bosch Rexroth AG (Member of the Board)
Dr. B.Bohr
- Robert Bosch GmbH (Member of the Board)
- ZF Lenksysteme GmbH (Member of Supervisory Board)
Mr.B. Steinruecke
- Indo German Chamber of Commerce. (Director General)
- FAG Bearings India Ltd.
- Zodiac Clothing Company Ltd.
- HDFC ERGO General Insurance Company Ltd.
- Apollo Munich Health Insurance Company Ltd.
Mr. B. Muthuraman
- Tata Steel Ltd. (Vice Chairman)
- Tata International Ltd.(Chairman)
- Tata Industries Ltd.
- Tata Steel Europe Ltd.
- Tulip UK Holdings No.2 Ltd.
- Tulip UK Holdings No.3 Ltd.
- Tata Incorporated, New York.
- Tata Africa Holdings (SA) (Pty) Ltd.
- Strategic Energy Technology Systems Ltd.
- Confederation of Indian Industry (President)
Mr. Renu S Karnad
- Housing Development Finance Corporation Ltd. (Managing Director)
- Credit Information Bureau (India) Ltd.
- GRUH Finance Ltd.
- HDFC Asset Management Co. Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- HDFC Property Ventures Ltd. (Chairperson)
- HDFC Standard Life Insurance Co. Ltd.
- Indraprastha Medical Corporation Ltd.
- HDFC Bank Ltd.
- AKZO Nobel India Ltd.
- EIH Ltd.
- HDFC Sales Pvt. Ltd. (Chairperson)
- Feedback Infrastructure Services Pvt. Ltd.
- G4S Corporate Services (India) Pvt. Ltd.
- Value and Budget Housing Corporation (India) Pvt. Ltd.
- Credila Financial Services Pvt. Ltd. (Chairperson)
- Lafarge India Pvt. Ltd.
- HDFC Education and Development Services Pvt. Ltd. (Chairperson)
- Transunion LLC, Chicago.
- HDFC PLC, Maldives.
Mr. Prasad chandran
- BASF India Ltd. (Chairman and Managing Director)
- BASF Asia Pacific (India) Pvt. Ltd. (Chairman)
- BASF Catalysts (India) Pvt. Ltd.
- BASF Lanka Private Ltd.
- BASF Bangladesh Ltd.
- BASF Grameen Ltd.
- Indo German Chamber of Commerce. (Committee Member)
- Federation of Indian Chamber of Commerce. (Executive Committee
Member)
- Bombay Chamber of Commerce and Industry. (Managing Committee Member)
- The Energy and Resource Institute (Committee Member)
Mr. V.K. Vishwanathan
- Robert Bosch Engineering and Business Solutions Ltd. (Chairman)
- Bosch Rexroth (India) Ltd. (Chairman)
- Bosch Chassis Systems India Ltd.
- MICO Trading Pvt. Ltd.
- Foundation Brake Manufacturing Ltd.
- Bosch Electrical Drives India Pvt. Ltd.
- Bosch Automotive Electronics India Pvt. Ltd. (Chairman)
- BSH Home Appliances Pvt. Ltd.
- Hagglunds Drives (India) Pvt. Ltd.
- FLSmidth Pvt. Ltd.
- Indo German Chamber of Commerce.
(Vice President)
- Confederation of Indian Industry (Committee Member)
Dr. Manfred Duernholz
- MICO Trading Pvt. Ltd.
Mrs. Renu S Karnad, Mr. Prasad Chandran and Mr. V.K. Viswanathan are
liable to retire by rotation and offer themselves for re-election.
Mrs. Renu S Karnad, 59, holds a Bachelor Degree in Law from the
University of Bombay and Masters Degree in Economics from Delhi School
of Economics. She joined HDFC Ltd in 1978 in the legal and credit
department and grew to become the head of lending business of HDFC Ltd.
She is responsible for the lending operations of HDFC, both retail as
well as corporate, framing policies and strategies for mortgage lending
by HDFC, development of new retail products, expansion of branch
network and other channels of distribution, budgeting and management
information system, for setting goals and targets at the national,
regional and branch levels, monitoring performance vis-a-vis the
budgets, development of new asset and liability products, introduction
of innovative and structured products, coordinating resource raising
from domestic and international markets, negotiating and finalizing
financing facilities from multilateral agencies such as World Bank,
Asian Development Bank, Commonwealth Development Corporation (CDC) and
KfW, communicating with equity analysts and international investors
besides also coordinating with regulators such as the National Housing
Bank and liaising on behalf of HDFC with the Government of India and
the State Governments and Housing Industry etc. As a member of the
Investment Committee of HDFC, she partakes in the decision making for
investments by HDFC in debt, equity and other related treasury
products. She is currently functioning as Managing Director in HDFC
Ltd.
In 1984, she was awarded Pravin Fellow - Woodrow Wilson School of
International Affairs, Princeton University, Princeton, NJ. She has
attended several senior management programs on financial management,
urban planning, political science and women's studies. Mrs. Renu S
Karnad is an Independent Director of the Company (appointed on
01.04.2007). She is the Chairperson of the Audit Committee, member of
Shareholders' / Investors' Grievance Committee, Investment Committee
and Property Committee of the Company. She does not hold any shares in
the Company.
Mr. Prasad Chandran, 59, is a post-graduate in Chemistry and has a
Masters degree in Business Administration. He has also received
Advanced Management Education from Institutes in the US, UK and Japan.
He is the Past President of the Indo German Chamber of Commerce (IGCC).
He is also the co- chairman of the National Committee on Chemicals and
Petrochemicals of the Confederation of Indian Industries (CII), Member
of the Executive Committee of Federation of Indian Chambers of Commerce
& Industry (FICCI) and Managing Committee Member of the Bombay Chamber
of Commerce and Industry. He is also an active participant in a number
of trade/industry delegations of the Government of India.
Mr. Chandran heads the "Million Minds" Project. This is conceptualized
by him to improve governance and fight corruption. Whilst implementing
the BASF Global values and principles, he addresses policy issues on
corruption to raise the standards of governance in India. The "Million
Minds" project sensitizes stakeholders and creates voluntary action
groups in different parts of the country. He is associated with NGOs
like Public Concern for Governance Trust (PCGT) and Coalition Against
Corruption (CAC) etc.
Mr. Chandran is the Chairman and Managing Director of BASF India
Limited. In addition to his direct responsibilities, he is a member of
the BASF Human Resources Council, which oversees the personnel policies
and the Sustainability Development Council, which oversees the
sustainability issues of the BASF Group in the Asia Pacific Region. Mr.
Chandran is an independent Director of the Company (appointed on
01.01.2009). He is the member of Audit Committee, Shareholders' /
Investors' Grievance Committee, Remuneration Committee and Share
Transfer Committee of the Board. He does not hold any shares in the
Company.
Mr. V. K. Viswanathan, 61, is a Bachelor of Commerce from Madras
University and a Chartered Accountant. Prior to joining the Company,
he was the Group Treasurer & Head of Mergers and Acquisitions with
Hindustan Unilever Limited with which group he was associated in
various capacities for 17 years.
Mr. Viswanathan joined the Company as Chief General Manager in August
1998. After a brief orientation in the Company, he took up an
assignment in the Diesel Systems Division of Robert Bosch GmbH, Germany
from September 1998. Upon completion of the assignment, he returned to
the Company in November 2000. Mr. Viswanathan joined the Board as
Additional Director and Joint Managing Director on 01.01.2001,
responsible for Finance, Administration and IT Co- ordination. Upon
assuming new responsibilities in Robert Bosch Corporation, Farmington
Hills, USA (Robert Bosch North America), Mr. Viswanathan ceased to be a
Director and Joint Managing Director of the Company from February
28,2006.
