Mar 31, 2023
The Directors are pleased to present the Company''s 84th Annual Report and the Company''s audited financial statements for the financial year ended March 31,2023.
The highlights of the Standalone Financial Results are as under: |
(H in crore, except for EPS) |
|
Particulars |
FY 2022-23 |
FY 2021-22 |
Revenue from Operations & Other Income |
5,500.73 |
4,860.61 |
Gross Profit before Finance Cost and Depreciation |
440.85 |
323.55 |
Less: Finance Cost |
47.70 |
68.67 |
Less: Depreciation |
75.42 |
63.04 |
Profit/(Loss) before Exceptional Items and Tax |
317.73 |
191.84 |
Exceptional Items |
0.00 |
(13.23) |
Profit/(Loss) before Taxes |
317.73 |
178.61 |
Less: Provision for Tax expenses |
87.22 |
41.83 |
Profit/(Loss) after Tax |
230.51 |
136.79 |
Add: Other Comprehensive Income |
1.76 |
5.84 |
Add: Balance in Profit & Loss Account |
- |
- |
Add: Transferred to retained earnings for vested cancelled options |
0.64 |
0.35 |
Amount transferred to General Reserves |
- |
- |
Amount transferred from Debenture Redemption Reserve |
- |
37.50 |
Dividend Paid |
(34.47) |
- |
Balance available for appropriation |
814.52 |
615.77 |
Basic EPS (H) |
20.05 |
11.93 |
Diluted EPS (H) |
20.01 |
11.88 |
The highlights of the Consolidated Financial Results are as under: |
||
(H in crore, except for EPS) |
||
Particulars |
FY 2022-23 |
FY 2021-22 |
Revenue from Operations & Other Income |
5,505.11 |
4,881.35 |
Profit/(Loss) before Exceptional Items and Tax |
303.42 |
179.51 |
Exceptional Items |
- |
(13.23) |
Profit/(Loss) before Taxes |
303.42 |
166.28 |
Share of Profit/(Loss) of subsidiaries, associates & joint ventures |
- |
- |
Profit/(Loss) before Taxes |
303.42 |
166.28 |
Less: Provision for Tax expenses |
87.23 |
41.88 |
Profit/(Loss) for the period |
216.19 |
124.41 |
Basic EPS (H) |
18.80 |
10.85 |
Diluted EPS (H) |
18.77 |
10.81 |
Return on Net Worth, Return on Capital Employed and EPS for the financial year ended March 31,2023, and for the last four financial years, are given below:
Particulars |
FY 2022-23 |
|FY 2021-22 |
|FY 2020-21 |
|FY 2019-20 |
|FY 2018-19 |
Return on Net Worth (%) |
12.44 |
9.06 |
12.31 |
(0.01) |
15.50 |
Return on Capital Employed (%) |
19.53 |
14.01 |
13.85 |
8.20 |
14.13 |
Basic EPS (after exceptional items) (H) |
20.05 |
13.38 |
16.08 |
(0.01) |
16.34 |
CREDIT RATING The below table depicts Company''s credit ratings profile in a nutshell: |
||
Instrument |
Rating Agency |
Rating |
Short Term Debt |
CRISIL Ratings Limited |
CRISIL A1 |
Bank Loan Facilities (long-term) |
CRISIL Ratings Limited |
CRISIL A /Watch Positive |
Bank Loan Facilities (short-term) |
CRISIL Ratings Limited |
CRISIL A1 |
The financial results of the Company are elaborated in the Management Discussion and Analysis Report, which forms part of the Annual Report.
STATE OF COMPANY AFFAIRS / OPERATIONS
During the financial year 2022-23:
⢠Revenue from operations on standalone basis increased to H 5,417.41 crore as against H 4,788.19 crore in the previous year - a growth of 13.1%.
⢠Revenue from Consumer Product Segment increased by 14% to H 3,752.39 crore.
⢠Revenue from EPC Segment increased by 29.5% to H 540.02 crore.
⢠Cost of goods sold as a percentage to revenue from operations decreased to 69.6% as against 71.3% in the previous year.
⢠Employee cost as a percentage to revenue from operations decreased to 7.7% (H 419.09 crore) as against 8.3% (H 395.44 crore) in the previous year.
⢠Other expense as a percentage to revenue from operations increased to 16.1% (H 872.45 crore) as against 15.2% (H 728.27 crore) in the previous year.
⢠The Profit after Tax for the current year is H 230.51 crore as against H 136.79 crore in the previous year - a growth of 68.5%.
⢠On a consolidated basis, the group achieved revenue of H 5,429.26 crore as against H 4,813.01 crore - a growth of 12.8%. Net profit for the group for the current year is H 216.19 crore as against H 128.52 crore in the previous year - a growth of 68.2%.
As at March 31, 2023, the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at H 903.50 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at H 589.91 crore. Capital Expenditure during the year amounted to H 83.27 crore (H 72.60 crore in the previous year).
The Company''s cash and cash equivalent as at March 31, 2023 was H 340.47 crore. The Company manages cash and cash flow processes assiduously, involving all parts of the business. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
Foreign Exchange transactions are partly covered and there are no materially significant uncovered exchange rate risks in the context of Company''s imports and exports. The Company accounts for mark-to-market gains or losses every quarter end, are in line with the requirements of Ind AS 21.
During the year under review, there has been no change in the nature of business of the Company.
Detailed information on the operations of the different business segments of the Company are covered in the Management Discussion and Analysis Report, which forms part of the Annual Report.
The Company has not transferred any amount to the General Reserves during the current financial year.
DIVIDEND & DIVIDEND DISTRIBUTION POLICY
Your Directors are pleased to recommend a dividend of 200% (H 4.00) on 11,50,75,638 equity shares of H 2 each for the financial year 2022-23. The amount of dividend aggregates to H 46.03 crore (previous year H 34.46 crore). The dividend on equity shares, subject to the approval of the Members at the Annual General Meeting (âAGM") to be held on August 10, 2023, will be paid on or after August 14, 2023 to the Members whose names appear in the Register of Members as of the close of business hours on July 28, 2023; and, in respect of shares held in dematerialised form, it will be paid to Members whose names are furnished by Depositories, as beneficial owners as of the close of business hours on that date. Shares that may be allotted on exercise of stock options granted under the Employee Stock
Option Scheme before the book closure date for payment of dividend will rank pari-passu with the existing shares and be entitled to receive the dividend. The Board of Directors, at its meeting held on May 17, 2022, had last amended the Dividend Distribution Policy of the Company. In terms of the amendment, and subject to the parameters/circumstances given in the said revised Dividend Distribution Policy, the Board would endeavor to maintain a dividend pay-out in the range of 20-40% of the Company''s Profit After Tax on standalone financials. The revised Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI Listing Regulations is attached as Annexure A and forms part of this Report. This Policy can also be accessed on the Company''s website at: https://www.baiaielectricals.com/
media/7301/dividend-distribution-policy.pdf.
The paid-up equity share capital of the Company as on March 31, 2023 was H 23.02 crore. The increase in number of shares during the year is on account of (i) allotment of 19 equity shares of H 2 each to the shareholders of Starlite Lighting Limited (âTransferor Company") pursuant to the Scheme of Merger by Absorption of the Transferor Company into the Company and their respective shareholders; and (ii) allotment of 2,01,505 equity shares of H 2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS. The Company has not issued shares with differential voting rights. No disclosure is required under Section 67(3)(c) of the Companies Act, 2013 (âAct"), in respect of voting rights not exercised
In line with the requirements of the Act and SEBI Listing Regulations, the Company has formulated a Policy on Materiality of Related Party Transactions which is also available on the Company''s website at:
directly by the employees of the Company, as the provisions of the said Section are not applicable.
The equity shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited (collectively âStock Exchanges"). The listing fees for financial year 2023-24 have been paid to the Stock Exchanges.
The Company''s shares are compulsorily tradable in electronic form. As on March 31, 2023, 99.65% of the Company''s total paid up capital representing 11,46,68,943 equity shares are in dematerialised form.
In light of the provisions of Regulation 40 of the SEBI Listing Regulations, read with a Circular No. SEBI/HO/ MIRSD/MIRSD_RTAMB/P/CIR/2022/8 dated January 25, 2022, as issued by the Securities and Exchange Board of India (âSEBI"), Members may please note that the transfer of shares will be in dematerialised form only. In view of the above and to avail advantages offered by the Depository system as well as to avoid frauds, Members holding shares in physical mode are advised to avail the facility of dematerialisation from either of the Depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited.
During the year under review, the Company has not accepted any deposits covered under Chapter V of the Act. Accordingly, no disclosure or reporting is required in respect of details relating to deposits.
https://www.baiaielectricals.com/media/7307/ policv-on-materialitv-of-dealing-with-related-partv-transactions.pdf. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties.
During the year under review, the following person(s) or entity(ies) belonging to the promoter/promoter group held 10% or more shares in the paid-up equity share capital of the Company: |
Name of the person/entity Shareholding (%) Jamnalal Sons Private Limited 19.59 Bajaj Holdings and Investment Limited 16.63 |
Pursuant to the provisions of Regulation 34(3) read with clause 2 of Part A of Schedule V of the SEBI Listing Regulations, the listed entity shall make disclosures in respect of loans and advances in compliance with the Accounting Standard on Related Party Disclosures. The required disclosure is as under:
(Amount: H in crore) |
|||
Name |
Category |
Balance of loans and advances as on March 31, 2023* |
Maximum outstanding during the year* |
Nirlep Appliances Private Limited ("Nirlep") Bajel Projects Limited ("Bajel") Hind Lamps Limited ("Hind Lamps") |
Subsidiary Subsidiary Associate |
93.23 |
93.23 |
* Excluding trade advances. |
All transactions entered with related parties for the year under review were in ordinary course of business and at arm''s length basis. No Material related party transactions i.e., transactions exceeding H 1,000 crore or 10% of the annual consolidated turnover whichever is less, as per the last audited financial statements, were entered during the year by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act, in Form AOC-2 is not applicable. Further, there are no material related
Disclosures of transactions pursuant to the provisions of Regulations 34(3) read with clause 2A of Part A of Schedule V of the SEBI Listing Regulations is attached as Annexure B and forms part of this Report.
PARTICULARS OF LOANS AND ADVANCES, GUARANTEES OR INVESTMENTS
Pursuant to the provisions of Section 186 of the Act and the rules framed thereunder, the particulars of the loans given, investments made or guarantees given or security provided are given in the Notes to the standalone financial statements.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the regulators/courts/tribunal which would impact the going concern status of the Company and its operations in the future.
party transactions during the year under review with the Promoters, Directors, or Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.
The related party transactions are mentioned in the notes to the accounts. The Directors draw attention of the members to Note No. 38 to the standalone financial statements which sets out related party disclosure.
MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE TILL THE DATE OF THIS REPORT
There are no material changes and commitments, affecting the financial position of the Company, which has occurred between the end of the financial year for the Company i.e., March 31,2023, and the date of this Board''s Report i.e., May 23, 2023.
APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR
No application has been made under the Insolvency and Bankruptcy Code against the Company; hence
the requirement to disclose the details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the financial year is not applicable.
DIFFERENCE BETWEEN AMOUNT OF THE
VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS
THEREOF
During the year under review, there was no instance of one-time settlement with banks or financial institutions; hence the requirement to disclose the details of difference between amount of the valuation done at the time of onetime settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof, is not applicable.
SCHEME OF ARRANGEMENTS UNDER SECTIONS 230-232 OF THE ACT
⢠Scheme of Merger by Absorption of Starlite Lighting Limited with Bajaj Electricals Limited and their respective shareholders:
The Board of Directors of the Company, at its meeting held on May 25, 2021, had considered and approved the Scheme of Merger by Absorption of Starlite Lighting Limited with Bajaj Electricals Limited and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Act ("SLL Merger Scheme").
The Hon''ble National Company Law Tribunal, Mumbai Bench, vide its order dated August 25, 2022 approved the said SLL Merger Scheme whereby and where under inter-alia the Transferor Company was merged with the Company with effect from September 30, 2022.
⢠Scheme of Merger by Absorption of Nirlep Appliances Private Limited with Bajaj Electricals Limited and their respective shareholders:
The Board of Directors of the Company, at its meeting held on September 29, 2022, has considered and approved the Scheme of Merger by Absorption of Nirlep Appliances Private Limited with Bajaj Electricals Limited and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Act ("Nirlep Merger Scheme").
The Nirlep Merger Scheme is subject to the necessary statutory and regulatory approvals including the approvals of Hon''ble National Company Law Tribunal, the shareholders and creditors of each of the companies.
⢠Scheme of Arrangement between Bajaj Electricals Limited and Bajel Projects Limited and their respective shareholders:
The Board of Directors of the Company, at its meeting held on February 8, 2022, had considered and approved the Scheme of Arrangement between Bajaj Electricals Limited ("Company") and Bajel Projects Limited ("Bajel") and their respective shareholders under Sections 230 to 232 of Act ("Demerger Scheme") involving the transfer by way of demerger of the Demerged Undertaking (as defined in the Demerger Scheme) consisting of Power Transmission and Power Distribution Business (as defined in the Demerger Scheme) of the Company into Bajel and consequent issue of equity shares by Bajel to the shareholders of the Company. The equity shares of Bajel shall be listed on the Stock Exchanges, post the effectiveness of the Scheme. The shareholders of the Company will be issued equity shares in Bajel in the same proportion as their holding in the Company.
During the year under review, the Demerger Scheme was approved by the shareholders of the Company at their National Company Law Tribunal convened meeting of the Equity Shareholders held on March 2, 2023, through Video Conferencing / Other Audio-Visual Means.
The Demerger Scheme is subject to the necessary statutory and regulatory approvals including the approval of Hon''ble National Company Law Tribunal.
CORPORATE SOCIAL RESPONSIBILITY
The Company is having a Policy on Corporate Social Responsibility ("CSR") and has constituted a CSR Committee as required under the Act for implementing various CSR activities. The CSR Committee comprised of Mr. Shekhar Bajaj, as the Chairman of the Committee, and Dr. (Mrs.) Indu Shahani and Dr. Rajendra Prasad Singh, as the members of the Committee. The CSR policy is available on the website of the Company at: https://www.baiaielectricals.com/media/7071/
corporate-social-responsibilitv-policv.pdf.
Regulations. The said Certificate will be made available for inspection through electronic mode by writing to the Company at [email protected] from the date of circulation of the AGM Notice till the date of the AGM i.e., August 10, 2023.
SUBSIDIARY, JOINT VENTURE AND ASSOCIATE
As on March 31, 2023, your Company has two (2) subsidiaries and one (1) associate. During the year under review, with the effectiveness of the Scheme of Merger by Absorption of Starlite Lighting Limited ("SLL") with the Company and their respective shareholders, SLL ceased to be a subsidiary of the Company, with effect from September 30, 2022.
Details of subsidiary/associate companies/joint ventures of the Company
% of shareholding |
||
Name |
of the Company as on March 31,2023 |
Status |
Nirlep Appliances Private Limited ("Nirlep") |
100.00 |
Subsidiary |
Bajel Projects Limited ("Bajel") |
100.00 |
Subsidiary |
Hind Lamps Limited ("Hind Lamps") |
19.00 |
Associate |
Other details about the CSR Committee are provided in Corporate Governance Report which forms part of this Report. The Company has implemented various CSR projects directly and/or through implementing partners and the said projects undertaken by the Company are in accordance with its CSR Policy and Schedule VII to the Act. Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended, is given in Annexure C, which forms part of this Report.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)
In compliance with Regulation 34 of the Listing Regulations, a separate report on the Business Responsibility and Sustainability Report, forms an integral part of this Annual Report.
Maintaining high standards of Corporate Governance has been fundamental to the business of the Company since its inception. As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a separate section on corporate governance practices followed by the Company, together with the following declarations/certifications forms an integral part of this Corporate Governance Reporting:
a. A declaration signed by Mr. Anuj Poddar, Managing Director & Chief Executive Officer, stating that the members of board of directors and senior management personnel have affirmed compliance with the Company''s Code of Business Conduct and Ethics;
b. A compliance certificate from the Company''s Statutory Auditors confirming compliance with the conditions of Corporate Governance;
c. A certificate of Non-Disqualification of Directors from the Secretarial Auditor of the Company; and
d. A certificate of the CEO and CFO of the Company, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
The Management Discussion and Analysis Report on the operations of the Company, as required under the
SEBI Listing Regulations is provided in a separate section and forms an integral part of this Annual Report.
Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the financial year ended March 31,2023 can be accessed at https://www.bajajelectricals.com/annual-reports/.
The Company has a Whistle Blower Policy to report genuine concerns or grievances about any poor or unacceptable practice and any event of misconduct and to provide adequate safeguards against victimisation of persons who may use such mechanism. The Whistle Blower Policy has been posted on the website of the Company at: https://www. baiaielectricals.com/media/6129/whistle-blower-policy-vigil-mechanism-wef-1st-april-2019.pdf.
The Company implemented the Employees Stock Option Scheme ("ESOP Scheme") in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014, read with Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations") as a measure to reward and motivate employees as also to attract and retain talent.
During financial year under review, 3,27,500 stock options were granted to the eligible employees at the market price prevailing on the National Stock Exchange of India Limited as on the date of their grant. Details of the shares issued under ESOP Scheme, as also the disclosures in compliance with SEBI SBEB Regulations is uploaded on the website of the Company www. baiaielectricals. com, which forms part of this Report. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant. The issuance of equity shares pursuant to exercise of stock options does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.
The Company has obtained a Certificate from the Secretarial Auditors stating that ESOP Scheme has been implemented in accordance with the SEBI SBEB
Performance of Subsidiary, Joint Venture and Associate
Nirlep: Total income of Nirlep for the financial year 2022-23 stood at H 70.76 crore (Previous Year: H 71.17 crore). Loss for the year was at H 10.00 crore (Previous Year Loss: H 7.07 crore).
Bajel: Total income of Bajel for the financial year starting from January 19, 2022 (i.e., the date of incorporation of Bajel) to March 31, 2023 was NIL. Loss for the same period was at H 0.21 crore.
Hind Lamps: Total income of Hind Lamps for the financial year 2022-23 stood at H 3.72 crore (Previous Year: H 2.82 crore). Profit for the year was at H 0.04 crore (Previous Year Loss: H 0.08 crore).
Pursuant to the provisions of Section 129(3) of the Act, a Report on the performance and financial position of the subsidiary, associate and joint venture are included in the Consolidated Financial Statement and their contribution to the overall performance of the Company in Form AOC-1 is given in Annexure D, which forms part of this Report.
In accordance with the fourth proviso to Section 136(1) of the Act, the Annual Report of Company, containing therein its Standalone and Consolidated Financial Statements are available on the Company''s website at: https://www.baiaielectricals.com/annual-reports/. Further, as per fifth proviso to the said Section, the annual accounts of the subsidiary, joint venture and
associate of the Company are also available on the Company''s website at: https://www.bajajelectricals. com/annual-reports/. Any member who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Company''s Registered Office. Further, the said documents will be available for examination by the shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 11.00
a.m. to 01.00 p.m.
The Policy for Determining Material Subsidiary as approved by the Board may be accessed on the Company''s website at: https://www.baiaielectricals. com/media/6127/policy-for-determining-material-subsidiary-wef-1st-april-2019.pdf.
The financial statements of the Company for the year ended March 31, 2023, as per Schedule III to the Act forms part of this Report.
CONSOLIDATED FINANCIAL STATEMENTS
The Directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiary, associate and joint venture prepared in compliance with the Act,
applicable Accounting Standards and the SEBI Listing Regulations and they form part of this Report.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
Appointments/Re-appointments and Director coming up for retirement by rotation
⢠Re-designations and fresh appointments of Mr. Shekhar Bajaj and Mr. Anuj Poddar
During the year under review, the Board of Directors of the Company, on the recommendation of Nomination and Remuneration Committee, resolved to split the positions of the Chairman and Managing Director, and considered and approved the following in its meeting held on August 12, 2022:
a The re-designation and appointment of Mr. Shekhar Bajaj (DIN: 00089358) as an Executive Chairman, in the category of a whole-time director, with the title as the "Chairman" of the Company, for a fresh term of five (5) years commencing from August 12, 2022; and
b. The re-designation and appointment of Mr. Anuj Poddar (DIN: 01908009) as the "Managing Director and Chief Executive Officer" of the Company, for a fresh term of five (5) years commencing from August 12, 2022.
The special resolutions pertaining to the above re-designations and appointments were duly approved by the shareholders of the Company, with requisite majority, on October 12, 2022, by means of Postal Ballot, through remote e-voting only.
⢠Appointment of Mr. Sudarshan Sampathkumar as an Independent Director for a term of five consecutive years from May 23, 2023
On the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held on May 23, 2023, appointed Mr. Sudarshan Sampathkumar (DIN: 01875316) as an Additional Director on the Board of the Company in the category of Non-Executive & Independent Director to hold office for a term of 5 (five) consecutive years from May 23, 2023 to May 22, 2028, subject to approval of the shareholders. Mr. Sudarshan Sampathkumar will hold office as an Additional Director upto the ensuing AGM of
the Company to be held on August 10, 2023 and thereafter, subject to the approval of the Members at the said AGM, as a Non-Executive Independent Director, not liable to retire by rotation.
The Board recommends appointment of Mr. Sudarshan Sampathkumar for the consideration of the Members of the Company at the forthcoming AGM. The relevant details including profile of Mr. Sudarshan Sampathkumar is included separately in the Notice of AGM and Report on Corporate Governance of the Company, forming part of the Annual Report.
⢠Director coming up for retirement by rotation
In accordance with the provisions of Section 152 of the Act and the Company''s Articles of Association, Mr. Madhur Bajaj (DIN: 00014593) and Mr. Rajiv Bajaj (DIN: 00018262), are the Directors liable to retire by rotation at the forthcoming AGM and being eligible offers themselves for re-appointment. The Board recommends re-appointment of Mr. Madhur Bajaj and Mr. Rajiv Bajaj for the consideration of the Members of the Company at the forthcoming AGM. The relevant details including profiles of Mr. Madhur Bajaj and Mr. Rajiv Bajaj are included separately in the Notice of AGM and Report on Corporate Governance of the Company, forming part of the Annual Report.
As on the date of this Report, the Company''s Board comprises of eleven (11) Directors, out of which, nine (9) are Non-Executive Directors (NEDs) including two (2) Woman Directors. NEDs represent 81.82% of the total strength. Further, out of the said nine (9) NEDs, six (6) are independent directors representing 54.55% of the total strength of the Board. The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations and also with the provisions of the Act.
Independent Directors
All Independent Directors of the Company have given declarations under Section 149(7) of the Act that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1) (b) and other applicable provisions of the SEBI Listing Regulations. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to
discharge their duties with an objective independent judgement and without any external influence. The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation. All Independent Directors of the Company have valid registration in the Independent Director''s databank of Indian Institute of Corporate Affairs as required under Rule 6(1) of the Companies (Appointment and Qualification of Director) Fifth Amendment Rules, 2019. In the opinion of the Board, the Independent Directors, fulfil the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1) (b) and other applicable provisions of the SEBI Listing Regulations.
The terms and conditions of appointment of the Independent Directors are placed on the website of the Company at: https://www.bajajelectricals.com/ media/6937/letter-of-appointment-to-independent-directors.pdf.
In compliance with the requirement of SEBI Listing Regulations, the Company has put in place a familiarisation programme for the independent directors to familiarise them with their role, rights and responsibility as directors, the working of the Company, nature of the industry in which the Company operates, business model, etc. The details of familiarisation programme are explained in the Corporate Governance Report and the same are also available on the website of the Company at: https://www. baiaielectricals.com/media/7317/familiarisation-programmes-for-independent-directors-for-financial-year-ended-march-31-2022.pdf.
Key Managerial Personnel
During the year under review, there has been a change in the key managerial personnel of the Company. Mr. Anuj Poddar has been designated as one of the key managerial personnel in place of Mr. Shekhar Bajaj, following his re-designation and appointment as the "Managing Director and Chief Executive Officer" of the Company, effective from August 12, 2022.
As on March 31, 2023, the Board has designated Mr. Anuj Poddar, Managing Director & Chief Executive Officer, Mr. E C Prasad, Chief Financial Officer, and Mr. Ajay Nagle, Company Secretary & Chief Compliance Officer, as Key Managerial Personnel of the Company, pursuant to the provisions of Sections 2(51) and 203 of the Act, read with the Rules framed thereunder.
None of the Key Managerial Personnel of the Company has resigned during the year under review.
Further, the Board of Directors of the Company, at its meeting held on May 23, 2023, has:
a. Taken on record the cessation of Mr. Ajay Nagle, Company Secretary & Chief Compliance Officer and Key Managerial Personnel of the Company, with effect from the close of business hours on June 30, 2023, since he would be taking up higher responsibilities within the group; and
b. Considered and approved the appointment of Mr. Prashant Dalvi, the existing Vertical Head - Corporate Secretarial & Compliance of the Company, as the new Company Secretary & Chief Compliance Officer and Key Managerial Personnel of the Company with effect from the start of business hours on July 1, 2023.
NUMBER OF MEETINGS OF THE BOARD
Six (6) Board meetings were held during the financial year 2022-23. The intervening gap between the meetings was within the period prescribed under the Act and SEBI Listing Regulations. The details of meetings of the Board held during the financial year 2022-23 forms part of the Corporate Governance Report.
As on March 31, 2023, the Board of Directors had the following Committees:
a. Audit Committee;
b. Nomination and Remuneration Committee;
c. Stakeholders'' Relationship Committee;
d. Risk Management Committee;
e. Corporate Social Responsibility Committee;
f. Finance Committee; and
g. Committee of Independent Directors.
The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report which forms part of this Annual Report.
Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board and
standalone financial statements were adequate and operating effectively.
COMPLIANCE WITH SECRETARIAL STANDARDS
The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.
REPORTING OF FRAUD
There was no instance of fraud reported during the year under review, which required the Statutory Auditors, Cost Auditor or Secretarial Auditor to report the same to the Audit Committee of the Company under Section 143(12) of the Act and Rules framed thereunder.