Upon completion of his assignment with Robert Bosch Corporation,
Farmington Hills, USA (Robert Bosch North America), he was appointed as
Additional Director and Joint Managing Director with effect from
01.11.2007 and from 01.02.2008 as Managing Director responsible for
Automotive Aftermarket, Starters and Generators, Packaging Machine,
Power Tools and Security Technology. Mr. Viswanathan is a member of
Shareholders'/ Investors' Grievance Committee, Share Transfer
Committee, Investment Committee and Property Committee of the Company.
He does not hold any shares in the Company.
Particulars of Employees
Information in accordance with the provisions of Section 217(2 A) of
the Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per
provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, this
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 Companies Act, 1956. Any shareholder interested in
obtaining a copy of the said Statement may write to the Company
Secretary at the Registered Office of the Company and the same will be
sent by post.
Corporate Governance
A Report on Corporate Governance approved by the Board of Directors of
the Company and a certificate from the Practicing Company Secretary is
set out in the Annexure to the Directors' Report. The Company has fully
complied with the Corporate Governance practices specified under the
Companies Act, 1956, and the listing agreement with the Stock
Exchanges.
A Code of Conduct for Directors and Senior Management, Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy, Rules and
Regulations of Service Conduct for Managerial and Superintending Staff,
Code of Business Conduct etc., effectively support the Corporate
Governance processes.
A Management Discussion and Analysis Report also accompany this report.
Energy, Technology, Foreign Exchange, etc.
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(l)(e) read with The Company's (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in the Annexure
to the Directors' Report.
Auditors
M/s. Price Waterhouse & Co., Chartered Accountants, the retiring
auditors, are eligible for re-appointment.
Directors' Responsibility Statement
Pursuant to Section 217(2 AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
- Accounting policies have been selected and applied consistently and
the judgments and estimates made 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.
- Proper and sufficient care has been taken 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.
- The annual accounts have been prepared on a going concern basis.
Acknowledgements
The Directors express their gratitude to the Central Government and the
State Governments of Karnataka, Maharashtra, Rajasthan and Goa for the
support given to the Company. The Directors also thank all customers,
dealers, suppliers, financial institutions and banks, members and
others connected with the business of the Company for their
co-operation.
For and on behalf of the Board of Directors
Bangalore Albert Hieronimus
28th February 2012 Chairman
Dec 31, 2010
The Directors have pleasure in presenting their FIFTY- NINTH Annual
Report together with the Audited Statement of Accounts for the year
ended 31st December 2010.
Financial Results
The following are the financial results:
(Rs. Million)
2010 2009
Net Sales (excluding recovery
of duties and taxes) 66,305.0 47,497.7
Of which Export Sales 8,460.7 5,854.6
Profit before tax 12,027.9 7,934.1
Less: Provision for tax 3,660.0 2,495.5
Add: Deferred tax and tax
adjustments relating to earlier years 221.1 467.8
Profit after tax 8,589.0 5,906.4
Appropriations:
Capital Redemption Reserve 6.3
Dividend:
Dividend recommended
at Rs.40 per share
(previous year: Rs.30 per share) 1,255.9 941.9
Tax on Dividend 208.6 160.1
General Reserve 3,750.0 4,500.0
Capital Reserve 0.6 35.4
Dividend and Dividend Tax
thereon write back relating
to previous year (3.6) (14.7)
Balance carried forward 3,377.5 277.4
Total 8,589.0 5,906.4
Net sales for the year 2010 grew by 39.6%. The Profit Before Tax (PBT)
in 2010 as a percentage of net sales was at 18.1% as compared to 16.7%
in 2009. The Profit After Tax (PAT) as a percentage of net sales was
13.0% in 2010 as against 12.4% in 2009.
Material costs as a percentage to sales increased to 54.3% in 2010 as
compared to 53.7% in 2009.
Overall, the Profit Before Interest, Depreciation and Taxes, for the
year shows an increase of 38.9% over the previous year.
Investments
Capital investment during 2010 was higher than previous year, at
Rs.3,021 mio. as against Rs. 1,446 mio. in 2009.
Dividend
The Board of Directors recommend a dividend of Rs.40 per equity share
for 2010 as against a dividend of Rs.30 per equity share in 2009.
Business Situation
The upswing in the Indian automotive industry which began in the second
half of the year 2009 continued in 2010 as well. Indias fast growing
middle class segment coupled with soaring demand from rural areas
created a very buoyant market in 2010, resulting in all business units
attaining an all-time high production and sales volumes. New model
launches and easy financing options were the other key drivers that
helped to achieve a higher growth trajectory in 2010.
All segments, be it commercial vehicles, passenger cars or tractors,
posted strong double digit growth levels. Leading the pack, was the
Medium and Heavy Commercial Vehicle segment which recorded a growth of
70% over 2009. Light Commercial Vehicle and Passenger Car segments
which were the first to recover post the stimulus packages announced by
the Government of India in 2009, continued their robust performance in
2010 with 44% and 30% growth respectively. The tractor segment crossed
the half a million production mark. This segment registered a growth of
29% over the year 2009.
As a result, our Company performed exceedingly well with sales from the
automotive segment growing by 41.5% and Exports recording the best ever
performance at Rs.8,461 million with a growth of 44.5% over 2009.
Our non-automotive businesses grew by 26.6% in 2010 compared to 2009.
This can be mainly attributed to growth in the Power Tools, Security
Technology and Machine Building divisions.
Automotive Technology
Diesel Systems business grew by a significant 51.9% in the year 2010,
recording an all time high sales. This phenomenal growth was driven
primarily by the robust demand in the Medium / Heavy Commercial Vehicle
and Tractor segments.
The Bharat Stage 3 (BS3) and Bharat Stage 4 (BS4) emission norms were
also introduced in 2010 and our Company was closely associated with all
OEMs for effective, timely and smooth transition.
One of the major highlights of the division was the successful
introduction of inline fuel injection pumps for Medium duty Commercial
Vehicle applications meeting BS3 emission norms. The year also saw the
introduction ofValue-Line Common Rail Systems for Medium duty
Commercial Vehicle applications. These unique products are a clear
testimony to the Companys strong innovative culture and its focus on
providing value to the customers.
Gasoline Systems business achieved a growth of
60.9% in the year 2010. The key highlights of the division were the
development of Engine Manage- ment Systems for two wheelers and Low
Priced Vehicles. As a firm commitment to providing local development
and application support, the division focused on heightened R&D
infrastructure build up.
Starter Motors and Generators business witnessed a growth of 12.2% in
the year 2010 over 2009. The division was successful in acquiring many
new projects. A new product HX87 Starter Motor was launched for
Commercial Vehicle applications.
The Automotive Aftermarket division registered an impressive growth of
24% in the year 2010. This success was achieved primarily on account of
expansion of product and customer portfolio, widened distribution
network, effective channel management and innovative customer binding
programmes.
The division expanded its presence pan India, taking the number of
workshops to 1963 outlets in 2010 as compared to 1600 workshops in
2009. Another key highlight was the introduction of 500th Bosch Car
Service outlet. With this, Bosch Car Service has become one of the
largest distributor and service networks in the automotive market in
the country.
Industrial Technology
Packaging Technology (Verna Plant)
The year 2010 saw many challenges in Packaging Technology business with
postponed customer projects and increased competition in general.
Despite these market dynamics, the division achieved a growth of 6.2%
in the year 2010 over 2009.
Significant improvements in design quality and dedicated engineering
efforts have resulted in the reduction of design lead time and cost
optimization. The division successfully launched Transwrap 1650 and
High speed cup doser machine in Chocolate and Confectionery segment.
The division sold a record 24 Nos. BVK 2000 candy wrappers in the year
2010, as well as bagging the first order for sale of this machine in
the African market. It also executed the first commercial order for
Pharmaceutical machine for the overseas market.
Industrial Equipment
The Industrial Equipment division posted a positive growth of 6% in the
year 2010 after a de-growth in the previous year. This was mainly
driven by capital investments within our Company and our external
customers.
New product launches such as Bosch Vertical Machining Centre, BeAT 40
and assembly lines for key and core processes in the manufacture of
diesel and gasoline fuel injection systems were the major highlights of
the division.
Consumer Goods and Building Technology Power tools
The Power Tools business recorded a strong growth of 28.3% in the year
2010 and maintained a robust pace of growth higher than that of
construction and infrastructure sectors in India.
The division launched the full range of Lawn and Garden Tools including
the Hedge Cutter and Lithium Ion Lawn Mower. To capitalise on the
potential in the infrastructure segment, the division also launched the
I&I (Industrial & Institutional) concept which caters to the needs of
these segments along with the FATS (Fischer-Accessories-Tools-Spares)
concept to provide comprehensive construction solutions to the thriving
infrastructure sector.
Localization was one of the core focus areas of the division.
Production of 2kg Hammer was started in 2010 at the Bosch Power Tools
Plant in Bangalore. This is the 3rd Plant in the Bosch Power Tool
World to manufacture these kinds of hammers. The division launched the
first Fischer Exclusive Store at Hyderabad to provide anchoring
solutions.
The division also supplied tightening system solutions to the major
automotive OEMs in India and specialized power tools and anchoring
solutions for a major metro rail projects.
Security Technology
The Security Technology business achieved a 19.8% growth in the year
2010 compared to 2009. The division was successful in implementing the
Professional Sound System at the Jawaharlal Nehru Stadium for the
Common Wealth Games held in New Delhi. The Company is also successfully
implementing the Video Surveillance System for a major Metro Rail
project.
Another key highlight of the division was the launch of Bosch Security
Training Academy. The state-of- the-art demo and training center was
set up at Bangalore. This training academy aims to bring the highest
level of manufacturer training to the industry, to improve product
knowledge, its application and awareness.
Competition and challenges in our business sectors
Our Company will continue to expand its product portfolio, deploy its
resources towards developing innovative technologies and market
relevant products with a view to take on the challenges arising from
competition both locally and globally.
Focus on increasing productivity, achieving cost competitiveness in all
areas, efficient utilization of resources and customer centric
initiatives will be accorded paramount importance.
While the year 2010 saw an exhilarating pace in our operations, 2011
will see more dynamic activity across business spheres. With innovative
and market relevant products, we shall strive to be successful in
converting business potential into profitable growth and secure the
leadership position of our Company.
Plants Bangalore
Bangalore Plant attained the highest production levels in all its value
streams viz., Inline Pumps, Elements, Delivery Valves and Glow Plugs,
in the year 2010.
The Plant added new generation products with the start of production of
the Rail which is part of the Common Rail system. A-Pump (Inline Pump)
which has been the main line product for the Plant since its inception
in 1951, has extended the life of the product further with the launch
of A4000 variant which conforms to BS3 norms.
Nashik
Nashik Plant has achieved the highest production levels of Nozzle
Holder assembly, DSLA Nozzle and Common Rail Injector.
The Plant was honored with CII-EXIM Banks Commendation for
significant achievements in Business Excellence for the year 2010.
Jaipur
Jaipur Plant rolled out its 3 millionth VE Pump in the year 2010
alongside achieving highest production levels since its inception in
1999. With focused effort, the Plant was able to ensure seamless
transition from BS2 to BS3 norms by supporting OE customers efficiently
with respect to product mix and call-off schedules.
The Plant won the first prize from Rajasthan Government for Energy
Conversation in the automotive segment.
Naganathapura
In the year 2010, the Plant has expanded its product portfolio by
setting up a new hangar for the manufacture of Gasoline Systems.
The Plant has obtained BS OHSAS 18001 certification from TUV-Nord for
having implemented the new Occupational Safety and Management System
keeping in mind the safety of associates.
Information Technology (IT)
The Companys IT systems and processes are periodically audited to
ensure adequacy of Information Security and controls for
Authorizations.
The Automotive Aftermarket division of the Company migrated its
business operations to an SAP system to meet the increasing and varying
needs of its business for optimized support of the retail business.
Change Initiatives
Continuous Improvement Program (CIP)
In 2010, a more methodical approach of CIP was adopted through
involvement of leaders, known as LeaderCIP. It is a structured
improvement process that works with the goal of excellence in
controlling everyday work, thereby increasing the value contribution.
The program attained a multifold growth in support functions in 2010
and provided a platform for leaders and associates to address issues
through many CIP workshops, laying the foundation for sustainable
development. Along with this, a new approach called VSDiA - Value
Stream Design in Indirect Areas, applying Lean (waste elimination)
philosophy in indirect processes has immensely helped in identifying
and eliminating "Non-value adding activities".
While indirect functions benefitted from LeaderCIP and VSDiA, CIP for
direct functions resulted in many problems being solved through the
Shop Floor CIP drive. In the year 2010, associate involvement in
improvements also increased through Team Oriented Production (TOP) and
Voluntary Lernstatt teams. Our associates participated in regional,
national & international competitions and won accolades for the
Company.
Bosch Production System (BPS)
BPS, a time tested and proven model at Bosch, can be successfully
implemented through continuous improvements. The BPS has 8 guiding
principles and supporting implementable tools called elements. The
main focus in 2010 was to align the BPS principles and its elements
with the business objectives. The measurement of overall effectiveness
of BPS implementation was improved from audit orientation to system
maturity and business penetration. The two supportive strategies viz.,
BPS leadership trainings and New BPS Assessment model helped align
value stream culture with business Key Performance Indicators (KPIs).
The BPS focus is now being extended to our business partners with an
aim to holistically improve the entire "value chain". Project
Transform1 has been launched with our key component suppliers to
improve their operational efficiencies through training and
implementing lean concepts.
Deployment of Business Excellence (OBE)
Deployment of Business Excellence (DBE) in our Diesel Systems business
led to improvements in leadership aspects, strategy management, people
engagement, process orientation, resource management and eventually
business results. DBE is facilitating the organization to align all its
functions towards the Companys vision and mission. This management
concept places a strong emphasis on meeting all stakeholders
expectations.
While the Bangalore Plant (Diesel Systems) was awarded the CII-EXIM
Bank award for business excellence based on the European Foundation for
Quality Management (EFQM) model in 2009, the Companys Nashik Plant has
been honored with CII -EXIM Bank Commendation for significant
achievements in Business Excellence for the year 2010.
Bosch Vocational Centre
The Company has always emphasized on skills development and has
believed in keeping in pace with the latest technological advancements.