RISK MANAGEMENT
The Company has formulated a risk management policy and has in place a mechanism to inform the Board about risk assessment and minimisation procedures along with a periodical review to ensure that executive management controls risk by means of a properly designed framework.
The Risk Management Framework is reviewed periodically by the Risk Management Committee, which includes discussing the Management submissions on risks, prioritising key risks and approving action plans to mitigate such risks.
Detailed discussion on risk management forms part of the Management Discussion and Analysis, which forms part of this Integrated Annual Report. At present, in the opinion of the Board of Directors, there are no risks which may threaten the existence of the Company
AUDIT COMMITTEE
The Audit Committee comprises of three Directors viz. Mr. Shailesh Haribhakti as the Chairman of the Committee, and Dr. (Mrs.) Indu Shahani, and Dr. Raiendra Prasad Singh, as the members of the Committee.
During the year under review all the recommendations of the Audit Committee were accepted by the Board. Details of the role and responsibilities of the Audit Committee, the particulars of meetings held, and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of the Annual Report.
Actual date of filing of Report |
September 7, 2022 |
of the Committees of the Board, by way of individual and collective feedback from Directors. The manner in which the evaluation was conducted by the Company and evaluation criteria has been explained in the Corporate Governance Report which forms part of this Annual Report.
The Board of Directors has expressed its satisfaction with the evaluation process.
POLICY ON DIRECTORS'' APPOINTMENT AND REMUNERATION
The Board of Directors has framed a Nomination and Remuneration Policy which lays down a framework in relation to appointment and remuneration of Directors, Key Managerial Personnel, Senior Management and other employees of the Company ("Policy"). The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel, Senior Management and other employees. The Policy also provides for the Board Diversity, the criteria for determining qualifications, positive attributes and independence of Director and criteria for appointment of Key Managerial Personnel/Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors whilst taking a decision on the potential candidates.
The above Policy is given in Annexure E, which forms part of this Report, and has also been posted on the website of the Company at: https://www. baiaielectricals.com/media/6722/nomination-and-remuneration-policy.pdf.
RISK AND INTERNAL CONTROLS ADEQUACY
The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors and cover all offices, factories and key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Company''s internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Company''s risk management policies and systems.
Based on the report of the Statutory Auditors, the internal financial controls with reference to the
AUDITORS AND AUDITOR''S REPORT Statutory Auditors
The Members at their 83rd Annual General Meeting ("83rd AGM") of the Company held on August 12, 2022, had appointed Messrs S R B C & Co. LLP, Chartered Accountants (ICAI Registration No.324982E/E300003) as the Statutory Auditors of the Company to hold office for a second term of five years i.e. from the conclusion of 83rd AGM till the conclusion of 88th Annual General Meeting of the Company to be held in 2027.
The Auditors'' Report on the financial statements forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.
Cost Auditors
Pursuant to the provisions of Section 148 of the Act read with the Rules framed thereunder, the cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited. Messrs R. Nanabhoy & Co. (Firm Registration No.000010), Cost Accountants carried out the cost audit for applicable businesses during the year.
Based on the recommendation of the Audit Committee, the Board of Directors has appointed Messrs R. Nanabhoy & Co. (Firm Registration No.000010), Cost Accountants as the Cost Auditors for the financial year 2023-24. The Company has received a certificate from Messrs R. Nanabhoy & Co., confirming that they are not disqualified from being appointed as the Cost Auditors of the Company.
The remuneration payable to the Cost Auditors is required to be placed before the members in the general meeting for their ratification. Accordingly, a resolution seeking members'' ratification for the remuneration payable to Messrs R. Nanabhoy & Co., Cost Accountants, is included at Item No.5 of the Notice of the ensuing AGM.
The particulars of the Cost Auditors and cost audit conducted by them for financial year 2021-22 are furnished below:
ICWA Membership No. |
7464 |
Registration No. of Firm |
000010 |
Address |
Jer Mansion, 70, August Kranti Marg, Mumbai 400036. |
Cost Audit Report |
Financial year 2021-22 |
Due date of filing of Report |
September 30, 2022 |
As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records and accordingly, such accounts and records are maintained.
Secretarial Auditors
The Board had appointed Messrs Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No. 1860) as the Secretarial Auditors to conduct the secretarial audit of the Company for the financial year ended March 31, 2023, as per the provisions of Section 204 of the Act read with Rules framed thereunder. The Secretarial Audit Report in Form MR-3 is given as Annexure F and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations read with SEBI Circulars issued in this regard, the Company has undertaken an audit for the financial year 2022-23 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Messrs Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No. 1860) has been submitted to the Stock Exchanges within 60 days of the end of the Financial Year.
TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND
Transfer of Unpaid/Unclaimed Dividend to Investor Education and Protection Fund
Pursuant to the provisions of Sections 124 and 125 of the Act read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended, unpaid and/ or unclaimed dividend of H 93,75,78 pertaining to the financial year ended on March 31, 2015, were transferred during the year to the Investor Education and Protection Fund ("IEPF").
Transfer of shares to IEPF
Pursuant to the provisions of Section 124 of the Act read with the IEPF Rules, 8,677 equity shares of face value of H 2/- each, in respect of which dividend was not paid or claimed by the members for seven consecutive years or more, have been transferred by
the Company to IEPF during the year. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure G which forms part of this Report.
HUMAN RESOURCES AND INDUSTRIAL RELATIONS
The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. The Company considers people as its biggest assets and hence has put in concerted efforts in talent management and succession planning practices, strong performance management and learning, coupled with training initiatives to ensure that it consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, the Company has also focused on employee engagement initiatives and drives aimed at increasing the culture of innovation and collaboration across all strata of the workforce. These are discussed in detail in the Management Discussion and Analysis Report forming part of the Annual Report.
The relations with the employees of the Company have continued to remain cordial.
KEY INITIATIVES WITH RESPECT TO STAKEHOLDER RELATIONSHIP, CUSTOMER RELATIONSHIP, ENVIRONMENT, SUSTAINABILITY, HEALTH, SAFETY AND WELFARE OF EMPLOYEES
The key initiatives taken by the Company with respect to stakeholder relationship, customer relationship, environment, sustainability, health and safety are provided separately under various Capitals in this Integrated Annual Report.
The Environment, Health and Safety Policy and Human Rights Policy are available on the website of the Company at www.baiaielectricals.com.
PROTECTION OF WOMEN AT WORKPLACE
In order to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder ("POSH Act"), the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All women employees either permanent, temporary or contractual are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. This has been widely disseminated. An Internal Complaint Committee (ICC) has been set up in compliance with the said provisions.
Number of cases filed and their disposal under Section 22 of the POSH Act, as at March 31,2023, is as follows:
Particulars |
Numbers |
Number of complaints pending as on the beginning of the financial year |
Nil |
Number of complaints filed during the financial year |
2 |
Number of complaints pending as on the end of the financial year |
Nil |
PARTICULARS OF EMPLOYEES
Disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure H, which forms part of this Report.
Further, in accordance with the provisions of Sections 197(12) & 136(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the list pertaining to the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, is kept open for inspection during working hours at the Registered Office of the Company and the Report & Accounts as set out therein are being sent to all the Members of the Company. Any Member, who is interested in obtaining these, may write to the Company Secretary at the Registered Office of the Company.
DIRECTORS'' RESPONSIBILITY STATEMENT
The Directors confirm that:
a. in the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;
b. they have selected such accounting policies and applied them consistently and made iudgements 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. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
OTHER DISCLOSURES / CONFIRMATIONS
a. Neither the Chairman nor the Managing Director & Chief Executive Officer of the Company received any remuneration or commission from any of the subsidiaries of the Company.
b. The Company has not issued any sweat equity shares to its directors or employees.
c. The Company has not failed to implement any corporate action during the year under review.
d. The disclosure pertaining to explanation for any deviation or variation in connection with certain terms of a public issue, rights issue, preferential issue, etc. is not applicable to the Company.
e. The Company''s securities were not suspended during the year under review.
f. There was no revision of financial statements and Board''s Report of the Company during the year under review.
APPRECIATION AND ACKNOWLEDGEMENT
The Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment, which is vital in achieving the overall growth of the Company.
The Board places on record its appreciation for the support and co-operation the Company has been receiving from its suppliers, distributors, business partners and others associated with it as its trading partners. The Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Company''s endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests. The Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government Regulatory Authorities and Stock Exchanges, for their continued support.
ANNEXURES
a. Dividend Distribution Policy - Annexure A;
b. Disclosures of transactions pursuant to the provisions of Regulation 34(3) read with clause 2A of Part A of Schedule V of the SEBI Listing Regulations -Annexure B;
c. Annual Report on CSR Activities - Annexure C;
d. Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures - Annexure D;
e. Nomination and Remuneration Policy of the Company - Annexure E;
f. Secretarial Audit Report - Annexure F;
g. Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo - Annexure G; and
h. Disclosures under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure H.
For and on behalf of the Board of Directors of Bajaj Electricals Limited
Shekhar Bajaj
Mumbai Chairman
May 23, 2023 DIN: 00089358
Mar 31, 2018
Dear Shareholders,
The Directors are pleased to present the 79th Annual Report of the Company, together with the audited financial statements for the financial year (FY) ended March 31, 2018. This Report states compliance as per the requirements of the Companies Act, 2013 (the âActâ), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and other rules & regulations as applicable to the Company.
FINANCIAL RESULTS
The highlights of the Standalone Financial Results are as under:
(Amount: Rs. in crore, except for EPS)
Particulars |
FY 2017-18 |
FY 2016-17 |
Revenue from Operations & Other Income |
4,769.58 |
4,333.85 |
Gross Profit before Finance Cost and Depreciation |
346.63 |
278.35 |
Less: Finance Cost |
58.86 |
80.44 |
Less: Depreciation |
33.94 |
29.87 |
Profit / (Loss) before Exceptional Items and Tax |
253.83 |
168.04 |
Exceptional Items |
(89.36) |
- |
Profit/(Loss) before Taxes |
164.47 |
168.04 |
Less: Provision for Tax expenses |
80.85 |
60.38 |
Profit/(Loss) after Tax |
83.62 |
107.66 |
Less: Other Comprehensive Income |
(4.08) |
2.29 |
Add: Balance in Profit & Loss Account |
140.92 |
35.55 |
Less: Dividend including Dividend Distribution Tax paid during the year |
34.18 |
- |
Balance available for appropriation |
194.44 |
140.92 |
Amount transferred to General Reserves |
- |
|
Earnings per share (Rs.) Basic |
8.23 |
10.65 |
Earnings per share (Rs.) Diluted |
8.19 |
10.63 |
The highlights of the Consolidated Financial Results are as under:
(Amount: Rs. in crore, except for EPS)
Particulars |
FY 2017-18 |
FY 2016-17 |
Revenue from Operations & Other Income |
4,769.58 |
4,333.85 |
Profit / (Loss) before Exceptional Items and Tax |
253.83 |
168.04 |
Exceptional Items |
78.79 |
- |
Profit / (Loss) before Taxes |
175.04 |
168.04 |
Share of Profit / (loss) of associates and joint ventures |
(10.56) |
(5.49) |
Profit / (Loss) before tax |
164.48 |
162.55 |
Less: Provision for Tax expenses |
80.85 |
60.38 |
Net Profit / (Loss) for the period |
83.63 |
102.17 |
Earnings per share (Rs.) Basic |
8.23 |
10.10 |
Earnings per share (Rs.) Diluted |
8.19 |
10.08 |
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
SHARE CAPITAL
The Paid-up Equity Share Capital as on March 31, 2018 was Rs.20.41 crore. During the year under review, there was no public issue, rights issue, bonus issue, preferential issue, etc. made by the Company. The Company has not issued shares with differential voting rights. The increase in number of shares is due to issue of 747325 equity shares of Rs.2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS. Details of Directorsâ shareholding as on March 31, 2018, are mentioned in the Annexure to this Directorsâ Report in âForm MGT - 9â.
No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company, as the provisions of the said Section are not applicable.
The equity shares of the Company continue to remain listed on BSE Limited (âBSEâ) and National Stock Exchange of India Limited (âNSEâ). The stipulated listing fees for FY 2018-19 have been paid to both the stock exchanges.
DEPOSITORY SYSTEM
As the members are aware, the Companyâs shares are compulsorily tradable in electronic form. As on March 31, 2018, 97.96% of the Companyâs total paid up capital representing 99953845 shares are in dematerialised form. In view of the numerous advantages offered by the Depository system as well as to avoid frauds, members holding shares in physical mode are advised to avail the facility of dematerialisation from either of the Depositories viz. National Securities Depository Limited (âNSDLâ) and Central Depository Services (India) Limited (âCDSLâ).
DIVIDEND & DIVIDEND DISTRIBUTION POLICY
Your Directors are pleased to recommend a dividend of 175% (Rs.3.50) on 102037501 equity shares of Rs.2 each for FY 201718. The amount of dividend and tax thereon aggregates to Rs.43.05 crore (previous year Rs.34.18 crore). The dividend on equity shares, subject to the approval of the Members at the Annual General Meeting (âAGMâ) to be held on August 9, 2018, will be paid on or after August 16, 2018 to the Members whose names appear in the Register of Members as of the close of business hours on August 3, 2018; in respect of shares held in dematerialised form, it will be paid to Members whose names are furnished by Depositories, as beneficial owners as of the close of business hours on that date.
Shares that may be allotted on exercise of stock options granted under the Employee Stock Option Scheme before the book closure date for payment of dividend will rank pari-passu with the existing shares and be entitled to receive the dividend.
As per Regulation 43A of the Listing Regulations, the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or for retaining profits earned by the Company. The policy is annexed herewith as Annexure I and is also available at the Companyâs website: www.bajajelectricals.com.
TRANSFER TO RESERVE
The Company has not transferred any amount to the reserves during the current financial year.
FINANCIAL LIQUIDITY
The Companyâs cash and cash equivalent as at March 31, 2018 was Rs.21.82 crore. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
CAPITAL EXPENDITURE
As at March 31, 2018 the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at Rs.404.53 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at Rs.312.55 crore. Capital Expenditure during the year amounted to Rs.40.93 crore.
STATE OF COMPANY AFFAIRS / OPERATIONS
Detailed information on the operations of the different business segments of the Company and details on the state-of-affairs of the Company are covered in the Management Discussion and Analysis Report, which forms part of this Annual Report.
CREDIT RATING
The below table depicts Companyâs credit ratings profile in a nutshell:
Instrument |
Rating Agency |
Rating |
Outlook |
Commercial Paper (CP) |
ICRA Limited |
ICRA A1 (pronounced ICRA A one plus) |
- |
CARE Ratings Limited |
CARE A1 (pronounced CARE A one plus) |
- |
|
Line of Credit (LOC) |
ICRA Limited |
Short Term Rating - [ICRA] A1 (pronounced ICRA A one) |
Positive |
Long Term Rating - [ICRA] A (pronounced ICRA A) |
RELATED PARTY TRANSACTIONS
The Company undertakes various transactions with related parties in the ordinary course of its business. All transactions entered into with the related parties during the year under review were on armâs length basis and in the ordinary course of business. Your Company has not entered into any contracts / arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company i.e. Policy on Materiality of and Dealing with Related Party Transactions (âRPT Policyâ). Accordingly, AOC-2 is not applicable to the Company. Further, the details of transactions entered into by the Company with related parties in the normal course of business were placed before the Audit Committee of the Board.
There were no materially significant related party transactions with the Promoters, Directors and Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.
The RPT Policy as approved by the Audit Committee and the Board is available on the website of the Company: www.bajajelectricals.com.
Your Directors draw attention of the members to Note No. 38 to the standalone financial statements which sets out related party disclosure.
PARTICULARS OF LOANS AND ADVANCES, GUARANTEES OR INVESTMENTS
The Company has disclosed the full particulars of the loans given, investments made or guarantees given or security provided as required under Section 186 of the Act and Regulation 34(3) and Schedule V of the Listing Regulations in Note Nos. 4, 6, 7, 9 & 12 forming part of the financial statements.
The details of loans and advances which are required to be disclosed in the Annual Report of the Company pursuant to Regulation 34(3) read with Schedule V of the Listing Regulations are furnished separately as Annexure II to this report.
DEPOSITS
The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed thereunder.
NON-CONVERTIBLE DEBENTURES
During FY 2013-14, the Company had issued 1000 Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) of Rs.10,00,000/- each, aggregating to Rs.100.00 crore, on private placement basis, in two series, Series - 1 of 400 NCDs & Series - 2 of 600 NCDs, which were listed on NSE under ISIN âINE193E07014â and âINE193E07022â, respectively. The said Series - 1 and Series - 2 NCDs were redeemed on their respective due dates i.e. on April 28, 2016 and April 24, 2017.
Axis Trustee Services Limited was the Debenture Trustee for the debentureholders, whose details are provided in the Corporate Governance section of the Annual Report. Further, pursuant to Regulation 53 of the Listing Regulations, disclosures in compliance with the Accounting Standard on âRelated Party Disclosuresâ are given in the notes to the financial statements annexed to this Annual Report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators/Courts/Tribunal which would impact the going concern status of the Company and its operations in the future.
CORPORATE SOCIAL RESPONSIBILITY
Corporate Social Responsibility (âCSRâ) activities of the Company are guided by its CSR Policy, which is framed and approved by the Board. These are discussed in detail in the Management Discussion and Analysis Report, which forms part of this Annual Report. The statutory disclosure with respect to CSR activities forms part of this Report and is annexed herewith as Annexure III.
BUSINESS RESPONSIBILITY REPORT
Regulation 34(2) of the Listing Regulations, inter-alia, provides that the Annual Report of the top 500 listed entities based on market capitalisation (calculated as on March 31 of every FY), shall include a Business Responsibility Report (âBRRâ).
Your Company, being one of such top 500 listed entities, has included BRR, as part of the Annual Report, describing initiatives taken from an environmental, social and governance perspective.
As a green initiative, the BRR for FY 2017-18 has been hosted on the website of the Company: www. bajajelectricals.com. Any Member interested in obtaining a copy of BRR may write to the Company Secretary.
CORPORATE GOVERNANCE REPORT
A Report on Corporate Governance along with a certificate from the Statutory Auditors of the Company regarding the compliance of conditions of corporate governance as stipulated under Schedule V of the Listing Regulations forms a part of this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS REPORT
A detailed analysis of the Companyâs operational and financial performance as well as the initiatives taken by the Company in key functional areas are separately discussed in the Management Discussion and Analysis Report, which forms a part of this Annual Report.
WHISTLE BLOWER POLICY & VIGIL MECHANISM
As per the provisions of Section 177(9) of the Act, the Company has established a vigil mechanism by adopting Whistle Blower Policy pursuant to which whistle blowers can raise concerns in the prescribed manner. Further, the mechanism adopted by the Company encourages a whistle blower to report genuine concerns or grievances and provides for adequate safeguards against victimisation of the whistle blower, who avails of such mechanism, as well as direct access to the Chairman of the Audit Committee. The functioning of the vigil mechanism is reviewed by the Audit Committee from time to time.
None of the whistle blowers have been denied access to the Audit Committee of the Board. The Whistle Blower Policy is available on the website of the Company: www. bajajelectricals.com.
EMPLOYEES STOCK OPTION SCHEME
The Company implemented the Employees Stock Option Schemes (âESOP Schemesâ) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âSEBI SBEB Regulationsâ) as a measure to reward and motivate employees as also to attract and retain talent. There has been no material change in the ESOP Schemes during the year under review and the ESOP Schemes are in compliance with SEBI SBEB Regulations.
During FY 2017-18, 377500 stock options were granted to the eligible employees at the market price prevailing on NSE as on the date of their grant. The issuance of equity shares pursuant to exercise of stock options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.
The disclosures relating to ESOP Scheme required to be made under the provisions of the Act and the rules made thereunder and SEBI SBEB Regulations together with a certificate obtained from the Statutory Auditors, confirming compliance, are provided on the website of the Company: www.bajajelectricals.com. The details of options vested, exercised and cancelled are provided in the notes to the standalone financial statements. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.
The certificate from the Auditors of the Company which certifies that the ESOP Scheme has been implemented in accordance with SEBI SBEB Regulations and the resolutions passed by the shareholders would be placed at the AGM for the inspection by the Members.
SUBSIDIARIES / ASSOCIATES / JOINT VENTURES
The Company has no subsidiary as on March 31, 2018.
Details of associate companies/joint ventures of the Company:
Name of the Company |
% of shareholding of the Company as on March 31, 2018 |
Status |
Starlite Lighting |
47.00* |
Joint Venture |
Limited (SLL) |
||
Hind Lamps |
19.00 |
Associate |
Limited (HLL) |
*Acquisition of additional 28% equity shares in SLL
The Company had advanced a sum of Rs.3.80 crore to SLL as a Short-Term Loan inter-alia on the collateral security by way of pledge of 3500000 (28%) equity shares of Rs.10 each held in SLL by the Promoters of SLL, under an Agreement of Pledge of Shares dated February 23, 2007, with a right to the Company to purchase the same, at its sole discretion, at a pre-determined consideration of Rs.0.10 paisa per equity share. During the year under review, the Company exercised its right to acquire these shares and with this acquisition, the shareholding of the Company in SLL has increased from 19% to 47%.
Performance of Joint Venture and Associate
**SLL: The gross revenue of SLL for FY 2017-18 stood at Rs.158.07 crore (Previous Year: Rs.90.54 crore). Loss for the year was at Rs.122.30 crore (Previous Year Loss: Rs.29.17 crore).
**Based on unaudited figures.
HLL: The gross revenue of HLL for FY 2017-18 stood at Rs.42.18 crore (Previous Year: Rs.44.16 crore). Loss for the year was at Rs.8.46 crore (Previous Year Loss: Rs.9.30 crore).
A separate statement containing the salient features of the associate and joint venture in the prescribed âForm AOC-1â is annexed herewith as Annexure IV to this Report.
The policy for determining material subsidiaries as approved by the Board may be accessed on the Companyâs website: www.bajajelectricals.com.
In accordance with the third proviso to Section 136(1) of the Act, the Annual Report of Company, containing therein its Standalone and Consolidated Financial Statements are available on the Companyâs website: www.bajajelectricals. com. Further, as per fourth proviso to the said Section, the annual accounts of the joint venture and associate of the Company are also available on the Companyâs website: www.bajajelectricals.com. Any shareholder who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Companyâs Registered Office. Further, the said documents will be available for examination by the shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 10.00 a.m. to 05.00 p.m.
CONSOLIDATED FINANCIAL STATEMENTS
The directors also present the audited consolidated financial statements incorporating the duly audited/unaudited financial statements of the associate and joint venture prepared in compliance with the Act, applicable Accounting Standards and the Listing Regulations. The Consolidated Financial Statements of the Company and its associate and joint venture companies prepared in accordance with the Act and applicable Accounting Standards forms part of this Annual Report.
PRESENTATION OF FINANCIAL RESULTS
The financial results of the Company for the year ended March 31, 2018 have been disclosed as per Schedule III to the Act.
SCHEME OF ARRANGEMENT FOR DEMERGER OF MANUFACTURING BUSINESS OF HLL INTO THE COMPANY
During FY 2015-16, the Board of Directors of the Company had approved the proposal for demerger of manufacturing business of HLL into the Company, pursuant to a Scheme of Arrangement (âSchemeâ) under Sections 230-232 and other applicable provisions of the Act and granted its approval for issue of 529740 fully paid-up equity shares of the Company of the face value of Rs.2 each to the shareholders of the HLL (except to the Company itself) as a consideration for the demerger in compliance with the provisions of Section 2(19AA) of the Income Tax Act, 1961, which was based on the Share Entitlement Ratio (i.e. 109 equity shares of the Company of the face value of Rs.2 each for 1000 equity shares of HLL of the face value of Rs.25 each), as recommended by Messrs S.R.Batliboi & Co. LLP, Chartered Accountants, who were appointed as Independent Valuer by the Company and HLL.
Since HLL was declared as a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (âSICAâ) by the Board for Industrial and Financial Reconstruction (âBIFRâ), the said Scheme was required to be filed only with BIFR for its approval and accordingly, on April 22, 2016, HLL had filed the said Scheme with BIFR vide its letter dated April 18, 2016 under BIFR Case No.09/2002 (âCaseâ).
As the Scheme was not required to be filed with the High Court or Tribunal for its approval when it was approved by the Board of Directors of both the companies and was required to be filed only with BIFR, the provisions of erstwhile Clause 24(f) of the Listing Agreement and/ or Regulation 37 of the Listing Regulations and SEBI circulars No. CIR/CFD/DIL/5/2013 dated February 4, 2013 and CIR/CFD/CMD/16/2015 dated November 30, 2015 (âSEBI Circularsâ), in respect of filing of draft scheme of arrangement with the stock exchange(s) / SEBI for obtaining Observation Letter or No-Objection Letter were not applicable to the Company.
However, subsequently, the Central Government of India, vide Notification No. S.O. 3568 (E) dated November 25, 2016, brought the provisions of SICA Repeal Act into force with effect from December 1, 2016 and SICA was repealed. Section 4(b) of SICA Repeal Act (as amended by Section 252 of the Insolvency and Bankruptcy Code, 2016) provides that any proceeding of whatever nature, pending before BIFR shall stand abated. Accordingly, the Scheme filed by HLL stood abated as on December 1, 2016.
With the notification of SICA Repeal Act, the provisions of Regulation 37 of the Listing Regulations and SEBI Circulars have become applicable to the Company as the Scheme was then required to be filed with Tribunal.
On March 10, 2017, SEBI vide its Circular No. CFD/DIL3/ CIR/2017/21 (âRevised SEBI Circularâ), amended the regulatory framework for schemes of arrangements. The provisions of Para 8 of the Revised SEBI Circular, inter-alia, states that in cases of the issuance of shares under schemes to a select group of shareholders or shareholders of unlisted companies, the issuer shall follow the pricing provisions of Chapter VII of SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 (âSEBI ICDR Regulationsâ). Further, as per Para 6 of the said Revised SEBI Circular, the schemes filed with the stock exchange(s) / SEBI after the date of the Revised SEBI Circular shall be governed by its provisions.