The focus on overall development of skill sets has resulted into a
comprehensive and an intensive training programme under the aegis of
the Bosch Vocational Centre (BVC). The training is designed in
accordance with the Bosch guidelines to develop the skills and
technical knowledge of the employees. With the multicraft approach, the
emphasis is on practical hands on training.
BVC crossed a milestone by winning 7 Gold Medals at the 83rd All India
Competition for Apprentices. The present medal tally is at 182 gold
medals. BVC received the Best Establishment Award for the 40th time.
BVC also continuously invests in upgrading facilities and
infrastructure to maintain high standards of training.
Awards and Recognition
The Company received several awards and recognitions for its
achievements:
- Mahindra & Mahindra Best Performance Award 2009-10 for product
development.
- Overall Excellence Award conferred by Maruti Suzuki India Limited for
Vendor Performance.
- Par Excellence Trophy Award from Quality Circle Forum of India for
Naganathapura and Jaipur Plants.
- Gold Award from M/s Bajaj Auto for meeting the quality and delivery
targets.
- Award from M/s Volvo Eicher for outstanding contribution to Supply
Chain Management.
- Excellence in Technology Award from Tata Motors at National Vendor
Meet.
Dematerialization of shares
Of the 28.82% shares held by the public, 27.74% shares have been
dematerialized as on 31.01.2011.
Members holding shares in physical form are advised to dematerialize
their shares to avoid the risks associated with the physical holding of
such share certificates.
Bosch India Foundation
Bosch India Foundation, in its continued effort to serve the
underprivileged sections of the society, initiated over 15 different
projects in the fields of vocational training and health program during
the year 2010. The programs were conducted with active participation of
Bosch Associates across four cities viz., Bangalore, Pune, Ahmedabad
and Coimbatore. One of the new projects introduced was the training
for Fitter, Electrician, CNC mechanics and Mobile set repairers. Around
1200 underprivileged youths have benefitted from the program so far.
Also conducted was the Health awareness for women and children in slums
through radio communication.
Industrial Relations
Industrial relations at all Plants and other establishments continued
to be cordial. Long term productivity linked wages settlement for a
four year period (2009 - 2012) was signed at 4 Plants of the Company.
The Directors place on record their deep appreciation of the sincere
and dedicated teamwork by employees at all levels to meet the quality,
cost and delivery expectations of our customers in a growing market.
Subsidiary Companies
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on
31st December 2010 is not material, no consolidated financial
statements under Accounting Standard 21 "Consolidated Financial
Statements" as notified under section 211 (3C) of the Companies
Act,1956, has been prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors Report for the year ended 31st December 2010
of MICO Trading Pvt. Ltd.
Directors
Names of companies/firms in which Directors of the Company hold/held
office as Director/Partner are given below:
Or. A. Hieronimus
- Mind Tree Ltd.
- Bosch Rexroth AG (Member of the Board)
(from 01.01.2011)
Dr. B. Bohr
- Robert Bosch GmbH, Germany.
(Member of the Board)
- ZF Lenksysteme GmbH
(Member of Supervisory Board)
æ Mr. B. Steinruecke
- Indo German Chamber of Commerce. (Director General)
- FAG Bearings India Ltd.
- Zodiac Clothing Company Ltd.
- HDFC ERGO General Insurance Company Ltd.
- Apollo Munich Health Insurance Company Ltd.
Mr. B. Muthuraman
- Tata Steel Ltd. (Vice Chairman)
- Tata International Ltd.( Chairman)
- Tata Incorporated, New York.
- Tata Industries Ltd.
- Tata Steel Global Minerals Holdings Pte. Ltd.
- Tata Steel Europe Ltd.
- Tulip UK Holdings No.2 Ltd.
- Tulip UK Holdings No.3 Ltd.
- National Institute of Technology, Jamshedpur (Chairman)
- Xavier Labour Relations Institute, Jamshedpur (Chairman, Board of
Governors)
- Indian Institute of Technology, Khargpur (Chairman, Board of
Governors)
- Strategic Energy Technology Systems Pvt Ltd.
- Tata Africa Holdings (SA) (Pty) Ltd.
Mrs. Renu S Karnad
- Housing Development Finance Corporation Ltd. (Managing Director)
- Credit Information Bureau (India) Ltd.
- GRUH Finance Ltd.
- HDFC Asset Management Co. Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- HDFC Property Ventures Ltd. (Chairperson)
- HDFC Standard Life Insurance Co. Ltd.
- HDFC Venture Capital Ltd.
- Indraprastha Medical Corporation Ltd.
- Sparsh BPO Services Ltd.
- HDFC Sales Pvt. Ltd. (Chairperson)
- Feedback Ventures Pvt Ltd.
- G4S Corporate Services (India) Pvt. Ltd.
- Transunion LLC, Chicago.
- HDFC PLC, Maldives.
- Value and Budget Housing Corporation (India) Pvt. Ltd.
- Credila Financial Services Private Limited. (Chairperson)
- HDFC Bank Ltd. (from 27.01.2011).
- AKZO Nobel India Limited.
Mr. Prasad Chandran
- BASF India Ltd. (Chairman and Managing Director)
- BASF Polyurethanes India Ltd. (Chairman and Managing Director)
- BASF Construction Chemicals (India) Pvt. Ltd. (Chairman)
- BASF Coatings (India) Pvt. Ltd.(Chairman)
- BASF Asia Pacific (India) Pvt. Ltd. (Chairman)
- BASF Catalysts (India) Pvt. Ltd.
- BASF Lanka (Private) Limited, Sri Lanka.
- BASF Pakistan (Private) Ltd.
- BASF Bangladesh Ltd.
- BASF Grameen Ltd.
- Styrolution India Private Ltd. (Chairman)
- Indo German Chamber of Commerce. (Committee Member)
- Federation of Indian Chamber of Commerce. (Executive Committee
Member)
- Bombay Chamber of Commerce and Industry. (Managing Committee Member)
- The Energy and Resource Institute (TERI). (Committee Member)
Mr. V. K. Viswanathan
- Robert Bosch Engineering and Business Solutions Ltd. (Chairman)
- Bosch Chassis Systems India Ltd.
- MICO Trading Pvt. Ltd.
- Bosch Rexroth (India) Ltd. (Chairman)
- Bosch Electrical Drives India Pvt. Ltd.
- Bosch Automotive Electronics India Pvt. Ltd. (Chairman)
- BSH Home Appliances Pvt. Ltd.
- Hagglunds Drives (India) Pvt. Ltd.
- Indo German Chamber of Commerce. (Committee Member)
Dr. Manfred Duernholz
- MICO Trading Pvt. Ltd.
Mr. B. Steinruecke, Dr. B. Bohr, and Mr. B. Muthuraman are liable to
retire by rotation and offer themselves for re-election.
Mr. B. Steinruecke, 55, studied Law and Economics in Vienna, Bonn,
Geneva and Heidelberg. He has a Law degree from the University of
Heidelberg and passed the Bar Examination of the High Court of Hamburg.
He worked with Coopers and Lybrand, Hamburg before joining Deutsche
Bank in 1984 and rose to become General Manager of the Mumbai Branch
and Joint Chief Executive Officer of Banks operations in India. Later,
he became the Managing Partner and Speaker of the Board of the ABC
Privatkunden-Bank, Berlin. In July 2003, he became the Director General
of Indo-German Chamber of Commerce. Mr. Steinruecke is an Independent
Director of the Company, Chairman of Shareholders/Investors Grievance
Committee, member of Audit Committee, Remuneration Committee and the
Share Transfer Committee of the Board.
Dr. B. Bohr, 54, holds a Diploma in Production Engineering and a
Doctorate in Engineering from the University of Aachen, Germany. He
joined Robert Bosch, GmbH, Reutlingen, in Production Engineering in
1983 and held several positions such as Manager (Production
Engineering): Manager (Product Planning): Managing Director
(Manufacturing), Nippon ABS Ltd., Japan: Executive Vice President
(Manufacturing), Semiconductors and Electronic Control Unit Division;
Executive Vice President (Development worldwide), ABS and Braking
Systems Division. In 1999, he became a Deputy Member of the Board of
Management of Robert Bosch GmbH and a Member of the Board of Management
of Robert Bosch GmbH in 2001. He has corporate responsibilities for
Automotive Group, Automotive Systems Integration and Quality
Management, divisional responsibility for Gasoline, Diesel Systems,
Chassis Systems, Brakes and Control and Steering Systems with regional
responsibility for India.
Mr. Muthuraman, 66, holds degree in Metallurgical Engineering from
Indian Institute of Technology (IIT), Madras and Masters Degree in
Business Administration from Xavier Labour Relations Institute (XLRI),
Jamshedpur. Mr. Muthuraman joined Tata Steel as a Graduate Trainee in
1966 and worked in the areas of Iron-making and Engineering Development
for 10 years. Thereafter he moved to Marketing and Sales Division and
rose to the position of Vice President. He was appointed Executive
Director (Special Projects) in August 2000 and contributed as change
Manager for the major diversification projects of Tata Steel. He was
appointed Managing Director of Tata Steel in July 2001. He is currently
the Vice Chairman of Tata Steel Ltd. Mr. Muthuraman is an Independent
Director of the Company, member of Audit Committee, Remuneration
Committee, Investment Committee and the Share Transfer Committee of the
Board.
Particulars of Employees
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per
provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, this
Report and Accounts are being sent to the Shareholders of the Company
excluding the Statement of Particulars of Employees under Section 217(2
A) of the Companies Act, 1956. Any Shareholder interested in obtaining
a copy of the said Statement may write to the Company Secretary at the
Registered Office of the Company and the same will be sent by post.
Corporate Governance
A Report on Corporate Governance approved by the Board of Directors of
the Company aifd a Certificate from the Practicing Company Secretary is
set out in the Annexure to the Directors Report. The Company has fully
complied with the Corporate Governance practices specified under the
Companies Act, 1956, and the Listing Agreement with the Stock
Exchanges.
A Code of Conduct for Directors and Senior Management, Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy, Rules &
Regulations of Service Conduct for Managerial & Superintending Staff,
Code of Business Conduct etc., effectively support the Corporate
Governance processes.
A Management Discussion and Analysis Report also accompany this report.
Energy, Technology, Foreign Exchange, etc.
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(l)(e) read with The Companys (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in the Annexure
to the Directors Report.
Auditors
M/s. Price Waterhouse & Co., Chartered Accountants, the retiring
auditors are eligible for re-appointment.
Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
- Accounting policies have been selected and applied consistently and
the judgments and estimates made 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.
- Proper and sufficient care has been taken 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.
- The annual accounts have been prepared on a going concern basis.
Acknowledgements
The Directors express their gratitude to the Central Government and the
State Governments of Karnataka, Maharashtra, Rajasthan and Goa for the
support given to the Company. The Directors also thank all customers,
dealers, suppliers, financial institutions and banks, members and
others connected with the business of the Company for their
co-operation.
For and on behalf of the Board of Directors
Bangalore Albert Hieronimus
28,th February 2011 Chairman
Dec 31, 2009
The Directors present their FIFTY-EIGHTH Annual Report together with
the Audited Statement of Accounts for the year ended 31st December
2009.
Financial Results
The following are the financial results:
(Rs. Million)
2009 2008
Net Sales (excluding recovery
of duties and taxes) 47,497.7 45,416.5
Of which Export Sales 5,854.6 6,844.5
Profit Before Tax 7,934.1 8,565.7
Less: Provision for tax 2,495.5 2,602.2
Add: Deferred tax and tax
adjustments relating to earlier years 467.8 375.2
Profit After Tax 5,906.4 6,338.7
Appropriations:
Capital Redemption Reserve 6.3 0.3
Dividend:
Dividend recommended
at Rs. 30 per share
(previous year: Rs. 25 per share) 941.9 800.6
Tax on Dividend 160.1 136.1
General Reserve 4,500.0 5,000.0
Capital Reserve 35.4 --
Dividend write back relating to
previous year (14.7) --
Balance carried forward 277.4 401.7
Total 5,906.4 6,338.7
Net sales for the year 2009 grew by 4.6%. The Profit Before Tax (PBT)
in 2009 as percentage of net sales was at 16.7% as compared to 18.9% in
2008. The Profit After Tax (PAT) as percentage of net sales was 12.4%
in 2009 as against 14% in 2008.
Material costs as percentage to sales declined to 52.9% in 2009 as
compared to 53.2% in 2008. The staff cost was at 12.9% of sales as
compared to 11.7% in 2008. Operating expenses (excluding staff cost)
increased to 22.5% from 21.4% of sales in 2008. The depreciation for
the year decreased to 6.4% from 6.7% of sales in 2008 reflecting lower
investments in 2009.
Overall, in terms of Profit Before Interest, Depreciation and Taxes,
the result for the year shows a decline of 6.3% over the previous year.
Investments
Capital investment during the year was lower at Rs. 1,446 mio. as
against Rs. 4,336 mio. in 2008.
Dividend
The Board of Directors recommend a dividend of Rs.30 per equity share
for 2009 as against a dividend of Rs.25 per equity share in 2008.
Business Situation
The sharp decline witnessed in the fourth quarter of 2008 in the Indian
automotive market continued in the first quarter of 2009 as well with
Medium and Heavy Commercial Vehicle segment registering a drop as high
as 60% over first quarter 2008. However, the timely stimulus package
announced by the Government of India helped the industry to recover
lost ground. The Passenger Car and Light Commercial Vehicle segments
were the first to respond and stabilized by March / April 2009. The
recovery in Medium and Heavy Commercial Vehicle segment was delayed
until September 2009. Despite this recovery, this segment registered a
decline of 20% for the year as a whole in 2009 compared to the vehicle
production in 2008.
Effectively, our sales from the automotive segment grew by 4% in 2009.
With this, the marginal decline in sales to OE customers / exports has
been more than offset by the growth in the Automotive Aftermarket
business.
Our non-automotive business grew by 4.9% in 2009 compared to 2008
mainly driven by growth in sales from the Power Tools and Packaging
Machines divisions.
Automotive Technology
Diesel Systems business de-grew by 2.7% owing to a steep decline in
demand in the Medium and Heavy Commercial Vehicle segment and
significant decline in exports business.
The Diesel Systems team was successful in developing a mechanical based
system for Medium and Heavy Commercial Vehicles to meet Bharat Stage
(BS) III emission norms. This in-house development is testimony to the
Bosch culture that fosters innovation and thereby defending our
leadership position in the diesel business with a competitive edge. The
first single cylinder based Common Rail system for the small goods
carrier segment was well received in the market.
Strong demand from OE customers led to growth in Gasoline System
business by 121% in 2009 albeit on a lower base of 2008. A significant
milestone was reached with the start of production of Gasoline Engine
Management systems for Tata Nano.