On September 29, 2017, the Company had filed the Scheme with the stock exchanges under Regulation 37 of the Listing Regulations with a request for waiver from the requirements of adhering to the pricing provisions of Chapter VII of SEBI ICDR Regulations considering the fact that the Scheme was approved by the Board of Directors of both the companies well before the issue of the said Revised SEBI Circular.
However, the stock exchanges requested the Company to amend the Scheme and the Valuation Report to meet with the requirements of the Revised SEBI Circular. Accordingly, the Board of Directors of the Company, in its meeting held on November 9, 2017, considered and approved the revised valuation / share entitlement ratio for a demerger of the manufacturing business of HLL into the Company and made consequential amendment to the Scheme (hereinafter referred to as âAmended Schemeâ).
As per the revised valuation report dated October 31, 2017, as issued by Messrs Katre Barwe & Associates, Chartered Accountants, Mumbai, the independent valuation firm, the revised share entitlement ratio of equity shares for the proposed demerger of the manufacturing business of the HLL into the Company, as at relevant date, shall be 97 equity shares of the Company of Rs.2 each fully paid up for every 1,000 equity shares of HLL of Rs.25 each fully paid up (âRevised Valuation Reportâ). Accordingly, the shareholders of HLL, except the Company, shall now be issued 471420 fully paid-up equity shares of the Company of the face value of Rs.2 each, as against 529740 equity shares proposed earlier in consideration for the demerger, in compliance with the provisions of Section 2(19AA) of the Income Tax Act, 1961.
On November 20, 2017, the Company had filed the Amended Scheme with the stock exchanges under Regulation 37 of the Listing Regulations. On March 21, 2018, the stock exchanges conveyed their no-objection to the Company in terms of Regulation 94 of the Listing Regulations while advising the Company to publish the information pertaining to Dr. Rajendra Prasad Singh, Independent Director of the Company, in the matter of G.E.T. Power Limited in the Scheme and to bring the same to the notice of shareholders and Honâble National Company Law Tribunal (âHonâble NCLTâ). The copies of the aforesaid observation letters along with other relevant documents are available on the website of the Company: www.bajajelectricals.com.
To meet the requirements of the aforesaid observation letters, the Board at its meeting held on March 29, 2018, suitably amended the Scheme (hereinafter referred to as the âAmended Scheme with SEBI/RBI Observationsâ). The Company is now in the process of filling the Amended Scheme with SEBI/RBI Observations with the Honâble NCLT.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
During the year under review, Shri Vishnubhai Haribhakti, Independent Director and Chairperson of the Audit Committee, Nomination and Remuneration Committee and Stakeholdersâ Relationship Committee, stepped down from the directorship of the Company w.e.f. August 4, 2017 due to his advancing age. The Board placed on record its appreciation of the contribution made by Shri Vishnubhai Haribhakti as Director of the Company.
As on the date of this report, the Companyâs Board comprises of nine (9) Directors, out of which, seven (7) are Non-Executive Directors (NEDs) including one (1) Woman Director. NEDs represent 77.78% of the total strength. Further, out of the said seven (7) NEDs, six (6) are independent directors representing 66.67% of the total strength of the Board. The composition of the Board is in conformity with Regulation 17 of the Listing Regulations and also with the provisions of the Act.
Director coming up for retirement by rotation
In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Anant Bajaj retires by rotation and being eligible offers his candidature for reappointment as a Director. The information as required to be disclosed under Regulation 36 of the Listing Regulations in case of re-appointment of the director is provided in the Notice of AGM.
Independent Directors
The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation. In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.
The terms and conditions of appointment of the Independent Directors are placed on the website of the Company: www. bajajelectricals.com.
Number of Meetings of the Board
The details of the Board Meetings and attendance of Directors are provided in the Report on Corporate Governance, which forms part of this Annual Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.
Audit Committee
The Company has in place an Audit Committee in terms of the requirements of the Act read with the Rules made thereunder and Regulation 18 of the Listing Regulations. The details relating to the same are given in the Report on Corporate Governance which forms part of this Annual Report.
Familiarisation Programme for the Independent Directors
In compliance with the requirement of Listing Regulations, the Company has put in place a familiarisation programme for the independent directors to familiarise them with their role, rights and responsibility as directors, the working of the Company, nature of the industry in which the Company operates, business model, etc. The details of familiarisation programme are explained in the Corporate Governance Report. The said details are also available on the website of the Company: www.bajajelectricals.com.
Evaluation of performance of the Board, its Committees and Directors
The Board has conducted an annual evaluation of performance of all its Directors, Committees of the Board and that of its Chairman, in terms of the relevant provisions of the Act, Rules made thereunder and Listing Regulations. The manner in which the evaluation was conducted by the Company has been explained in the Corporate Governance Report, which forms part of this Annual Report.
Key Managerial Personnel (KMP)
Pursuant to the provisions of Sections 2(51) and 203 of the Act, read with the Rules framed thereunder, the Board has designated Shri Shekhar Bajaj, Chairman & Managing Director, Shri Anant Purandare, President & Chief Financial Officer and Shri Mangesh Patil, EVP - Legal & Taxation and Company Secretary and Compliance Officer, as KMPs of the Company.
None of the KMPs of the Company has resigned during the year under review.
Policy on Remuneration of Directors, KMPs and Senior Managerial Personnel & criteria for matters under Section 178 of the Act
Information regarding Policy on Remuneration of Directors, KMPs and Senior Managerial Personnel & criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Act are provided in the section of Corporate Governance Report.
Criteria for selection of candidates for appointment as Directors, KMPs and Senior Managerial Personnel
Your Company has laid down a well-defined criteria for the selection of candidates for appointment as Directors, KMPs and Senior Managerial Personnel.
Promotion and re-designation of Shri Anant Bajaj
On the recommendation of the Nomination and Remuneration Committee, the Board in its meeting held on May 23, 2018, has approved and recommended to the Membersâ for their approval, the promotion and redesignation of Shri Anant Bajaj, Joint Managing Director as the Managing Director of the Company.
Membersâ attention is drawn to the Item No. 7 of the Notice convening the AGM proposing the promotion / redesignation of Shri Anant Bajaj, Joint Managing Directors as the Managing Director of the Company.
INTERNAL FINANCIAL CONTROLS AND RISK MANAGEMENT
The Company has robust systems for internal audit and corporate risk assessment and mitigation. The Company has an independent Internal Audit Department assisted by dedicated outsourced audit team.
The Internal Audit covers all the factories, branch offices, warehouses, project sites and centrally controlled businesses and functions, as per the annual plan agreed with the Audit Committee. The audit coverage plan of Internal Audit is approved by the Audit Committee at the beginning of every year. Every quarter, the Audit Committee of the Board is presented with key control issues and actions taken on the issues highlighted in previous report.
The procedures have been set in place for self-assessment of business risks, operating controls and compliance with Corporate Policies. There is an ongoing process to track the evolution of risks and delivery of mitigating action plans.
The Companyâs internal financial control framework is commensurate with the size and operations of the business and is in line with the requirements of the Act. The Company has laid down standard operating procedures and policies to guide the operations of the business. Unit heads are responsible to ensure compliance with the policies and procedures laid down by the management. Robust and continuous internal monitoring mechanisms ensure timely identification of risks and issues. The management, Statutory and Internal Auditors undertake rigorous testing of the control environment of the Company.
Based on the report of the Statutory Auditors, the internal financial controls with reference to the standalone financial statements were adequate and operating effectively, however, the consolidated financial statements of the Company were qualified for internal financial controls, as SLL, a joint venture of the Company did not have appropriate internal financial control system over financial statement close process in relation to establishing processes for evaluation and determination of impairment of assets including tax assets, appropriate review of financial statements including application of accounting standards on non-routine transactions (sale and lease back of fixed assets) which could potentially result in the joint venture not recognising impairment of assets on a timely basis or incorrectly recognising or derecognising assets; resulting in restatement of financial statements.
The Board has taken note of the findings of the statutory auditors of SLL with respect to the weakness in its internal financial control system over financial statement close process and endeavors to strengthen the same so as to be commensurate with the size and nature of its business.
COMPLIANCE WITH SECRETARIAL STANDARDS
Pursuant to the approval given on April 10, 2015 by Central Government to the Secretarial Standards specified by the Institute of Company Secretaries of India, the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) came into effect from July 1, 2015. These Secretarial Standards were thereafter revised and made effective from October 1, 2017. The Company is in compliance with the same.
REPORTING OF FRAUD
The Auditors of the Company have not reported any instances of fraud committed against the Company by its officers or employees as specified under Section 143(12) of the Act.
RISK MANAGEMENT
The Company has formulated a risk management policy and has in place a mechanism to inform the Board about risk assessment and minimisation procedures and periodical review to ensure that executive management controls risk by means of a properly designed framework. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.
AUDITORS
Statutory Auditors
Messrs S R B C & Co. LLP, Chartered Accountants (ICAI Registration No.324982E/E300003) were appointed as the Statutory Auditors of the Company to hold office from the conclusion of the 78th AGM held on August 3, 2017 until the conclusion of the fifth consecutive AGM of the Company to be held in the financial year 2021-22, subject to ratification of their appointment by the Members at every AGM held after the AGM held on August 3, 2017.
As required under the provisions of Section 139(1) of the Act, the Company has received a written consent from Messrs S R B C & Co. LLP, Chartered Accountants and a Certificate to the effect that their appointment, if made, would be in accordance with the provisions of the Act and the Rules framed thereunder and that they satisfy the criteria provided in Section 141 of the Act.
The Members are requested to ratify the appointment of the Statutory Auditors as aforesaid and fix their remuneration.
The notes on financial statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments.
The Auditorsâ Report on financial statements does not contain any qualification, reservation or adverse remark or disclaimer.
Cost Auditors
Pursuant to Section 148 of the Act read with the Rules made thereunder, the cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited. The Board has, on the recommendation of the Audit Committee, appointed Messrs R. Nanabhoy & Co., Cost Accountants (Firm Registration No.000010), to audit the cost accounts of the Company for FY 2018-19. As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in the general meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to Messrs R. Nanabhoy & Co., Cost Accountants, is included at item no. 5 of the Notice of the AGM.
The particulars of the Cost Auditors and cost audit conducted by them for FY 2016-17 are furnished below:
ICWA Membership No. |
7464 |
Registration No. of Firm |
000010 |
Address |
Jer Mansion, 70, August Kranti Marg, Mumbai 400 036 |
Cost Audit Report |
FY 2016-17 |
Due date of filing of Report |
September 30, 2017 |
Actual date of filing of Report |
August 31, 2017 |
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and Rules thereunder, the Company had appointed Messrs Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No. 1860) to undertake the secretarial audit of the Company for FY 2017-18. The Report of the Secretarial Auditor is annexed herewith as Annexure V.
The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.
INVESTOR EDUCATION AND PROTECTION FUND
Please refer to paragraphs âUnclaimed Dividendsâ and âTransfer of Shares to IEPFâ, the Corporate Governance Report which forms part of this Annual Report.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments, affecting financial position of the Company which have occurred between the end of the financial year of the Company i.e. March 31, 2018 and the date of the Directorsâ Report.
EXTRACT OF ANNUAL RETURN
An extract of the Annual Return as of March 31, 2018 pursuant to the sub-section 3 of Section 92 of the Act, in Form MGT-9 is annexed herewith as Annexure VI.
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure VII to this Report.
HUMAN RESOURCES
Your Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. The Company considers people as its biggest assets and hence, has put in concerted efforts in talent management and succession planning practices, strong performance management and learning and training initiatives to ensure that it consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, this year your Company has also focused on employee engagement initiatives and drives aimed at increasing the culture of innovation & collaboration across all strata of the workforce. These are discussed in detail in the Management Discussion and Analysis Report forming part of this Annual Report.
PROTECTION OF WOMEN AT WORKPLACE
The Company has formulated a policy on âProtection of Womenâs Rights at Workplaceâ as per the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013. This has been widely disseminated. There were no cases of sexual harassment complaints received by the Company in FY 2017-18.
PARTICULARS OF EMPLOYEES
Disclosures with respect to the remuneration of Directors, KMPs and employees under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (âRulesâ), is given in Annexure VIII to this Report.
The Company had ten (10) employees who were employed throughout the year and were in receipt of remuneration more than Rs.102 lakh per annum and eleven (11) employees were employed for part of the year and were in receipt of remuneration of more than Rs.8.50 lakh per month.
In terms of Section 136 of the Act, the copy of the Financial Statements of the Company, including the Consolidated Financial Statements, the Auditorâs Report and relevant Annexures to the said financial statements and reports are being sent to the Members and other persons entitled therefore, excluding the information in respect of the said employees containing the particulars as specified in Rule 5(2) of the said Rules, which is available for inspection by the Members at the Companyâs Registered Office during all working days except on Saturday, Sunday, Public Holidays and National Holidays, between 10.00 a.m. to 5.00 p.m. up to the date of AGM. If any Member is interested in obtaining a copy thereof, he/she may write to the Company Secretary of the Company at its Registered Office.
The financial statements, reports etc. of the Company are available on the website of the Company: www. bajajelectricals.com.
INDUSTRIAL RELATIONS
The relations with the employees of the Company have continued to remain cordial.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134(3)(c) of the Act, your Directors state that:
a) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable Accounting Standards have been followed and there is no material departure;
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 as at March 31, 2018 and of the profit of the Company for the year ended on that date;
c) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) the annual accounts have been prepared on a going concern basis;
e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
f) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
ACKNOWLEDGEMENT AND APPRECIATION
Your Directors take this opportunity to thank the Companyâs customers, shareholders, suppliers, banks, financial institutions and the Central and State Governments for their unstinted support. The Directors would also like to place on record their appreciation to employees at all levels for their hard work, dedication and commitment.
ANNEXURES
The following annexures form part of this report:
a. Dividend Distribution Policy - Annexure I;
b. Details of Loans and Advances as per Regulation 34(3) read with Part A of Schedule V of the Listing Regulations - Annexure II;
c. Annual Report on CSR Activities - Annexure III;
d. Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in âForm AOC-1â - Annexure IV;
e. Secretarial Audit Report in âForm MR-3â - Annexure V;
f. Extract of Annual Return in âForm MGT-9â - Annexure VI;
g. Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo - Annexure VII; and
h. Disclosures with respect to the remuneration of Directors, KMPs and employees under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure VIII.
For and on behalf of the Board
Mangesh Patil Anant Bajaj Shekhar Bajaj
EVP - Legal & Taxation and Joint Managing Director Chairman & Managing Director
Mumbai Company Secretary DIN: 00089460 DIN: 00089358
May 23, 2018 FCS No.: 4752
Mar 31, 2017
Directorsâ Report
Dear Members,
The Directors are pleased to present the 78th Annual Report of the Company, together with the audited financial statements for the financial year ended 31 March 2017. This Report states compliance as per the requirement of the Companies Act, 2013 (âthe Actâ), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ) and other rules & regulations as applicable to the Company.
FINANCIAL RESULTS
The highlights of the Standalone Financial Results are as under:
(Amount: Rs. in crore, except for EPS)
Particulars |
FY 2016-17 |
FY 2015-16 |
Revenue from Operations & Other Income |
4,328.78 |
4,670.54 |
Gross Profit before Finance Cost and Depreciation |
278.35 |
312.33 |
Less: Finance Cost |
80.44 |
108.08 |
Less: Depreciation |
29.87 |
27.38 |
Profit/(Loss) before Taxes |
168.04 |
176.87 |
Less: Provision for Tax expenses |
60.38 |
66.52 |
Profit/(Loss) after Tax |
107.66 |
110.35 |
Less : Other Comprehensive Income |
2.29 |
2.25 |
Add: Balance in Profit & Loss Account |
35.55 |
9.68 |
Balance available for appropriation |
140.92 |
117.78 |
Amount transferred to General Reserves |
- |
30.00 |
Earnings per share (?) Basic |
10.65 |
10.94 |
Earnings per share (?) Diluted |
10.63 |
10.92 |
The highlights of the Consolidated Financial Results are as under: (Amount: Rs. in crore, except for EPS) |
||
Particulars |
FY 2016-17 |
FY 2015-16 |
Revenue from Operations & Other Income |
4,328.78 |
4,670.54 |
Profit before Taxes |
168.04 |
176.87 |
Profit/(Loss) from associates after Taxes |
(5.49) |
(2.54) |
Profit/(Loss) before Taxes |
162.55 |
174.33 |
Less: Provision for Taxation |
60.38 |
66.52 |
Profit/(Loss) after Tax |
102.17 |
107.81 |
Earnings per share (Rs.) Basic |
10.10 |
10.69 |
Earnings per share (Rs.) Diluted |
10.08 |
10.67 |
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
DIVIDEND
Your Directors are pleased to recommend a dividend of 140% (Rs. 2.80) on 101290176 equity shares of Rs. 2 each for the financial year 2016-17. The amount of dividend and the tax thereon aggregate to Rs.34.13 crore (previous year Rs.34.02 crore). The dividend on equity shares, subject to the approval of the Members at the Annual General Meeting on 3 August 2017, will be paid on or after 10 August 2017 to the members whose names appear in the Register of Members as of the close of business hours on 28 July 2017; in respect of shares held in dematerialised form, it will be paid to members whose names are furnished by National Securities Depository Limited and Central Depository Services (India) Limited, as beneficial owners as of the close of business hours on that date.
Shares that may be allotted on exercise of stock options granted under the Employee Stock Option Scheme before the book closure date for payment of dividend will rank pari-passu with the existing shares and be entitled to receive the dividend.
Dividend Distribution Policy
As per Regulation 43A of the Listing Regulations, the top 500 listed companies shall formulate a dividend distribution policy. Accordingly, the policy was adopted to set out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders and/or for retaining profits earned by the Company. The policy is available on the Companyâs website: www.baiaielectricals.com.
CHANGES IN SHARE CAPITAL
The paid-up equity share capital of the Company as on 31 March 2017 was Rs.20.26 crore. There was no public issue, rights issue, bonus issue, preferential issue, etc. made by the Company during the year. The Company has not issued shares with differential voting rights. The increase in number of shares is due to the issue of 341200 equity shares of Rs.2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS.
No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said Section are not applicable.
The equity shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited. The stipulated listing fees for FY 2017-18 have been paid to both the stock exchanges.
FINANCIAL LIQUIDITY
The Companyâs cash and cash equivalent as at 31 March 2017 was Rs.25.08 crore. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring.
CREDIT RATING
The below table depicts Companyâs credit ratings profile in a nutshell:
Instrument |
Rating Agency |
Rating |
Outlook |
Non-Convertible Debentures (NCDs) |
ICRA Limited |
[ICRA]A (pronounced ICRA A plus) |
Stable |
Commercial Paper (CP) |
ICRA Limited |
[ICRA]A1 (pronounced ICRA A one plus) |
|
Line of Credit (LOC) |
ICRA Limited |
Short Term Rating - [ICRA] A1 (pronounced ICRAAone) |
Positive |
Long Term Rating - [ICRA] A (pronounced ICRA A) |
DEPOSITS
The Company has not accepted deposits from the public falling within the ambit of Section 73 of the Act and the Rules framed there under.
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Act are given in the notes to the financial statements annexed to the Report.
NON-CONVERTIBLE DEBENTURES
During FY 2013-14, the Company had issued 1000 Secured Rated Listed Redeemable Non-Convertible Debentures (NCDs) of Rs.10,00,000/- each, aggregating to Rs.100.00 crore, on private placement basis, in two series, Series - 1 of 400 NCDs & Series - 2 of 600 NCDs, which were listed on National Stock Exchange of India Limited (NSE) under ISIN âINE193E07014â and âINE193E07022â, respectively. The said Series - 1 and Series - 2 NCDs were redeemed on their respective due dates for redemption on 28 April 2016 and 24 April 2017.
Axis Trustee Services Limited was the Debenture Trustee for the debenture holders, whose details are provided in the Corporate Governance section of the Annual Report. Further, pursuant to Regulation 53 of the Listing Regulations, disclosures in compliance with the Accounting Standard on âRelated Party Disclosuresâ are given in the notes to the financial statements annexed to the Report.
EMPLOYEES STOCK OPTION SCHEME
The Company implemented the Employees Stock Option Scheme (âSchemeâ) in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 (âthe SEBI SBEB Regulationsâ) as a measure to reward and motivate employees as also to attract and retain the talent.
Disclosures pertaining to the Scheme of the Company pursuant to the SEBI SBEB Regulations are placed on the Companyâs website: www.baiaielectricals.com. The details of options vested, exercised and cancelled are provided in the notes to the standalone financial statements. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant.
During the year under review, 507500 stock options were granted to the eligible employees at the market price prevailing on National Stock Exchange of India Limited (NSE) as on the date of their grant. The issuance of equity shares pursuant to exercise of stock options granted under Growth Plan does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.
The Company has received a certificate from the Auditors of the Company that the Scheme has been implemented in accordance with the SEBI SBEB Regulations and the resolutions passed by the shareholders. The certificate would be placed at the Annual General Meeting for the inspection by the Members.
CLOSURE OF GLS BULBS AND TUBE LIGHTS MANUFACTURING UNIT LOCATED AT KOSI
The operations of the Companyâs GLS bulbs and Tube lights manufacturing unit located at Kosi, Uttar Pradesh, which originally belonged to a sick company registered with BIFR and purchased by the Company in an open bid invited by the Operating Agency for BIFR, in the year 2012-13, were closed during the year under review as the efforts put in by the Companyâs management to improve its operations were not yielding the desired results and there was not even a remote chance of improvement therein on account of the following factors:
a. Energy saving LED based lighting products having a very long life have gained popularity in a very short time and the reducing prices of LED products has resulted in demand for GLS bulbs coming down continuously;
b. GLS bulbs are being phased out;
c. Under-utilisation of manufacturing capacity across the industry, so is with the Unit;
d. Higher cost of production of FTLs in comparison with competitors and the market of the same is also falling;
f. Non-availability of and difficulty in retention of skilled manpower because of losses made by the Unit;
g. Implementation of E-Waste (Management) Rules, 2016, requires technology up-gradation and calls for major investment in order to comply with stricter norms.
SCHEME OF ARRANGEMENT FOR DEMERGER OF MANUFACTURING BUSINESS OF HIND LAMPS LIMITED INTO THE COMPANY
During FY 2015-16, the Board of Directors of the Company (âCompanyâVTransferee Companyâ) had approved the proposal for demerger of manufacturing business of Hind Lamps Limited (âHLLâV''Transferor Companyâ) into the Company, pursuant to a Scheme of Arrangement (âSchemeâ) as they were of the view that the transfer and vesting of the Manufacturing Business of the Demerged Company with the Company will enable both the companies to achieve and fulfill their objectives more efficiently and economically and the same is also in the interest of all the stakeholders. The Companyâs management expertise and quality systems & controls will enhance the performance of this business.
Since, the Transferor Company, was declared as a sick industrial company within the meaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act, 1985 (âSICAâ) by the Board for Industrial and Financial Reconstruction (âBIFRâ), the said Scheme was filed with BIFR for its approval by the Transferor Company. However, subsequently, the Central Government of India, vide Notification No. S.O. 3568 (E) dated 25 November 2016, brought the provisions of the SICA Repeal Act into force with effect from 1 December 2016 and SICA was repealed.
Section 4(b) of the SICA Repeal Act (as amended by Section 252 of the Insolvency and Bankruptcy Code, 2016) provides that any proceeding of whatever nature, pending before the BIFR shall stand abated. Accordingly, Case No.09/2002 filed by the Company stood abated as on 1 December 2016. However, the proviso to Section 4(b), entitles the Company to make a reference to the National Company Law Tribunal (âNCLTâ) under the provisions of the Insolvency and Bankruptcy Code, 2016 provided that such reference is made within the time period prescribed therein.
Accordingly, both the Transferor Company and Transferee Company are in the process of filing petitions before the NCLT, Allahabad Bench and Mumbai Bench, having jurisdictions over the respective companies for approval of Scheme under the applicable provisions of the Act read with the Companies (Compromises, Arrangements and Amalgamations) Rules, 2016.
The Scheme is subject to the approval of the shareholders in the Court/NCLT convened meeting, sanction of the Court/ NCLT and such other approvals as may be applicable.
OPERATIONS
Detailed information on the operations of the different business segments of the Company and details on the state-of-affairs of the Company are covered in the Management Discussion and Analysis Report.
INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS
The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the scale and complexity of its operations. The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational, which includes its design, implementation and maintenance along with periodical internal review of operational effectiveness and sustenance. This ensures orderly and efficient conduct of its business, including adherence to the Companyâs policies, safeguarding of its assets, prevention of errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
The internal financial controls with reference to the financial statements were adequate and operating effectively.
INDIAN ACCOUNTING STANDARDS (IND AS), 2015
The financial statements up to year ended 31 March 2016 were prepared in accordance with the Accounting Standards notified under Companies (Accounting Standard) Rules, 2006 (as amended) and other relevant provisions of the Act.
The annexed financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Act [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act.
These financial statements are the first financial statements of the Company under Ind AS.
Detailed information on the impact of the transition from previous GAAP to Ind AS is provided in the annexed financial statements.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
In accordance with the provisions of Section 135 read with Schedule VII of the Act, the Company, as a part of its Corporate Social Responsibility (âCSRâ) initiative, has adopted a CSR Policy outlining various CSR activities to be undertaken by the Company in the area of health, water, sanitation, promoting education, skill development, empowerment of women and genderequality and promotion of art & culture, etc. The CSR policy of the Company is available on the Companyâs website www.baiaielectricals. com under âInvestorsâ tab.
During the year under review, the Company has spent Rs.108.48 lakh on CSR activities. The Board has constituted a CSR Committee inter-alia to recommend on the CSR projects/programmes, the amount on each CSR activity and to monitor such CSR activities, being undertaken by the Company.
The report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is set out as Annexure âAâ to this Report.
INDUSTRIAL RELATIONS
The relations with the employees of the Company have continued to remain cordial.
PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE
The Company is an equal opportunity employer and consciously strives to build a work culture that promotes dignity of all employees. As required under the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed there under, the Company has implemented a policy on Prevention of Sexual Harassment of Women at Workplace. An Internal Complaints Committee has been set up to receive complaints, investigate the matter and report to the management for redressal of complaints of sexual harassment.
During the year, no complaint was received by the committee.
WHISTLE BLOWER POLICY / VIGIL MECHANISM
The Company believes to conduct its affairs in a fair and transparent manner by adopting highest standards of professionalism, honesty, integrity and ethical behaviour. The Company is committed to developing a culture where it is safe for all employees to raise concerns about any wrongful conduct.
The Board of Directors has approved the vigil mechanism/ whistle blower policy of the Company which provides a framework to promote a responsible and secure whistle blowing. It protects employees wishing to raise a concern about serious irregularities within the Company. It provides for a vigil mechanism to channelize reporting of such instances/complaints/grievances to ensure proper governance. The Audit Committee oversees the vigil mechanism. No employee has been denied access to the Audit Committee. The policy has been appropriately communicated to the employees within the organization and posted on the Companyâs website: www.baiaielectricals. com.
RISK MANAGEMENT POLICY
Information on the development and implementation of a risk management policy for the Company including identification therein of elements of risk which in the opinion of the Board may threaten the existence of the Company is given in the report on Management Discussion and Analysis.
DEMONETISATION
The two largest denomination notes, Rs.500 and Rs.1000 (âSpecified Bank Notesâ), together comprising 86 percent of all the cash in circulation, were demonetized with immediate effect, ceasing to be legal tender except for a few specified purposes, on 8 November 2016.
Demonetization has had short-term costs in the form of slow growth but holds the potential for long-term benefits. Long-term benefits include reduced corruption, greater digitalization of the economy, increased flows of financial savings and greater formalization of the economy, all of which could eventually lead to higher GDP growth, better tax compliance and greater tax revenues.
The report on Specified Bank Notes (SBNs) held and transacted by the Company during the period from 8 November 2016 to 30 December 2016, in the format specified by the Ministry of Corporate Affairs vide its notification dated 30 March 2017, is provided in the notes to the financial statements:
DIRECTORS & KEY MANAGERIAL PERSONNEL
Directors
- Appointment of Directors
In order to strengthen the Board, during the year under review, the Board of Directors had appointed Shri Anuj Poddar and Shri Siddharth Mehta, as Additional Directors of the Company with effect from 30 May 2016 and recommended their appointment as Independent Directors for the approval of the Members. The Members at the Annual General Meeting held on 4 August 2016, approved their appointment as Independent Directors of the Company for a term of five (5) years, effective 30 May 2016.
As on the date of this report, the Companyâs Board comprises of ten (10) Directors, out of which, eight (8) are Non-Executive Directors (NEDs) including one (1) Woman Director. NEDs represent 80% of the total strength. Further, out of the said eight (8) NEDs, seven (7) are independent directors representing 70% of the total strength of the Board.
- Director coming up for retirement by rotation
In accordance with the provisions of the Act and the Articles of Association of the Company, Shri Madhur Bajaj retires by rotation and being eligible offers his candidature for re-appointment as a Director. The information as required to be disclosed under Regulation 36 of the Listing Regulations in case of reappointment of the director is provided in the notice of the ensuing Annual General Meeting.
- Independent Directors
The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation.
In accordance with Section 149(7) of the Act, each Independent Director has given a written declaration to the Company confirming that he/she meets the criteria of independence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.
- Meetings
A calendar of meetings is prepared and circulated in advance, to the Directors.
Board Meetings:
During the year, six (6) Board Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.
Audit Committee:
The Audit Committee comprises of three independent directors as its Members. During the year five (5) Audit Committee Meetings were convened and held, the details of which are given in the Corporate Governance Report. The intervening gap between the meetings was within the period prescribed under the Act and Listing Regulations.
CSR Committee:
The CSR Committee comprises of three Members of which one is the Independent Director. The Committee met twice during the reporting period. Details of the Committee and meetings are given in the Corporate Governance Report.
- Board Effectiveness
Familiarisation Programme for the Independent Directors:
In compliance with the requirement of Listing Regulations, the Company has put in place a familiarisation programme for the independent directors to familiarize them with their role, rights and responsibility as directors, the working of the Company, nature of the industry in which the Company operates, business model, etc. The details of the familiarisation programme are explained in the Corporate Governance Report. The said details are also available on the website of the Company www. baiaielectricals.com.
Evaluation of the performance of the Board, its Committees and the Directors:
Pursuant to the provisions of the Act and the Listing Regulations, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The criteria applied in the evaluation process are explained in the Corporate Governance Report.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Company pursuant to Sections 2(51) and 203 of the Act, read with the Rules framed there under:
a. Shekhar Bajaj, Chairman & Managing Director and CEO;
b. Anant Purandare, President & Chief Financial Officer; and
c. Mangesh Patil, EVP - Legal & Taxation and Company Secretary and Compliance Officer.
None of the Key Managerial Personnel of the Company have resigned during the year under review.
Policy on Remuneration of Directors, Key Managerial Personnel and Senior Managerial Personnel & Criteria for matters under Section 178 of the Act
Information regarding Policy on Remuneration of Directors, Key Managerial Personnel and Senior Managerial Personnel & Criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of Section 178 of the Act are provided in the section of Corporate Governance Report.
Criteria for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Managerial Personnel
Your Company has laid down a well-defined criteria for the selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Managerial Personnel.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES
All transactions with Related Parties are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on an annual basis for the transactions which are of a foreseen and repetitive nature.
The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a quarterly and on annual basis.
The Policy on Related Party Transactions as approved by the Board is available on the Companyâs website: www. baiaielectricals.com.
There were no materially significant related party transactions i.e. transactions exceeding ten percent of the annual turnover of the Company as per the last audited financial statements, entered into by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. Thus, the disclosure in âForm AOC-2â is not applicable.
None of the Directors or Key Managerial Personnel has any pecuniary relationships or transactions vis-a-vis the Company.
The details of related party transactions are given in the notes to the financial statements.
TRANSFER OF UNCLAIMED AMOUNTS/SHARES TO INVESTOR EDUCATION AND PROTECTION FUND
Pursuant to the provisions of Section 124 of the Act, relevant amounts which remained unpaid or unclaimed for a period of seven (7) years have been transferred by the Company to the Investor Education and Protection Fund (IEPF).
The Company has uploaded the details of unpaid and unclaimed amounts lying with the Company as on 4 August 2016 (date of last Annual General Meeting) on the website of the Company www.baiaielectricals.com, as also on the website of the Ministry of Corporate Affairs.
Further, Section 124(6) of the Act requires that all shares in respect of which dividend has not been paid or claimed for seven consecutive years or more, shall also be transferred to IEPF. Ministry of Corporate Affairs vide its notifications dated 5 September 2016 and 28 February 2017 has notified the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 and the IEPF Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2017 (âRulesâ) containing, inter alia, the provisions for transfer of such shares to âIEPF Suspense Accountâ.
Accordingly, in due compliance of the provisions of Rule 6(3) of the aforesaid Rules, the Company sent individual letters through Speed Post to such shareholders, in respect of whom dividend for a consecutive period of seven (7) years had remained unpaid and public notice was released in newspapers on 3 December 2016. Subsequently, on amendment of the said Rules vide MCA notification dated 28 February 2017, another public notice was released in newspapers on 6 May 2017 giving such shareholders a fresh opportunity to claim the unpaid dividends, up to such date of transfer. The Company is accordingly in the process of taking appropriate steps with regard to transfer of such shares in accordance with the amended Rules, in line with the necessary guidelines being issued by MCA in this regard.
As provided under these Rules, the shareholder shall be allowed to claim such unpaid dividends and shares transferred to IEPF by following the required procedure. The said Rules have been made available under the âInvestorâ section of the Companyâs website: www.baiaielectricals. com
MATERIAL CHANGES & COMMITMENTS
There have been no material changes and commitments, affecting the financial position of the Company, which have occurred between the end of the financial year of the Company and the date of this report.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS
There are no significant and material orders passed by the Regulators or Courts or Tribunals, which may impact the going concern status of the Company and its future operations.
SUBSIDIARIES / ASSOCIATES / JOINT VENTURES
The Company has no subsidiary as on 31 March 2017.
Details of associate companies/joint ventures of the Company:
Name of the Company |
% of shareholding of the Company as on 31 March 2017 |
Status |
Starlite Lighting Limited (SLL) |
19.00 |
Joint Venture |
Hind Lamps Limited (HLL) |
19.00 |
Associate |
For the purpose of Section 2(6) of the Act, âassociate companyâ, in relation to another company, means a company in which that other company has a significant influence, but which is not a subsidiary company of the company having such influence and includes a joint venture company. For the purposes of this clause, âsignificant influenceâ means control of at least twenty percent of total share capital, or of business decisions under an agreement. Though, the holding of the Company in the equity share capital of SLL and HLL is less than 20 percent, the Company is in a position to influence the operating and financial policies of these companies and hence the financial statements of SLL and HLL are consolidated with the Companyâs financial statements considering them as Joint Venture and Associate of the Company, respectively.
Starlite Lighting Limited
The gross revenue of SLL for FY 2016-17 stood at Rs.126.82 crore (Previous Year: Rs.164.86 crore). Loss for the year was at Rs.21.40 crore (Previous Year Loss: Rs.5.73 crore).
Hind Lamps Limited
The gross revenue of HLL for FY 2016-17 stood at Rs.44.16 crore (Previous Year: Rs.53.32 crore). Loss for the year was at Rs.8.05 crore (Previous Year Loss: Rs.7.04 crore).
PRESENTATION OF FINANCIAL RESULTS
The financial results of the Company for the year ended 31 March 2017 have been disclosed as per Schedule III to the Act.
STATUTORY DISCLOSURES
The summary of the key financials of the Companyâs associate and joint venture (Form AOC-1), is included in this Annual Report. The copies of audited financial statements of the said companies will be made available to the Members of the Company, seeking such information at any point of time. The audited financial statements of the said companies will be kept for inspection by any Member of the Company at its registered office during business hours. The same are placed on the Companyâs website: www.baiaielectricals.com.
AUDITORS
Statutory Auditors
The tenure of appointment of M/s. Dalai & Shah LLP, Chartered Accountants, Mumbai (Firm Registration No.: 102021W / W100110), the existing Statutory Auditors, will expire at the conclusion of the 78th AGM, as per the provisions of Section 139(2) of the Act and the Rules framed there under.
The Board of Directors of the Company at its meeting held on 9 February 2017 has, subject to the approval of the Members at the ensuing AGM, approved the appointment of M/s. SRBC & Co. LLP, Chartered Accountants (Firm Registration No.324982E / E300003) as the new Statutory Auditors of the Company in place of M/s. Dalai & Shah LLP for a term of five (5) years commencing from the conclusion of the 78th AGM till the conclusion of the 83rd AGM, subject to ratification of their appointment by the Members annually. M/s. SRBC & Co. LLP have confirmed their eligibility under Section 141 of the Act and the Rules framed there under for appointment as Auditors of the Company. As required under Regulation 33 of the Listing Regulations, the new auditors have also confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.
The notes on financial statements referred to in the Auditorsâ Report are self-explanatory and do not call for any further comments.
The Auditorsâ Report on standalone financial statements does not contain any qualification, reservation or adverse remark or disclaimer.
Explanations/comments bv the Board on qualification, reservation or adverse remark or disclaimer made bv the Auditors in their Report on consolidated financial statements:
The auditors of Hind Lamps Limited (HLL), the associate of the Company, have qualified their opinion regarding recognition of deferred tax assets, aggregating to Rs.9.21 crore as at 31 March 2017 in absence of convincing evidence of availability of adequate future taxable profits to demonstrate virtual certainty of reversal of such deferred tax assets. The Company holds 19% interest in HLL and as such the proportionate impact of qualified opinion on the Company is only Rs.1.74 crore, which on comparison with the total assets of the Company at standalone and consolidated level as at 31 March 2017 is 0.06%. Further, the proportionate impact of this qualified opinion on comparison with the profit before tax for the year ended 31 March 2017 is 1.04% at standalone level and 1.08% at consolidated level. Hence, the Company assesses the impact of the qualified opinion as insignificant.
Cost Auditors
Pursuant to Section 148 of the Act read with the Rules made there under, the cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited. The Board of Directors has, on the recommendation of the Audit Committee, appointed M/s. R. Nanabhoy & Co., Cost Accountants (Firm Registration No.000010), to audit the cost accounts of the Company for FY 2017-18. As required under the Act, the remuneration payable to the Cost Auditors is required to be placed before the Members in the general meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s. R. Nanabhoy & Co., Cost Accountants, is included at item no.5 ofthe Notice convening the AGM.
The particulars of the Cost Auditors and cost audit conducted by them for FY 2015-16 are furnished below:
ICWA membership no. |
7464 |
Registration No. of Firm |
000010 |
Address |
Jer Mansion, 70, August Kranti Marg, Mumbai 400 036 |
Cost Audit Report |
FY 2015-16 |
Due date of filing of Report |
30 September 2016 |
Actual date of filing of Report |
30 August 2016 |
Secretarial Auditors
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed, M/s. Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No.: FCS 3198; CP No.:1860) to undertake the Secretarial Audit of the Company.
The Company has undertaken Secretarial Audit for the financial year 2016-17 which, inter-alia, includes audit of compliance with the Act and the Rules made there under, Listing Regulations and other applicable Regulations prescribed by the Securities and Exchange Board of India and Foreign Exchange Management Act, 1999 and Secretarial Standards issued by the Institute of Company Secretaries of India. The report of the Secretarial Auditors for FY 2016-17 is annexed to this Report as Annexure âBâ. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark or disclaimer made by the Secretarial Auditors.
CORPORATE GOVERNANCE
Your Company is in compliance with the corporate governance requirements mentioned in the Listing Regulations. Pursuant to Regulation 34 of the Listing Regulations, a separate report on corporate governance has been included in this Annual Report together with a certificate from the auditors of the Company regarding compliance of conditions of corporate governance.
All Board members and senior management personnel have affirmed compliance with the code of conduct for the year 2016-17. A declaration to this effect signed by the Chairman & Managing Director and CEO of the Company is contained in this Annual Report.
The CEO and CFO have certified to the Board with regard to the financial statements and other matters as required under Regulation 17(8) of the Listing Regulations and the said certificate is contained in this Annual Report.
MANAGEMENT DISCUSSION AND ANALYSIS
The Management Discussion and Analysis Report on the operations of the Company, as required under the Listing Regulations, is provided in a separate section and forms an integral part of this Report.
BUSINESS RESPONSIBILITY REPORT
Listing Regulations mandates inclusion of the Business Responsibility Report (BRR) as a part of the Annual Report for top 500 listed entities based on market capitalization.
Since the Company is one of the top 500 listed entities, the Company has presented its BRR for the financial year 2016-17, which is part of this Annual Report.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure âCâ to this Report.
EXTRACT OF ANNUAL RETURN
The extract of Annual Return in Form MGT-9 as required under sub-section (3) of Section 92 of the Act read with Companies (Management & Administration) Rules, 2014, is annexed herewith as Annexure âDâ to this Report.
PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES
Disclosure pertaining to the remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed herewith as Annexure âEâ to this Report.
The information on employees who were in receipt of remuneration of not less than Rs.60 lakh during the year or Rs.5 lakh per month during any part of the year forms part of this Report and will be provided to any Member on a written request to the Company. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employeesâ particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing AGM. If any Member is interested in inspecting the same, such Member may write to the Company Secretary in advance.
CONSOLIDATED FINANCIAL STATEMENTS
The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the associate and joint venture prepared in compliance with the Act, applicable Accounting Standards and the Listing Agreement as prescribed by SEBI.
A separate statement containing the salient features of the associate and joint venture in the prescribed âForm AOC-1â is annexed herewith as Annexure âFâ to this Report.
DIRECTORSâ RESPONSIBILITY STATEMENT
Pursuant to Section 134 of the Act, your Directors confirm that:
(a) in the preparation of the annual accounts for the year ended 31 March 2017, the applicable accounting standards have been followed and that no material departures have been made from the same;
(b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state-of-affairs of the Company as at 31 March 2017 and of the profits of the Company for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
(d) the annual accounts of the Company have been prepared on a âgoing concernâ basis;
(e) proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; and
(f) systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.
ACKNOWLEDGEMENT
Your Directors take this opportunity to thank the Central and State Government Departments, organizations and agencies for their continued support and co-operation. The Directors are also thankful to all valuable stakeholders viz., customers, vendors, suppliers, banks, financial institutions and other business associates for their continued cooperation and excellent support provided to the Company during the year. The Directors acknowledge the unstinted commitment and valuable contribution of all employees of the Company.
Your Directors also appreciate and value the trust reposed in them by Members of the Company.
ANNEXURES
The following annexures form part of this report:
a. Annual Report on Corporate Social Responsibility -Annexure âAâ;
b. Secretarial Audit Report in âForm MR-3â-Annexure âBâ;
c. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo â Annexure âCâ;
d. Extract of Annual Return in Form MGT-9 â Annexure âDâ;
e. Information under Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014-Annexure âEâ and
f. Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures in âForm AOC-1â -Annexure âFâ.
For and on behalf of the Board of Directors
Mangesh Patil Anant Bajaj Shekhar Bajaj
EVP-Legal & Taxation and Joint Managing Director Chairman & Managing Director
Company Secretary DIN: 00089460 DIN: 00089358
FCS No.: 4752
Mar 31, 2016
Dear Members,
The Directors take pleasure in presenting the 77th Annual Report
together with the audited financial statements for the financial year
ended 31 March 2016. The Management Discussion and Analysis has also
been incorporated into this report.
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015
The Securities and Exchange Board of India (SEBI) vide its Notification
No.SEBI/LAD-NRO/GN/2015-16/013 dated 02 September 2015 notified the
Securities and Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("SEBI LODR Regulations"),
applicable with effect from 01 December 2015. This Report therefore
states compliance as per the requirement of the Companies Act, 2013
("the Act"), SEBI LODR Regulations and other rules & regulations as
applicable to the Company.
Financial Results
The highlights of the Standalone Financial Results are as under:
(Amount: Rs. in crore, except for EPS)
Particulars FY 2015-16 FY 2014-15
Revenue from Operations &
Other Income 4,634.80 4,286.80
Gross Profit before Finance
Cost and Depreciation 282.23 112.64
Less: Finance Cost 101.40 104.43
Less: Depreciation 27.24 29.03
Profit/(Loss) before Taxes 153.59 (20.82)
Less: Provision for Taxation 57.98 (6.87)
Profit/(Loss) after Tax 95.60 (13.95)
Add: Balance in Profit &
Loss Account 1.50 8.69
Add : Transferred from
General Reserve - 25.00
Balance available for
appropriation 97.10 19.74
Appropriations
(i) Interim Equity Dividend 28.27 -
(ii) Final Equity Dividend - 15.11
(iii) Tax on Equity Dividend 5.75 3.08
(iv) Transferred to General Reserve 30.00 -
(v) Dividend paid on exercise of
Stock Options along with
Dividend Distribution Tax 0.01 0.05
Closing Balance 33.07 1.50
Earnings per share (Rs.) Basic 9.48 (1.39)
Earnings per share (Rs.) Diluted 9.46 (1.39)
The highlights of the Consolidated Financial Results are as under:
(Amount: Rs. in crore, except for EPS)
Particulars FY 2015-16 *FY 2014-15
Revenue from Operations &
Other Income 4,634.80 -
Profit before Taxes 153.58 -
Profit/(Loss) from associates
after Taxes (0.15) -
Profit for the year 95.45 -
Earnings per share (Rs.) Basic 9.46 -
Earnings per share (Rs.) Diluted 9.45 -
- This being the first year Consolidated Financial Statements are drawn
up, the previous year''s comparative figures have not been presented.
Overview of Company''s Standalone Financial Performance
The overall performance of the Company for the year 2015-16 has been
satisfactory with turnaround of EPC business.
- The gross turnover and other income achieved for the year ended 31
March 2016 was Rs. 4,634.80 crore, a growth of 8.12% over the previous
year.
- PBDIT increased by 150.55% from Rs. 112.64 crore to Rs. 282.22 crore.
- Interest cost at Rs. 101.40 crore was lower by 2.90%.
- Net Profit was at Rs. 95.60 crore as against loss of Rs. 13.95 crore
in the previous year.
- Basic Earnings Per Share (EPS) for the year was Rs. 9.48 Dividend
The Board, in its meeting held on 10 March 2016, declared an interim
dividend for FY 2015-16 of Rs. 2.80 per share on 10,09,48,976 equity
shares of Rs. 2 each as compared to final dividend of Rs. 1.50 per
share for the previous year. The amount of dividend and the tax thereon
aggregate to Rs. 34.02 crore (previous year Rs. 18.20 crore). Your
Directors recommend that the interim dividend should be treated as the
final dividend for FY 2015-16.
Transfer to Reserves
The Company proposes to transfer an amount of Rs. 30.00 crore to
General Reserves. An amount of Rs. 33.07 crore is proposed to be
retained in the statement of Profit and Loss.
Share Capital
The paid up Equity Share Capital of the Company as on 31 March 2016 was
Rs. 20.19 crore. There was no public issue, rights issue, bonus issue,
preferential issue, etc. made by the Company during the year. The
Company has not issued shares with differential voting rights. The
increase in number of shares is due to the issue of 1,86,550 equity
shares of Rs. 2 each to the employees upon their exercise of stock
options. These shares were included, on weighted average basis, for
the computation of EPS.
No disclosure is required under Section 67(3)(c) of the Act, in respect
of voting rights not exercised directly by the employees of the Company
as the provisions of the said Section are not applicable.
Financial Liquidity
The Company''s cash and cash equivalent as at 31 March 2016 was Rs.
4,657.94 lacs. The Company continues to focus on judicious management
of its working capital. Receivables, inventories and other working
capital parameters were kept under strict check through continuous
monitoring.
Credit Rating
The below table depicts Company''s credit ratings profile in a nutshell:
Instrument Rating Agency Rating Outlook
Non-Convertible [ICRA] A
Debenture (NCD) ICRA Limited (pronounced ICRA A) Positive
Commercial Paper ICRA Limited [ICRA] A1
(CP) (pronounced ICRA A one) -
Line of Credit ICRA Limited Short Term Rating -
[ICRA] A1
(LOC) (pronounced ICRA A one) positive
Long Term Rating - [ICRA] A (pronounced ICRA A) Deposits
The Company has not accepted deposits from the public falling within
the ambit of Section 73 of the Act and the Rules framed thereunder.
Particulars of Loans, Guarantees and Investments
Details of Loans, Guarantees and Investments covered under the
provisions of Section 186 of the Act are given in the notes to the
financial statements annexed to the Report.
One third of 1,00,00,000 - 9% Non-Convertible Cumulative Redeemable
Preference Shares of Rs. 10 each of Starlite Lighting Limited, are due
for redemption in FY 2016-17 and hence they have been shown under the
head ''Current Investments''.
Non-Convertible Debentures
During FY 2013-14, the Company had issued 1000 Secured Rated Listed
Redeemable Non-Convertible Debentures (NCDs) of Rs. 10,00,000/- each,
aggregating to Rs. 100.00 crore, on private placement basis, in two
series, Series - 1 of 400 NCDs & Series - 2 of 600 NCDs, which are
listed on National Stock Exchange of India Limited (NSE) under ISIN
''INE193E07014'' and ''INE193E07022'', respectively. Out of the said NCDs,
Series - 1 NCDs were redeemed on 28 April 2016, the due date of their
redemption.
Axis Trustee Services Limited is the Debenture Trustee for the
Debentureholders, whose details are provided in the Corporate
Governance section of the Annual Report. Further, pursuant to
Regulation 53 of the SEBI LODR Regulations, disclosures in compliance
with the Accounting Standard on "Related Party Disclosures" are given
in the notes to the financial statements annexed to this Report.
Employees Stock Option Scheme
The Company implemented the Employees Stock Option Scheme ("Scheme") in
accordance with the Securities and Exchange Board of India (Share Based
Employee Benefits) Regulations, 2014 (''the SEBI SBEB Regulations'') as a
measure to reward and motivate employees as also to attract and retain
the talent. Details of the shares issued under the Scheme, as also the
disclosures in compliance with Regulation 14 of the SEBI SBEB
Regulations, are set out herewith in the Annexure ''A'' to this Report.
No employee has been issued stock options, during the year, equal to or
exceeding 1% of the issued capital of the Company at the time of grant.
During the year under review, 6,17,500 Stock Options were granted to
the eligible employees at the market price prevailing on National Stock
Exchange of India Ltd. (NSE) as on the date of their grant. The
issuance of equity shares pursuant to exercise of Stock Options granted
under Growth Plan does not affect the profit and loss account of the
Company, as the exercise is made at the market price prevailing as on
the date of the grant plus taxes as applicable.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI SBEB
Regulations and the resolutions passed by the shareholders. The
certificate would be placed at the Annual General Meeting for the
inspection by the Members.
Scheme of Arrangement for demerger of Manufacturing Business of Hind
Lamps Limited into the Company
During the year under review, the Board of Directors of the Company
("Company"/"Transferee Company") has approved the proposal for demerger
of manufacturing business of Hind Lamps Limited ("HLL"/"Transferor
Company") into the Company, pursuant to a Scheme of Arrangement
("Scheme").
The Transferor Company is an unlisted company incorporated on 30 April
1951 having its registered office & manufacturing unit located at
Shikohabad, Dist. Firozabad, Uttar Pradesh and HID Lamps manufacturing
unit located at Parwanoo, Himachal Pradesh. The Transferor Company is
engaged in the business of manufacturing of glass bulbs, HID bulbs and
aluminium caps and has been declared as a sick industrial company
within the meaning of Section 3(1)(o) of the Sick Industrial Companies
(Special Provisions) Act, 1985 ("SICA") by the Board for Industrial and
Financial Reconstruction ("BIFR").
Shri Shekhar Bajaj, Chairman & Managing Director and Shri Anant Bajaj,
Joint Managing Director of the Company are also the Directors in HLL.