Starter and Generator business also witnessed a steep decline in sales
in the first half of 2009 but considerably grew in the second half,
more so during the last quarter of the year. With this, the division
was able to limit the decline to 10.9% in the year 2009 over 2008.
Introduction and start of production of the New Baseline Alternators,
Compact Direct Starter Motor products and the launch of Start-Stop
systems which were well received in the market were the major
highlights of the division in 2009.
The Automotive Aftermarket grew by 17.3% in 2009 compared to the year
2008 clocking double digit growth for the fourth consecutive year
despite fall in exports business. This growth was a result of new
product launches, major distribution initiatives, increase in network
strength, end customer oriented campaigns with the latest service
trends, and customer binding programs. To encourage the general public
and traders to deal with only genuine automotive parts, the division
organized several raids in 2009 with the support from law enforcement
agencies to safeguard not only the brand Bosch but also to provide safe
and reliable products to Indian customers.
Bosch Car Service, the largest multi-brand car service network in India
added 103 stations across the country during the year 2009, ending up
with 361 stations. A Manual outlining dos and donts of Bosch Car
Service communication which include signages, interiors, displays,
hoardings, product posters and promotional activities has been made
available to all Bosch Car Service partners in order to ensure
consistency in brand identity and uniformity in communication by
strictly adhering to the specifications stated in the guidelines.
Industrial Technology
Packaging Technology (Verna Plant)
Our Packaging Technology business was stabilized at our manufacturing
location in Verna, Goa. Packaging Technology division went hand in
hand with the changing market scenario and grew by 15.9%. All the three
verticals viz. Food, Confectionary and Pharmaceuticals posted robust
growth driven by the rapidly changing consumer preference and needs.
The division has successfully added two machines SVI 2620 and BVK 1200
in the Packaging Machines and Confectionary / Chocolate business units
respectively.
The successful implementation of Material Resource Planning has reduced
the delivery time of components. Bosch Production System (BPS) has been
initiated in Food Packaging Machines which has improved the
productivity and quality of Terra 25 and TW 100 NEL machines.
Industrial Equipment
In view of major Capital investments which were withheld within our
Company as well as by our external customers in the year 2009, sales in
the Industrial Equipment division de-grew by 18.8% in 2009 compared to
the year 2008.
The division continued to strive towards providing innovative solutions
and has developed machines for manufacturing Fuel Injection Pumps,
Filters and Gasoline System parts especially for small car projects.
This division also provided solutions for assembly lines of gearbox and
transmission components for Heavy Commercial Vehicle manufacturers.
Consumer Goods and Building Technology Power tools
Power Tools business grew by 19.3% despite the construction business
being impacted adversely by the economic downturn. The division
launched the Bosch Lithium Ion powered cordless tools with a range
including drivers, impact drivers and impact wrenches.
The other highlights of the division was the conceptualization and
inauguration of the Worlds first "Clean and Green Solutions Store" at
Chennai showcasing the entire range of Bosch Lawn and Garden and High
Pressure Washers. Successful usage of the combination of Fischer,
Accessories and Tools for projects like Common Wealth Games Stadia, New
Delhi Airport, Delhi Metro Rail Corporation, Bosch Tightening Systems
and Pneumatic Tools at the prestigious Volkswagen assembly line, Pune,
were some of the initiatives taken in the year 2009.
Security technology
The security Technology business declined by 17.4% in the year 2009
compared to 2008. This decline was predominantly due to postponement of
many infrastructure and corporate projects.
Key highlights of this business group was the successful completion of
the National Gallery of Modern Arts project in New Delhi and the
Worlds first electro-voice EVA stadium installation in Mumbai which is
the largest EV installation in India.
Competition and challenges in our business sectors
The Companys businesses continue to face intense competition both from
the local and global players. Despite the adverse conditions, the
Company strengthened its position by expanding its product portfolio
and deploying its resources in developing new and innovative
technologies and products.
The year 2010 will be equally, if not more, challenging and demanding
due to severe pressure on input costs and pricing as we pursue our
return to the growth rates of 2007 and before.
Improving customer delight while judiciously managing the long term
growth and structure of the Company will be of paramount importance and
we are determined to meet this by our continued efforts to achieve cost
competitiveness through productivity improvement and effective
utilization of resources and capacities. Bharat Stage III and Bharat
Stage IV emission norms are scheduled to be introduced this year and
our customers need to be supported efficiently with respect to product
mix and call-off schedules.
The market optimism seen in the beginning of 2010 has heralded clear
signs of economic re-bound. However, we must continue the austere
measures adopted during the period of economic downturn and whilst
doing so, must focus on improving flexibility, speed and technological
superiority in order to sustain our competitive edge.
Plants Bangalore
The Plant attained highest production of Inline Pumps, Elements,
Delivery Valves and Glow Plugs. New generation Single Cylinder Pump
(PF51) for Common Rail system was launched in Sept 2009.
The Plant received prestigious recognitions from our key OE customers
viz. M/s Mahindra & Mahindra Ltd., Kirloskar Oil Engines Ltd., and John
Deere India Pvt. Ltd., at respective supplier recognition events. The
Plant also received Diesel Systems recognition for Energy Conservation
and C02 reduction.
Nashik
Nashik Plant has completed 40 years of operations in the year 2009. The
Plant achieved the production landmark of one million Common Rail
Injectors and 90 million conventional Injectors. Production ramp- up of
a new variety of conventional Injector commenced in the year 2009 for
Commercial Vehicle applications. In conventional products, Nozzle
Holder Assembly achieved highest turnover in the history of the Plant.
Nashik Plant received "Best-In-Class Manufacturing IT Award" for
excellence in manufacturing in private and public sector. The Plant
also bagged the Gold award in 10th Annual Greentech "Environment
Excellence" and silver award in 8th Annual Greentech "Safety" organized
by Greentech Foundation.
Jaipur
Jaipur Plant completed 10 years of operations in March 2009. The Plant
also crossed the milestone of 3 millionth VE Pump manufactured in India
during October 2009.
The Jaipur Plant quality circle won the Par Excellence Award in 23rd
National Convention on Quality Circles-2009 in December 2009 at
Bangalore organized by Quality Circle Forum of India.
Naganathapura
The Plant introduced two new products in 2009 viz., Throttle Position
Sensor and In-Tank Fuel Pump Module.
Information Technology (IT)
In the year 2009, the Companys ERP system was upgraded to the mySAP
ERP ECC 6.0 software to ensure good support and readiness for
Bosch-wide IT initiatives.
The Companys IT systems and processes are periodically audited to
ensure adequacy of internal controls and information security. Further
improvements were made particularly related to bringing down the level
of Critical Authorizations and putting in place more effective virus
monitoring and prevention measures.
Change Initiatives
Continuous Improvement Program (CIP)
CIP continued to remain an area of focus in the year 2009. The
Companys CIP was further bolstered by the introduction of LeaderCIP,
an approach created to fortify leaders involvement in continuous
improvement activities. CIP workshops saw active involvement of people
at all levels, both managerial and non managerial. The employee
involvement in continuous improvement, under Lernstatt, Kaizen or
classical CIP reached benchmark levels in 2009 with a good momentum in
the Voluntary Lernstatt Team (VLT) and shop floor CIP drives. The
Company is also driving such workshops with its customers and business
partners.
Bosch Production System (BPS)
The BPS implementation drive across all Plants benefited the Company.
The BPS maturity, being representative of a lean manufacturing system,
was measured again in 2009 using an extensive audit procedure covering
eight important principles such as pull system, standardization,
perfect quality etc.
This initiative also addresses improvements in the entire supply chain.
Business Partners were also trained on BPS and projects were taken-up
at their sites on topics such as Value Stream Mapping, Quick
Change-Over and other lean practices.*
Deployment of Business Excellence (DBE)
Deployment of Business Excellence in our Diesel Systems business has
fostered improvement in leadership aspects, policy and strategy
management, people focus, process orientation and resource management.
DBE is facilitating the organization to align all its functions towards
the Companys vision and mission. The management concept places a
strong emphasis on meeting all stakeholders expectations.
Bangalore Plant (Diesel Systems) in the course of its business
excellence journey based on the European Foundation for Quality
Management (EFQM) model was honored with the coveted CII-EXIM Bank
Award for Business Excellence for the year 2009 at a function held in
New Delhi on 19.12.2009.
The Nashik Plant was assessed for Business Excellence in 2009 and has
made a significant improvement in overall maturity of excellence.
Bosch Vocational Centre
Bosch Vocational Centre (BVC) conducted and extended its support to
various programs such as On Job Training, Skill Enhancement training,
Quality and Safety, training program on Mechatronics, Advanced
Measuring Techniques, Pneumatics, Hydraulics and CNC and need based
programmes like OHSAS, TPM and knowledge sharing sessions for our
executives. The year 2009 was devoted to intensify training of our
associates (workmen and staff) and sustaining excellence in the field
of training in the country. BVC continuously invested in upgrading
facilities and infrastructure to maintain international standards.
BVC has won 17 Best Apprentices Awards (Gold Medals) announced in the
year 2009 in three competitions viz., 80th, 81st and 82"" All India
Competition for Apprentices held during May 2008, November 2008 and May
2009 respectively. BVC being the "Best in Class" in the country also
sustained excellence in the field of Vocational Training by increasing
its tally of Gold medal winners to 170. The Company was declared the
"Best Establishment" in the country for the 38"1 time.
Awards and Recognition
The Company received several awards and recognitions for its
achievements:
- Third DHL-CNBC TV18 International Trade Award (ITA) for performance
in exports business.
- Mahindra & Mahindra - Farm Equipment Sector, Sanjeevani Special
Appreciation Award for outstanding performance in 2009.
- NDTV Car & Bike Award 2009 for the Auto Component Manufacturer of
the Year.
- Bosch-Diesel Systems at Bangalore was honored with CII-EXIM Bank
Award for Business Excellence for the year 2009.
- UTVi-Autocar Innovation Award jointly with Mahindra & Mahindra for
the first Start-Stop system in India.
- Honda Motorcycles and Scooters India (HMSI) award for achieving
quality and delivery targets (spark plug division).
- Adjudged as a runner-up in National Institute of Personnel
Managements (NIPM) prestigious competition on "HR best
practices-2008".
Buy-back of shares
Pursuant to the Public Announcement made by the Company on 08.12.2008
for buy-back of shares which commenced on 15.12.2008 and closed on
24.10.2009, the Company has bought back 652,560 equity shares from the
open market for a total consideration of Rs.2003 mio. and extinguished
all the shares that were bought back. Consequently, the percentage
holding of Robert Bosch GmbH has increased from 69.73% to 71.18%.
Dematerialization of shares
Of the 28.82 % shares held by the public, 27.65% shares have been
dematerialized as on 29.01.2010.
Members holding shares in physical form are once again advised to
dematerialize their shares to avoid the risks associated with the
physical holding of such share certificates.
Bosch India Foundation
Bosch India Foundation in its effort to serve the underprivileged
sections of the society, through vocational training and health
program, embarked on several projects during the year 2009 like Basic
Computer skills, Plumbing, Sericulture, Soft Skills, Hospitality and
Guest care, Orthopedic club foot and Cleft & Palate surgery etc. The
programs were conducted with active participation of Bosch Associates
across three cities viz. Bangalore, Pune and Ahmedabad. About 600
underprivileged youths benefitted from the program.
Industrial Relations
Industrial relations at all Plants and other establishments continued
to be cordial. The Directors place on record their deep appreciation of
the sincere and dedicated teamwork by employees at all levels to meet
the quality, cost and delivery expectations of our customers in a
growing market.
Subsidiary Companies
As the aggregate assets and income of MICO Trading Pvt. Ltd., as on 31
st December 2009 is not material, no consolidated financial statements
under Accounting Standard 21 "Consolidated Financial Statements" as
notified under section 211(3C) of the Companies Act, 1956, has been
prepared.
As required under Section 212 of the Companies Act, 1956, annexed
hereto are the Audited Statement of Accounts, the Report of the Board
of Directors and Auditors Report for the year ended 31 st December
2009 of MICO Trading Pvt. Ltd.
Directors
Names of companies/firms in which Directors of the Company hold/held
office as Director/Partner are given below:
Dr. A. Hieronimus
- Bosch Rexroth AG. (Chairman of the Management Board)
- MindTreeLtd.
Dr. B. Bohr
- Robert Bosch GmbH, Germany. (Member of the Board)
Mr. B. Steinruecke
- Indo German Chamber of Commerce.
(Director General)
- FAG Bearings India Ltd.
- Zodiac Clothing Company Ltd.
- HDFC ERGO General Insurance Company Ltd.
Mr. B. Muthuraman
- Tata Steel Ltd. (Vice Chairman) ,
- Natsteel Asia Pte. Ltd, Singapore.
(Chairman) (upto 02.02.10)
- Natsteel Holdings Pte. Ltd. Singapore.
(Chairman) (upto 02.02.10)
- Tata Steel (Thailand) Public Co. Ltd.,
Bangkok. (Chairman) (upto 02.02.10)
- Tinplate Company of India Ltd.
(Chairman) (upto 14.01.10)
- Tata International Ltd. (Chairman)
- Tata Incorporated, New York.
- Tata Industries Ltd.
- Tata Steel Global Minerals Holdings Pte. Ltd.
- Tata Steel Europe Ltd.
- Tulip UK Holdings No. 2 Ltd.
- Tulip UK Holdings No. 3 Ltd.
- CEDEP (European Centre of Executive
Development), France. (Director)
- National Institute of Technology,
Jamshedpur. (Chairman)
- Xavier Labour Relations Institute, Jamshedpur.
(Chairman, Board of Governors)
- Indian Institute of Technology, Kharagpur.
(Chairman, Board of Governors)
Mrs. Renu S Karnad
- Housing Development Finance Corporation Ltd.
(Managing Director)
- Credit Information Bureau (India) Ltd.
- GRUH Finance Ltd.
- HDFC Asset Management Co. Ltd.
- HDFC Bank Ltd.
- HDFC ERGO General Insurance Co. Ltd.
- HDFC Property Ventures Ltd. (Chairperson)
- HDFC Standard Life Insurance Co. Ltd.
- HDFC Venture Capital Ltd.
- ICI India Ltd.
- Indraprastha Medical Corporation Ltd.
- Sparsh BPO Services Ltd.
- HDFC Sales Pvt. Ltd. (Chairperson)
- Feedback Ventures Pvt Ltd.
- G4S Corporate Services (India) Pvt. Ltd.
- Transunion LLC, Chicago.
- HDFC PLC, Maldives.