Rationale and Object of the Scheme:
HLL, amongst others, has been Company''s vendor for last several years
and supplying products under Company''s brand. The Company, being a
leading player in the business of lighting & consumer durables business
for over 75 years, has management expertise and quality system &
controls, whereas HLL has a manufacturing capabilities and required
infrastructure.
The Board of Directors of the Company is of the view that the proposed
Scheme would inter-alia have the following benefits:
i. The transfer and vesting of the manufacturing business of HLL into
the Company will enable both the companies to achieve and fulfill their
objectives more efficiently and economically and the same is also in
the interest of all the stakeholders.
ii. The Company''s existing management expertise and quality system &
controls will facilitate revival of the manufacturing business of HLL
upon its consolidation into the Company.
Salient features of the Scheme:
a. The entire manufacturing business of HLL together with all its
assets and liabilities will be transferred to the Company on a going
concern basis.
b. The Scheme shall be deemed to be effective from the Appointed Date
i.e. 31 March 2014, but shall be operative from the Effective Date.
c. Pursuant to the Scheme, the shareholders of HLL will be issued
5,29,740 fully paid-up equity shares of the Company of the face value
of Rs. 2 each, except to the Company itself, in consideration for the
demerger in compliance with the provisions of Section 2(19AA) of the
Income Tax Act, 1961.
d. The equity shares to be so issued to the shareholders of HLL have
been determined based on the Share Entitlement Ratio of 109 equity
shares of the Company of the face value of Rs. 2 each for 1000 equity
shares of HLL of the face value of Rs. 25 each, as recommended by S.R.
Batliboi & Co. LLP, Chartered Accountants, Mumbai and the same will be
issued on the record date.
e. Fairness opinion has been given by SPA Capital Advisors Limited.
f. The Audit Committee and the Board of Directors of the Company have
approved the Scheme, Valuation Report and the Fairness Opinion.
g. Upon the Scheme becoming effective, the shareholding of the
Promoters in the Company would increase to 63.80% from the existing
shareholding of 63.61%.
h. HLL will retain the remaining business which includes all the
undertakings, businesses, activities (including trading activities and
support services to other undertakings), employees and operations other
than that of the manufacturing business.
i. The Scheme would be effective upon receipt of all requisite
approvals including from the Shareholders, Creditors, BIFR or such
other appropriate authorities and filling the certified copies of the
order of BIFR with the Registrar of Companies.
j. Subject to the regulatory approvals, the proposed transaction is
expected to be completed in a period of about 12 months.
Operations
Engineering & Projects Business
- Transmission Line Towers (TLT)
TLT BU has performed well in FY 2015-16 in terms of margins, though the
top line has not grown as expected in comparison with the previous
year. The increase in the services related revenue by about 70% has
resulted in excellent collection of dues against sales. The new orders
intake for the year was Rs. 400 crore.
During the year under reporting, due to release of fewer transmission
line orders by the central power utility companies and availability of
huge idle capacities with the manufacturers, many of the manufacturers
compromised with the margins while picking up the fresh orders.
However, your Company was selective in picking up the orders to ensure
coverage of the fixed costs and protection of margins.
Major achievements of TLT BU for FY 2015-16 are:
i. Completed and commissioned 2 sub-stations of 132 kV along with
connected transmission lines and bays at Mungoli and Gohad for MPPTCL;
ii. Bagged order for 220 kV sub-station along with connected
transmission line and bay at Mittemari in Karnataka from KPTCL;
iii. Successfully completed and commissioned 187 KM long 765 kV D/C
Kudgi Kolhapur Transmission line for PGCIL;
iv. Successfully completed and commissioned re- conductoring of
Neyveli TS-I to TS-II expansion 400 kV link with HTLS conductor along
with LILO of 2nd circuit of Neyveli-Trichy 400 kV D/C line at
Nagapatnam Pooling Station;
v. Bagged 2 packages of 765 kV D/C Warora Parli transmission line from
PGCIL; and
vi. Completed Pile Foundations at 15 tower locations for 132 kV
transmission lines of BSPTCL with design, engineering and construction
in record time of 6 months.
In consideration of increase in the share of investment of private
utilities in transmission sector, new EPC business models are expected
to be evolved in future. EPC players who will be able to provide one
stop solution for the transmission sector, with sustained quality and
completion of job in the given timelines will have competitive edge.
Keeping this in mind, your Company is focusing on developing
capabilities in other related business areas like usage of monopoles
for transmission lines, construction of EHV sub-stations and laying of
underground EHV cables, besides conventional transmission lines
business. Further, to improve margins, the Company has decided to set
its foot prints in overseas EPC transmission sector.
- Power Distribution (PD) Business Unit
The performance of PD Business Unit for FY 2015-16 was satisfactory, as
it achieved a turnover of Rs. 917 crore with a growth of 35% over the
previous year. Considering the unexecuted order book of Rs. 2,474 crore
in hand at the beginning of the financial year, the Business unit was
conservative in acquiring fresh orders and acquired orders worth Rs.
120 crore, including the prestigious orders of Feeder Separation
Project by Madhya Pradesh Poorva Kshetra Vidyut Vitaran Company Limited
(MPPKVVCL) at Rewa District and Madhya Pradesh Madhya Kshetra Vidyut
Vitaran Company Limited (MPMKVVCL) at Guna District, to close the
year-end order book at Rs. 1,677 crore.
During the year, the focus of this BU was on to improve project
execution capabilities and efficient supply chain management and in
order to achieve this, the BU took strong strides in implementing TOC
as a methodology. This has resulted in increase in the speed of
project execution substantially, which has been appreciated by the
customers. Due to major improvement in the project execution
capabilities, the outlook of the BU for the coming years is positive.
For FY 2016-17, the focus of this BU will be on keeping the working
capital under control while achieving the topline growth.
- Illumination
Illumination BU ended the year with a sales turnover of Rs. 332 crore
with a year-on-year increase of close to 10% despite an almost flat
infrastructure growth market and achieved 8% reduction in the total
outstanding resulting in a better utilisation of working capital.
The year saw the acquisition and successful commissioning of many
notable orders including Rs. 72 crore EESL order for retrofitting over
86,000 LED Streetlights in Delhi with remote management; Rs. 35 crore
order for 611 Nos. Highmasts with floodlights for a Nigerian refinery
and the floodlighting of the iconic Mohun Bagan football stadium in
Kolkata. The BU is also executing Rs. 50 crore order for LED
streetlights and poles with controls based on the Internet of Things
(IoT) in Uttar Pradesh which is a first of its kind for a National
Highway.
During the year, the Siddeshwar temple in Solapur, Dakshineshwar temple
in Kolkata and Chatrapati Shivaji Terminus building of Central Railways
were illuminated. The Lighting of the Chatrapati Shivaji Terminus
building has become Mumbai''s landmark visual. The tallest Flag Mast in
the country with a height of 82 metres is being installed by the BU at
Raipur to join the legion of flag masts installed by the Company. The
BU is also installing LED floodlights on High Masts & Poles on the
international border at Jammu under the most difficult working
conditions.
During the year, the Company made significant progress towards
stabilizing Leap Ahead initiatives in all facets of EPC business. These
initiatives channelize activities of business viz. tendering,
engineering & design, sales, supply chain, manufacturing and logistics
towards faster completion of project execution. This has resulted in
closure and handing over of some of the projects to the customers
before time, resulting in improving in working capital turns.
Consumer Durables
- Domestic & Kitchen Appliances
The Company has a wide range of domestic and kitchen appliances
comprising of Water Heaters, Room Heaters, Coolers, Irons, Mixers,
Induction Cookers, Toasters, Kettles, OTG, Microwave, Rice Cookers, Gas
stoves, Non electrical kitchen aids & Pressure Cookers and is a
dominant player in small appliances segment in India. The Company
enjoys leadership positions in the industry for the product categories
such as Mixers, Toasters, Water Heaters, Room Heaters, Coolers and
Irons, whereas categories like Gas stoves, OTG & Microwaves are growing
significantly year-on-year.
During the year under reporting, domestic appliances sale was Rs. 524
crore, whereas kitchen appliances sales was Rs. 638 crore.
The sale of appliances was impacted due to sluggish market conditions,
growing competition and implementation of Range and Reach Expansion
Programme (RREP) across the country. However, the implementation of
RREP across the country will help the BU in controlling the inventory
at all levels and improving margins.
- Fans
Fans BU has a modern assortment of ceiling, table, pedestal, wall,
fresh air and industrial fans manufactured at plants in India and
abroad that have ISO 9001/9002 quality certifications. The BU is also
involved in marketing self-priming, centrifugal & submersible pumps.
Due to sluggish market conditions, growing competitiveness, dominance
of newer channels like e-commerce, the market remained price sensitive
leading to drop in sales vis-a-vis the previous year. However, the BU
has been able to maintain profitability and market share.
During FY 2015-16, the BU has achieved a sales turnover of Rs. 639
crore. Robust distribution, launch of new models in premium range,
better product mix and disciplined maintenance of market operating
price has resulted in improvement of margins. The BU''s focus for FY
2015-16 continued on implementation of RREP. The CSD channel continued
on its growth path by delivering 11% growth over the previous year.
Chakan Unit:
The production at this Unit showed increase during the year under
review with the production of 6,00,934 numbers of fans as against
4,57,436 numbers of fans in the previous year. This Unit has been
developed to cater to the demand of export market.
Lighting
- Luminaires
Luminaires BU design and market total lighting solution to all key
market segments covering commercial lighting, industrial lighting,
street lighting and area lighting. The BU is certified ISO 9000 while
most of the products are manufactured in plants conforming to ISO
9000:2000 and select plants are certified for ISO 14001 which sets out
the criteria for environmental management.
With lighting industry moving to LED technology big time, the BU has
designed and developed high end LED Luminaires to suit to wide variety
of applications ranging from office lighting, retail lighting, power
plants, manufacturing industry, warehouses, street lighting, area
lighting and city beautification. The BU is working to offer energy
efficient, value for money and environment friendly lighting solutions
to the customers under one roof.
For FY 2015-16 the BU achieved a turnover of Rs. 460 crore with a
growth of 15% in a relatively tough business environment. The BU
continues to maintain its dominant position in the Indian Luminaires
market.
The demand for LED Luminaires is gaining momentum with tremendous push
from the Government and hence, the BU has focused on the development of
LED luminaires. Other than the government and local bodies, the BU has
serviced private corporates including Asian Paints, Accenture,
Capgemini and Godrej.
Creating Smart Cities is one of the major agenda of the Central
Government and the BU has taken the challenge to provide high end
lighting and smart solutions to such cities. The beginning has already
been done by the Company by signing an agreement for developing &
launching City Infrastructure Management for Intelligent Public Street
Lighting Solution and commissioning of pilot installations with
satisfactory results.
With thrust to harness renewable energy, the BU has launched solar
solutions under brand "Sunsoko" for street lighting, power packs, roof
top panels, hand pumps and semi high masts. The Company''s solar product
has received an award "Outstanding contribution towards development of
roof top solar industry" during Indian Roof- top Solar Summit 2016 held
in January, 2016 at New Delhi.
The BU also offers a range of sophisticated Integrated Building
Management Solutions (IBMS) in creating smart and efficient buildings.
The Company was awarded the "Best Company in Integrated Building
Management Solutions" at the Hospital Management Conference 2015 by a
jury consisting of the NHBA panel, UBM Medica, CMIS and Hospital
Associations. The Company has contracts with Securiton from
Switzerland, Delta Controls from Canada and Vivotek from Taiwan for
IBMS systems.
During FY 2015-16, the BU has made a significant progress in
stabilizing Leap Ahead initiative in supply chain of luminaires, which
has resulted in timely availability of material against confirmed
orders and increase in sales.
- Lighting
The Lighting BU makes a wide range of conventional light sources, LED
based lighting products, Domestic Luminaires, HID Lamps, Torches and
Lanterns. The light sources includes General Lighting Service (GLS)
Lamps, Fluorescent Tube Lights (FTL), Compact Fluorescent Lamps (CFL)
and special purpose lamps. In line with the emerging trend from all
segments of the distribution set up, the BU made concentrated efforts
in developing LED based products by launching LED Bulbs, Panel Lights,
Down Lighters, portable lanterns and torches. The competition is very
intense on the LED business with various segments vying for market
share.
A strong distribution network exists for marketing these products both
in urban and rural areas and the special focus is on rural penetration.
The manufacturing of GLS and FTL Lamps is undertaken at Company''s Kosi
Unit and Hind Lamps Limited''s Shikohabad Unit, whereas CFL Lamps and
LED Lamps are manufacture by Starlite Lighting Limited at its Nashik
plants.
During FY 2015-16, the Lighting BU has achieved a turnover of Rs. 615
crore with growth of 20%. The growth is mainly because of steep
increase in LED turnover to Rs. 112 crore from Rs. 18 crore for last
year, which includes sales of Rs. 61 crore to EESL.
Considering the shift in demand for LED products, the BU has introduced
good future ready LED products. With fast growing trade business of LED
products and LED Bulb orders from EESL, the LED lights business will be
the front runner for the Lighting business in the coming years.
The BU has continued on the path of RREP to spread its reach and range
to a much higher level, the benefits of which will start accruing now
onwards. The BU with its improved distribution network, wide product
range and efficient sourcing strategies is poised for a better than the
industry growth in the coming years.
The Company has consolidated quality function with an objective to give
a thrust on improvement of product quality and manufacturing processes.
Supply Chain Management
In the year 2013, Supply Chain Management (SCM) was identified as a
function to develop core competencies and bring competitive edge to the
business. The Company''s management took a decision to integrate the SCM
of all separate verticals of Consumer Products into one integrated SCM.
The objective was to create a group which could standardize process,
focus on consistent quality while getting the muscle power of
aggregated purchase. The entire group was galvanized into one body to
relentlessly push the agenda of improving "availability of products for
sale at lower inventories". The main tenets of this strategy was to
improve "supplier relation with joint planning" and "rationalisation of
product costing". Last two years saw a steady improvement in both these
parameters. In the year 2015-16 SCM was truly established as supply
system based on the replenishment model of the "Theory of Constraints"
waiting to go into the next cycle of improvement.
Encouraged with the results of Consumer Products segment, in July 2015,
the Luminaries business procurement group was integrated with SCM. In
Luminaries business where a large portion of business is of customised
nature and made against specific orders, the strategy identified was to
deliver "On Time In Full (OTIF)" and create a decisive competitive edge
by reducing the "lead time in servicing of the customer orders". Using
a combination strategy of replenishment and order queuing, the team
worked with the suppliers to implement systems and processes which lead
to measurement parameter of OTIF climbing to over 85%. In FY 2016-17
the focus will be on bringing down the lead time in servicing of
customer orders. The other significant impact of this drive was the
transformation of a motley group of buyers into a self- driven and
motivated team of SCM.
The Company has also integrated EPC (including Ranjangaon Units) with
the SCM to create strategic tie-ups with suppliers for consistent
quality and supply schedules and started using e-sourcing tool for
aggregation of demand, price discovery and systematizing procurement of
direct and indirect material and services.
Green Energy - Wind Energy
The Company''s 2.8 MW Wind Farm located at Village- Vankusawade in
Satara District of Maharashtra has generated 29,80,491 electrical units
during the year under review as compared to 30,67,570 electrical units
in the previous year.
Internal Control Systems and its adequacy
The Company has in place well defined and adequate internal controls
commensurate with the size of the Company and the scale and complexity
of its operations and the same were operating effectively throughout
the year. These controls are routinely tested and certified by
statutory as well as internal auditors and cover all offices, factories
and key areas of business.
The Company has an in-house internal audit function. The scope of
internal audit is decided by the Audit Committee. To maintain its
objectivity and independence, the internal audit function reports to
the Chairman & Managing Director of the Company and the Chairman of the
Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and
adequacy of internal control system in the Company, its compliance with
operating systems, accounting procedures and policies at all locations
of the Company. Based on the report of internal audit function,
process owners undertake corrective action in their respective areas
and thereby strengthen the controls. Significant audit observations and
corrective actions thereon are presented to the Audit Committee of the
Board.
Internal Controls over Financial Reporting
The Company has in place adequate internal financial controls
commensurate with the size and complexity of its operations. During the
year, such controls were tested and no reportable material weakness in
the design or operations were observed. The Company has policies and
procedure in place for ensuring proper and efficient conduct of its
business, the safeguarding of its assets, the prevention and detection
of frauds and errors, the accuracy and completeness of accounting
records and the timely preparation of reliable financial information.
The Company has adopted accounting policies which are in line with the
Accounting Standards and the Act. These are in accordance with
generally accepted accounting principles in India. Changes in policies,
if required, are made in consultation with the Auditors and are
approved by the Audit Committee.
The Company has robust financial closure, certification mechanism for
certifying adherence to various accounting policies, accounting hygiene
and accuracy of provisions and other estimates.
Indian Accounting Standards (Ind AS) - IFRS converged standards
The Ministry of Corporate Affairs vide its notification dated 16
February 2015 has notified the Companies (Indian Accounting Standards)
Rules, 2015.
In pursuance of this notification, the Company will adopt Ind AS with
effect from 01 April 2016 with the comparatives for the period ending
31 March 2016.
The implementation of Ind AS is a major change process for which the
Company has set up a dedicated team and is providing desired resources
for its completion within the time frame. The impact of the change on
adoption of Ind AS is being assessed.
Information Technology (IT)
The Company continues to invest in Information Technology for
automating various business processes to be productive. One of the
primary requirement for running all the business functions in automated
manner is to keep ERP, CRM, BI and Intranet on for the employees and
extranet portal for all other stakeholders. During the year, the IT
focus was on developing new modules on Intranet for automating business
processes for EPC BU based on TOC processes and mobile application for
Customer Care team. These applications are completely integrated with
Core ERP & CRM.
As more and more business processes are getting automated and
dependency on IT systems is increasing for all business units, there is
continuous focus on IT security and reliable disaster recovery
management processes to ensure all critical systems are always
available. These are periodically reviewed, upgraded and tested for
efficacy, security and reliability.
During FY 2015-16, the Company has received following recognitions from
various media agencies for its IT projects:
i. EMC Transformation Award 2015 for Private Cloud Implementation;
ii. CIO 100 Award from IDG for Project Leap Ahead for EPC Business;
iii. CIO Hall of fame 2015 from IDG for getting four CIO-100 awards for
various projects; and
iv. PCQUEST Best IT implementation award for Project Leap Ahead for
EPC (Project with maximum business impact).
Customer Care
The Company has maintained its tradition and reputation of providing
efficient after sales service to its customers through a strong network
of 400 service franchisees and service dealers. Some of the important
actions that it took during the year were to provide toll free call
registration facility to customers and dealers, mobile application to
end customers to register calls any time, higher than ever before call
resolution, providing home service to all its consumer products across
all deep interior areas and monitoring of performance through feedback
mechanism from customers through SMS facility. The Survey Monkey web
surveys confirmed more than 98% customer satisfaction.
To help customers with spare parts requirements, the Company has
started selling key required spare parts through its website giving
comfort and convenience to meet their requirements.
Brand Development and Protection
FY 2015-16 saw many new communication initiative by the Company. The
first major step was taken by the Company was to consolidate all its
sub-brand to have unified brand approach, under an umbrella brand
"Bajaj" and the same was implemented across all internal and external
touch points.
To support the RREP, the Company implemented retail branding across
Traditional Trade Channels, Canteen Store Department, Modern Retail
Stores, etc. and branded over 10,000 stores Pan India.
''We are Family'', the latest advertising campaign, was conceived with
the idea that the Company''s Products completes a home and have been a
part of the Indian families for over 75 years. The media exposure for
this campaign has been phenomenal considering more than 10 Million
video views across all the platforms viz. more than 6.9 Million video
views on YouTube; 2.5 Million video views on Facebook; 0.85 Million
video views on Hotstar; 0.25 Million video views on Inmobi; and 0.8
Million video views on Vdopia.
Bajaj LED "The Science of Light" - Reinforcing its focus in the
lighting segment, the Company launched a massive mass media campaign
which was promoted through a Television Commercial, Print ads, Digital
and Social Mediums. The campaign was strategically planned keeping in
mind the futuristic nature of the product and the communication clearly
articulated the key benefits to the consumer of Bajaj LEDs, namely long
life, energy efficiency, multi coloured light source, environmentally
friendly and inbuilt voltage surge protector.
The Company also organised Regional Lighting Dealer events - "Upgrade"
across various region and launched series of new LED products, educate
the dealers about the benefits of evolving LED technology and also to
felicitate top performing dealers from respective regions.
The age old Indian game of Kabaddi in its third season, the Pro Kabaddi
League (PKL) was much bigger and better. Enhanced graphics, analytics
and the in-vision commentary elevated the viewer experience. The
Company was associate sponsors for PKL in 2nd and 3rd seasons. The
Company achieved unmatched mileage with branded kiosks, perimeter
branding, ground mat branding, stadium branding, digital banners on
hotstar app and through Television Airtime. Pro Kabaddi reached out to
a huge global audience by reaching over 109 countries as it was relayed
in five different languages namely Hindi, English, Kannada, Telugu,
Marathi, etc.
In response to market need and potentials of LED Luminaires, the
Company has taken the next logical step and organised a first ever
customer focused program ".nxt Upgrade". Ten display booths were
specially created to showcase the products segments and its actual
lighting design for Commercial, Retail, Industrial, Urban
Architectural, Area, Street, IBMS, Solar lighting. Also, a day long
conclave included media interaction, talks on LED technology, Marketing
and Product initiatives. Architects and Consultants from various
industries, Channel partners, Government and other Institutional
customers were the recipients of these events. This show went through 4
major cities in southern region at the first step; Chennai, Hyderabad,
Bangalore and Cochin.
Your Company has taken significant actions against counterfeits, fakes
and other forms of unfair competition/trade practices.
Corporate Social Responsibility (CSR)
The Company''s CSR activity is guided by the 4 pillars - Sustainability,
Diversity (gender inclusion), Employee Volunteering and Community
Outreach.
In our endeavour to work for the benefit of the communities where we
operate, all our community outreach programs are planned and executed
with a focus on the following:
- Ensuring Environmental sustainability & promoting its education;
- Employment, enhancing vocational skills and livelihoods;
- Promoting Preventing Health Care; and
- Promotion of Arts & Culture.
As a part of environmental & sustainability initiatives, the Company
partnered with environmental organisations to educate masses on
environment protection and to undertake renewable energy projects viz.
setting up solar powered libraries, solar computer laboratory, solar
street lights and solar education centres which will benefit to the
rural off grid communities.
In celebration of the International Year of Light and Light- based
Technologies (IYL 2015), the Company conducted Science of Light
workshops in schools with an objective to create awareness amongst the
students about the fundamentals of light based technologies, energy
efficiency and use of alternative renewable energy like solar.
The Company also took initiatives to establish a "Peace Park" in Almora
district of Uttarakhand by motivating selected self- help groups of
women, to create awareness amongst local communities and school
children about the fragility of eco-systems in the Himalayas. The
Company also planted about 7,660 trees.
The Company continued with Project Disha in partnership with
specialised organisations to impart vocational skills like masonry,
electrical works etc. to about 1,000 rural youth to enable them to
upgrade their skills and enhance their employability.
The Company has joined hands with NGOs and created a pool of
anti-tobacco crusaders to spread awareness among different stakeholders
about healthy and tobacco free living.
The Company also supported two organisations working to preserve Indian
heritage, promote art and culture and Indian Classical Music.
The Company and its employees contributed to support those affected
from Nepal Earthquake & Chennai Flood and undertook several activities
viz. tree plantation, blood donation, cleanliness drives, health
check-up camps and tobacco awareness sessions across India through
employee volunteering. Through dedicated efforts of about 1,250
employees and 200 social organisations, over 16,600 trees have been
planted across the country.
The Company and its employees also participated in Mumbai, Kolkata &
Delhi Marathon in support of ''Paryavaran Mitra'' to propagate the cause
of environment protection and supported the cause of raising awareness
for breast cancer and well being of women by supporting Pinkathon
(women''s only marathon) in 9 cities.
Total CSR expenditure incurred by your Company during the year was Rs.
1,35,95,069/-.
The CSR Policy Statement and Report on CSR initiatives taken during the
year pursuant to Sections 134 & 135 of the Act is annexed to the
Board''s Report as Annexure ''B''.
Human Resources
The Company''s human resource function is committed to make the
organisation future ready. A diverse pool of lateral talent has been
hired to enhance the bench strength. This includes professional experts
with excellent academic credentials and professional track record. The
Company has also successfully attracted management and engineering
graduates through a focused annual campus hiring program. The Company
has also identified a pool of best human resources who are being
groomed for future leadership roles. Talent mobility within the
Company is encouraged through job posting process.
To enhance the engagement, retention and work life balance of the
employees, the Company has introduced progressive policies & programs
like flexible working hours, compensatory off policy, flexible pay
policy, diverse reward & recognition program and other employee
interaction programs.
The Company has invested in its human capital regularly with an aim to
enhance organisation & individual capabilities to make them effective
and efficient in the short run and long run. The Company is driving
the learning & development agenda through a mix of in-house and
external learning interventions in the functional, behavioral and cross
functional areas. Select employees are encouraged to attend management
development programs conducted by renowned institutes across the
country and best practices learnt are being implemented in the Company.
A unique knowledge sharing platform has been developed to share the
knowledge amongst the colleague through short duration learning
interventions.
The Company is in the process of developing a robust performance and
talent management system which would be pathbreaking, progressive and
totally aligned to the organisation''s and employee''s needs.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Prevention, Prohibition and Redressal of Sexual Harassment of Women at
Workplace
Pursuant to the legislation "Prevention, Prohibition and Redressal of
Sexual Harassment of Women at Workplace Act, 2013" introduced by the
Government of India, which came into effect from 09 December 2013, the
Company has framed a Policy on Prevention of Sexual Harassment at
Workplace.
Internal Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All employees
(permanent, contractual, temporary, trainees) are covered under this
policy. There were no cases reported during FY 2015-16 under the
Company''s Policy on Prevention of Sexual Harassment at Workplace.
Whistle Blower Policy / Vigil Mechanism
The Company has a Whistle Blower Policy adopted in May 2011, which
enables its directors and employees to report their concerns about
unethical behavior, actual or suspected fraud or violation of the
Company''s Code of Conduct or ethics policy and provides safeguards
against victimisation of director(s)/employee(s), who avail of the
mechanism. The said Policy was amended in February, 2015 to extend its
applicability to other persons dealing with the Company viz.
contractors, vendors, customers and business consultants. The Policy
has been appropriately communicated to the employees within the
organisation and posted on the website of the Company.
Business Risk Management
The Company has a proper framework in place to identify, evaluate and
mitigate business risks. The key business risks identified by the
Company and their mitigation plans are as under:
(a) Business environment
The competitive environment in small appliances continues to be tough
and to take care of that the Company has embarked on RREP to extend its
demographics and offer value proposition to the customers to develop
and grow in consumer facing business further.
(b) Currency fluctuation related risk
The weakening of the Indian Rupee, though slightly, has impacted our
cost of imports. The Company had undertaken some foreign exchange
forward contracts to hedge the risks against the currency fluctuations
for the imports.
(c) Hiring and retention risk
The Company has been continuously working on retaining the best talent
in the industry to work with, but it is a constant challenge to retain
the good talent. There is imminent short term risk from new entrants
and existing domestic players to hire talent from our Company. The
Company''s human resource agenda focuses mainly on building a robust and
diverse talent pipeline by hiring fresh management graduates to cater
to various businesses and functions, enhancing individual and
organisational capabilities for future readiness, driving greater
employee engagement and strengthening employee relations. The Company
has also taken a number of employee initiatives like benchmarking
compensation structure with the industry, stock options, innovative
management training programmes, job rotations, etc. to retain and grow
talent.
(d) Occupational health and safety risk
Safety of employees and workers is of utmost importance to the Company.
To reinforce the safety culture in the Company, it has identified
Occupational Health & Safety as one of its focus areas. Various
training programmes have been conducted at the plants and project sites
such as behavior based safety training program, safety leadership
program, logistics safety program, etc.
Economic Scenario, Future Outlook and Sector Overview
India''s economic growth rate in FY 2015-16 was estimated at 7.6% by
RBI, an improvement to the previous year (7.2% in FY 2014-15), mainly
on the back of recent policy initiatives, pick up in investments and
lower oil prices. Going forward, growth rate is estimated at 7.5% by
IMF (7.6% by RBI), which would mean that India will outpace most
emerging economies including China and Africa. This is achieved mainly
because of restoring macro-economic stability achieved on account of
fiscal consolidation; control over inflation and support from fall in
the global commodity prices.
On the forecast of normal monsoon this year and the steps taken by the
government in recent times have shown positive results. These
initiatives are expected to increase the purchasing power of an average
Indian consumer, which would further boost demand and lead to spurt in
development.
Currently the manufacturing sector in India contributes 15% of GDP. The
Government of India under its "Make in India" initiative is trying to
boost the contribution of manufacturing sector and aims to take it to
25%. Experts'' view is that Indian Economy is expected to grow by 7.75%
during FY 2016-17.
Consumer Durable Sector:
India is expected to become the fifth largest consumer durables market
in the world by 2025. Rural markets are likely to witness growing
demand for consumer durables in the coming years as the government
plans to invest significantly in rural electrification.
Lighting Industry:
It is expected that the market size of Indian LED industry may touch
Rs. 21,600 crore by 2020 on the back of government''s decision to switch
to LED for all street lamps and public space lighting.
The Indian LED industry was pegged at Rs. 1,925 crore out of the
lighting industry''s aggregate turnover of Rs. 13,000 crore in 2013.
As projected, the turnover of Indian lighting industry by 2020 will be
Rs. 35,000 crore and LED will account for Rs. 21,600 crore, which is
significantly over 60 per cent of this total turnover.
In the wake of continual government''s support for the promotion of LED
lighting and its decision to switch to LED for all street lamps and
public space lighting, this market is expected to grow substantially.
The Company''s prime focus is on to educate and promote the sustainable
energy efficiency and drive the LED.
Power Sector:
Indian power sector is undergoing a significant change that has
redefined the industry outlook. Sustained economic growth continues to
drive electricity demand in India. The Government of India''s focus on
attaining ''Power For All'' has accelerated capacity addition in the
country. At the same time, the competitive intensity is increasing at
both the market and supply sides (fuel, logistics, finances, and
manpower).
The Government of India has identified power sector as a key sector of
focus so as to promote sustained industrial growth and has taken many
initiatives to boost the power sector such as:
- Ujwal DISCOM Assurance Yojna (UDAY) for financial turnaround and
revival of power distribution companies (DISCOMs), which will ensure
accessible, affordable and available power for all;
- Resolution of issues regarding transfer of mining leases and grant of
forest clearances to the winning bidders of coal blocks;
- Provision of electricity to 18,500 villages in three years under the
Deendayal Upadhyaya Gram Jyoti Yojana (DUGJY); and
- Implementation of two national level programmes, namely Grid
Connected Rooftop & Small Solar Power Plants Programme and Off-Grid &
Decentralised Solar Applications, in order to promote installation of
solar rooftop systems.
India''s wind energy market is expected to attract investments totaling
Rs. 1,00,000 crore by 2020, and wind power capacity is estimated to
almost double by 2020 from over 23,000 MW in June 2015, with an
addition of about 4,000 MW per annum in the next five years.
Directors
Appointment of Directors:
During the year under review, Shri Anant Bajaj was re- appointed as the
Joint Managing Director of the Company for a further period of five
years w.e.f. 01 February 2016. His appointment was approved by the
shareholders by way of a special resolution passed through postal
ballot.
In order to strengthen the Board, on the recommendation of the
Nomination & Remuneration Committee, the Board of Directors has
appointed Shri Anuj Poddar and Shri Siddharth Mehta, as Additional
Directors of the Company with effect from 30 May 2016 in the category
of Non-Executive & Independent Directors.
In accordance with Section 161 of the Act, aforesaid Additional
Directors hold office upto the date of the forthcoming Annual General
Meeting of the Company and being eligible offer their candidature for
re-appointment as Directors. Your approval for their appointment as
Directors in the category of Non- Executive Independent Directors has
been sought in the Notice convening the forthcoming Annual General
Meeting of the Company.
As on the date of this report, Company''s Board comprises of 10 (ten)
Directors, out of which, 8 (eight) are Non-Executive Directors (NEDs)
including 1 (one) Woman Director. NEDs represent 80% of the total
strength. Further, out of said 8 NEDs, 7 are independent directors
representing 70% of total strength of the Board.
Directors coming up for retirement by rotation:
In accordance with the provisions of the Act and the Articles of
Association of the Company, Shri Anant Bajaj retires by rotation and
being eligible offers his candidature for re- appointment as a
Director. The information as required to be disclosed under Regulation
36 of the SEBI LODR Regulations in case of re-appointment of the said
director is provided in the notice of the ensuing Annual General
Meeting.
Independent Directors:
The Independent Directors hold office for a fixed term of five years
and are not liable to retire by rotation.
In accordance with Section 149(7) of the Act, each Independent Director
has given a written declaration to the Company confirming that he/she
meets the criteria of independence as mentioned under Section 149(6) of
the Act and Regulation 16(1)(b) of SEBI LODR Regulations.
Board Effectiveness:
- Familiarisation Programme for the Independent Directors:
In compliance with the requirement of SEBI LODR Regulations, the
Company has put in place a familiarisation programme for the
Independent Directors to familiarise them with their role, rights and
responsibility as Directors, the working of the Company, nature of the
industry in which the Company operates, business model etc. The details
of the familiarisation programme are explained in the Corporate
Governance Report. The same is also available on the website of the
Company www.bajajelectricals.com.
- Evaluation of the performance of the Board, its Committees and the
Directors:
Pursuant to the provisions of the Act and the SEBI LODR Regulations,
the Board has carried out the annual performance evaluation of its own
performance, the Directors individually as well as the evaluation of
the working of its Audit and Nomination & Remuneration Committee. The
criteria applied in the evaluation process are explained in the
Corporate Governance Report.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel
of the Company pursuant to Section 2(51) and Section 203 of the Act,
read with the Rules framed thereunder:
- Shekhar Bajaj, Chairman & Managing Director and CEO;
- Anant Purandare, Executive Vice President & Chief Financial Officer
(CFO); and
- Mangesh Patil, Vice President - Legal & Company Secretary and
Compliance Officer
None of the Key Managerial Personnel of the Company have resigned
during the year under review.
Criteria for selection of candidates for appointment as Directors, Key
Managerial Personnel and Senior Leadership Positions
Your Company has laid down a well-defined criteria for the selection of
candidates for appointment as Directors, Key Managerial Personnel and
Senior Leadership Positions.
Directors'' Remuneration Policy & Criteria for matters under Section 178
Information regarding Directors'' Remuneration Policy & Criteria for
determining qualifications, positive attributes, independence of a
director and other matters provided under sub-section (3) of Section
178 of the Act are provided in the section of Corporate Governance
Report.
Directors'' Responsibility Statement
To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the
following statement in terms of Section 134 of the Act:
(a) that in the preparation of the annual accounts for the year ended
31 March 2016, the applicable accounting standards have been followed
and that no material departures have been made from the same;
(b) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the
state-of-affairs of the Company as at 31 March 2016 and of the profits
of the Company for the year ended on that date;
(c) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 2013 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(d) that the annual accounts of the Company have been prepared on a
''going concern'' basis;
(e) that proper internal financial controls were in place and that the
financial controls were adequate and were operating effectively; and
(f) that systems to ensure compliance with the provisions of all
applicable laws were in place and were adequate and operating
effectively.
Meetings
A calendar of meetings is prepared and circulated in advance, to the
Directors.
Board Meetings:
During the year, seven (7) Board Meetings were convened and held, the
details of which are given in the Corporate Governance Report. The
intervening gap between the meetings was within the period prescribed
under the Act and SEBI LODR Regulations.
Audit Committee:
The Audit Committee comprises of three Independent Directors as its
Members. During the year five (5) Audit Committee Meetings were
convened and held, the details of which are given in the Corporate
Governance Report.
CSR Committee:
The CSR Committee comprises of three Members of which one is the
Independent Director. The Committee met twice during the reporting
period. Details of the Committee and meetings are given in the
Corporate Governance Report.
Particulars of Contracts or arrangements with Related Parties
All transactions with Related Parties are placed before the Audit
Committee as also the Board for approval. Prior omnibus approval of the
Audit Committee is obtained on an annual basis for the transactions
which are of a foreseen and repetitive nature.
The transactions entered into pursuant to the omnibus approval so
granted are audited and a statement giving details of all related party
transactions is placed before the Audit Committee and the Board of
Directors for their approval on a quarterly and on annual basis.
The Policy on Related Party Transactions as approved by the Board is
available on the Company''s website: www.bajajelectricals.com.
All related party transactions that were entered into during the
financial year were on an arm''s length basis and were in the ordinary
course of its business. There were no materially significant related
party transactions i.e. transactions exceeding ten percent of the
annual turnover of the Company as per the last audited financial
statements, entered into by the Company with Promoters, Directors, Key
Managerial Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large. Thus,
the disclosure in ''Form AOC-2'' is not applicable.
None of the Directors or the Key Managerial Personnel has any pecuniary
relationships or transactions vis-a-vis the Company.
The details of Related Party Transactions are given in the notes to the
financial statements.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Act, relevant amounts
which remained unpaid or unclaimed for a period of seven (7) years have
been transferred by the Company to the Investor Education and
Protection Fund.
The Company has uploaded the details of unpaid and unclaimed amounts
lying with the Company as on 06 August 2015 (date of last Annual
General Meeting) on the website of the Company
(www.bajajelectricals.com), as also on the website of the Ministry of
Corporate Affairs.
Material Changes & Commitments
There have been no material changes and commitments, affecting the
financial position of the Company, which have occurred between the end
of the financial year of the Company and the date of this report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators
or Courts or Tribunals, which may impact the going concern status of
the Company and its future operations.
Subsidiaries / associates
The Company has no subsidiary as on 31 March 2016.
Details of the company which is an associate company of the Company:
Name of the company % shareholding of the Company Status
Starlite Lighting
Limited 19% Associate
(SLL)
For the purpose of Section 2(6) of the Act, "associate company", in
relation to another company, means a company in which that other
company has a significant influence, but which is not a subsidiary
company of the company having such influence and includes a joint
venture company. For the purposes of this clause, "significant
influence" means control of at least twenty per cent of total share
capital, or of business decisions under an agreement. Though, the
holding of the Company in the equity share capital of SLL is less than
20%, the Company is in a position to influence the operating and
financial policies of SLL and hence the financial statements of SLL are
consolidated with the Company''s financial statements considering it as
an Associate of the Company.
Statutory disclosures
The summary of the key financials of the Company''s associate company
(Form AOC-1), is included in this Annual Report. A copy of audited
financial statements of the said company will be made available to the
members of the Company, seeking such information at any point of time.
The audited financial statements of the said company will be kept for
inspection by any member of the Company at its registered office during
business hours. The same are placed on the Company''s website
www.bajajelectricals.com.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2016
have been disclosed as per Schedule III to the Act.
(Amount: Rs. in Crore)
Particulars 2015-16 2014-15
Standalone revenue 4,634.80 4,286.80
Standalone profit for the year 95.60 (13.95)
-Consolidated revenue 4,634.80 -
-Consolidated profit for the year 95.45 -
*This being the first year Consolidated Financial Statements are drawn
up, the previous year''s comparative figures have not been presented.
Secretarial Standards of ICSI
The Act has mandated the Secretarial Standards on Board Meetings &
General Meetings specified by the Institute of Company Secretaries of
India (ICSI). The secretarial standards issued by ICSI from time to
time have been complied with by the Company during the year under
review.
Auditors
Statutory Auditor:
The Company''s Auditors M/s. Dalal & Shah LLP, Chartered Accountants,
Mumbai (Firm Registration No.: 102021W/ W100110), who retire at the
ensuing AGM of the Company are eligible for re-appointment. They have
confirmed their eligibility under Section 141 of the Act and the Rules
framed thereunder for re-appointment as Auditors of the Company. As
required under Regulation 33 of SEBI LODR Regulations, the auditors
have also confirmed that they hold a valid certificate issued by the
Peer Review Board of the Institute of Chartered Accountants of India.
The notes on financial statements referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments. The
Auditors'' Report does not contain any qualification, reservation or
adverse remark or disclaimer.
Cost Auditor:
The cost audit records maintained by the Company in respect of its
manufacturing activities are required to be audited pursuant to Section
148 of the Act and Rules made thereunder. The Board of Directors has,
on the recommendation of the Audit Committee, appointed M/s. R.
Nanabhoy & Co., Cost Accountants (Firm Registration No.000010), to
audit the cost accounts of the Company for FY 2016-17. As required
under the Act, the remuneration payable to the Cost Auditor is required
to be placed before the Members in the General Meeting for their
ratification. Accordingly, a Resolution for seeking Members
ratification for the remuneration payable to M/s. R. Nanabhoy & Co.,
Cost Accountants, is included at Item No.7 of the Notice convening the
AGM.
The particulars of the Cost Auditor and cost audit conducted by them
for FY 2014-15 are furnished below:
ICWA Membership No. 1337
Registration No. of Firm 000010
Address Jer Mansion, 70,
August Kranti Marg,
Mumbai 400 036
Cost Audit Report FY 2014-15
Due date of filing of Report 30 September 2015
Actual date of filing of Report 24 September 2015
Secretarial Auditor:
Pursuant to the provisions of Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
Company has appointed, M/s. Anant B. Khamankar & Co., Practicing
Company Secretaries (Membership No. FCS 3198; CP No.:1860) to undertake
the Secretarial Audit of the Company. The Report of the Secretarial
Auditor for FY 2015-16 is annexed to the Board''s Report as Annexure
''C''. The Secretarial Audit Report does not contain any qualification,
reservation or adverse remark or disclaimer made by the Secretarial
Auditor.
Corporate Governance
Pursuant to Regulation 34 of the SEBI LODR Regulations, a separate
report on corporate governance has been included in this Annual Report
together with a certificate from the auditors of the Company regarding
compliance of conditions of Corporate Governance.
All Board members and senior management personnel have affirmed
compliance with the Code of Conduct for the year 2015-16. A declaration
to this effect signed by the Chairman & Managing Director/CEO of the
Company is contained in this Annual Report.
The Chairman & Managing Director and CFO have certified to the Board
with regard to the financial statements and other matters as required
under Regulation 17(8) of the SEBI LODR Regulations and the said
certificate is contained in this Annual Report.
Business Responsibility Reporting
Regulation 34 of the SEBI LODR Regulations provides that the Annual
Report of the top hundred listed entities, based on market
capitalisation (calculated as on March 31 of every financial year),
shall include business responsibility report describing the initiatives
taken by them from an environmental, social and governance perspective,
in the format as specified by the Board from time to time.
SEBI vide its Notification dated 22 December 2015 issued SEBI (Listing
Obligations and Disclosure Requirements) (Amendment) Regulations, 2015,
providing that for the word "hundred" the words "five hundred" shall be
substituted and which shall come into effect from 01 April 2016.
The Company was ranked 426th in the list of top 500 companies as per
NSE list and thus the requirement of publishing Business Responsibility
Report shall now be applicable to the Company w.e.f. 01 April 2016.
First such report shall be printed for the year 2016-17.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The information on conservation of energy, technology absorption and
foreign exchange earnings and outgo stipulated under Section 134(3)(m)
of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is
annexed herewith as Annexure ''D'' to the Board''s Report.
Extract of Annual Return
The extract of Annual Return as provided under sub-section (3) of
Section 92 of the Act, in the prescribed Form MGT- 9 is enclosed as
Annexure ''E'' to the Board''s Report.
Particulars of Employees and related disclosures
Disclosure pertaining to the remuneration and other details as required
under Section 197(12) of the Act read with Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014 is
enclosed as Annexure ''F'' to the Board''s Report.
The information on employees who were in receipt of remuneration of not
less than Rs. 60 lacs during the year or Rs. 5 lacs per month during
any part of the year forms part of this Report and will be provided to
any Member on a written request to the Company. In terms of Section 136
of the Act, the Report and Accounts are being sent to the Members and
others entitled thereto, excluding the information on employees''
particulars which is available for inspection by the Members at the
Registered Office of the Company during business hours on working days
upto the date of the ensuing Annual General Meeting. If any Member is
interested in inspecting the same, such Member may write to the Company
Secretary in advance.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
associate prepared in compliance with the Act, applicable Accounting
Standards and the Listing Agreement as prescribed by SEBI.
A separate statement containing the salient features of the associate
in the prescribed ''Form AOC-1'' is enclosed herewith as Annexure ''G'' to
the Board''s Report.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, customers, investors, business associates, vendors, regulatory
and government authorities, stock exchanges and members. Your Directors
also wish to place on record their deep sense of appreciation to
employees at all levels for their sincere personal efforts as well as
their collective dedication and contribution to the Company''s
performance.
Cautionary Statement
Statements in the Board''s Report and the Management Discussion &
Analysis describing the Company''s objectives, expectations or forecasts
may be forward looking within the meaning of applicable securities laws
and regulations. Actual results may differ materially from those
expressed in the statement. Important factors that could influence the
Company''s operations include demand and supply conditions affecting
selling prices of finished goods, input availability and prices,
changes in government regulations, tax laws, economic developments
within the country and other factors such as litigation and industrial
relations.
For and on behalf of the Board of Directors
Mangesh Patil Anant Bajaj Shekhar Bajaj
V P - Legal & Company
Secretary Jt. Managing Director Chairman & Managing
Director
FCS No.: 4752 DIN: 00089460 DIN: 00089358
Mumbai, 30 May 2016
Mar 31, 2014
Dear Shareholders,
The Directors are pleased to present the 75th Annual Report and the
audited accounts for the financial year ended 31 March 2014.
The Companies Act, 2013:
The long-awaited Companies Bill 2012 got its assent in the Lok Sabha on
18 December 2012 and in the Rajya Sabha on 8 August 2013. After having
obtained the assent of the President of India on 29 August 2013, it has
now become the Companies Act, 2013 ("the Act") which replaced the
Companies Act, 1956.
Since this report pertains to financial year that commenced prior to 1
April 2014, the contents therein are governed by the relevant
provisions / schedules / rules of the Companies Act, 1956, in
compliance with General Circular No.08/2014 dated 4 April 2014 issued
by the Ministry of Corporate Affairs.
Financial Performance:
Rs. in crore
Particulars FY 2013-14 FY 2012-13
Revenue from Operations & Other Income 4079.98 3419.37
Gross Profit before Finance Cost &
Depreciation 97.08 127.69
Less : Finance Cost 78.29 68.99
Less : Depreciation 24.75 14.45
Profit/(Loss) before Exceptional
Items & Taxes (5.96) 44.25
Add: Profit on sale of Investments - 24.72
Profit/(Loss) before Taxes (5.96) 68.97
Less : Provision for Taxation (0.65) 17.76
Profit/(Loss) after Tax (5.31) 51.21
Add : Balance in Profit & Loss Account 31.55 28.69
Balance available for appropriation 26.24 79.90
Less : Appropriations :
(i) Dividend paid on exercise of Stock Options
including dividend distribution tax - 0.01
(ii) Proposed Dividend on Equity Shares 15.00 19.95
(iii) Tax on Dividend 2.55 3.39
(iv) Transferred to General Reserve - 25.00
Closing Balance 8.69 31.55
Results of Operations:
The net revenue from operations increased by 19.3% to Rs. 4,079.98 crore,
despite the industry-wide slow down but has resulted in a loss of Rs.
5.31 crore.
The drop in profit was the result of various factors, including a
challenging business environment. The infrastructure sector saw a
low-key investment, mainly due to environmental clearances and land
acquisition issues. The other major challenges faced by the Company
include weakening of rupee, right-of-way issues, commodity price
fluctuations, high interest rates, cost & time overrun in some of the
turnkey projects and low margins in power sector projects. Even the
margins in both lighting and consumer durable business have come down.
During the year under review, the management has taken several measures
to ensure better management of working capital, monitoring of project
performance on continuous basis and completion of projects as per
schedule to avoid cost and time over run.
The operations of the company are elaborated in the annexed Management
Discussion and Analysis Report.
Increase in number of shares
The increase in number of shares is due to the issue of 2,13,847 equity
shares of Rs. 2 each to the employees upon their exercise of stock
options. These shares were included, on weighted average basis, for the
computation of EPS.
Dividend
The Directors of your Company are pleased to recommend a dividend of Rs.
1.50 per equity share (previous year Rs. 2 per share) for the financial
year ended 31 March 2014, subject to the approval of the shareholders.
The amount of dividend and the tax thereon aggregate to Rs. 17.55 crore
(previous year Rs. 23.34 crore). The dividend will be paid to the members
whose names appear in the Register of Members as on 31 July 2014; in
respect of shares held in dematerialized form, it will be paid to
members whose names are furnished by National Securities Depository
Limited and Central Depository Services (India) Limited, as beneficial
owners as on that date.
Shares that may be allotted on exercise of Options granted under the
Employee Stock Option Scheme before the Book Closure date for payment
of dividend will rank pari passu with the existing shares and be
entitled to receive the dividend.
Issue of Debentures on Private Placement basis
During the year under review, the Company issued 1000 Secured Rated
Listed Redeemable Non-Convertible Debentures (NCDs) of Rs. 10,00,000/-
each, aggregating to Rs. 100 crores, on private placement basis, in two
series, Series  1 of 400 NCDs & Series  2 of 600 NCDs, which are
listed on National Stock Exchange of India Limited (NSE) under ISIN
''INE193E07014'' and ''INE193E07022'', respectively.
Axis Trustee Services Limited is the Debenture Trustee for the
Debenture holders, whose details are provided in the corporate
governance section of the Annual Report.
Employees Stock Option Scheme
The Company implemented the Employees Stock Option Scheme ("Scheme") in
accordance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 (''the SEBI Guidelines'') as a measure to reward and motivate
employees as also to attract and retain the talent. Details of the
shares issued under the Scheme, as also the disclosures in compliance
with Clause 12 of the SEBI Guidelines, are set out in the Annexure to
this Report. No employee has been issued stock options, during the
year, equal to or exceeding 1% of the issued capital of the Company at
the time of grant.
During the year under review, 5,05,000 Stock Options were granted to
the eligible employees under Growth Plan at the market price prevailing
on National Stock Exchange of India Ltd (NSE) as on the date of the
grant plus taxes as applicable. The issuance of equity shares pursuant
to exercise of Stock Options granted under Growth Plan does not affect
the profit and loss account of the Company, as the exercise is made at
the market price prevailing as on the date of the grant plus taxes as
applicable.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolutions passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for the
inspection of members.
Corporate Governance
Your Company is committed to achieving the highest standards of
Corporate Governance and continues to lay a strong emphasis on
transparency, accountability and integrity.
A separate report on Corporate Governance is provided in this Annual
Report, together with a Certificate from the Auditors of the Company
regarding compliance of conditions of Corporate Governance as
stipulated under Clause 49 of the Listing Agreement with the Stock
Exchange(s). A Certificate of the CEO and CFO of the Company in terms
of sub-clause (v) of Clause 49 of Listing Agreement, inter alia,
confirming the correctness of the financial statements, adequacy of the
internal control measures and reporting of matters to the Audit
Committee is also annexed.
SEBI vide its Circular No.CIR/CFD/POLICY CELL/2/2014 dated 17 April
2014 has notified the revised Clause 49 of the Listing Agreement to be
applicable with effect from 01 October 2014. This Report therefore
stands complied against the previous Clause 49 of the Listing
Agreement.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2013-14. A declaration
to this effect signed by the Chief Executive Officer (CEO) of the
Company is contained in this annual report.
Management Discussion and Analysis Report
A Management Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Corporate Social Responsibility
Section 135 of the Companies Act, 2013 concerning Corporate Social
Responsibility along with the Rules there under and revised Schedule VII
were notified on 27 February 2014 to come into effect from 01 April
2014.