- Value and Budget Housing Corporation (India)
Pvt. Ltd. (from 14.02.10)
Mr. Prasad Chandran
- BASF India Ltd. (Chairman and Managing
Director)
- BASF Polyurethanes India Ltd. (Chairman
and Managing Director)
- Ciba India Ltd. (Chairman)
- BASF Styrenics Pvt. Ltd. (Chairman)
- BASF Construction Chemicals (India) Pvt. Ltd.
(Chairman)
- BASF Coatings (India) Pvt. Ltd. (Chairman)
- BASF Asia Pacific (India) Pvt. Ltd. (Chairman)
- BASF Catalysts (India) Pvt. Ltd.
- BASF Finlay (Private) Limited, Sri Lanka.
- BASF Pakistan (Private) Ltd.
- BASF Bangladesh Ltd.
- Indo German Chamber of Commerce.
(Committee Member)
- Federation of Indian Chamber of Commerce.
(Executive Committee Member)
- Bombay Chamber of Commerce and Industry.
(Managing Committee Member)
- The Energy and Resource Institute (TERI).
(Committee Member)
Mr. V. K. Viswanathan
- Robert Bosch Engineering and Business
Solutions Ltd. (Chairman)
- Bosch Chassis Systems India Ltd.
- MICO Trading Pvt. Ltd.
- Bosch Rexroth (India) Ltd. (Chairman)
- Bosch Electrical Drives India Pvt. Ltd.
- Bosch Automotive Electronics India Pvt. Ltd.
(Chairman)
- Indo German Chamber of Commerce.
(Committee Member)
Dr. Manfred Duernholz
- MICO Trading Pvt. Ltd.
Dr. A. Hieronimus, Mr. V.K. Viswanathan and
Dr. Manfred Duernholz are liable to retire by rotation
and offer themselves for re-election.
Dr. A. Hieronimus, 62, holds a Diploma in Mathematics from the
University of Cologne. He received a Doctorate in Business
Administration also from the same University.
Dr. Hieronimus started his career as an Academic Assistant in the
University of Cologne, Germany. He joined Mannesmann AG in 1979 and
held senior positions responsible for materials management, sales and
operation planning, head of department of sales and marketing, head of
the department of corporate planning in the Mannesmann group companies
in Germany. In 1990, he became a Member of the Management Board of
Mannesmann Demag Baumaschinen GmbH and later of the Board of Management
in Mannesmann Rexroth GmbH. From 1997 to April 2001, he was Member of
Executive Board of Mannesmann Rexroth AG, Germany and continued in that
position till August 2003, upon the takeover of Rexroth AG by Robert
Bosch GmbH.
Dr. A. Hieronimus was appointed as Managing Director of the Company
from 01.09.2003 and consequent upon assuming new responsibility from
01.02.2008 as Chairman of the Board of Directors of Bosch Rexroth AG,
he ceased to be the Managing Director of the Company from 01.02.2008.
The Board of Directors of the Company appointed Dr. A. Hieronimus as
Chairman from 01.02.2008. Dr. Hieronimus holds 640 shares in the
Company. He is a member of Audit Committee and Shareholders/
Investors Grievance Committee of the Company. He is also the Chairman
of the Shareholders/ Investors Grievance Committee and a member of
the Audit Committee in MindTree Limited.
Mr. V.K. Viswanathan joined the Board as Additional Director and Joint
Managing Director on 01.01.2001, responsible for Finance,
Administration and IT Co- ordination. Mr. Viswanathan joined the
Company as Chief General Manager in August 1998. After a brief
orientation in the Company, he took up an assignment in the Diesel
Systems Division of Robert Bosch GmbH, Germany from September 1998.
Upon completion of the assignment, he returned to the Company in
November 2000. Upon assuming new responsibilities in Robert Bosch
Corporation, Farmington Hills, USA (Robert Bosch North America), Mr.
Viswanathan ceased to be a Director and Joint Managing Director of the
Company from 28.02.2006.
Upon completion of his assignment with Robert Bosch Corporation,
Farmington Hills, USA (Robert Bosch North America), he was appointed as
Additional Director and Joint Managing Director with effect from
01.11.2007 responsible for Automotive Aftermarket, Starters and
Generators, Packaging Machine, Power Tools and Security
Technology. He was appointed as Managing Director with effect from
01.02.2008.
Mr. Viswanathan, 59, is a Bachelor of Commerce from Madras University
and a Chartered Accountant. Prior to joining the Company, he was the
Group Treasurer & Head of Mergers and Acquisitions with Hindustan
Unilever Limited with which group he was associated in various
capacities for 17 years.
He does not hold any shares in the Company and is a member of
Shareholders/Investors Grievance Committee of the Company and
Chairman of the Audit Committee of Bosch Rexroth (India) Limited.
Dr. Manfred Duernholz joined the Executive Management of the Company on
01.02.2008 as Joint Managing Director responsible for the Powertrain
business.
Dr. Manfred Duernholz, 54, holds a diploma in Engineering and a
graduate degree in Machine building from the Technical University of
Aachen, Germany. He is also a doctorate in Engineering.
He held varied technical position from 1974 to 1999 before joining the
Bosch group in April 1999. In the Bosch group he held important
positions including in Engine Laboratory at the Feuerbach Plant (1999-
2001), as Senior Vice President-Development (2001- 2007) and as Senior
Vice President-Engineering (2007). He does not hold any shares in the
Company.
Particulars of Employees
Information in accordance with the provisions of Section 217(2A) of the
Companies Act, 1956, read with Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, as per
provisions of Section 219(l)(b)(iv) of the Companies Act, 1956, this
Report and Accounts are being sent to the Shareholders of the Company
excluding the Statement of Particulars of Employees under Section 217(2
A) of the Companies Act, 1956. Any Shareholder interested in obtaining
a copy of the said Statement may write to the Company Secretary at the
Registered Office of the Company and the same will be sent by post.
Corporate Governance
A Report on Corporate Governance approved by the Board of Directors of
the Company and a Certificate from the Auditors of the Company is set
out in the Annexure to the Directors Report. The Company has fully
complied with the Corporate Governance practices specified under the
Companies Act, 1956, and the Listing Agreement with the Stock
Exchanges.
A Code of Conduct for Directors and Senior Management, Code of Conduct
for Prevention of Insider Trading, Whistle Blower Policy, Rules &
Regulations of Service Conduct for Managerial & Superintending Staff,
Code of Business Conduct etc., effectively support the Corporate
Governance processes.
A Management Discussion and Analysis Report also accompany this report.
Energy, Technology, Foreign Exchange, etc.
The report in respect of conservation of energy, technology absorption,
foreign exchange earnings and outgo, as required under Section
217(l)(e) read with The Companys (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988, is set out in the Annexure
to the Directors Report.
Auditors
M/s. Price Waterhouse & Co., Chartered Accountants, the retiring
auditors are eligible for re-appointment.
Directors Responsibility Statement
Pursuant to Section 217(2AA) of the Companies Act, 1956, the Board of
Directors report that:
- In the preparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures, if any.
- Accounting policies have been selected and applied consistently and
the judgments and estimates made 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.
- Proper and sufficient care has been taken 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.
- The annual accounts have been prepared on a going concern basis.
Acknowledgements
The Directors express their gratitude to the Central Government and the
State Governments of Karnataka, Maharashtra, Rajasthan and Goa for the
support given to the Company. The Directors also thank all customers,
dealers, suppliers, financial institutions and banks, members and
others connected with the business of the Company for their
co-operation.
For and on behalf of the Board of Directors
Bangalore Albert Hieronimus
5th March 2010 Chairman
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