Your Company welcomes the initiative taken by the MCA with an aim to
embrace responsibility for the corporates actions and encourage a
positive impact through its activities on the environment, consumers,
employees, communities and all other members of the public sphere who
may also be considered stakeholders.
The Company, being covered under the provisions of the said Section,
has formed a Committee of Directors, titled "Corporate Social
Responsibility Committee" comprising of the following three Directors
as its members:
Shri Shekhar Bajaj, Chairperson
Shri Anant Bajaj, and
Dr.(Smt) Indu Shahani
The purpose of the Committee is to formulate and monitor the CSR Policy
of the Company. The Committee has in place a CSR Policy.
The said Section being enacted with effect from 01 April 2014,
necessary details as prescribed under the said Section shall be
presented to the members in the annual report for the year 2014-15.
Even when the said provisions were not mandated by the Ministry of
Corporate Affairs, your company demonstrated a sense of responsibility
towards society and environment through the Company''s culture of trust
and caring. The sound business practices adopted by the Company are
perfectly in sync with its value system. In keeping with the Company''s
commitment towards contribution to community welfare, the Company and
its employees continue to whole heartedly support and closely associate
with "Paryavaran Mitra" (Friends of Environment) a non-government
organization (NGO) and involved in numerous activities like tree
plantation, cleanliness drive, tobacco free environment and creation of
social awareness, training & dissemination of information concerning
Environment (Paryavaran) and Pollution and host of other activities for
the cause of environment protection at all its business locations.
Employee volunteers and spouses of employees are important drivers of
our social initiatives. The Company has made green thinking a part of
its business agenda to reduce its carbon footprint, energy & water
conservation, waste reduction and product innovation. The Company has
been enlisting more green champions through regular communications in
the form of e-mails, posters and banners that are disseminated across
the Company and organizing various events outside the Company to
propagate the cause of environment protection. The green thinking is
now the order of the day in the functioning of the Company.
Subsidiaries
The Company has no subsidiary as on 31 March 2014.
Directors
In view of the provisions of the Companies Act, 2013 (''Act''), Shri
Anant Bajaj has now become retiring director and retires from the Board
by rotation this year and being eligible, offers himself for
re-appointment. The information as required to be disclosed under
Clause 49 of the Listing Agreement in case of re-appointment of
directors is provided in the notice of the ensuing annual general
meeting.
Pursuant to Section 149(4) of the said Act, every listed company is
required to appoint at least one third of its directors as Independent
Directors. The Board already has more than half of its directors in the
category of Independent Directors in terms of the provisions of Clause
49 of the Listing Agreement. The Board therefore, in its meeting held
on 29 May 2014 appointed the existing Independent Directors under
Clause 49 as ''Independent Directors'' pursuant to provisions of the said
Act, subject to the approval of shareholders.
As required under the said Act and the Rules made there under, the same
is now put up for approval of members at the ensuing annual general
meeting. Necessary details have been annexed to the notice of the
meeting in terms of Section 102(1) of the said Act.
The Independent Directors have submitted the Declaration of
Independence, as required under Section 149(6) of the Act, declaring
that they meet the criteria of independence.
With the appointment of Independent Directors, the conditions specified
in the Act and the Rules made there under as also under revised Clause
49 of the Listing Agreement stand complied.
Auditors
M/s.Dalal & Shah, Chartered Accountants, the statutory auditors of the
Company, will retire at the conclusion of the forthcoming Annual
General Meeting and are eligible to hold office for a period of three
years, upto 2017, pursuant to the provisions of Sections 139, 142 and
other applicable provisions, if any, of the Companies Act, 2013
(corresponding to Section 224 and other applicable provisions, if any,
of the Companies Act, 1956), subject to the approval of the Members and
thereafter, ratification by the shareholders annually.
The members are requested to appoint M/s Dalal & Shah, Chartered
Accountants, as auditors for three years from the conclusion of the
ensuing annual general meeting till the conclusion of the 78th annual
general meeting in 2017 and to fix their remuneration for the year
2014-15.
The Notes on Financial Statements referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments.
Cost Auditors
M/s.R.Nanabhoy & Co., Cost Accountants, was appointed as Cost Auditor
to conduct audit of cost accounts maintained by the Company in relation
to the manufacture of fans and generation of wind energy as also to
conduct compliance audit in relation to manufacturing of High Masts,
Transmission Line Towers etc for the financial year 2013-14
The full particulars of the Cost Auditor and Cost Audit conducted by
them for the financial year 2012-13 are furnished below:
ICWA Membership No. 1337
Registration No. of Firm 000010
Address Jer Mansion, 70, August Kranti
Marg, Mumbai 400 036
Cost Audit Report FY 2012-13
Due date of filing of Report 30 September 2013
Actual date of filing 27 August 2013
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
Section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out in the Annexure to this Report.
Particulars of Employees
In terms of the provision of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' Report. However, having regard to
the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Prevention, Prohibition and Redressal of Sexual Harassment of Women at
Workplace
During the year under review, pursuant to the new legislation
"Prevention, Prohibition and Redressal of Sexual Harassment of Women at
Workplace Act, 2013" introduced by the Government of India, which came
into effect from 9 December 2013, the Company has framed a Policy on
Prevention of Sexual Harassment at Workplace. There were no cases
reported during the year under review under the said Policy.
Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
(a) in the preparation of the annual accounts for the year ended 31
March 2014, the applicable accounting standards have been followed and
that no material departures have been made from the same;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at 31 March 2014 and of the profit of the Company for
the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(d) the annual accounts of the Company have been prepared on a ''going
concern'' basis.
Presentation of Financial Results
The financial results of the Company for the year ended 31 March 2014,
as in the previous year, have been disclosed as per the revised
Schedule VI of the Companies Act, 1956, pursuant to Notification dated
28 February 2011 issued by the Ministry of Corporate Affairs.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provision of Section 205A(5) and 205C of the Companies
Act, 1956, relevant amounts which remained unpaid or unclaimed for a
period of 7 years have been transferred by the Company to the Investor
Education and Protection Fund.
Pursuant to the provisions of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company as on 6 August 2013
(date of last Annual General Meeting) on the website of the Company
(www.bajajelectricals.com), as also on the Ministry of Corporate
Affairs website.
Secretarial standards of ICSI
During the year under review, secretarial standards issued by the
Institute of Company Secretaries of India (ICSI) from time to time,
though were recommendatory in nature, your Company complied with the
same.
Brand Protection
Your Company has taken significant actions against counterfeits, fakes
and other forms of unfair competition.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, customers, investors, business associates, vendors, regulatory
and government authorities, stock exchanges and members during the year
under review. Your Directors also wish to place on record their deep
sense of appreciation to employees at all levels for their sincere
personal efforts as well as their collective dedication and
contribution to the Company''s performance.
For and on behalf of the Board of Directors
Mangesh Patil Anant Bajaj Shekhar Bajaj
V P - Legal & Company
Secretary Jt. Managing Director Chairman &
Managing Director
Mumbai, 29 May 2014
Mar 31, 2013
Dear Shareholders,
The Directors are pleased to present the 74th Annual Report and the
audited accounts for the financial year ended 31st March, 2013.
Financial Performance:
Rs. in crore
Particulars FY 2012-13 FY 2011-12
Revenue from Operations &
Other Income (Gross) 3429.71 3144.26
Gross Profit before Finance Cost &
Depreciation 127.68 251.51
Less : Finance Cost 68.98 63.04
Less : Depreciation 14.45 12.52
Profit before Exceptional Items & Taxes 44.25 175.95
Add: Profit on sale of Investments 24.72 -
Profit before Taxes 68.97 175.95
Less : Provision for Taxation 17.76 58.07
Profit after Tax 51.21 117.88
Add : Balance in Profit & Loss Account 28.69 43.47
Balance available for appropriation 79.90 161.35
Less : Appropriations:
(i) Dividend paid on exercise of
Stock Options including dividend
distribution tax 0.01 0.24
(ii) Proposed Dividend on Equity Shares 19.95 27.90
(iii) Tax on Dividend 3.39 4.52
(iv) Transferred to General Reserve 25.00 100.00
Closing Balance 31.55 28.69
Results of Operations:
FY 2012-13 was a challenging year for the Company, due to slow down in
the industry and infrastructure facing businesses. The profitability of
the Company was badly impacted due to lower margins, abnormal increase
in site expenses on account of closure of overrun sites and de- growth
in E&P BU turnover by 17.3% over the corresponding previous period.
Further, on the basis of the financial closures of some old projects,
the Company had to make provision for write off of certain old
outstanding amounts. This is a onetime hit and is not likely to recur
in future as the management has taken appropriate measures to monitor
the projects performance on a continuous basis and take timely
corrective actions to ensure the completion of projects as per schedule
to avoid cost and time over-run.
The highlights of the performance are as under :
- Gross Revenue from operations increased by 9.1% to Rs.3429.71
crore.
- PBDIT decreased by 49.2% to Rs.127.68 crore.
- PBT decreased by 60.8% to Rs.68.97 crore.
- Net Profit decreased by 56.5% to Rs.51.21 crore. Increase in
number of shares
The increase in number of shares is due to the issue of 1,15,002 equity
shares of Rs.2 each to the employees upon their exercise of stock
options. These shares were included, on weighted average basis, for the
computation of EPS.
Dividend
The Directors of your Company are pleased to recommend a dividend of
Rs.2 per equity share (Previous year Rs.2.80 per share) for the
financial year ended 31st March, 2013, subject to the approval of the
shareholders. The dividend will be paid to the members whose names
appear in the Register of Members as on 6th August, 2013; in respect of
shares held in dematerialized form, it will be paid to members whose
names are furnished by National Securities Depository Limited and
Central Depository Services (India) Limited, as beneficial owners as on
that date.
Shares that may be allotted on exercise of Options granted under the
Employee Stock Option Scheme before the Book Closure date for payment
of dividend will rank pari passu with the existing shares and be
entitled to receive the dividend.
Employees Stock Option Scheme
The Company implemented the Employees Stock Option Scheme
("Scheme") in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 (''the SEBI Guidelines'') as a measure to reward and
motivate employees as also to attract and retain the talent. The
applicable disclosures as stipulated under the SEBI Guidelines as at
March 31, 2013 are provided in Annexure I to this Report. Details of
the shares issued under ESOP, as also the disclosures in compliance
with Clause 12 of SEBI Guidelines are set out in the Annexure to this
Report.
During the year under review, 5,25,000 Stock Options were granted on
25th October, 2012 and 1,10,000 Stock Options were granted on 6th
February, 2013 under Growth Plan to the eligible employees at the
prices of Rs.224.65 and Rs.183.15 per Stock Option respectively, being
the closing equity prices of the Company on the National Stock Exchange
of India Ltd where the trading volume was high.
The issuance of equity shares pursuant to exercise of Stock Options
granted under Growth Plan does not affect the profit and loss account
of the Company, as the exercise is made at the market price prevailing
as on the date of the grant plus taxes as applicable.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for the
inspection of members.
Depository System
As the members are aware, the Company''s shares are compulsorily
tradable in electronic form. As on March 31, 2013, 97.43% of the
Company''s total paid-up capital representing 97,196,445 shares was in
dematerialised form. In view of the numerous advantages offered by the
Depository Systems, members holding shares in physical mode are advised
to avail of the facility of dematerialization from either of the
Depositories.
Risk and Internal Controls Adequacy
The Company''s internal control systems are commensurate with the nature
of its business and the size and complexity of its operations. These
are routinely tested and certified by Statutory as well as Internal
Auditors and cover all offices, factories and key areas of business.
Significant audit observations and follow up actions thereon are
reported to the Audit Committee. The Audit Committee reviews adequacy
and effectiveness of the Company''s internal control environment and
monitors the implementation of audit recommendations including those
relating to strengthening of the Company''s risk management policies and
systems.
Your Company has an elaborate process for Risk Management. The
Company''s Risk Management Policy is backed by strong internal control
systems. The risk management framework consists of policies and
procedures designed to provide reasonable assurance that objectives are
met by integrating management control into the daily operations, by
ensuring compliance with legal requirements and by safeguarding the
integrity of the Company''s financial reporting and its related
disclosures. Major risks identified by the businesses and functions are
systematically addressed through mitigating actions on a continuing
basis. These are discussed with both Management Committee and Audit
Committee. Some of the risks relate to competitive intensity and cost
volatility.
Corporate Governance
Your Company is committed to achieving the highest standards of
Corporate Governance. Accordingly, your Board functions as trustees of
the shareholders and seeks to ensure that the long term economic value
for its shareholders is achieved while balancing the interest of all
the stakeholders.
A separate section on Corporate Governance standards followed by your
Company, as stipulated under Clause 49 of the Listing Agreement with
the Stock Exchanges is enclosed as an Annexure to this report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49, is attached to this Report.
Management Discussion and Analysis Report
A Management Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Environment, Health & Safety
Your Company understands the importance of responsible Environment,
Health and Safety (EHS) management in it growth, profitability and long
term sustainability. Your Company is committed to meeting the highest
standards of corporate citizenship by protecting the health and safety
of its employees and others working at its facilities, by safeguarding
the environment, and by creating long lasting positive impact on the
communities where it does business.
Your Company''s one of the highest priorities is to provide a safe and
healthy workplace. The Company also expects all its employees to take
individual responsibility for their health and safety and to exhibit
and encourage safe work behaviours. The Company has implemented several
company-wide processes at its work places, including improved awareness
and communication programmes, safety audits, periodic health check-ups
for its employees as well as accident prevention and investigation
programs, to further improve its track record. Safety procedures
related to hazardous processes are also regularly reviewed, monitored
and strengthened. Further, PUC checks of Company and employee owned
vehicle, organized training sessions on First Aid and emergency
preparedness are also conducted at regular intervals. Special attention
is being given to safety standards and awareness at project sites
through regular training, induction, tool box talk, workshops, etc. for
the safety of workforce. A "Safety Cell" has been created to
address the management concern on safety and well being of workmen.
Other initiatives include waste segregation and recycling of waste
including cardboard and plastics, review and monitoring of the energy,
paper & water consumption, etc.
The Company has achieved ISO 14001 Environmental Standards and
Management Certification and OHSAS 18001 Certification for Occupational
Health & Safety Assessment Systems. The Company periodically conducts
surveillance audits of both ISO 14001 and OHSAS 18001, to ensure
continued conformity with these standards.
Corporate Social Initiatives
A sense of responsibility towards society and environment is
demonstrated through our culture of trust and caring. The sound
business practices adopted by the Company are in sync with its value
system. In keeping with the Company''s commitment towards contribution
to community welfare, the Company and its employees continue to support
and closely associated with "Paryavaran Mitra" (Friends of
Environment) a non-government organization (NGO) and involved in
numerous activities like tree plantation, cleanliness drive, tobacco
free environment and creation of social awareness, training &
dissemination of information concerning Paryavaran (Environment) and
Pollution and host of other activities for the cause of environment
protection at Company''s various locations. Employee volunteers and
spouses of employees are important drivers of our social initiatives.
The ''green'' thinking needs continuous motivation. The Company on its
part is doing its bit by making green thinking a part of its business
agenda to reduce its carbon footprint, energy & water conservation,
waste reduction and product innovation. The Company is helping enlist
more green champions through regular communications in the form of
e-mails, posters and banners that are disseminated across the Company
and organizing various events outside the Company to propagate the
cause of environment protection.
Subsidiaries
The Company has no subsidiary as on 31st March, 2013. Directors
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, Shri Ashok Jalan and
Dr.R.P.Singh retire by rotation at the ensuing Annual General Meeting
and being eligible, offer themselves for re-appointment.
Auditors
M/s. Dalal & Shah, Chartered Accountants, who are the statutory
auditors of the Company, will retire at the conclusion of the
forthcoming Annual General Meeting and are eligible for re-appointment,
subject to the approval of the Members.
The Company has received a certificate from them to the effect that
their reappointment, if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
Members are requested to consider their re-appointment on a
remuneration to be decided by the Board or Committee thereof for the
ensuing financial year i.e. 2013-14.
The Notes on Financial Statements referred to in the Auditors'' Report
are self-explanatory and do not call for any further comments.
Cost Auditors
The Company has appointed M/s.R. Nanabhoy & Co., Cost Accountants, ICWA
Membership No.1337, to audit the cost accounts related to Fans
manufacturing and Wind Energy generation, and for conducting Compliance
Audit in relation to manufacturing of High Masts, Transmission Line
Towers etc carried out at Ranjangaon Units, for the financial year
2012-13.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out in the Annexure to this Report.
Particulars of Employees
In terms of the provision of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors'' Report. However, having regard
to the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Directors'' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
(a) in the preparation of the annual accounts for the year ended March
31, 2013, the applicable accounting standards read with requirements
set out under Schedule VI of the Companies Act, 1956, have been
followed and that no material departures have been made from the same;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2013 and of the profit of the Company
for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(d) the Directors have prepared the annual accounts of the Company on a
''going concern'' basis.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provision of Section 205A(5) and 205C of the Companies
Act, 1956, relevant amounts which remained unpaid or unclaimed for a
period of 7 years have been transferred by the Company to the Investor
Education and Protection Fund.
Pursuant to the provisions of Investor Education and Protection Fund
(Uploading of information regarding unpaid and unclaimed amounts lying
with companies) Rules, 2012, the Company has uploaded the details of
unpaid and unclaimed amounts lying with the Company as on July 26, 2012
(date of last Annual General Meeting) on the website of the Company
(www.bajajelectricals.com), as also on the Ministry of Corporate
Affairs website.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, customers, investors, business associates, vendors, regulatory
and government authorities and members during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation to all the executives, staff and workers of the Company
for their sincere personal efforts as well as their collective
dedication and contribution to the Company''s performance.
For and on behalf of the Board of Directors
Mangesh Patil Anant Bajaj Shekhar Bajaj
V.P. - Legal & Company
Secretary Jt. Managing Director Chairman &
Managing Director
Mumbai, May 27, 2013
Mar 31, 2012
The Directors are pleased to present the 73rd Annual Report and the
audited accounts for the financial year ended 31st March, 2012.
Financial Performance:
Rs. in crore
FY FY
2011-12 2010-11
Revenue from Operations &
Other Income (Gross) 3144.31 2781.47
Gross Profit before Finance Cost &
Depreciation 251.52 271.01
Less : Finance Cost 63.05 36.65
Less : Depreciation 12.52 10.80
Profit before Taxes & Provisions 175.95 223.56
Less : Provision for Irrecoverable
portion of Loan - 5.00
Less : Provision for Taxation 58.07 73.99
Less : Taxes in respect of earlier years - 0.78
Profit after Tax 117.88 143.79
Add : Balance in Profit & Loss Account 43.47 32.02
Balance available for appropriation 161.35 175.81
Less : Appropriations:
(i) Dividend paid on exercise of Stock
Options including dividend distribution tax 0.24 0.17
(ii) Proposed Dividend on Equity Shares 27.90 27.68
(iii) Tax on Dividend 4.52 4.49
(iv) Transferred to General Reserve 100.00 100.00
Closing Balance 28.69 43.47
Results of Operations:
FY 2011-12 was a challenging year. The global economy witnessed lower
economic growth resulting primarily from high commodity and oil prices.
Despite the challenging environment, the Company performed reasonably
well and the highlights of the performance are as under :
Gross Revenue from operations increased by 13.1% to Rs.3125.13 crore.
PBDIT decreased by 7.2% to Rs.251.52 crore.
PBT decreased by 21.3% to Rs.175.95 crore.
Net Profit decreased by 18.0% to Rs.117.88 crore
Lighting
The turnover of lighting products viz. Lamps, Tubes and Luminaires
increased by about 21.1% at Rs.765 crore during
FY 2011-12 from Rs.631 crore in the previous financial year. The CFL
(Compact Fluorescent Lamps) sales has increased by 41% over last year
and crossed Rs.250 crore mark. During the year, Lighting and
Luminaires, both have seen improvement in their margins. The thrust is
on developing energy-efficient consumer luminaire and lighting products
based on LED and lighting control technologies which is a global
mandate to arrest global warming.
Consumer Durables
The turnover of consumer durables, which include fans and small
appliances, increased by over 17.5 % at Rs.1,500 crore during the year
under review from Rs.1,277 crore in the previous year. The Company's
Morphy Richard brand has emerged as the fastest growing brand in
premium segment with a growth of 36% and a CAGR of 35%. The Company has
continued to introduce new range of products with varied models and
improve the technology and quality in order to gain a competitive
advantage.
The slowdown in the housing and real estate sector has adversely
affected the fan industry. For the first time since 2002-03, the
industry, which has been growing at 20-25% on a year-on-year basis for
the last couple of years, has recorded negative growth of about 6.16%
in production and 6.18% in domestic sales during the year.
The production at Chakan Unit showed increased during the year under
review with production of 4,68,347 nos. of fans as against 4,28,259
nos. of fans in the previous year.
Engineering & Projects
During the year, the top line performance of E & P BU was flat at
Rs.830 crore as compared to Rs.832 crore in the previous year. The
Ranjangaon Unit produced 4,655 nos. of Highmasts and 53,279 nos. of
Street Lighting Poles as against 4,200 nos. and 45,000 nos.
respectively in the previous year. The Unit also manufactured 24,035 MT
of transmission line towers as against 19,004 MT in the previous year.
The BU's order book position at the end of the year 2011-12 stood at
Rs.604 crore. The year gone by was tough for the BU as its performance
was adversely impacted by slower order inflow, increased competition,
pressure on margins and time and cost overrun in some of the projects.
The infrastructure development continues to be the Government's focus
area. Projects under Restructured- Accelerated Power Development and
Reform Programme (R-APDRP), new packages under Rajeev Gandhi Gramin
Vidyutikaran Yojana and Governments plan to add power generation
capacity will give good opportunity to this division to improve its
growth and profitability in the future.
Wind Energy
The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated
46,49,716 electrical units during the year under review (Previous Year
36,02,359 units).
Increase in number of shares
The increase in number of shares is due to the issue of 7,95,522 equity
shares of Rs.2 each to the employees upon exercise of their stock
options. These shares were included, on weighted average basis, for the
computation of EPS.
Dividend
Your Directors have recommended a dividend of Rs.2.80 per equity share
(Previous year Rs.2.80 per equity share) for the financial year ended
31st March, 2012, amounting to Rs. 32.43 crore (inclusive of tax of
Rs.4.53 crore). The dividend will be paid to the members whose names
appear in the Register of Members as on 26th July, 2012; in respect of
shares held in dematerialized form, it will be paid to members whose
names are furnished by National Securities Depository Limited and
Central Depository Services (India) Limited, as beneficial owners as on
that date.
Shares that may be allotted on exercise of Options granted under the
Employee Stock Option Scheme before the Book Closure for payment of
dividend will rank pari passu with the existing shares and be entitled
to receive the dividend.
Employees Stock Option Scheme
The Company implemented the Employees Stock Option Scheme
("Scheme") in accordance with the Securities and Exchange Board of
India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 ('the SEBI Guidelines'). The applicable disclosures as
stipulated under the SEBI Guidelines as at March 31, 2012 are provided
in Annexure I to this Report.
During the year under review, 24,55,000 Options were granted on 29th
August, 2011 and 1,40,000 Options were granted on 28th March, 2012
under Growth Plan to the eligible employees at the prices of Rs.164.85
and Rs.182.20 per option respectively, being the closing equity prices
of the Company on the National Stock Exchange of India Ltd.
The issuance of equity shares pursuant to exercise of Options granted
under Growth Plan does not affect the profit and loss account of the
Company, as the exercise is made at the market price prevailing as on
the date of the grant plus taxes as applicable.
None of the management employees or Whole-time Directors has received
options exceeding 5% of the value of the options issued for the year
ended March 31, 2012. Likewise, no employee has been issued share
options, during the year equal to or exceeding 1% of the issued capital
of the Company at the time of grant.
The Company has received a certificate from the Auditors of the Company
that the Scheme has been implemented in accordance with the SEBI
Guidelines and the resolution passed by the shareholders. The
Certificate would be placed at the Annual General Meeting for
inspection of members.
Depository System
As the members are aware, the Company's shares are compulsorily
tradable in electronic form. As on March 31, 2012, almost 96.94% of the
Company's total paid-up capital representing 9,65,85,099 shares were in
dematerialised form.
Risk Management
Risk management forms an integral part of the business planning and
review cycle. The Company's Risk Management Policy is backed by strong
internal control systems. The risk management framework consists of
policies and procedures designed to provide reasonable assurance that
objectives are met by integrating management control into the daily
operations, by ensuring compliance with legal requirements and by
safeguarding the integrity of the company's financial reporting and its
related disclosures. It makes management responsible for identifying
the critical business risks and take appropriate actions to mitigate
risks. The risk policy and internal Audit Reports are periodically
reviewed by the Board and Audit Committee with emphasis on maintaining
its effectiveness in dynamic business environment.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance and adhere to the Corporate Governance requirements set out
by SEBI. The Company has also implemented several best Corporate
Governance practices.
The Report on Corporate Governance as stipulated under Clause 49 of the
Listing Agreement forms part of the Annual Report.
The requisite Certificate from the Auditors of the Company confirming
compliance with the conditions of Corporate Governance as stipulated
under the aforesaid Clause 49, is attached to this Report.
Management Discussion and Analysis Report
A Management Discussion and Analysis Report for the year under review,
as stipulated under Clause 49 of the Listing Agreement with the Stock
Exchanges in India, is presented in a separate section forming part of
the Annual Report.
Social Initiatives
Your Company is a socially responsible corporate citizen. In keeping
with the Company's commitment towards contribution to community
welfare, the Company and its employees continue to support and closely
associated with "Paryavaran Mitra" (Friends of Environment) a non-
government organization (NGO) and involved in numerous activities like
tree plantation, cleanliness drive, tobacco free environment and
creation of social awareness, training & dissemination of information
concerning Paryavaran (Environment) and Pollution and host of other
activities for the cause of environment protection at Company's various
locations. The Company also sponsored Mumbai, Delhi & Hyderabad
Marathons, which received overwhelming participation from the employees
to propagate the cause of environment protection.
Subsidiaries
The Company has no subsidiary as on 31st March, 2012.
Directors
In accordance with the provisions of the Companies Act, 1956, Shri
Madhur Bajaj and Dr.(Mrs.) Indu Shahani retire by rotation and being
eligible, offer themselves for re- appointment.
Brief resumes of the Directors proposed to be re-appointed as required
under Clause 49 of the Listing Agreement are provided in the Notice of
the Annual General Meeting forming part of the Annual Report.
Auditors
M/s. Dalal & Shah, Chartered Accountants, Statutory Auditors of the
Company, hold office until the conclusion of the ensuing Annual General
Meeting and are eligible for reappointment.
The Company has received a certificate from them to the effect that
their reappointment , if made, would be within the prescribed limits
under Section 224(1B) of the Companies Act, 1956 and that they are not
disqualified for reappointment within the meaning of Section 226 of the
said Act.
The observations made in the Auditors' Report read together with the
relevant notes thereon, are self-explanatory and hence do not call for
any comments under section 217 of the Companies Act, 1956.
Energy Conservation, Technology Absorption and Foreign Exchange
Earnings and Outgo
The particulars relating to energy conservation, technology absorption,
foreign exchange earnings and outgo, as required to be disclosed under
section 217(1)(e) of the Companies Act, 1956 read with the Companies
(Disclosure of Particulars in the Report of Board of Directors) Rules,
1988 are set out in the Annexure-II to this Report.
Particulars of Employees
In terms of the provision of Section 217(2A) of the Companies Act,
1956, read with the Companies (Particulars of Employees) Rules, 1975,
as amended, the names and other particulars of the employees are set
out in the annexure to the Directors' Report. However, having regard to
the provisions of Section 219(1)(b)(iv) of the said Act, the Annual
Report excluding the aforesaid information is being sent to all the
members of the Company and others entitled thereto. Any member
interested in obtaining such particulars may write to the Company
Secretary at the Registered Office of the Company.
Directors' Responsibility Statement
Pursuant to the requirement under Section 217(2AA) of the Companies
Act, 1956, with respect to Directors Responsibility Statement, it is
hereby confirmed that:
(a) in the preparation of the annual accounts for the year ended March
31, 2012, the applicable accounting standards read with requirements
set out under Schedule VI of the Companies Act, 1956, have been
followed and that no material departures have been made from the same;
(b) the Directors have selected such accounting policies and applied
them consistently and made judgements and estimates that are reasonable
and prudent so as to give a true and fair view of the state of affairs
of the Company as at March 31, 2012 and of the profit of the Company
for the year ended on that date;
(c) the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(d) the Directors have prepared the annual accounts on a 'going
concern' basis.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provision of Section 205A(5) of the Companies Act,
1956, relevant amounts which remained unpaid or unclaimed for a period
of 7 years have been transferred by the Company to the Investor
Education and Protection Fund.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Acknowledgement
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, customers, investors, business associates, vendors, regulatory
and government authorities and members during the year under review.
Your Directors also wish to place on record their deep sense of
appreciation for the sincere efforts put in by the executives, staff
and workers of the Company, in helping it reach its current growth
levels.
For and on behalf of the Board of Directors
Mangesh Patil Anant Bajaj Shekhar Bajaj
Company Secretary Jt. Managing Director Chairman & Managing Director
Mumbai, May 28, 2012
Mar 31, 2011
The Companys Directors are pleased to present the 72nd Annual Report
of the Company along with the audited accounts for the year ended 31st
March, 2011.
Financial Performance
Rs. in Crore
FY 2010-11 FY 2009-10
Gross Sales Turnover and Other Income * 2770.55 2253.02
Gross Profit before Interest & Depreciation 263.69 246.30
Less : Interest 29.08 31.47
Less : Depreciation 10.76 9.20
Profit before Taxes & Provisions 223.85 205.63
Less : Provision for Irrecoverable
portion of Loan 5.00 5.00
Less : Provision for Taxation
(including deferred taxation & FBT) 73.99 75.35
Profit after Tax 144.86 125.28
Less : Prior Period Adjustments 0.29 0.55
Less : Taxes in respect of earlier years 0.78 -
Less : Provision for Taxation in respect of
earlier years - 7.63
Add : Balance brought forward from
previous year 32.02 21.73
Balance available for appropriation 175.81 138.83
Appropriations :
(i) Dividend paid on exercise of Stock Options 0.15 -
(ii) Tax on Dividend paid on exercise of
Stock Options 0.02 -
(iii) Proposed Dividend on Equity Shares 27.68 23.42
(iv) Tax on Dividend 4.49 3.89
(v) Transferred to General Reserve 100.00 79.50
Balance carried to Balance Sheet 43.47 32.02
* Other income Rs.5.73 crore (Previous year - Rs.3.62 crore)
Increase in number of shares
The increase in number of shares is due to the issue of 13,00,312
equity shares of Rs. 2 each to the employees upon exercise of their
stock options. These shares were included, on weighted average basis,
for the computation of EPS.
Dividend
Directors are pleased to recommend a dividend of Rs.2.80 per equity
share of the face value of Rs.2 for the year ended 31st March, 2011
(Previous year Rs.2.40 per equity share of the face value of Rs.2). The
payment of dividend, subject to the approval at the AGM on July 28,
2011 will be paid to the shareholders whose names appear on the
Register of Members with reference to the book closure from July 22,
2011 to July 28, 2011 (inclusive of both dates). The dividend will
absorb Rs.32.17 crore (including dividend tax of Rs.4.49 crore).
Shares that may be allotted on exercise of Options granted under the
Employee Stock Option Scheme before the Book Closure for payment of
dividend will rank pari passu with the existing shares and be entitled
to receive the dividend.
Operations:
Lighting
The turnover of lighting products viz. Lamps, Tubes, Luminaires, and
Domestic fittings increased by about 17.8% at Rs.631 crore during the
year under review from Rs.536 crore in the previous year.
The Luminaires BU is continuously working on developing
energy-efficient consumer luminaire. It has successfully launched LED
based luminaries for landscape & decorative lighting. It has also
entered into an arrangement with Helvar Ltd of Finland for Dimming &
non-Dimming electronic ballasts as also for Lighting Controls to offer
complete energy saving solutions to discerning class of customers and
has partnered with Securiton of Switzerland & Delta Controls of Canada
to offer the latest and cutting edge Security and BMS (Building
Management Systems) to its institutional customers. The CFL (Compact
Fluorescent Lamps) sales has increased significantly and crossed Rs.175
crore mark.
Consumer Durables
The turnover of consumer durables, which include fans and small
appliances, increased by over 33.8% at Rs.1,277 crore during the year
under review from Rs. 954 crore in the previous year. The Companys
Morphy Richard brand has emerged as the fastest growing premium brand
with a growth of 34% and a CAGR of 35%. The Company has continued to
introduce new range of products with varied models and improve the
technology and quality in order to gain a competitive advantage.
Chakan Unit
The production at this Unit showed increase during the year under
review with production of 4,28,259 nos. of fans as against 3,47,434
nos. of fans in the previous year. We are developing this Unit to cater
to our growing export requirement.
Engineering & Projects
The E & P BU has achieved a turnover of Rs.850 crore as compared to
Rs.755 crore in the previous year, registering a growth of 14% and a
CAGR of 25%. The Unit produced 4,200 nos. of Highmasts and 45,000 nos.
of Street Lighting Poles as against 4,600 nos. and 33,255 nos.
respectively in the previous year. The Unit also manufactured 19004 MT
of transmission line towers as against 17,446 MT in the previous year.
The BUs order book position at the end of the year 2010-11 stood at
Rs.750 crore. The overall margins for this BU during the year under
review were depressed, because of abnormal increase in raw materials
prices and extra efforts for time bound completion of prestigious CWG
Projects under critical time constraints and adverse weather
conditions.
The infrastructure development continues to be the Governments focus
area, which offers a good opportunity to this division to improve its
growth and profitability in the future.
Wind Energy
The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated
36,02,359 electrical units during the year under review (Previous Year
41,51,102 units).
Stock Options
During the year under review 6,95,000 Options were granted under Growth
Plan to the eligible employees at a price of Rs.313.95 per option,
being the closing equity price of the Company on the National Stock
Exchange of India Ltd.
Details of the shares issued under ESOP, as also the disclosures in
compliance with Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in the Annexure to this Report.
None of the management employees or Wholetime Directors has received
options exceeding 5% of the value of the options issued for the year
ended March 31, 2011. Likewise, no employee has been issued share
options, during the year equal to or exceeding 1% of the issued capital
of the Company at the time of grant.
Deposits
From the financial year 2008-09, the Company has stopped accepting
and/or renewing public deposits and the deposits aggregating to
Rs.211.34 lacs, which were due for repayment after March 31, 2009, were
prepaid along with interest accrued thereon as on March 31, 2009. Out
of this, as on the date of this report, pre-payment cheques in respect
of 5 deposits aggregating to Rs.1.46 lacs have not been encashed and
therefore remains to be paid.
Depository System
As the members are aware, the Companys shares are compulsorily
tradable in electronic form. As on March 31, 2011, almost 94.92% of the
Companys total paid-up capital representing 9,38,18,582 shares were in
dematerialised form.
Risk Management
The Companys Risk Management Policy is backed by strong internal
control systems. The risk management framework consists of policies and
procedures framed at management level and strictly adhered to and
monitored at all levels. The Company also has a sound internal audit
system in place. The audit consists of an independently constituted
team in the Company and outside auditors appointed for the purpose.
The risk policy and internal Audit Reports are periodically reviewed by
the Board and Audit Committee with emphasis on maintaining its
effectiveness in dynamic business environment.
Corporate Governance
Pursuant to Clause 49 of the Listing Agreement with BSE, NSE and DSE,
the Corporate Governance Report together with a certificate from the
Companys Auditors confirming compliance, is set out separately,
forming part of this Report.
All the Directors in the Board and the senior management personnel of
the Company have affirmed compliance with the Code of Conduct for the
financial year 2010-11. A declaration to this effect signed by the
Chief Executive Officer (CEO) of the Company is contained in this
Annual Report.
The CEO and CFO have certified to the Board with regard to the
financial statements and other matters as required in Clause 49 of the
Listing Agreement and the said Certificate is contained in the Annual
Report.
Management Discussion and Analysis Report
A Management Discussion and Analysis Report is been attached and forms
part of the Annual Report.
Social Initiatives
Your Company is a socially responsible corporate citizen. In keeping
with the Companys commitment towards contribution to community
welfare, the Company and its employees continue to support and closely
associate with "Paryavaran Mitra" (Friends of Environment) a non-
government organization (NGO) and involved in numerous activities like
tree plantation, cleanliness drive, tobacco free environment and
creation of social awareness, training & dissemination of information
concerning Paryavaran (Environment) and Pollution and host of other
activities for the cause of environment protection at Companys various
locations.
Subsidiaries
The Company has no subsidiary as on 31st March, 2011.
Directors
In accordance with the provisions of the Companies Act, 1956, Shri
H.V.Goenka and Shri V.B.Haribhakti retire by rotation and being
eligible, offer themselves for re-appointment.
Brief resumes of the Directors proposed to be re-appointed as required
under Clause 49 of the Listing Agreement are provided in the Notice of
the Annual General Meeting forming part of the Annual Report.
Auditors Report
The observations made in the Auditors Report read together with the
relevant notes thereon, are self-explanatory and do not call for any
comments under Section 217 of the Companies Act, 1956.
Auditors
The Members are requested to appoint Auditors and fix their
remuneration. M/s.Dalal & Shah, the retiring Auditors have furnished a
certificate of their eligibility for re-appointment as required under
Section 224(1B) of the Companies Act, 1956.
Disclosure of Particulars
The particulars prescribed under Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure
of Particulars in the Report of Board of Directors) Rules, 1988
regarding Conservation of Energy, Technology Absorption, Foreign
Exchange Earnings and Outgo, etc. to the extent applicable are set out
in the Annexure hereto.
Particulars of Employees
Information to be provided under Section 217(2A) of the Companies Act,
1956 read with the Companies (Particulars of Employees) Rules, 1975, as
amended, forms part of this Report. However, as per the provisions of
Section 219(1)(b)(iv) of the Companies Act, 1956, the Report and
Accounts are being sent to the shareholders of the Company excluding
the statement of particulars of employees under Section 217(2A) of the
Act and the same will be made available to any shareholder on request.
Directors Responsibility Statement
The Directors based on the information / representations received from
the Operating Management, confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
(b) they have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(d) they have prepared the annual accounts on a going concern basis.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Acknowledgement
The Board wishes to place on record its appreciation of the sincere
efforts put in by employees of the Company, in helping it reach its
current growth levels.
Your Directors place on record their appreciation for the support and
assistance received from the customers, investors, business associates,
bankers, vendors, regulatory and government authorities.
For and on behalf of the Board of Directors
Mangesh Patil R. Ramakrishnan Shekhar Bajaj
Company Secretary Executive Director Chairman & Managing Director
Mumbai, May 23, 2011
Mar 31, 2010
The Companys Directors are pleased to present the 71sl Annual Report
of the Company along with the audited accounts for the year ended 31st
March, 2010.
Financial Performance
Rs. in Crore
FY 2009-101 FY 2008-09
Gross Sales Turnover and Other Income * 2252.27 1794.13
Gross Profit before Interest & Depreciation 246,27 185.54
Less : Interest 31.45 36.97
Less : Depreciation 9.20 8.55
Profit before Taxes & Provisions 205.62 140.02
Less : Provision for Irrecoverable
portion of Loan 5.00 -
Less : Provision for Taxation
(including deferred taxation & FBT) 75.35 50.67
Profit after Tax 125.27 89.35
Less : Prior Period Adjustments 0.55 0.21
Less : Provision for Taxation in respect of
earlier years 7.63 -
Add : Balance brought forward from
previous year 21.73 17.82
Balance available for appropriation 138.82 106.96
Appropriations:
(i) Dividend on Equity Shares 23.41 17.29
(ii) Tax on Dividend 3.89 2.94
(iii) Transferred to General Reserve 79.50 65.00
Balance carried to Balance Sheet 32.02 21.73
* Other income Rs.2.86 crore (Previous year - Rs.5.70 crore)
Placement of Equity Shares of the Company with Qualified Institutional
Buyers
The Company completed a private placement of shares under Securities
and Exchange Board of India (Issue of Capital and Disclosure
Requirements) Regulations, 2009, during the second week of December,
2009. Pursuant to Members approval at the Extra-Ordinary General
Meeting of the Company held on November 18,2009, the Company allotted
20,48,339 Equity Shares of Rs. 10 (Rupees Ten) each at the Issue Price
of Rs. 785/- (Rupees Seven Hundred Eighty Five), to various Qualified
Institutional Buyers (QIBs) on December 11, 2009. This was at a slight
premium over Rs. 782.44 (Rupees Seven Hundred Eighty Two and paise
forty four), the floor price as determined by the formula prescribed by
SEBI. In the immediate term, the money raised has been used to retire
some of the short-term debts on the Companys books. This is in line
with the issue purpose mentioned in the Placement Document filed with
various authorities.
Increase in number of shares
The increase in the number of shares is due to the allotment of
20,48,339 equity shares of Rs.10 each on account of allotment of shares
to Qualified Institutional Buyers in accordance with Securities and
Exchange Board of India (Issue of Capital and Disclosure Requirements)
Regulations, 2009 and issue of 1,74,800 equity shares of Rs.10 each to
the employees upon exercise of their stock options. These shares were
included, on weighted average basis, for the computation of EPS.
Sub-division in face value of Equity Shares of the Company
By Postal Ballot, the results of which were announced on November 18,
2009, shareholders of the Company approved a sub-division of the
Companys equity shares to 5 shares of a face value of Rs. 2 for every
share of a face value of Rs.10. It is expected that the lower face
value of Equity Shares will bring in additional interest from retail
investors and contribute towards enhancement in the liquidity in the
Companys scrip on the Stock Exchanges.
It may be noted that the number of shares, for the purpose of
computation of Earnings Per Share (EPS), has been suitably adjusted
following the sub-division of equity share of Rs. 10 each to 5 equity
shares of Rs. 2 each in January, 2010.
Dividend
Directors are pleased to recommend a dividend of Rs.2.40 per equity
share of the face value of Rs.2 for the year ended 31st March, 2010
(Previous year Rs.10 per equity share of the face value of Rs.10). The
dividend, subject to the approval at the AGM on July 28, 2010 will be
paid to the shareholders whose names appear on the Register of Members
with reference to the book closure from July 21, 2010 to July 28, 2010
(inclusive of both dates). The dividend will absorb Rs.27.30 crore
(including dividend tax of Rs.3.89 crore).
Shares that may be allotted on exercise of Options granted under the
Employee Stock Option Scheme before the Book Closure for payment of
dividend will rank pari passu with the existing shares and be entitled
to receive the dividend.
Operations :
Lighting
The turnover of lighting products viz. Lamps, Tubes, Luminaires, and
Domestic fittings increased by about 9.8% at Rs.536 crore during the
year under review from Rs.488 crore in the previous year.
The Luminaires BU is continuously working on developing
energy-efficient consumer luminaires. It has successfully launched LED
based luminaries for landscape, commercial and retail lighting
applications. It has partnered with Securiton of Switzerland & Delta
Controls of Canada to offer cutting edge solutions in Fire Alarms,
Security systems and Integrated Building Management Systems (IBMS) to
its institutional customers. The CFL (Compact Fluorescent Lamps) sales
has increased significantly and crossed the Rs.150 crore mark.
Consumer Durables
The turnover of consumer durables, which include fans and small
appliances, increased by over 26.6% at Rs.957 crore during the year
under review from Rs.756 crore in the previous year. Bajaj Platini
range of premium appliances have been launched successfully. The
Companys Morphy Richards brand has emerged as the fastest growing
premium appliances brand with a growth of 32.9% and a CAGR of 26.0%.
The Company has continued to enhance its product portfolio with new
categories and models, invest in technology and quality improvement in
order to gain a competitive advantage.
Chakan Unit
The production at this Unit increased during the year under review to
3,47,434 nos. of fans as against 3,12,035 nos. of fans in the previous
year. This unit has also contributed significantly to our new product
innovation initiatives and value engineering efforts.
Engineering & Projects
The E & P BU has achieved a turnover of Rs.755 crore as compared to
Rs.543 crore in the previous year, registering a growth of 39.0%. The
Unit produced 4,600 Highmasts and 33,255 Poles as against 3,682 and
38,078 respectively in the previous year. The Unit also manufactured
17,446 MT of transmission line towers as against 20,106 MT in the
previous year. The BUs order book position at the end of the year
2009-10 stood at Rs.750 crore.
Infrastructure development and the power sector continue to be the
Governments focus areas, which offer a good long term opportunity to
this division to improve its growth and profitability in the future.
Wind Energy
The 2.8 MW Wind Farm at Village Vankusawade in Maharashtra generated
41,51,102 electrical units during the year under review (Previous Year
47,84,467 units).
Stock Options
The Remuneration & Compensation Committee of your Company has, in its
meeting held on 30th April, 2009 cancelled 5,55,000 outstanding options
and re-granted 4,66,385 stock options under Growth Plan to the eligible
employees, at an exercise price of Rs.215.55. This
revision was in consideration of the unusual meltdown of the stock
market, which had resulted in a steep fall in the market price of the
Companys shares compared to the price prevalent when the stock options
were granted. The revision would achieve the basic objectives of the
ESOP Scheme of motivating the employees to contribute to the growth and
profitability of the Company as also to attract and retain talent in
the organization.
The Remuneration & Compensation Committee has also, in its meeting held
on 28th January, 2010, granted 1,44,000 incremental stock options under
Growth Plan to 69 eligible employees consisting of promotees and new
joinees, at a price of Rs.866.75 per option, being the closing equity
price of the Company on the National Stock Exchange of India Ltd.,
where the trade volume was high. This is as per their eligibility under
ESOP 2007 of the Company.
Details of the shares issued under ESOP, as also the disclosures in
compliance with Clause 12 of the Securities and Exchange Board of India
(Employee Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines, 1999 are set out in the Annexure to this Report.
None of the management employees or Wholetime Directors has received
options exceeding 5% of the value of the options issued for the year
ended March, 2010. Likewise, no employee has been issued share options
during the year equal to or exceeding 1 % of the issued capital of the
Company at the time of grant.
Deposits
From the financial year 2008-09, the Company has stopped accepting
and/or renewing public deposits and the deposits aggregating to
Rs.211.34 lacs which were due for repayment after March 31, 2009 were
prepaid along with interest accrued thereon as on March 31,2009. As on
the date of this report, pre-payment cheques in respect of 80 deposits
aggregating to Rs. 16.14 lacs have not been encashed and therefore
remains to be paid.
Information Systems
In order to strengthen the internal control systems and improve the
management information system, last year the Company rolled out Oracle
based ERP which went live with effect from April 1,2009. The Board is
pleased to state that the application has been successfully implemented
and the system has stabilized well. The Board places on record its deep
sense of appreciation for the contribution made by the employees of the
Company in rolling out the Oracle based ERP. The Company received the
prestigious "NASSCOM CNBC IT User Award 2009" for its ERP
implementation success.
Depository System
As the members are aware, the Companys shares are compulsorily
tradable in electronic form. As on March 31, 2010, almost 94.51% of the
Companys total paid-up
capital representing 9,21,84,485 shares were in dematerialised form.
Risk Management
The Companys Risk Management Policy is backed by strong internal
control systems. The risk management framework consists of policies and
procedures framed at management level and strictly adhered to and
monitored at all levels. The Company also has a sound internal audit
system in place. The audit consists of an independently constituted
team in the Company and outside auditors appointed for the purpose. The
risk policy and internal Audit Reports are periodically reviewed by the
Board and Audit Committee with emphasis on maintaining its
effectiveness in a dynamic business environment.
Corporate Governance
The Company is committed to maintain the highest standards of Corporate
Governance. The Company has complied with the recommendations of the
Corporate Governance code as provided in Clause 49 of the Listing
Agreement with the stock exchanges.
A separate section of Corporate Governance, together with a certificate
from the Companys Auditors confirming compliance, is set out
separately, forming part of this Report.
The members of the Board and the senior management personnel have
affirmed compliance with the Code of Conduct for the financial year
2009-10. A declaration to this effect signed by the Chief Executive
Officer (CEO) of the Company is contained in this Annual Report.
The CEO and Chief Financial Officer (CFO) have certified to the Board
with regard to the financial statements and other matters as-required
in Clause 49 of the Listing Agreement and the said Certificate is
contained in the Annual Report.
Management Discussion and Analysis Report
A Management Discussion and Analysis Report is been attached and forms
a part of the Annual Report.
Social Initiatives
Your Company is a socially responsible corporate citizen. In keeping
with the Companys commitment towards contribution to community
welfare, the Company and its employees continue to support and are
closely associated with "Paryavaran Mitra" (Friends of Environment) a
non- government organization (NGO) and are involved in numerous
activities like tree plantation, cleanliness drive, tobacco free
environment, creation of social awareness, training & dissemination of
information concerning Paryavaran (Environment), Pollution control and
a host of other activities for the cause of environmental protection at
the Companys various locations.
Subsidiaries
The Company has no subsidiary as on 31 st March, 2010.
Directors
In accordance with the provisions of the Companies Act, 1956, Shri A.K.
Jalan and Shri Ajit Gulabchand retire by rotation and being eligible,
offer themselves for re- appointment.
Brief resumes of the Directors proposed to be re-appointed as required
under Clause 49 of the Listing Agreement are provided in the Notice of
the Annual General Meeting forming part of the Annual Report.
Auditors Report
The observations made in the Auditors Report, read together with the
relevant notes thereon, are self- explanatory and hence do not call for
any comments under Section 217 of the Companies Act, 1956.
Auditors
The Members are requested to appoint Auditors and fix their
remuneration. M/s.Dalal & Shah, the retiring Auditors have furnished a
certificate of their eligibility for re- appointment as required under
Section 224(1 B) of the Companies Act, 1956.
Disclosure of Particulars
The particulars prescribed under Section 217(1)(e) of the Companies
Act, 1956 read with the Companies (Disclosure of Particulars in the
Report of Board of Directors) Rules, 1988 regarding Conservation of
Energy, Technology Absorption, Foreign Exchange Earnings and Outgo,
etc. to the extent applicable are set out in the Annexure hereto.
Particulars of Employees
Particulars of employees as required under Section 217(2A) of the
Companies Act, 1956 read with the Companies (Particulars of Employees)
Rules, 1975, as amended, forms part of this Report. However, pursuant
to Section 219(1)(b)(iv) of the said Act, the Report and Accounts are
being sent excluding the statement containing the particulars to be
provided under Section 217(2A) of the said Act and the same will be
made available to any shareholder on request.
Directors Responsibility Statement
The Directors, based on the information / representations received from
the Operating Management, confirm that:
(a) in the preparation of the annual accounts, the applicable
accounting standards have been followed and that no material departures
have been made from the same;
(b) they have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and
prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profit or loss
of the Company for that period;
(c) they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the
Companies Act, 1956, for safeguarding the assets of the Company and for
preventing and detecting fraud and other irregularities; and
(d) they have prepared the annual accounts on a going concern basis.
Industrial Relations
The relations with the employees of the Company have continued to
remain cordial.
Group
Pursuant to an intimation from the Promoters, the names of the
Promoters and entities comprising "Group" as defined under the
Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969 are
disclosed in the Annual Report for the purpose of the SEBI (Substantial
Acquisition of Shares and Takeovers) Regulations, 1997.
Acknowledgement
The Board wishes to place on record its appreciation of the sincere
efforts put in by employees of the Company, in helping it reach its
current growth levels.
Your Directors place on record their appreciation for the support and
assistance received from the customers, investors, business associates,
bankers, vendors, regulatory and government authorities.
For and on behalf of the Board of Directors
Mangesh Patil R. Ramakrishnan Anant Bajaj Shekhar Bajaj
Company Secretary Executive Director Executive Chairman &
Director Managing Director
Mumbai, May 26, 2010